With the 2020-21 tax year being such a challenging time for businesses and employees due to COVID-19, taking advantage of changes to the way we work is a must. In need of a few tips for getting prepared for tax time? Have a read of our blog below.
Many of us have spent a decent amount of time working from home over the last tax year. The Australian Taxation Office (ATO) has made it easier when preparing for tax time with a number of COVID-19 related tax time tips. If you have been working from home there may be expenses to claim at tax time. The ATO has introduced a temporary shortcut method (80 cents for every hour worked from home) for calculating these expenses with minimal record keeping requirements. It can be applied up until June 30, 2021.
There are other methods of claiming if you would prefer to work them out in more detail. To claim working from home deductions you have to have spent the money, it has to be related to your income and you have to keep a record of the expense. You cannot claim expenses if your employer has reimbursed you for them.
You may be eligible for various concessions when it comes to preparing for tax time. Instant asset write-offs are great tax time tips because they allow businesses to claim the full cost of an asset used or installed ready for use in the first year. Conditions apply so speak to your tax professional but generally amounts up to $150,000 per asset can be written off for businesses with a turnover less than $500 million.
During the pandemic, the Federal Government gave many employers and employees access to JobKeeper payments. These payments finished in March 2021 but do need to be declared as income when preparing for tax time.
Many of us have heard of people trying to cheat the tax system by claiming deductions they are not entitled to like a week-long holiday with the family under the guise of conference travel. There are many common tax myths to be across when preparing for tax time. As always, speak to an expert before shelling out on fancy accommodation you think may be written off or buying that expensive furniture for your home office if you plan to claim deductions.
When preparing for tax time don’t forget to keep track of any losses from the past year so they can be deducted against future gains. This can be tricky, so a good tax time tip is to ask an expert. If you have any tax questions relating to businesses or individuals, make sure to call Meridian Accounting and Business Services. You can reach us at Emu Park on (07) 4938 8262 and Rockhampton on (07) 4927 4625.