It’s coming up to the end of the financial year and that means it’s tax time.
But with COVID-19 having a massive impact on our personal circumstances, there have been some big changes to how we do our tax returns this year.
And according to the ATO, nearly everyone’s circumstances have changed.
Here’s what you need to know.
What can you claim while working from home?
Put simply, you can now claim 80 cents per hour for every hour worked between March 1 to June 30.
This ‘shortcut method’ is the easiest way to make a claim from your working-from-home expenses, and includes phone and internet, lighting, heating and depreciation on equipment.
“This new method is a lot easier to comply with,” said Chartered Accountants senior tax advocate Susan Franks.
Of the hundreds of responses we received, here are just a handful to help you feel a little united as our working lives take a dramatic turn.
“But you need to keep a record of your hours, like a diary or a timesheet.”
Multiple people living in the same house can claim the rate, and there is no requirement to have a dedicated work-from-home space.
“If you’re working full-time from home from 1 March to the end of the financial year, that’s a deduction of just over $500. We do think it’s that balance of fair and easy,” assistant tax commissioner Karen Foat said.
Here are two other ways to claim
Alternatively, you can use one of the other two existing methods to calculate your working from home deductions.
But you’ll need to have a dedicated office space at home.
With the fixed-rate method, you can claim 52 cents per work hour for heating, cooling, lighting and the decline in value of office furniture, plus the work-related portion of your phone and internet, stationery and decline in value of laptop or computer.
Or you can use the actual expenses method, where you calculate the work-related portion of all your running expenses.
But you can’t claim your mortgage interest, rent, coffee or tea, or any expenses associated with online schooling, says Ms Foat.
“A lot of people think that because they’re working from home and need to travel to the office occasionally that the home-to-work travel can be claimed — it can’t,” she said.
Is Jobseeker tax-free?
Well, that depends.
As you may already know, most government benefits are taxed.
So, if you’re one of the 1.6 million people receiving JobSeeker and the coronavirus supplement, you will have to declare it as income on your tax return.
Whether you have to pay tax on it depends on whether you receive any other income.
The standard tax-free thresholds apply. For instance, if you earn up to $18,200, you won’t pay tax.
If your income is over $18,200, you’ll pay the normal tax rates.
The ATO automatically includes the information in your tax return (it will be there from early July).
“If you’re receiving JobKeeper as an employee, you don’t need to do anything different,” Ms Foat said.
“Your employer will include it in your income statement either as part of salary and wages or as an allowance.”
If your employer gave you a ‘stand down’ payment (before JobKeeper was announced) that will also be included as part of your salary and wages and you won’t have to do anything different.
And if you’re a sole trader who has received JobKeeper on behalf of your business, you’ll need to include the payments as assessable income for the business.
But what if I’ve been made redundant?
Well, again, it all depends on the circumstances, Ms Foat says.
Often redundancies have up to three parts.
Some of the money will probably be tax-free (based on your years of service), some of the payment will be concessionally taxed (taxed at a lower rate than your marginal tax rate), and some money taxed at your usual marginal tax rate.
Your employer should help you work out these calculations.
If you need more information to do with your individual circumstances, have a look on the ATO’s website.
I’ve had to buy masks and hand sanitiser. Can I claim them?
Yes, there’s a decent chance you can.
If you’ve got a job in a sector like healthcare, retail or hospitality, you might be able to lodge some extra claims this year.
“If you’ve been working in a role that requires physical contact you may be able to claim the cost of sanitiser, gloves, face masks and anti-bacterial spray, provided you’ve got the receipt and your employer hasn’t reimbursed you,” Ms Franks said.
I took money out of my super early – do I have to pay tax?
More than 2.1 million Australians have taken money out of their retirement savings early under the Superannuation Early Release Scheme.
The good news is that you don’t have to pay tax on it or declare it in your tax return.
I’ve given my tenants a rent reduction. What does this mean?
If you’ve agreed on new rental arrangements with your tenants, just declare the rent you actually receive in this financial year.
“If they’ve deferred payments, you only declare the rent when you receive it,” Ms Foat said.
You can still claim your usual deductions.
That includes the interest on your mortgage, even if you’ve deferred the payments.
If that’s happened, you still claim the interest now because you’ve incurred that expense in this financial year (even if you don’t pay it yet).
The amount should be on your bank statement.
If your investment property is empty (say your tenants moved out and you can’t get new ones), you can still make your regular claims for deductions as long as your property is still genuinely available for rent.
“When you can’t claim is if you decided to stop renting it out and decided to move in or let friends or family members stay for free,” Ms Foat explained.
So when is the tax return deadline?
If you’re doing it yourself through MyGov you’ve got until October 31, or a bit longer if you use a tax agent.
But don’t feel the need to rush. The ATO is advising people to wait until the end of July to lodge their returns.
If you’re still confused, check out the ATO’s online guide for workers.