The 2020 year has had much disruption through bushfires, floods and the COVID-19 pandemic.
These disruptions have meant that there have been a few more things things to take into consideration for tax time this year.
Firstly, most employees will no longer receive PAYG payment summaries (previously known as group certificates). Employers are now required to report each payment directly to the ATO and finalise their employees wages by the end of July. Employees can then access what is now known as an income statement through their myGov account or through their tax agent.
It is also important to keep in mind that Jobkeeper payments are taxable. If you are an employee then these payments will appear on your income statement as either salary and wages or as an allowance. If you received Jobkeeper payments as a self employed person then these payments will be included in your business income.
For those that were receiving Jobseeker payments, this is also taxable income.
If you have accessed your super early as part of the COVID-19 early release scheme then this will not be assessable income.
The 2020 tax year also saw the introduction of the simplified method for claiming home office expenses. For the period 1 March 2020 to 30 June 2020 you can claim a flat rate of 80 cents per hour for each hour you worked from home. Please note that this rate includes ALL deductible home office expenses such as phone, internet utilities, computers and office equipment. Therefore, if you use the simplified method you won’t be able to claim a separate deduction for these. The fixed rate and actual costs methods are still available to calculate home office expenses.
If you are in business you may be eligible to claim an immediate deduction for any assets that you purchase for your business. From 12 March 2020 to 31 December 2020 the instant asset write-off threshold has increased from $30,000 to $150,000. This applies to business entities with aggregated turnover of up to $500 million (up from $50 million). Please note that the asset needs to be installed and ready for use in the year the deduction is claimed. Cost limits apply for passenger vehicles.
Please get in touch if you would like to discuss these matters further.