Here are our favourite tips and tricks to ensure you are receiving the tax refund you are entitled to this year:
- Home Office and working from home expenses – to make it easier for people to claim deductions for working from home during COVID-19 (for hours work between 1 March 2020 to 30 June 2020), the ATO have introduced a new ‘shortcut method’ which will allow taxpayers to claim a rate of 80 cents per hour for all their running expenses, rather than needing to calculate costs for specific running expenses. Claims for working from home expenses prior to 1 March 2020 cannot be calculated using the shortcut method, and must use the pre-existing working from home approach and requirements. The ATO will review the special arrangement for the next financial year as the COVID-19 situation progresses. For more information refer to the ATO website https://www.ato.gov.au/general/covid-19/support-for-individuals-and-employees/employees-working-from-home/
- Protective Clothing – taxpayers working in jobs that require physical contact or close proximity with customers or clients during COVID-19 measures may be able to claim a deduction for items such as gloves, face masks, sanitiser or anti-bacterial spray if they have paid for the items and not been reimbursed. This includes industries like healthcare, retail and hospitality.
- Claiming mobile phone, internet and home phone expenses – to claim a deduction of more than $50 you need to keep a 4-week diary of your usage (that is reflective of your entire year – i.e. if you are working from home because of COVID-19 then keeping a diary during this period would not be reflective of your entire year if you don’t normally work from home). For further details on how to calculate your deduction we suggest you refer to the ATO website https://www.ato.gov.au/Individuals/Income-and-deductions/Deductions-you-can-claim/Other-work-related-deductions/Claiming-mobile-phone,-internet-and-home-phone-expenses/
- Personal superannuation contributions – to claim a deduction for personal superannuation contributions you must have lodged a notice of intent with your superannuation fund and received a letter back confirming the tax-deductible amount. You will need to provide a copy of this letter to your tax agent so they can claim the deduction in your return this year.
As always, the key message every year is to make sure you keep good records to substantiate your deductions. There is no such thing as a ‘standard’ deduction so you must be able to substantiate and have receipts to support your claims.