Tax year 2020: Coronavirus has changed everything

TAX TIME: Here's what you need to know about COVID-19 and tax time claims. Photo: SHUTTERSTOCK
TAX TIME: Here's what you need to know about COVID-19 and tax time claims. Photo: SHUTTERSTOCK

CHANGES to working environments brought about by the coronavirus will affect people's tax claims this year. Thousands of people across the region have been working from home and it's left many people wondering what they will be able to claim.

Orange-based Madden Partners managing director James Madden said there have been a few different changes for making tax claims this year particularly in regard to people working from home.

Dubbo-based Wright Partners accountant Alison Comber said employers are also not required to send payment summaries to employees.

"They don't have to issue a payment summary anymore so that information is with the tax office," Mrs Comber said.

"The person can go to myGov or alternatively we get it through our tax office Australian Tax Office portal.

"Every time [an employer] pays someone it gets reported to the tax office, at the end of the year they have to do this final step."

CLAIM OPTIONS: Orange-based Madden Partners managing director James Madden says working from home will change many people's tax claims this year. Photo: JUDE KEOGH

CLAIM OPTIONS: Orange-based Madden Partners managing director James Madden says working from home will change many people's tax claims this year. Photo: JUDE KEOGH

Mrs Comber said employees should make sure that final step has been completed before attempting to fill out a tax return or seeing a tax agent.

She said the ATO has also issued extensions for 2019 tax returns given that tax agents have been busy helping businesses with JobKeeper and there will be no late payment penalties if people lodge by June 30. Interest will also be waived if people have a good reason for late payments.

Mr Madden said working from home would be the biggest change for many people this year.

He said the ATO created an alternative way for people to calculate the percentage of electricity, gas, phone and internet use when working from home.

"It used to be cents per hour," Mr Madden said.

He said people can claim 80 cents per hour of work done from home between March 1 and June 30 this year.

"The rest of the year is a fixed rate of 52 cents [per hour]," Mr Madden said.

ONLINE ONLY: Dubbo-based Wright Partners accountant Alison Comber says employees will not receive payment summaries this year. Photo: SUPPLIED

ONLINE ONLY: Dubbo-based Wright Partners accountant Alison Comber says employees will not receive payment summaries this year. Photo: SUPPLIED

"It's usually better off looking at your bills and looking at the area of your house the home office takes up, you can look at electricity, gas, phone, internet.

"If it's 10 per cent of the house you can claim 10 per cent of the bills."

Mr Madden said people could also look at their bills and calculate the difference between the bills from before and after they started working from home.

"Have a look at all three and choose the one that works out the best," he said.

If it's 10 per cent of the house you can claim 10 per cent of the bills.

Orange-based Madden Partners managing director James Madden

Mr Madden said the ATO is also expecting more people to claim home office equipment and furniture this year as a result of coronavirus.

"A lot of people have bought laptops now," he said.

"If it costs more than $300 then there's depreciation, say you bought a laptop for $3000, you get a reduction for $1000 for each three years."

He said people could also claim a heater if it was purchased for the home office space but whatever people have bought to help them work from home they should keep their receipts.

"If their claims are going to be higher than usual it's possible they will be reviewed," Mr Madden said.

He also suggested that if businesses or workers are relying on getting their tax return this year and were going to buy something work-related in July, they should consider getting it in June.

"It's always my advice to have your tax prepared by somebody who is going to get the best result ... they just have to find a few more deductions to offset you having to pay them," he said.

It's always my advice to have your tax prepared by somebody who is going to get the best result ... they just have to find a few more deductions to offset you having to pay them.

Orange-based Madden Partners managing director James Madden

"We are going to be busy this year but we have taken steps to make sure we can take everyone on."

Mrs Comber said she anticipated more clients booking in for tax appointments earlier this year so they can get their refunds earlier.

"A lot of them would have had a drop in income so they would be expecting to get a tax refund," she said.

Her advice included keeping a log book of hours that people have worked from home.

