Tax ready, set, go!

Many of us have a love-hate relationship with paying tax and getting organised for the annual appointment with a professional tax agent or adviser. For those expecting a return there will be a scramble to get everything together quickly. Normally one partner within a household will already have plans for any potential refund!

With so much information now being pre-filled into your tax return, it's best to wait until all the data is loaded before lodging. This is usually by the end of July but can take a little longer in some cases.

Take the time to understand what tax deductions and offsets you may be eligible for. With many people being impacted by COVID-19 and working from home there are more areas to consider around possible deductions this year. Keep in mind, as always with tax, it is important to be prepared and keep good records.

Check that your income statement from your employer on myGov says 'tax ready' and your private health insurance, dividend and interest information is available before visiting your tax agent.

JobKeeper and JobSeeker payments will be included by the ATO in your tax return by the end of July if you have received them. If you have received access to your superannuation due to COVID-19, you will not need to pay tax on these amounts and therefore will not need to include them in your tax return.

The ATO also have some useful fact sheets for many occupations with some guidance.

Some broad tips or areas to consider when getting ready this year:

• Consider deductions that you may be able to apply

  • Work related deductions

  • Self-education expenses

  • Work from home and home office expenses (there are some extra claim options due to COVID-19)

  • Motor vehicle or travel for work

  • Donations

  • Superannuation contributions

• Use a registered tax agent

• Beware of scams

Being tax ready is about getting organised and understanding what you may be eligible for. Don't stress as you don't need to do this yourself and can engage a registered tax agent to assist you through the process.

COVID-19: Tax deductions for working from home

The ATO has announced a new, simplified method of calculating deductible home running expenses for people working from home due to COVID-19. The new method can be used to calculate a tax deduction for the period 1 March 2020 to 20 June 2020. This means there are now 3 methods you can choose from for claiming this type of expense:

• The Shortcut Method: The new shortcut method allows you to claim a rate of $0.80 per hour of work at home for all additional running expenses incurred. Unlike the fixed rate method, this shortcut rate includes phone and internet costs, computer consumables, stationery and the decline in value of a computer or similar device.

  The shortcut method does not require you to have a dedicated work area at home and multiple people living in the same house can individually claim the $0.80 per hour deduction. Unlike the other methods, which require a logbook to be kept, the only evidence needed for this method is a record of hours worked from home.

• The Fixed Rate Method: with this method you claim $0.52 per work hour for heating, cooling, lighting, cleaning and depreciation of office furniture, the work related portion of your actual costs for phone and internet expenses, computer consumables and stationery and the work related portion of the decline in value of a computer, laptop or similar device.

• The Actual Cost Method: with this method you claim the actual work-related portion of all your running expenses, which you need to calculate on a reasonable basis.

CLICK HERE for more information on what you can and cannot claim, requirements to be eligible for the above claims as well as how to make the claim.