The last year has been a year like no other, with COVID-19 changing the way we have gone about our lives. When it comes to your tax return it is important to keep in mind these changes and how they will impact your return.
- Working from home
- Protective equipment
- Car expenses
- Laundry expenses
- JobKeeper payments
- JobSeeker payments
- COVID-19 early release of super
Working from home
Where you undertake work from a home office, the ATO allows a deduction for the costs of using that area. In addition to specific home office costs such as phone, internet and office equipment, the ATO allows a claim for running the home office. This is generally done by either claiming a fixed rate per hour worked from the home office, or a percentage of actual home gas and electricity costs incurred.
For the 2019/20 financial year, the ATO has temporarily introduced the ‘shortcut method’. This method is only available for the period 1 March 2020 to 30 June 2020, so you will need to keep records for this period separate to those for the first 8 months of the year.
The shortcut method is claimed as a deduction of 80 cents per hour worked from home. This method is intended to simplify your claims and therefore covers ALL home office expenses, so you will not be able to claim other office costs such as utilities, phone, internet, computer or office equipment separately. Unlike the other methods, the shortcut method is available to use whether or not you have a dedicated area set aside as a home office.
Where your work has required you to be in physical contact or close proximity to customers the ATO will allow a deduction for protective items such as gloves, masks, sanitizer and antibacterial sprays. This may be especially relevant for employees in the retail, hospitality and healthcare sectors.
If you are usually required to use your own car to travel for work, but this travel either reduced or stopped completely you will likely need to adjust how you claim car expenses. Where you make a claim using the logbook method, it may be appropriate to only claim your car for part of the year up until you ceased work related travel, or adjust you claim based on a lower work use percentage taking into account how your travel requirements were affected.
Despite many employees still having to attend the office on occasions, travel from home to your regular work location is still not deductible.
If your work from home increased, then it is likely that you have worn your uniform less than usual. Therefore, if you are using the common method of calculating laundry deductions based on the number of times the uniform was washed your may have to adjust your claim appropriately.
JobKeeper payments are a subsidy paid to employers who have been impacted during COVID-19. Although the wages you receive may have changed due to your employer receiving the subsidy, you do not need to include any JobKeeper payments separately in your tax return as this is already included in what is reported as wages on your income statement. However, if you operate a business as a sole and have received JobKeeper then you will need to be include these payments as part of your business’ income.
JobSeeker payments are made to those of working age with minimal income or out of work. The Government increased the amount and accessibility of the payment during COVID-19. JobSeeker payments are taxable income and will therefore need to be included in your tax return.
COVID-19 early access to super
The Government allowed early access to super to those whose incomes had been sufficiently affected by COVID-19. The good news is that if you did access your super under this measure, the payment received is tax free and is not required to be included in your tax return.
For more information on the above topics contact one of our friendly consultants at Private Wealth Accountants on email@example.com or 03 9973 5905.