Change impacts claims for staff

WORK PURCHASES: Adam Windsor has seen an increase in office equipment purchases at Officeworks Bathurst. Photo: PHIL BLATCH

WORK PURCHASES: Adam Windsor has seen an increase in office equipment purchases at Officeworks Bathurst. Photo: PHIL BLATCH

The coronavirus has created big changes for businesses across the region with some having to shut and stand down employees, while others asked staff to work from home.

Officeworks Bathurst store business manager Justin Bennett said more people bought equipment for working from home this year.

''We have seen increased sales in technology and home office products such as home printers, monitors, computer accessories, cables and sit-stand desks, products that all help our customers work or study remotely," Mr Bennett said.

"Laptops and tablets, digital storage and desk chairs are also proving really popular. As the period of people working from home continues, consumables such as ink and toner are in greater demand."

Mr Bennett said there were also increased sales in sanitisers and thermometers, as well as products that help schools and businesses safely open such as posters and social distancing floor decals.

A spokesperson from the Australian tax office said if people need to spend money as part of their income producing activities, they can claim a deduction for the expense.

VITAL HELP: CPA Australia tax policy adviser Elinor Kasapidis says accounts are playing an essential role helping communities deal with economic repercussions of COVID-19. Photo: SUPPLIED

VITAL HELP: CPA Australia tax policy adviser Elinor Kasapidis says accounts are playing an essential role helping communities deal with economic repercussions of COVID-19. Photo: SUPPLIED

To claim a deduction they must have spent the money themself and weren't reimbursed, it must be directly related to income, and there must be a record, usually a receipt.

"You can claim the amount spent on renting a desk at a co-working space so long as the expense meets the above rules. If you used the space for personal reasons at any point, you must take care to only claim the work-related portion of your use," the spokesperson said.

CPA Australia is one of the world's largest accounting bodies and tax policy adviser Elinor Kasapidis said there are more than 300 members across the region with just under 100 in each of Orange, Bathurst and Dubbo.

She said businesses should consider the $150,000 instant asset-write off which has been extended to December 2020, as well as the investment incentive currently being offered by the government.

"We recommend that businesses see their registered tax agent early to discuss COVID-19 impacts, access available relief, undertake end-of-year tax planning and to prepare for 2020-21," she said.

For employees she said allowances including JobSeeker and employment termination payments need to be correctly reported.

Set yourself up early

TAX TIME: How to improve your tax time experience, from the Australian Taxation Office. Photo: SHUTTERSTOCK

TAX TIME: How to improve your tax time experience, from the Australian Taxation Office. Photo: SHUTTERSTOCK

The Australian Taxation Office is advising people to act now to improve their tax time experience.

Assistant commissioner Karen Foat said anyone who wants to lodge their own return can access the ATO's online myTax service, which has almost completely replaced paper lodgements.

She said people with simple tax affairs can lodge in under half-an-hour and a lot of income will be automatically included in their return by the end of July but there are two main speed-bumps when lodging via myTax for the first time.

She said they included linking their myGov account to the ATO's online services, and making sureincome details were finalised before lodgement.

"My number one piece of advice for people who are going to use myTax for the first time is to log into your myGov account and link to the ATO well before tax time," Ms Foat said.

"You'll be prompted to answer two questions, based on your records, such as an income statement or Centrelink payment summary from the past two years, or your bank account details."

My number one piece of advice for people who are going to use myTax for the first time is to log into your myGov account and link to the ATO well before tax time.

Australian Taxation Office assistant commissioner Karen Foat

Those who don't have enough information to confirm their identity will need to phone the ATO to get a unique linking code, which can be entered instead of answering the questions. Taxpayers need to have identification information ready, such as their Tax File Number and their driver's licence, or Medicare card.

The other delay is people lodging before they have all their income information. Income statements are replacing payment summaries and will be finalised electronically with the information provided directly to the ATO. Employers have until July 31 to finalise statements, which can be viewed through myGov.

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This story Working from home will be a game changer this tax time first appeared on Central Western Daily.