It has been a difficult year, but your tax return doesn’t need to be. Find out the how different types of income and expenses may affect your obligations this year.
2020 has been difficult and the Australian Taxation Office (ATO) recognises that businesses have experienced significant challenges. To help make tax time easier, the ATO has a range of different approaches to support you, particularly where new circumstances mean that people are receiving a different type of income or able to claim new deductions.
COVID-19 work related expenses
Working from home
The ATO announced the temporary ‘short-cut method’ that applies from 1 March 2020 to 30 June 2020 for those who have incurred some form of expense for working from home as a result of COVID-19.
If you’re using the short-cut method, you should know:
It covers all deductible expenses and can be used by multiple people working from home in the same house.
All you need to do is keep a record of the hours you worked from home as evidence of your claim. The short-cut method is all inclusive, you can’t claim for any other working from home expenses.
You can still choose to use one of the other existing methods to calculate your expenses for working from home if you prefer.
Learn more about the short-cut method and the expenses you can and can’t claim.
If you work in industries like healthcare, retail and hospitality; another deduction you may be claiming due to COVID-19 is expenses for protective items if they have been paid for and not been reimbursed. These items include:
Travelling from home to work
Generally, most people cannot claim the cost of travelling to and from work and working from home as a result of COVID-19.
JobKeeper and JobSeeker
If you’re a sole traders and received the JobKeeper payment on behalf of your business, you will need to include the payments as assessable income for the business.
If you have received JobSeeker, the ATO will also load this information into your tax return at the Government Payments and Allowances question once it’s ready. If you’re lodging before this information is included for you, you will need to make sure you include it. Leaving out income can slow your return down or result in a bill later so it’s definitely best avoided.
Early access to superannuation
If you received early access to your super this year under the special arrangements due to COVID-19, any amounts you’ve withdrawn from super under this program are tax-free and you do not need to declare them in your tax return.