Your tax return might look a little different this end of financial year
The impact of COVID-19 has made a lasting impression on the conventional office workplace. Working from home seems to be here to stay for a lot of companies, meaning the process of lodging your tax return may look a little different. You can still lodge your tax return online via myGov, as well as hire a professional tax accountant from the 1st of July to 31st of October 2022. The Australia Tax Office has continued the methods they introduced last year when it comes to claming for working from home, due to Coronavirus.
This article will focus on filing a tax return if you’re an employee and explain:
The ATO states that there are now three methods to calculate your running expenses. The third Shortcut Method was introduced to support us working from home due to coronavirus. The three methods include the:
1. Shortcut Method: Claim 80 cents per work hour for all running expenses
2. Fixed Rate Method:
Claim 52 cents per work hour (Lighting, cooling, heating and decline in office furniture)
Work-related portion of your phone and internet expenses, computer and stationery
Worked-related portion of the decline in value for your electronic work devices
3. Actual Cost Method: Claim all your actual work-related portion
The Shortcut Method covers all deductible running expenses, so you don’t need to expense them individually. In order to be eligible to claim for the ATO deduction of 80 cents per hour due to working from home due to COVID-19, you need to:
Note: Since this method covers all deductible running expenses, you cannot claim further reductions on these expenses.
Work from home bookkeeping is equally as important if you were to still be working at your workplace. The main records you will need is a record of the number of yours you have worked from home due to COVID-19, as well as receipts of running, phone and internet and home office expenses. Acceptable records for proof of your working hours include timesheets, rosters and diary entries. Remember, you must include the note ‘COVID-Hourly Rate’ in your tax return whether you’re submitting it through myGov or a tax agent.
If you predominantly work from home prior to COVID-19, you have always been able to claim tax on expenses such as running, occupancy and phone and internet. Let’s refer to these as working from home expenses.
This year the ATO recognises that many of us are now working from home if possible. The be eligible for claiming tax on working from home expenses, whether it’s one day a week or due to COVID-19, you must keep the following records:
If it’s your first time working at home, here’s a list of work from home tax deductions you can claim for. In order to be eligible to claim a deduction, the following must apply:
Note: If you’re using this Shortcut Method, you must note ‘COVID-hourly rate’ in your tax return and keep in your records.
Using the Shortcut Method is the simplest way to calculate your running expenses, but what if you want to use the old Fixed Rate Method (52 cents) or the Actual Rate Method? Here’s a quick summary of how to make calculations for both methods.
There are generally two options when submitting a tax claim. You can either do it yourself with the myGov tax return process or hire a tax accountant. It’s recommended to hire a tax agent if you have multiple expenses or just want your tax return to be accurate and correct. Keep reading for a list of records and documents you need for both options.
Tip: You can check the status of your tax return on your myGov account and if you made any mistakes, simply click on the ‘Manage tax returns’ button to amend any records.
Sometimes it might be easier to hire a professional to ensure no mistakes are made.
Hiring a tax accountant is one of the most popular services on Oneflare. Tax return fees can cost approximately $100 to over $1,000 depending on if you’re lodging for just yourself or your business. Find out more about what can affect the cost of your accountant fees on our Tax Accountant Cost Guide.
Do I need to lodge a tax return?
If you are working or have had government support such as the Higher Education Loan Program (HELP) or Trade Support Loan (TSL). If you are still unsure, contact the ATO or ask an accountant for help.
How do I get a tax file number?
The process for applying for a TFN differs if you’re an Australian citizen or resident or you’re foreign to the country. Generally, you can apply for a TFN at your local post office or online. Find out what process you need to follow on the ATO website.
How long does a tax return take to process?
The ATO states that it can take approximately two weeks if you lodge online and ten weeks to process if you lodge on paper.
How is the ATO supporting Australians?
The ATO is offering support for COVID-19 for businesses, employers, individuals, employees and tax professionals.
My partner and I both work from home, can we both claim expenses under the Shortcut Method?
Yes. For example, if you and your partner both live together, you can both individually claim 80 cents per work hour. The previous ATO requirement that you both need a dedicated work area has been removed. Remember to note ‘COVID-19 Hourly Rate’ in your tax return.
What is the ATO Tax Brackets for 2019-2020?
What are the ATO’s Contact Hours?
There are multiple ways to contact the ATO, including in person, on the phone or online chat. If you are contacting the ATO via phone, the hours have been extended to support high volume calls from 8 am to 8 pm (AEST) Monday to Friday, and 10 am to 4 pm (AEST) Saturday and Sunday.
Disclaimer – Due to the ever-changing nature of COVID-19, please check on the ATO website for the most accurate and up-to-date information.
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