It's that time of year again - tax time. Here are a few key issues to consider this year.
This year will be the first year, for many, where you do not receive a payment summary from your employer. It will be available electronically through your MyGov account or through your tax agent.
Working From Home
This year because of the need for lots of people to work from home, you may be able to claim a deduction for the additional expenses you incurred in working from home.These include:
- electricity expenses associated with heating, cooling, and lighting the area from which you are working and running items you are using for work
- cleaning costs for a dedicated work area
- phone and internet expenses
- computer consumables (for example, printer paper and ink) and stationery
- home office equipment, including computers, printers, phones, furniture and furnishings – you can claim either the full cost of items up to $300 or the decline in value for items over $300.
For the 2019–20 income year, there are three ways of calculating home office expenses depending on your circumstances.
- Shortcut method (new)
- 80 cents for each hour you worked from home in the 2019–20 income year during the period 1 March to 30 June 2020.
- Fixed rate method
- 52 cents for each hour you worked from home in the 2019–20 income year.
- Actual cost method.
You can claim a deduction of 80 cents for each hour you worked from home in the 2019–20 income year during the period 1 March to 30 June 2020 as long as you:
- were working from home to fulfil your employment duties and not just carrying out minimal tasks such as occasionally checking emails or taking calls
- incurred additional running expenses as a result of working from home
Note: The shortcut method doesn't require you to have a dedicated work area, such as a private study.
The shortcut method covers all additional deductible running expenses. If you use this method, you can't claim any other expenses for working from home for that period.
Some other significant matters that may relate to businesses this year include:
Accelerated Tax Depreciation
If you have purchased assets costing less than $150,000 you may be able to claim the full amount as tax deduction. You may also be able to claim a deduction equal to 50% of the cost of assets costing more than $150,000. For more information on this please see our recent 'Key Tax Planning Measures' Blog.
Taxation of COVID-19 Initiatives
If you have received any JobKeeper income, this needs to be reported as assessable income. The JobKeeper payments made to employees are deductible expenses.
If you have received any Cash Boost payments from the ATO, these payments are not included as assessable income.
As always, if you have any questions or need further information, please contact your Johnsons MME Advisor.