Tax time 2020: things to know

July 2, 2020

To help tax practitioners and their clients this tax time, CPA Australia has published its annual tax tips for tax agents, employees, small business, investors and students.

The ATO has also put together a list of 10 important things to know this year.

  1. The ATO has tax time toolkits for tax practitioners.
  2. Wait until clients’ income statements are “tax ready” before lodging.
  3. Employees’ income statements will be available in ATO online services through myGov and in online services for agents.
  4. Employers need to make a finalisation declaration by Tuesday 14 July if they have 20 or more employees, or Friday 31 July if they have 19 or less employees.
  5. JobKeeper payments a client receives are treated as assessable income and will be included in pre-fill data. If the client is a sole trader, they need to include the payments as business income in their tax return.
  6. Funds received through the COVID-19 early access to superannuation measure are not assessable income and do not need to be included in a client’s tax return.
  7. The cash flow boost amounts are non-assessable non-exempt (NANE) income and should be included in a client’s tax return the same way as other NANE income. Employers are still entitled to a deduction for the PAYG withholding paid.
  8. Under the optional shortcut method for employees working from home during COVID-19, employees can claim 80 cents for each hour they worked from home between Sunday 1 March 2020 and Tuesday 30 June 2020, to cover all deductible expenses.
  9. The instant asset write-off threshold increased to $150,000 and eligibility was expanded to cover businesses with an aggregated turnover of less than $500 million from 12 March 2020 until 31 December 2020. To claim this tax time, assets must be first used or installed ready for use by Tuesday 30 June 2020.
  10. If a client is unable to make a payment by the due date, tax practitioners can submit a payment-only deferral request form on their behalf until Monday 14 September 2020 for eligible obligations.

The ATO has also provided an overview of key changes for tax professionals.