2020: one those years where a trophy should be awarded for just making it out of bed in the morning!
We’ve battled devastating bushfires, a global pandemic, and now a nationwide house arrest. And with all that extra time lockdown has given us, it's the perfect chance to get stuck into your tax return! (We know, we know - tax isn't usually something to get excited about... but hear us out!)
If there was ever a year to put some effort into your tax return, 2020 is it. There is more to claim this year than other years, with some interesting adjustments in light of the COVID-19 lockdown.
So clear your schedule, hunt down those receipts, and get cracking -- 2020 might be in shambles, but your tax return doesn’t have to be!
Start with your new hallway office
Regardless of your role or industry, the pandemic lockdown is likely to have had a major impact on your work experience this year. For many of us, this will be the first year that we will be claiming working-from-home expenses.
The ATO has created an easy list of work-related expenses for this year, including:
- Safety protection gear, like masks or hand sanitiser
- Cleaning for your home office (sadly, your mum doesn’t count)
- Up to $300 worth of new office supplies
- Or one item over $300 you can claim depreciation
Haven’t touched a calculator since high school? Fear not! The clever folk at the ATO have created a simple rule to help figure out your claims for the time you’ve spent working from your bed/ couch/ ironing board/ dining room table. The temporary short-cut method allows you to claim 80 cents per hour, for every hour you worked from home between 1 March and 30 June.
If you are going down this path, make sure you keep a detailed diary of your work hours. If you have a timesheet, even better. You’ll have to be pretty specific about your hours in order to claim. You can find more information here.
Property owner? Union member? Shareholder? Get curious
If you’re new to the world of tax claims, you may not be aware of some of the rules around what you can actually lodge in your tax return.
If you’re a shareholder, for example, maybe you have had correspondence with your financial manager during the pandemic to check in on the share’s safety and performance. Those management fees? They could be a tax deduction.
Other potential deductions include union fees, bank fees, income protection insurance, magazine subscriptions, charity donations or even club memberships.
However while there are new additions, some previous things you could claim have been retracted. For eg. If you’re the owner of a rental property, for example, you probably haven’t been out to speak with or check on your tenants during the lockdown. In recent years, you would have been able to claim this travel on your tax.
The big take away? Take the time this financial year to really research see what you can claim, to ensure you’re doing the right thing. If in doubt, the ATO have plenty of helpful resources you can access here.
As always, there are rules.
While there’s no better feeling than being reimbursed for the 100L drum of hand sanitiser you panic bought on Amazon, there are still firm regulations around what you can, and cannot, claim. Crystals for the home office? Nope. Dry cleaning for your work uniform? Yes!
If this is your first year making a tax claim it can be overwhelmingly tempting to claim, well, everything. But this won’t be the last time you’ll be dealing with the ATO, so it’s important to set yourself up with healthy financial habits from the start. Begin on the right foot, and it’s all easy from here.
It’s important to know that lodging a dodgy claim can land you in seriously hot water. Making false expenses, forging receipts, or claiming purchases other than your own can amount to fines up to $360,000, and even jail time. Still not convinced to keep your crystals off your claim? Have a scan through the ATO penalties, here.
No idea where to begin?
Personal tax claims will be a first for a lot of people this year. If the words ‘tax return’ give you stress rash, try not to worry -- it’s a lot easier than you may think.
Your first option is to hire an accountant. This is a wise option for those with a significant amount of claims or monetary assets, as you can delegate your fistfuls of receipts, and they will manage the rest. Also, this year does come with a significant amount of fiddly adjustments to claims, that only an accounting specialist will truly be across.
If you have a more straightforward claim, you can lodge everything personally online. Firstly, you’ll have to create a MyGov account, and then link it up to the myTax ATO account. If you’re going down this route, make sure you have the following handy:
- Tax File Number [TFN]
- Receipts for all purchases
- Measurements of your home office
- Home utility bills
- Diary or roster of work-from-home hours
If it becomes a little too much, reach out to the ATO Tax Help Volunteers. They are offering both digital and face-to-face sessions to assist you with your return.
We’re here to help.
When it comes to sitting down and working through your return, BOQ has a few handy tools to help you. For those lodging for the first time, take a look at our Tax Tips For First Timers. Or, if you want an estimate on how much tax you can expect to pay on your income, try our Income Tax Calculator.
And if you’re looking to get your finances in order for FY21, be sure to pop into your local BOQ branch and speak to one of our friendly staff members today!