finance

"Will I receive $1080?" Every question you had about the 2020-21 tax return, answered.

It's tax time. 

Over the coming weeks and months, millions of Australians will lodge their tax return; and many of them will reap the rewards. Thanks to COVID-19 and working from home, there's a lot you can claim for the 2020-21 financial year. 

Plus, there's a pretty decent government handout on offer.

Watch: Four money hacks that don't cut out your daily cup of coffee! Post continues after video.


Video via Mamamia.

We asked Mark Chapman, Director of Tax Communications at H&R Block, the most pressing questions about tax returns this year. Here's what he shared.

What working from home expenses can we claim?

Anyone who worked from home during the 2020-21 tax year, can claim those hours on their tax return. As Mark explained, there are three ways you can go about this.

"The ATO has introduced a temporary 'shortcut method' of calculating additional running expenses allowing those working from home to claim a rate of 80 cents per work hour during the coronavirus crisis," Mark told Mamamia. "This applies for the whole of the 2020/21 tax year." 

"You will need to keep a record of the number of hours you have worked from home as a result of COVID-19, such as a diary or timesheet. If you use the 80 cents per hour method, you can make no other claims in relation to working from home. So, items like mobile phone and internet usage are included in the 80 cent rate."

"Another option (which generally produces a bigger deduction) is to use the 52 cents per hour fixed rate," Mark said.

"Like the 80 cents fixed rate, you need to keep a record of the number of hours worked from home but, unlike the 80 cent rate, you can claim mobile phone usage, home internet and depreciation of computer equipment separately (which is why the total deduction is often bigger)."

Mark shared one more option.

"You can claim the work-related portion of your actual working from home expenses," he said.

Amongst the items you can claim are:

  • Heating, cooling and lighting bills.
  • Costs of cleaning your home working area (including cleaning products or payment for a cleaner if required).
  • Depreciation of home office furniture and fittings.
  • Depreciation of office equipment and computers.
  • Costs of repairing home office equipment, furniture and furnishings.
  • Small capital items, such as furniture and computer equipment costing less than $300 can be written off in full.
  • Computer consumables (like printer ink) and stationery.
  • Phone (mobile and/or landline) and internet expenses.

What surprising things can we claim, besides working from home expenses?

Because of the wild year we've had, there are some new things you can claim in your tax return that you might not know about (we didn't). Mark shared eight of them.

ADVERTISEMENT

1. Face masks, hand sanitiser and antibacterial spray.

"If you work in an occupation where it simply isn’t possible to maintain social distancing, or you need to have physical contact with clients, you may be able to claim personal protection items," Mark said.

"People who can claim include teachers, hospitality staff, retail staff, medical staff (including ancillary workers such as receptionists and cleaners), hairdressers and beauty therapists."

2. A handbag.

"If you use a bag for work purposes – for example to carry an iPad, phone, calculator, stationery or anything else you need for work, you can claim a deduction for the cost of the bag," he said.

"You might struggle to claim that new Gucci bag but a more modest bag – genuinely used only for work purposes – should be claimable," he added.

3. Sunscreen, sunglasses and hats.

Mark explained that if you work outside for long periods of the day, you may be entitled to claim the cost of products that protect you from the sun.

"Gardeners, farmers, building and construction workers and outdoor recreation staff, such as those who run outdoor fitness classes are amongst those who could potentially claim sunscreen," he said. 

"Sunglasses and hats are also claimable."

4. An apartment in another city.

If you're required to work away from home and stay in an apartment (renting or owned) when you do so, you can claim those costs.

"You can claim a deduction for the work-related costs relating to the apartment, including either rent or interest on the mortgage, depending on whether you rent or buy," Mark said.

Listen to What the Finance, Mamamia's podcast all about money. Post continues after audio.

5. Cost of conferences, even if you stay on afterwards for a break.

If you got the chance to travel over the past 12 months for work, there's a good chance you can claim it.

"If you attend a conference interstate that is related to your current job and paid for personally, the costs associated with attending the conference should be deductible," Mark said. 

"That could include airfares, hotels and meals." 

"Better still, you could even stay on afterward for a short break provided the additional time is merely incidental to the time spent at the conference or you couldn’t catch an earlier flight home," he added.

6. Performance tools.

"If you’re a professional performer (actor, musician, dancer, magician, circus performer, etc), there are all manner of strange deductions which you might look at claiming," Mark said.

"Mime lessons? Absolutely. The cost of ceremonial swords? Certainly (if you’re a professional sword swallower). Acting classes, dance classes, musical instruments, or magic tricks might also be an option."

7. A dog.

Yep, you read that correctly. In some circumstances, you can claim a deduction for a dog. Here's when you can.

ADVERTISEMENT

"If your business uses a guard dog to keep your premises secure, a dog is indeed deductible," Mark said. 

"It’s regarded as a capital asset of the business and you can claim an immediate deduction for the whole cost using the instant asset write-off for small and medium-sized businesses."

"The same logic applies to dogs used on a farm, such as a sheepdog. The work-related costs of keeping the dog – food, vet bills, etc – could also be deductible," he added.

8. Social functions.

"As a general rule, the ATO won’t let you claim tax deductions for a night out. The exception is where attending the function is actually part of your work," Mark said.

"An example would be where a journalist attends a function that they will later report on through their media outlet; in that case, a deduction can be claimed."

Who will receive the $1080 payment?

Over 10 million Australians will be eligible to receive a government handout this year. Here's how to know if you're eligible.

"The low and middle income tax offset amount is between $255 and $1,080," Mark told Mamamia

"If you earn between $48,000 and $90,000 you’ll get the maximum offset of $1,080 but if your taxable income is as low as $37,000 or as high as $126,000 you’ll benefit from the offset to an extent.

"The offset is applied automatically when you lodge your tax return. You don’t have to do anything – other than lodge your return! – to benefit."

Well, you heard him. Time to get our tax returns sorted.

Feature image: Getty.

Share with us. Take our survey for a chance to win a $100 voucher.
MMSurvey