Will tax time look different for you?

The end of the financial year is just around the corner, and for those people who have been working from home over the pandemic, tax returns may be a bit more involved this year – but hopefully in a good way.

Home office expenses have, for a long time, been counted as legitimate deductions, however calculating them can be tricky, and there are a number of conditions that need to be met for a space at home to be classified as a home office by the ATO.

However, with so many Australians suddenly finding themselves having to set up a productive home workspace wherever they can, the Government introduced a flat 80¢ per hour rate that can be used to claim a tax deduction against the costs of working from home. There are still some conditions however, though they’re not as onerous as those attached to claiming deductions for a home office.

Firstly, in this financial year, you can only claim for the period 1 March 2020 to 30 June 2020. Secondly, the hours you claim must be hours you were actively involved in your employment, not simply doing incidental tasks such as checking voice mail or your email inbox.

If, on the other hand, you did set up a dedicated home office, especially if it was prior to March 1st, then you may be better off claiming home office expenses, and it’s worth chatting to a tax professional at WhiteStar to make sure you’re making the correct calculations, because mistakes can be costly.

The Australian Government also extended its tax offset scheme for low-and middle-income earners. This means that those who qualify, could get tax relief of up to $1,080 for singles and up to $2,160 for dual income families. The amount you may be eligible for depends on your income, and is automatically calculated by the ATO. Tax offsets can only be used to lower the amount of tax you pay, not reduce your Medicare Levy, or deliver you a refund if your total payable tax is less than the offset amount.

The Government has also recently announced that it will continue to offer the instant asset write-off scheme for businesses with a turnover of less than half a billion dollars, on assets