With our lives shifting to a new normal after the impacts of COVID-19 and the devastating bushfires earlier this year, tax time is upon us once again.
CPA Australia is seeking to help Australians make the right economic decisions before the end of the financial year, to inform them of what they may be legally entitled to claim through the tax system, and to provide some tips on what to watch out for this tax season.
Tax can be confusing and complex. There are always new topics of which to be aware, and this year is no exception. COVID-19 has created new tax issues for many with questions around JobKeeper, redundancy payments, working from home, rental properties and unanticipated losses. CPA Australia’s Tax Tips 2020 will assist you – whether you are a small business, an employee, an investor or a student.
CPA Australia’s tax policy adviser Elinor Kasapidis said “COVID-19 has affected the incomes and businesses of many Australians, and these impacts can have tax consequences, so it’s critical to get your tax affairs in order and be aware of available concessions.”
However, Kasapidis warned employees and investors that it may take a few weeks after 30 June before all their necessary tax information is available to lodge their tax return.
“While many taxpayers might be tempted to lodge early this year, the pre-filled data in tax returns from third parties, such as banks and employers, means that many tax returns may not be ready for lodgment until late July – or even mid-August. It’s best to wait until you have all your appropriate data before lodging. Otherwise, you might need to amend your tax return and pay additional tax later.
“For individuals who unfortunately lost their job during the year, JobSeeker and certain termination payments remain subject to tax, and income from gig economy activities such as ride-sharing and odd jobs may also be taxable.
“If you’re in business, check that you’re up to date on employee payments, superannuation contributions, asset purchases or trust obligations by 30 June. After 30 June is when you need to bring your records together and get to a tax agent to lodge your income tax return and possibly other tax forms.
“It is important to be aware that the government and ATO have provided tax support and specific guidance related to COVID-19, and the ATO will be using software and other means to check that claims are correct,” Kasapidis said.
COVID-19 issues for business include losses, cancelled contracts, rent forgiveness, renegotiated loans, bad debts, income from certain government grants, trading stock and private company loan repayments.
“A tax professional can check that the JobKeeper claims and GST adjustments by a business have been done correctly,” Kasapidis said.
To find out more, speak to a CPA Australia-registered tax agent about your specific circumstances.
To find a CPA in your local area, visit the CPA Australia website.
Further information: www.cpaaustralia.com.au/professional-resources/taxation/tax-tips