From working at home, buying petrol and renting an Airbnb: Expert reveals what you SHOULD claim to maximise your tax return - and what you need to do to avoid a nasty surprise
- Working from home for the coronavirus means you can claim back expenses
- Tax trap: they want you to keep a claims diary for TWO months, not just one
- You can claim furniture, cleaning costs, mobile phone bill: three ways to do it
- Here’s how to help people impacted by Covid-19
Experts have revealed their top tips for maximising tax returns next month, without falling foul of the rules.
The coronavirus pandemic has produced a unique tax year with millions of Australians forced to work from home.
As a result, workers can claim a variety of expenses that may not have been possible in previous tax returns, says Julia Hartman, Principal of Ban Tacs National Accountants Group.
Pictured: Adelaide woman Victoria Bowes in her study on April 2, before the government announced Australians could claim a flat rate of 80 cents an hour for working at home
The coronavirus has produced a unique tax year with millions of Australians forced to work from home. As a result, workers can claim a variety of expenses that may not have been possible in previous tax returns (stock image)
WORKING FROM HOME
You can claim expenses including: electricity, lighting, cleaning, heating, cooling, data, wear and tear on the home office, home internet, mobile phone use and stationary.
There are three different ways to claim.
1) The easy way
The Australia Tax Office (ATO) has introduced an 80 cents per hour rate you can claim to cover all your working from home expenses from March 1 to June 30, 2020.
This makes it easy for people working from home for the first time during the coronavirus pandemic lockdown period to just claim without teasing out and substantiating exactly how much time you used the phone for work and for home.
Australians working from home can claim expenses including: electricity, lighting, cleaning, heating, cooling, data, wear and tear on the home office, home internet, mobile phone use and stationary (stock image)
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You simply add up all the hours you worked from home between March 1 and June 30, and claim the 80 cents per hour.
However if you choose the 80 cents per hour rate you cannot claim separately for depreciation on your computer, use of internet, stationery or home phone. They are all tied up in the 80 cents an hour.
You will need to keep a diary record of the hours you spend working from home.
2) The hard way
You can individually work out each itemised category with receipts to prove each deduction.
Keep a diary record of the hours working from home, for at least one month to justify your claims to the ATO.
Pictured: Phoenix Crawford does school work on a laptop while his mum Donna Eddy replies to client emails on April 09, 2020 in Sydney, Australia
Celebrity Personal Trainer and Influencer Ana Coppola conducts a personal training session using Facetime. Australians can claim their mobile phone bill after working at home during the coronavirus pandemic
For example, if you calculate that you spend about 20 percent of your data costs on work each month, you can claim 20 percent of the monthly bill and then multiply it by 12 months.
Your diary can be used to work out the percentage of home internet and phone use dedicated to work.
Always remember to keep your receipts especially for stationary, couriers and postage.
Julia Hartman, founder of Ban Tacs National Accountants Group
3) The middle way
You can claim 52 cents per hour for your running costs for all the hours you worked from home. Then you can claim separately your other items such as stationary, internet, and furniture depreciation.
You will need to keep receipts to substantiate your claim.
TAX TRAP TO AVOID
The ATO has said that because the coronavirus has increased the number of people working from home, it is no longer enough just to keep a diary for one month this year.
You need to have a diary for one month showing your usage patterns before the coronavirus - and another for a month during the coronavirus shut down.
'This means that if you hadn’t got around to keeping your one month diary before the Coronavirus shut down you will now not be able to claim any home office costs for that period - even though you thought you had the full year to get around to keeping one,' Ms Hartman said.
Some Australians working from home may have used their car more frequently for their job and can claim back 68 cents per kilometre up to 5000 kilometres (stock image)
CAR
If you are working from home, you may have to use your car more often for work.
You can claim back 68 cents per kilometre up to 5000 kilometres - if you keep a diary, record the reason for the travel, the kilometres travelled and the destination.
FURNITURE FOR THE HOME OFFICE
You can claim up to $300 in furniture for the office.
Amounts over $300 you can claim back in depreciation for wear and tear.
PROPERTY CLAIMS
People who rent out a room of their homes for Airbnb or who have an investment property are under the microscope again.
For two years now the ATO has been cracking down on these claims.
The ATO is cracking down on Airbnb claims and will keep a sharp eye out for anyone claiming expenses when their property isn't actually rented
About 90 percent of people who rent their homes out have been filling in their returns incorrectly over the past two years.
The ATO is watching carefully to see if you have not declared income from Airbnb or your rentals.
They will also be looking to catch people who claim maintenance expenses when the home is not rented.
You will need to keep your receipts and document everything.
TAX AGENT FEES
You can claim them back on tax, too.
Just keep your receipt.
PROFESSIONAL MEMBERSHIPS
You can claim back your union fees or professional association membership fees
TAX OFFSET
The low- and middle-income earner tax offset was introduced last year and continues this year, reducing your tax bill.
The largest cuts go to the highest earners up to $126,000 a year.
The maximum that you can get is $1080.
The ATO will work out how much you are eligible for and automatically apply it to your tax.
Pictured: Celebrity Personal Trainer and Influencer Ana Coppola conducts a personal training session using Facetime from her home on April 20 in Sydney
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