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Tax time with a twist: how to handle the strangest tax year yet

24 August 2020 | 5 min read
With the most recent financial year been and gone, your attention may have turned to tax time. But it’s complicated, right? There’s a lot of new factors to consider. Including how to navigate the impacts of COVID-19, super, JobKeeper and JobSeeker. Here’s what you need to know.

Include JobKeeper and JobSeeker in your tax return

When it comes to either the JobKeeper or JobSeeker payments, they’re both taxable. That means they need to be included in your tax return.

The JobKeeper subsidy has kept many Australians in their jobs. And fortunately, it’s likely that your income statement, accessed via myGov, will automatically include your tax information.

Things differ if you’re a sole trader on JobKeeper. You may not have paid tax on the subsidy payment yet, so be sure to include the JobKeeper payments in your business income.

For those on JobSeeker, if you’re taxable income is below $18,200, you won’t need to pay tax. If your income is over $18,200, you'll need to pay the normal tax rates.

What’s the deal with tax and super?

Let’s keep this one short and sweet.

If you chose to withdraw money from your super as part of the government’s Superannuation Early Release Scheme, there’s no tax to pay.

The Federal Government scheme ensures that if you qualify to withdraw your super early, there are no further fees or tax.

Working from home? Here’s what you can claim

If you’re looking for a straightforward answer, here it is.

You can claim 80 cents for every hour worked between March 1 to June 30.

This calculation with offer many people the simplest way to claim working from home costs. It includes phone and internet, lighting, heating, as well as depreciation on equipment.

Keeping a record of your hours is recommended. Maybe a diary, calendar or timesheet could be helpful.

If you worked from home from March 1 to June 30, that could lead to a deduction of over $500. That’s pretty handy.

And if there are multiple people in your household working from home, you can all claim the rate.

This method will only remain available until 30 September 2020. After that, it’s likely your claiming options will revert to the existing methods. It’s also worth noting that the fixed-rate and actual cost methods are still perfectly fine to use if you prefer.

Work expenses related to COVID-19 you can claim

Each year at tax time, there are a multitude of expenses that can be claimed. The typical array of phone and internet expenses, stationary, as well as home office equipment and furniture are no different this year.

As usual, you can claim the full cost of items if they’re below $300. And above $300, the decline in value must be accounted for.

However, COVID-19 has left some people with expenses they haven’t encountered before.

For certain taxpayers working in jobs requiring physical contact or where social distancing may not be possible, you may be able to claim deductions for things like gloves, masks, cleaning products and sanitiser.

And while sanitiser sales have witnessed an unprecedented jump, other expenses have slumped.

Due to the pandemic, usual work-related spending patterns have shifted. And as a result, there has been a reduction in expenses like laundry and travel.

So, be cautious with what you claim. Especially in the last quarter of the tax year where so much of the workforce has moved to working from home and with it, a very different set of expenses.


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