Your Tax Time Checklist
A new financial year and tax season are underway again and the ATO is working hard processing through lodgements. In 2020, more than 10.9 million individual refunds were issued, totalling more than $30.9 billion with an average refund of $2,829.
Due to COVID-19, working from home arrangements may have changed. Some tax items are a little different after a full year of the COVID-19 pandemic.
Here’s a look at what you need to know.
Key Dates
One thing that hasn't changed this year is when tax returns need to be lodged. As always, you have until the 31st of October.
You have longer if you are planning on using a registered tax agent, but you still need to be one of their clients by the end of October.
Don’t Rush
Getting a refund as fast as possible is enticing, but racing to lodge a tax return can often lead to easily avoidable mistakes. Lodging a tax return too early might miss important information and result in a delayed return.
By the end of July, information from employers, banks, health funds, government agencies and more will automatically be added to tax returns, allowing pre-filling of essential information.
Remember, there may be new pandemic support payments income to declare, such as JobKeeper, or other employer COVID payments.
Should I Get an Accountant?
There are a number of reasons why people need professional tax accountants but usually, if their tax returns are quite complex such as property, capital gains and losses or overseas income or assets etc, it is probably best to get professional advice.
Getting professional help takes the stress out of the process and ensures tax returns are correct and lodged on time. Best of all, tax agents will often be able to highlight deductions you may not have seen and the cost can always be claimed back next year.
Working From Home
The 2020-21 financial year forced millions of Australians to begin working from home, and with that new working from home expenses. Last year, in response to rising work from home claims due to pandemic lockdowns, the ATO introduced a new shortcut method.
This method allows people to claim 80 cents per hour for all their running expenses, rather than needing to calculate specific running costs, and is currently for the time frames below:
March 1 to June 30, 2020, for 2019-20 tax returns; and
July 1 to June 30, 2021, for 2020-21 tax returns.
Individuals can use the shortcut method for claims relating to phone and internet expenses, the decline in value of equipment and furniture, and costs associated with electricity and gas for heating, cooling and lighting.
The method is not mandatory and claims can continue to be made under existing arrangements, including the actual cost method, or the fixed-rate method, which allows for 52 cents per hour.
A Handy Checklist
To help you complete your tax return, especially if you’ve been working from home, this checklist outlines income and expenses you need to disclose to the ATO when lodging your return.
IN CONCLUSION
The business and tax landscapes have and will continue to change dramatically. Engaging an expert can ensure you stay up to date with changing regulations and help identify new financial opportunities.
Please don’t hesitate to get in touch with Shape Financial to discuss your personal financial goals.