Individual Tax Return - Tips for Your Best Return
Updated: Oct 26
There’s been a few changes this year with Covid impact being the biggest due to job losses and also government stimulus. The ATO is offering extra support and measures for individuals impacted by COVID-19 including:
The ATO have introduced an optional simplified method (from 1 March 2020 to 30 June 2020) to claim 80 cents for each hour you work from home to cover all deductible running expenses. You can find more info here - https://www.ato.gov.au/General/COVID-19/Support-for-individuals-and-employees/Employees-working-from-home/
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Low and middle-income tax offset
You may be eligible for an income tax offset if:
• you are an Australian resident for income tax purposes
• your taxable income is in the appropriate income range.
You don’t have to do anything to claim this offset. It will be calculated as part of your Income tax return estimate. The offset can only reduce the amount of tax you pay to zero and it does not reduce your Medicare levy. If your taxable income is between $37,001 and $126,000, you will get some or all of the low and middle income tax offset. The amount of offset you receive depends on your circumstances, such as your taxable income and how much tax you have paid.
If an employer reports through Single Touch Payroll they are not required to provide a payment summary to you/their employees.
Income statements will replace payment summaries. You should be able to access your income statements through ATO online services via myGov, at any time. You should have received a notification from the ATO in your myGov inbox when your income statement is 'Tax ready' and use it to complete your tax return. If you don’t receive the notification or you can’t access MyGov contact the ATO for a copy of your income statement.
Claim work-related expenses
Think about expenses that you pay out of pocket (that’s expenses that your employer doesn’t pay for) as long as they are incurred in the course of performing your work (for example, if you work from home often you can claim part of your home internet bill), they can be claimed as deductions. But to make a work-related claim you must have spent the money yourself and haven’t been reimbursed, it must directly relate to earning your income and you must have a record to prove it. If your total claim for work-related expenses is more than $300, you must have written evidence to prove your claims.
There are hundreds of things that may be eligible to claim as work related expenses, here are a few that are often forgotten:
• Self-education to improve skills for your career
• Travel expenses including accommodation/parking/some meals
• Sun protection if you work outside (but not cosmetics)
• Equipment and tools
• Office furniture
• Professional libraries
• Union Fees
• Work from home expenses
New way of calculating work from home expenses
There are three ways you can choose to calculate your deduction for home office expenses on the ATO website but I’m sure most of you that don’t usually work from home will be using the ATO’s short cut method… Claim a rate of 80 cents per hour for each hour you work from home during the period 1 March to 30 June 2020. Anyone working from home in this period can use this shortcut method. The shortcut method can be used by multiple people working from home in the same house.
The shortcut method covers all your work from home expenses such as:
• phone expenses
• internet expenses
• the decline in value of equipment and furniture
• electricity and gas for heating, cooling and lighting.
If you use this method, you can't claim any other expenses for working from home. (You don't need to have a dedicated work area to use this method.)
Line entry deduction data
The ATO are now collecting more information about the deductions you make. The written information entered into the tax return will now be sent to the ATO along with the financial data.
Download your Income Tax Checklist by clicking the image or this link - https://bit.ly/taxprepmadeeasy
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