COVID-19 has affected a lot of Australians. Most notably, it affected livelihood, tax time, and lodgments. During these trying times, the Australian Tax Office (ATO) made some changes to support taxpayers and make tax lodgments a seamless process.
Rental Property Challenges
Rental property investors and owners experienced significant changes due to deferred rental payments. They have to reduce rental prices based on prevailing market prices, which are much lower than the usual. As a result, rental property owners and investors have to declare loss of income to avail rental insurance payouts.
Work-From-Home Related Expenses
Another significant change is the shortcut method in computing deductions. A taxpayer, working from home since lockdowns became prevalent, can avail 80 cents per hour. You must have incurred the expenses from 01 March to 30 June 2020.
Most importantly, you have to follow these three rules to claim these work-from-home related expenses.
- You haven’t reimbursed the expenses to your employer.
- Expenses are for earning income from your home and related to the business of your employer.
- Substantiate the claims with records and documents.
Asset Write-offs
If you’re a business owner, you can claim asset write-off up to AUD150,000. The condition is that the asset is usable from 12 March onwards. If you bought and used the asset before 12 March, you can still claim a write-off to AUD30,000 max.
However, if the business asset is a car, the write off amount is up to AUD57,581. You can’t claim any depreciation deduction on the remaining cost of the vehicle.
Early Tax Lodgments
Many tax accountants are lodging their client’s tax returns as early as now. The reason for early tax lodgments is to assess the tax deductions and support that a business or taxpayer can claim, legally.
Conclusion
The ATO has created financial support to taxpayers by providing access to super that is tax-free, cash flow boosts and arrangements on JobKeeper. However, it will focus on uncovering fraud and ineligible individuals during this 2020 tax time. So, avoid making false claims to avail of the tax offsets, write-offs or deductions.
If you aren’t sure what tax offsets are available for you, you can contact the ATO for more information. Alternatively, avail of services from companies such as Sphere Accountants and Advisors to assist you with this matter.
Reference: https://www.intheblack.com/articles/2020/07/16/tax-time-and-covid19
