All up, the Australian Taxation Office has so far received 1.7 million individual 2020 returns, an increase of 12 per cent compared with the same period last year.
However, online lodgements on 1 July, the first day of financial year 20–21, jumped by a staggering 640 per cent.
“We saw the biggest 1 July ever, with ATO staff hard at work to ensure we could receive over 740,000 online lodgements on the day, ranging from income tax returns to early release of super and JobKeeper applications. This is up from just over 100,000 online lodgements across our channels on 1 July 2019,” assistant commissioner Karen Foat confirmed.
To date, over $1 billion has hit around 457,000 taxpayers’ bank accounts.
“Most returns that are lodged electronically are processed within two weeks, so refunds for the first returns lodged will continue to be issued into the first half of next week,” Ms Foat said.
While the ATO is looking at a record-breaking tax time in terms of lodgement numbers, one thing it wants to avoid is a record-breaking number of easily avoidable errors.
“These errors slow down returns or might lead to an unexpected debt down the track,” she said.
“While we’re pleased that many early lodgers are getting it right, there are some trends in the issues we’ve been seeing.”
Shortcut method causes headaches
The most common mistake taxpayers are making stems from the new method the ATO has introduced for working-from-home expenses: the 80 cents per hour shortcut method.
Ms Foat said: “We’ve already seen some taxpayers claiming working-from-home expenses under multiple methods either accidentally or deliberately.
“It’s important to remember that if you’re claiming under the working-from-home shortcut method for 1 March to 30 June 2020, you can’t claim any other expenses for working from home for that period.
“If you want to specifically claim the depreciation of big-ticket items like laptops or desks, you can use one of the existing methods, but you can’t double-dip and claim under the shortcut method as well.”
The 80 cents per hour shortcut method was developed to make things easy for taxpayers this year and takes into account all working-from-home costs such as electricity; depreciation on office furniture and laptops; and phone, internet and stationery costs.
It’s an all-inclusive rate, so you can’t claim any other working-from-home expenses if you use it.
“If you want to claim under one of the existing methods, it’s really important that you either work through the detailed guidance on our website or talk to your tax agent because it is complicated and it’s an area that we see a lot of people making mistakes,” Ms Foat said.
Another concerning trend the ATO is seeing is people increasing deductions where they’ve spent more, like working from home, but forgetting to reduce claims in areas they have cut spending.
“We know that more people have been working from home, working reduced hours or, unfortunately, not working at all. So, if you aren’t travelling for work, you can’t claim travel expenses. If you aren’t wearing your work uniform, you can’t claim laundry expenses,” Ms Foat said.
Consistent with last year, taxpayers are once again forgetting to report all their income when lodging early, with as many as one in five people falling prey to this error.
“If you’re lodging early, it’s crucial you check this information is there and manually add it if it’s not,” she said.
“While we try to include as much as possible, we are asking taxpayers to add any amounts that aren’t automatically included to your return. This includes cash wages, foreign-sourced income or even gains from cryptocurrency.”
As working from home due to COVID-19 has continued for some people into the new financial year, the ATO is reassuring taxpayers that the shortcut method of 80 cents per hour will continue to be available to work out your claims until 30 September 2020.