What’s New for TAX 2020!
LMITO Tax Offset of $1080.
Base amount = $255 and Maximum Amount =$1080
The way you get your Payment Summary information is changing
If your employer has started using Single Touch Payroll (STP), your payment summary information is now called an ‘Income Statement‘ in myGov. You will be notified by the ATO via myGov when your Income Statement is finalised. We are then able to lodge your Finalised Income Statement and help you get the best refund possible!
As you know, you may now no longer get a payment summary from your workplaces. We will be able to see your payment summaries as soon as they are lodged with the ATO by your employers. Sometimes in early July, they are not yet available.
We prefer you to book an appointment with us after Mid-July as your payment summaries and your hospital cover information will be available to access from the ATO. Otherwise, you will need to provide us all your income information prior to it being available at the ATO.
Booking an appointment later and once the information is available increases the likelihood that your tax return is accurate at the time of the appointment and prevents the need for you or ATO to amend a tax return at a later stage.
Should you still wish to visit the office while your payment summaries are unfinalised, we would still proceed with inputting all your details and deductions from your information as we cannot access it yet from the ATO.
Working from Home
While many Australians were doing their part in helping slow the spread of the virus in the country by staying at home and working, the ATO had their own way of helping Australians to cope up with the work-from-home expenses.
The Australian Taxation Office had made special arrangements which will allow taxpayers to claim a rate of 80c per hour for all the expenses they endured while working from home. Now, taxpayers are able to use the 80c rate instead of calculating specific running.
There is no requirement to have a dedicated room for the home in order to claim this rate. The only requirement is that you keep a diary record of the number of hours worked from home.
This new shortcut method is only applicable for expenses incurred from 1 March 2020 to 30 June 2020.
COVID-19 measures and support – business & employers
Following the Government’s response to COVID-19, new rules have been put forward:
- If you, as an employer, received a Cash-flow boost under the boosting cash-flow for employers scheme, this entirety of the amount is TAX-FREE (non-assessable, non-exempt income) and you are also entitled to a deduction for the PAYG withholding paid.
- The instant asset write-off threshold has increased from $30,000 to $150,000, applicable from 12 March 2020 until 30 June 2020.
- Businesses with an aggregated turnover of less than $500 million are able to accelerate their depreciation deductions on the purchase of certain new depreciable assets. This applies to eligible assets held and first used or installed ready for use from 12 March 2020 until 30 June 2021.
- Your JobKeeper Payment is the assessable income of the business!
Businesses that are receiving JobKeeper Payment for eligible employees or business participant, must include it as assessable income of the business.
NO DEDUCTIONS FOR VACANT LAND! (apply from 1 July 2019)
You can no longer claim deductions for the cost of holding vacant land. These costs include:
- Interest on loans to acquire the land
- Land tax rates
- Council rates
- Maintenance rates
- Land used by you in a business carried on from producing income.
- The land is used or available for use in carrying on a business (primary production)
- The land is vacant due to unforeseen circumstances that occurred within the last 3 years (fire, flood, etc) (bush-fire 2020)
- Your JobKeeper Payments and JobSeeker Payments are both included in your Tax return and are part of your taxable income. JobKeeper is just a substitute term for “Salary & Wages” for months you’re receiving it, not a freebie.
LIMITING TAX RELIEF FOR FOREIGN RESIDENTS SELLING PROPERTY IN AUSTRALIA
Foreign residence can no longer claim the CGT main residence exemption when they dispose of their residential property in Australia.
Existing foreign resident residential property owners can access the CGT main residence under certain exceptions. These exceptions include:
- Property held before 7.30 pm (AEST) on 9 May 2017 and
- disposed of on or before 30 June 2020.
- Existing foreign resident residential property owners who have been foreign residents for a period of six years or less may be able to access the CGT main residence exemption under pre-existing rules if, during that period of that foreign residency, certain prescribed life events occur.
Expanding tax incentives for investments in affordable housing
Additional CGT discount of up to 10% for Australian resident individuals who provide affordable rental housing to people earning a low to moderate-income.
This will increase the CGT discount to up to 60% for qualifying investors. This will apply to CGT events occurring on or after 1 January 2021.
These residential rental properties must have been provided on or after 1 January 2018 for a period or periods totaling to a minimum of three years (1,095 days), which may be aggregated usage over different periods.
New company tax rate of 26% from 1/7/2020