There was a hard-hitting time for people across the world due to the Covid-19 destruction, which has impacted the business owners more significantly. Similarly, amid this, the majority of the taxpayers are a bit stressed for their tax.
As we all know, the financial year’s end is on the way, so now it’s time to be attentive. Moreover, to reduce the burden, and keeping the current situations in mind, ATO (Australian Tax Office) has been trying to bring easiness in tax returns.
The Australian Taxation Office (ATO) has already done huge preparations in this taxation month. For which they are introducing additional options to give relaxations to small and big firm owners so that it can help them to file tax returns on time.
Hence, major changes have been made by ATO (mentioned by assistant Commissioner Karen Foat, from ATO). So what’re the things you should remember are mentioned below.
Claims for working from home with the ‘Shortcut’ method
Due to COVID-19, the ATO is expecting to see a considerable hike across business owners filing for claims deductions during the lockdown as they are working from home.
Taking into consideration, work from home, ATO has introduced a ‘shortcut’ which enables taxpayers to claim almost 80 cents for each hour until they are working from home.
This method will help workers a lot. For instance, if while working from home, they incurred expenses, then they are eligible to claim for that. However, in this claim, traveling expenses and laundry expenses aren’t included.
Change in income during COVID-19
A sole trader who receives job keeper payments will have to be a bit considerate. Because, for your business, you’ll have to include job keeper payments as assessable income. However, this rule doesn’t apply to employees.
David Mckeller (the Allied Business Accountant) says that businesses must ensure that they respect to obligations made for claim deduction on salary payments.
Avoid spending splurge at the EOFY
At the end of the financial year, businesses might already have a huge shopping list. Similarly, it implies that there’s no shortage of items, so there’re loads of deals rolling around. Hence, you might be wondering about spending extra at the time of EOFY.
But remember, cash flow is a king, hence make sure that you spend wisely. If purchasing goods at present costs you more in the upcoming time, then it’s surely going to become a significant obstruction in your business.
For instance,- if you purchase anything on loan right now, don’t forget the interests you’ll have to pay on it. Due to the coronavirus outbreak, each country’s economy is going through a recession.
Hence spending extra can put you into big trouble. Moreover, you can seek help from a financial adviser to avoid any problem in the future.
Must Remember! Super contribution
According to the McKeller, a superannuation cap is an effective tax strategy that businesses should not forget. Almost all businesses had to face-off with depressed income due to the COVID-19 outbreak. Hence carrying forward, concessional Superannuation can be the best decision.
For instance, apart from super, if your contribution to the marginal tax rate is higher than 15%, then you must employ a Super contribution strategy for tax. Moreover, you’re also able to carry forward unused cap for the duration of 5 years if your income isn’t high because of COVID-19.
Getting the Tax Payment Early
Here in these prevalent situations, we’ll have to stay thoughtful for filing tax return so that it may not impact us with huge problems. Example- from expenses, working from home deductions to charitable donations, you’ll have to pay special attention to each point. After all, plenty of things have changed over time.
Moreover, play smart if you want to be proactive and stay top of the line. If you don’t want to confront tax affairs problems, the sooner you file your tax return, the better it will be for you. It’s the time to get most refunds out of your tax returns. Hence, you should book a meet with your tax agents as early as possible without any delay.