While the temptation could be to book in with your tax accountant early, in a bid to get some much-needed cash in your accounts, experts are warning against being too hasty in filing your tax return this year.
The Institute of Public Accountants (IPA) has urged both business owners and their employees to take some time, ensuring all variables have been considered.
“There are a lot of new variables such as COVID-19 related payments to be considered in submitting tax returns for the 2019/20 financial year,” advises Andrew Conway, IPA CEO, highlighting the issues that people believe will lead to them getting a larger than usual refund this year: loss of employment; reduced earnings; rental property losses due to tenants being unable to pay or have negotiated a lower occupancy rate; deductions for protective COVID-19 measures such as gloves, face masks, sanitisers; and increased working from home expenses.
“Those who have lost their employment this year and have received JobSeeker will need to wait for Services Australia to load this information into the pre-fill as this entitlement represents income which is taxable and needs to be added to other income,” Conway said.
“Services Australia does not normally withhold tax so this may adversely impact on the individual’s overall tax situation which may turn a refund into an amount payable depending on personal circumstances. Similarly, if the employers have not withheld the proper amount of tax from JobKeeper payments this, too, can have an impact on the refund amount.
Andrew also advises another reason to hold fire: “Employers with 20 or more employees will have until 14 July 2020 to finalise single touch payroll data. Smaller employers have until 31 July 2020 to finalise. If someone has interest, dividends, or trust distributions, then it is even more important not to lodge early until this data has had time to hit the pre-fill records.”
If you work as a sole trader and have been eligible to receive JobKeeper, Andrew says these will also beed to be included as part of your business income.
“Our strong message is to wait for the information to become available before you lodge; otherwise, you may end up with an unexpected tax bill and angst down the track,” he said.
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