How listing your working from home expenses could be BETTER for your tax return - and why claiming a COVID-19 shortcut will cost you money
- Workers warned COVID-19 shortcut on tax return could lead to smaller rebate
- Australian Taxation Office announced simplified deduction last month
- Workers can claim 80 cents for every hour they worked from home since March
- The shortcut is an alternative to sorting out and claiming individual expenses
Workers have been warned to expect less money on their tax return if they choose to claim a COVID-19 shortcut over listing individual expenses.
The Australian Taxation Office announced last month wage earners could claim 80 cents for every hour they worked from home between March and September.
Taxpayers would only need to record the flat hourly rate in the tax return form rather than sift through bundles of receipts and records to claim individual expenses, Australian Financial Review reported.
H&R Block's Mark Chapman warned the simpler method could actually lead to a much smaller tax return.
'The 80 cent shortcut rate is a nice simple calculation, but generally speaking, claiming your actual costs will give you a much bigger deduction,'
Workers have been warned to expect less money on their tax return if they choose to claim a COVID-19 shortcut over listing individual expenses (stock image)
Taxpayers would only need to record the flat hourly rate in the tax return form rather than sift through bundles of receipts and records to claim individual expenses (stock image)
'It could be potentially several times larger, depending on the things you claim.'
The ATO brought in the simplified deduction as it prepared for 'a tax time like no other'.
The beginning of the new financial year on July 1 saw the Australian Taxation Office's website crash as people rushed to file their returns.
Within two days, the ATO received a whopping 230,000 tax return applications.
More than 457,000 individual refunds have been completed as of July 14, towering over the 389,000 claims lodged during the same time last year.
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Mr Chapman previously said the rush to file tax returns was a sign many people were in trouble.
'With COVID-19, a lot of people are in a position of financial distress.'
'They're potentially looking at bigger refunds than in the past, partly because of the tax offset and partly because of the impact of COVID-19.'
More than 10million Australians earning between $37,000 and $126,000 are also entitled to between $255 and $1,080 in low and middle-income tax offsets.
Almost half, or 4.5million of them earning between $48,000 and $90,000, will be eligible for the full $1,080 benefit.
That includes those earning an average, full-time salary of $86,237 but not minimum wage earners now on $39,198 a year.
Treasurer Josh Frydenberg said tax cuts announced in the April 2019 budget would help Australians keep more of what they earned.
'A record number of Australians have already lodged their tax return with refunds to land in bank accounts over the course of the week,' he said.
Though H&R Block's Mark Chapman warned the simpler method could actually lead to a much smaller tax return (stock image)
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