INTHEBLACK July 2020 - Page 5



GET SMART
// C PA A U S T R A L I A P O L I C Y
JULY
UPDATE
AT A G L A N C E
Elinor Kasapidis, policy adviser
– tax, at CPA Australia



Many Australians are
accessing various forms
of government support
this year, due to changes
in their employment or
income streams.
The tax consequences are
not always clear, so the
tax preparation process is
critical in ensuring income
and expenses are
correctly reported.
Individuals will need
to be registered with
myGov, or engage a
tax agent well before
31 October, to get onto
their lodgement program.
GETTING READY
FOR TAX TIME 2020
THE END OF THE FINANCIAL YEAR IS ALWAYS A BUSY TIME FOR
ACCOUNTANTS, AND FOR MANY, THIS YEAR WILL BE BUSIER THAN
EVER. HERE’S HOW TO TICK ALL THE RIGHT BOXES WITH YOUR CLIENTS.
STAY IN
TOUCH
CPA Australia’s policy
team welcomes feedback
and comments. Visit the
policy pages at
cpaaustralia.com.au/
policy for more details
about our submissions,
plus information about
open consultations and
the latest policy bulletins
and newsletters.
MEMBER
RESOURCE
To access CPA Australia’s
tax tips for employees,
students, investors and tax
agents, visit: cpaaustralia.
com.au/taxtips
10 ITB July 2020
F
or public practitioners in Australia, this year’s
tax time may require additional checks and
discussions with clients to ensure they are
aware of what information they need to provide,
and the types of income and expenses that need
to be disclosed.
Here are some tips to get started.
As most employers now report through Single
Touch Payroll (STP), income statements (formerly
known as group certificates or payment summaries)
are generated electronically via myGov or through
online services for agents. Some micro-employers
and closely held payees may not yet be reporting
through STP, so pre-fill information may not be
available until later in July.
Self-preparers will need to be registered with
myGov, or should alternatively engage a tax agent
well before 31 October, to get onto their lodgement
program, which provides deferred due dates.
Pre-fill data will be available on tax returns in
myGov or through online services for agents. While
this usually has a high degree of accuracy, it is best
practice to check this information against records
and not just accept it at face value. When relying
on pre-fill information beyond an income statement
to complete a tax return, it may be advisable to
wait until at least early August to ensure that all
the relevant data is available, in order to avoid any
unexpected adjustments.
With COVID-19 also resulting in many of us working
from home more often or even for the first time, the
Australian Taxation Office (ATO) has announced a
new shortcut method for work-from-home
deductions, which allows individuals to claim 80 cents
per work hour for expenses incurred between 1 March
and 30 June 2020 should they choose to do so.
Individuals will need to keep a record of work hours
at home, and have a choice of using a fixed rate or
actual cost method.
As always, records of all deductions are required,
so make sure any claims can be substantiated, and
that this information is kept for five years after the
tax return is lodged.
The ATO has created the myDeductions app for
individuals and sole traders to assist in this process.
It is possible to take photos of receipts, record
expenses and upload the myDeductions data into the
tax return. Alternatively, data can be emailed to a tax
agent straight after year-end (70 per cent of
Australians use a tax agent).
Many Australians have experienced changes in their
employment or income streams, with some accessing
various forms of support.
Sometimes the tax consequences are not always
clear, and the tax return preparation process becomes
critical in ensuring that income and expenses are
correctly categorised and reported.
SOME THINGS TO CONSIDER
If superannuation has been accessed early, under
the government’s COVID-19 support package, these
amounts are not taxed and do not need to be
included on the tax return.
If JobKeeper payments were received, these
amounts are assessable, and tax should have been
withheld by the employer. If this did not occur,
a liability may have been created and the ATO could
be contacted to enter into a payment arrangement.
If Australian Government allowances and payments
or lump sum payments, including employment
termination payments, have been received, this
information must be correctly reported on the tax
return. If leave has been taken, or if COVID-19 led to
being stood down or job loss, there are different tax
consequences for payments that have been received
from the employer. Where amounts are pre-filled
through income statements or matched against
Services Australia information, they need to be
checked for correctness.
Some individuals may have received grants or other
forms of support, which will need to be correctly
disclosed if assessable. The ATO matches data from
various federal, state and local government agencies
to check for taxable government grants and payments.
If a private health insurance policy was reduced or
cancelled during the year, caution must be taken not
to over-claim the rebate or incorrectly calculate any
Medicare levy surcharge amounts.
If additional income-earning activities have been
undertaken, such as renting out property, selling on
eBay or providing contract services on Airtasker, these
income amounts will need to be included in assessable
income, and any associated deductions claimed.
On a final note, if income has decreased due to
COVID-19 or other negative impacts during the year,
a pleasant surprise in the form of a larger-than-usual
tax refund may present itself for the first time. This is
due to benefitting from the low and middle income
tax offset, which is automatically calculated when a
tax return is lodged and assessed.
With many of us
working remotely,
some for the
first time, the
Australian
Taxation Office
(ATO) has
announced a new
shortcut method
for work-fromhome deductions.
intheblack.com July 2020 11

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