Office matters!

At Power2 we have put many measures in place to protect both our staff and clients during these unprecedented times and particularly during the busy tax Season. Our clients can rest assured that the office is being constantly cleaned and sanitised and that we are following all the necessary guidelines to keep us all safe.

If you are unwell on the day of your appointment please let us know as we have alternative measures in place to make sure you are not inconvenienced and your tax return is still completed on the day.

For any questions regarding our COVID 19 protection measures feel free to contact our office.

COVID tax questions

Following are some COVID specific tax questions. Due to the rapidly changing and ongoing nature of the outbreak, legislation and rulings are shifting constantly meaning the below information can quickly become out of date. Although we try to keep you informed with the below please don’t rely or act on these answers. Make an appointment to discuss and be sure that the answer you act on is the best one for you.

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

This method is the simplest way to claim for your working from home expenses. You can claim expenses such as phone and internet, lighting, heating and depreciation on equipment. One requirement is a log of hours worked such as a timesheet.
Multiple people living in the same house can claim the rate, and there is no requirement to have a dedicated work-from-home space.

While this method is the simplest it may not be the best calculation in every circumstance, and it is best to check with your consultant to be sure one of the other methods is better for you. (see next section)

The other two methods to calculate your working from home deductions require that you have a dedicated office space at home.

The fixed-rate method – you can claim 52 cents per work hour for heating, cooling, lighting and the decline in value of office furniture, plus the work-related portion of your phone and internet, stationery and decline in value of laptop or computer.
The actual expenses method – a calculation of the work-related portion of all your running expenses.

One of these two methods may suit your situation better, but it is important to confirm this with your tax consultant to be sure.

This will vary for each person

Most government benefits are taxed meaning that JobSeeker and the coronavirus supplement do need to be declared as income on your tax return. The amount of other income you have received throughout the financial year will decide if you have to pay any tax or not. If for instance your total income for the year including Job Seeker was less than $18,200, you won’t pay tax.

Employees will not need to keep track of the Job Keeper payments as their employer should include it in their income statement as part of wages.
Sole traders who have received JobKeeper on behalf of their business will need to include the payments as assessable income for the business.

Additionally, if your employer has already withheld tax at a higher rate through the year and your income has now reduced you may find you are due a refund.

Redundancies are complicated and should be discussed carefully with your consultant.

Redundancies can have up to three parts.

  • Some of the money will probably be tax-free (based on years of service),
  • some of the payment will be concessionally taxed (taxed at a lower rate than your marginal tax rate), and
  • some will be taxed at your usual marginal tax rate.

Most of the time employers will work out these calculations

Perhaps.

People working within healthcare and hospitality may be able to lodge some extra claims this year.

Roles that require physical contact may enable a claim for the cost of sanitiser, gloves, facemasks and anti-bacterial spray. As usual receipts are necessary and you cannot claim if your employer has already reimbursed you.

No – The good news is that you don’t have to pay tax on the early super withdrawal offered by the government as part of the COVID19 response or even declare it in your tax return.

This should not be confused with other early withdrawals from super, check with your consultant if you are unsure.

If new rental arrangements have been made with tenants the lower rent received in this financial year is declared as usual along with all normal deductions.

Interestingly, this amount can include interest on mortgages, even if payments have been deferred. This is because although the interest has not been paid yet the expense was still incurred in this financial year.

If tenants have moved out and the property has remained vacant due to a lack of tenants, regular claims for deductions can still be made as long as the property is still available for rent.

If you are completing your own Individual Tax Return, it is due on October 31.

Using a tax agent (such as Power2!) provides you with an extension.

You can lodge a return at any time from July the 1st but be warned the ATO normally takes a week or so to have all the required information on site.

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