Settlement Guide

Tax Return 2020: how to best prepare and lodge your tax return?

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If you earned an Australian income between July 1 and June 30, you will need to lodge a tax return by October 31. Here are some ways you can claim tax refunds and lessen your tax bill for the financial year.

 


Highlights

  • Anyone who has earned an Australian income will need to lodge their tax returns for the income year July 1st to June 30th
  • You’ll need to lodge a personal tax return if you’ve earned salary or wages and had PAYG withheld from the salary
  • JobKeeper payments are taxable income

Over thirteen million Australian citizens and residents will lodge their tax returns this year.

Part of that process is an assessment by the Australian tax office of eligibility for tax refunds, while economic measures taken by the Australian government amid the pandemic make this a different tax year than usual.

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Michael Crocker, Australian tax Leader for Chartered Accountants Australia and New Zealand  says that people doing odd jobs who are not formally regarded as being employed will be exempt from paying tax.

Workers earning less than $18,200 will not be taxed although still obliged to lodge a tax return.

Working holiday makers on visas 417 and 462 earning less than $37,001 are also exempt. 

Even if you’re on a low-income tax bracket and don’t actually have tax to pay or much tax to pay you might be eligible for a refund and the only way you can get a refund is to lodge that return.

Australia has signed tax treaties with over 40 countries to share financial information on individuals to avoid double taxation and fiscal evasion from those who earn an overseas income whilst living here.

Michael Crocker says it is necessary be honest about your tax affairs and your income assets to avoid penalties and interest.

Nearly half of Australian workers are eligible for the federal government’s $1500-per-fortnight JobKeeper payments which are deemed as taxable income.

It’s a system where there are winners and some losers.Not everyone is eligible. 1 March was a critical date to be an employee.

Michael Crocker adds that in some cases employers who have dismissed long standing employees can rehire and reengage them.

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Anand Shukla, principal of Melbourne’s A One Accountants says some part-time or casual workers may be better off if they were paid less than $1500-per-fortnight prior to the COVID-19 outbreak.  

If an employee works longer hours and the employer owes more than $1500,then whatever the employer needs to top up the employer will have to come up with that portion of payment.

JobKeeper is a complicated process for some employers but Shukla says this should not stop employees from taking proactive actions to speed up the process.

He encourages employees to download and fill out their section of the ATO’s JobKeeper Employee Nomination Notice. 

Shukla advises employees notified of their eligibility to hand the forms back to their employer as soon as possible for payments to be redirected back to their employers.

There is possibility that some of them might miss out on these payments and this is the employer missing out on the payments that the employer has already made to the employee.

Shukla says many Uber and food delivery drivers are eligible to claim for expenses such as fuel, insurance, car registration, repairs and maintenance, car wash, car loan and mobile phone fees.

Unfortunately, many drivers tend to miss out on eligible tax refunds due to poorly kept records.

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The government is offering 80 cents per work hour for millions of Australian workers temporarily working from home due to COVID-19.

Shukla says workers such as architects who use a larger space to conduct their work from home could claim further deductions provided they have detailed records using the actual cost method.

Sole traders working from home are entitled to the same working from home tax entitlements.

There is a possibility of claiming deductions from their mortgage and rent although Shukla warns it could have implications on a homeowner’s capital gains tax.

Michael Crocker suggests keeping a record of business expenses using the ATO app “myDeductions” or check in with a tax agent to assess eligible tax refunds.

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ATO has worked with around 700 culturally and linguistically diverse community organisations to distribute tax information.

You can learn about tax information on the SBS Tax Talk webpage in your language or call ATO for advice on 13 28 61.

You may also be eligible for free Tax Help if you earn less than $60,000.

If you need language help, call the Translating and Interpreting Service on 13 14 50 and ask to be directed to the ATO helpline.

Visit the ATO website for information on tax measures and support for businesses and individuals during  COVID-19

 

 

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