Are you entitled to more tax deductions than usual this year? Find out what you can claim to boost your return.
Whether you’re working from home, receiving JobSeeker payments or taking social-distancing measures at work, chances are COVID-19 has impacted your working situation. It’s unsurprising, then, that it might also change how you lodge your tax. While it’s certainly been a challenging year, the good news is that you may be able to get more money back come tax time.
My work hours have been slashed. How does this affect my tax?
If you’ve lost your job or had your hours cut during COVID-19, you may be looking at a larger tax refund this year.
Before the virus turned 2020 on its head, your employer would have assumed that your salary for the 2019–2020 financial year would be the same as the year before (providing your job role hadn’t changed) and taxed you accordingly. But if your loss of income is significant enough, it’s possible your tax may have been over deducted.
Check out the ATO’s tax withheld calculator to see if this could be the case for you.
I’ve spent money kitting out my home office. Can I claim these expenses?
After admitting to yourself that being slumped in a beanbag with your laptop between your knees isn’t quite as ergonomic as your office set up, you’ve bitten the bullet and bought yourself a real chair and desk. Keep that receipt!
Put simply, anything you need to use for work is tax deductible. This includes office furniture, computers, tablets, phone and internet bills, stationery, paper and cleaning products. And before you ask, no – the biscuits you usually pinch from the office kitchen aren’t considered a WFH essential (sorry!).
My energy bill has skyrocketed since working from home. Is this deductible?
Despite donning your warmest dressing gown and uggs in your DIY home office, on those colder days you couldn’t resist cranking up the heater – and it shows on your electricity bill. Good news! You may be eligible to tax deduct 80 cents per every hour you’ve worked at home from the ATO.
This means lighting, heating and cooling is all covered, provided you can show that your running expenses have increased during your WFH period, and you’re not just carrying out small tasks such as making the odd call or flinging out an email every now and then.
If your flat mates or family are working from home too, everyone in the household can apply for the new 80 cents per hour rate.
You can even opt to use the old-fashioned system and calculate your expenses yourself (such as recording when you use the internet), but if you haven’t been keeping track, claiming the flat rate should make tax time a walk in the park.
I’ve been forking out more money to keep myself safe at work. What can I claim?
If you work in industries such as hospitality, retail and healthcare, chances are you’ve been getting through the hand sanitiser bottles. Many workplaces will supply these, but if you’ve had to pay for any protective items out of pocket during the virus, you’ll be able to deduct them. These could include gloves, antibacterial wipes, hand sanitiser and face masks.
I’ve been receiving JobSeeker or JobKeeper payments. How do I declare them?
If you’ve received JobSeeker payments, this will have been recorded by the ATO and will appear on your tax return under the Government Payments and Allowances section. If you’re lodging before this information is ready, you’ll need to enter it in yourself. Be sure to check that these payments are included, otherwise you may slow down the process or receive a bill down the track.
If you’re a sole trader and you’re obtaining JobKeeper on behalf of your business, you’ll need to record these payments yourself as part of your business’s assessable income. And for all your other COVID-19 tax-related questions, don’t forget to check out the ATO website.
Virgin Money Australia has not considered your objectives, financial situation or needs in preparing this advice. Before acting on any advice please consider the appropriateness of the advice for you, having regard to your objectives, financial situation and needs.