The ATO is preparing for “a tax time like no other” as millions of Australians claim expenses for working from home during the pandemic.
With another surge in early tax return filing expected in 2020, Tax Office Assistant Commissioner Karen Foat said a new simplified system had been created for deductions related to working from home expenses.
The shortcut — which allows taxpayers to simply claim 80 cents for each hour they’ve worked from home — can be used by multiple people working from home in the same house.
The total amount should be claimed in the ‘other work-related expenses’ question in the tax return submission, with ‘COVID-hourly rate’ listed as the description.
“Lots of people have income types that they’re not used to receiving and also people are entitled to different types of deductions to normal,” Ms Foat said.
“We know that millions of Australians are working from home and many of them are doing it for the first time.”
Taxpayers can also choose to use one of the other existing methods to calculate their expenses for working from home this tax time.
A special web portal has been set up to help taxpayers navigate tax time 2020.
Claims for protective clothing are expected to increase, due to the risk from COVID-19 exposure in the workplace. Items including protective gloves, masks, sanitiser and anti-bacterial spray can all be claimed, provided taxpayers have not been reimbursed by their employer for the items.
Employees who have received the government’s JobKeeper payment won’t have to change their annual return. Employers will include the payment on income statements for each worker.
“What that means is the ATO will automatically include it in your return, once your employer finalises that income statement,” Ms Foat said.
“If you received JobKeeper as a small business, you actually need to include it in the assessable income of the business. You will need to do that yourself.”
The Tax Office is expecting to see a drop in claims related to laundry and travel expenses as fewer people attend their normal workplace.
“If you received early access to your super this year under the special arrangements due to COVID-19, any amounts you’ve withdrawn from super under this program are tax-free and you do not need to declare them in your tax return,” Ms Foat said.
Taxpayers completing their own tax return have until the end of October to lodge with the ATO.
In March, Tax Commissioner Chris Jordan committed to working “shoulder-to-shoulder” with businesses affected by the expected COVID-19 downturn.
Individual taxpayers will be offered fair and reasonable engagement during tax time, including flexibility with payment plans for tax debts.
Ms Foat said last year’s record numbers of early lodgements could be replicated again.
“We do know that a lot of people, particularly people who are expecting refunds like to lodge their returns early.
“With people facing financial pressures more this year than other years, we know people will want to lodge early. We encourage them to start getting all of their information together.”
This week the Morrison government moved to defer $1 billion worth of forecast pay-as-you-go tax receipts from businesses and high-income earners, to help them with cash flow during COVID-19.
The deferral will delay instalment payments for as many as 2.2 million people paying pay-as-you-go income tax instalments and about 81,000 paying Goods and Services Tax instalments next financial year.
This story originally appeared in the Australian Financial Review. Read the original story here.