Rands Tax & Business Consultants

Navigating the details of tax return can be challenging, often leading to processing delays and unexpected tax liabilities. Let’s delve deeper into some prevalent misconceptions that demand clarity

1. Using the Shortcut for Working from Home

Sometimes, people claim expenses for working from home using a simple method. But here’s the catch: if you go for the easy way, you can’t get more money back for other home-work expenses. Choosing the more detailed method might get you a bigger deduction. While some prefer doing their own taxes, having a tax agent can make sure everything is done right.

2. Real Talk About Work Expenses

Tax payers might try to get money back for things that do not really relate to their jobs. For example, if your job means you're close to customers and you buy things like hand sanitizer for work, you can get some money back. But trying to get money back for hand sanitizer when you're working from home for personal reasons is a no-go. To get the most money back and follow the rules, it's good to talk to a tax accountant.

3. Going from Home to Work

Unless your employer mandates carrying large tools or equipment to work, and there is no secure place to store them at the workplace, you cannot seek refunds for your daily commute. Even if you work from home due but occasionally need to go to your regular office, you cannot claim the travel cost. Your home remains your residence, not a business location.

4. About Getting $300 Back

Some think it is s easy to get $300 back without showing receipts. But the truth is, while you don’t need receipts for amounts under $300, you still have to prove you spent that money. If you want to be sure everything is right, it helps to work with a tax expert as Rands Tax & Business Consultants .

5. Tax Tricks for You

Facilitate the process of handling your personal taxes by seeking guidance from a qualified tax accountant. Effectively utilize tax credits and deductions tailored to your financial circumstances with their professional tax agent's assistance. Collaborating with a tax accountant ensures accuracy and optimization of your tax filing for optimal results.

6. Making the Most of Work Expenses

For a clearer grasp of eligible work-related expenses and effective strategies, consider consulting with a tax professional. Collaborating with a knowledgeable tax advisor ensures comprehensive insights and maximizes your potential refunds in a precise manner.

If you want to make sure your taxes are done correctly, call us at 0434 391 331. We can set up a time to get your individual tax return ready without any problems.

“Every year we see people tripped up by tax time myths. Unfortunately, this often results in slowing their return down when either they or we realise their mistake as the return is processed,” assistant ATO commissioner Karen Foat said. “Where it doesn’t delay the initial return, it can result in a surprise tax bill later on.” She said 2020 has a range of new myths that need busting.

Double Dipping

“We are concerned that some taxpayers may either accidentally or deliberately double dip by claiming their working from home expenses using the all-inclusive shortcut method while also claiming for specific items such as laptops or desks,” Foat said.

“It’s important to remember that if you’re claiming under the shortcut method, you cannot claim a separate additional deduction for any expenses you incur as a result of working from home.”

According to Chapman, if you’re willing to do the work, claiming your actual expenses rather than using the ATO’s 80c flat rate can result in a deduction that is four times higher.

“A lot of people logging into myTax will just use the flat rate because they’re not aware of how to use the more complicated method, but if you use a tax agent they will do that for you,” he said. The 80c flat rate is a trade-off between simplicity and value of the claim, he said.

Work-Related Expenses

The ATO said every year it sees Australians trying to claim work-related expenses that aren’t actually related to work.

“We have been reminding taxpayers recently that if they are in jobs that require physical contact or close proximity to customers and they had to buy their own hand sanitizer, gloves or masks for use at work, that they can claim these items,” Foat said.

“However, people who aren’t in jobs that aren’t in close proximity to the public or people who have purchased these items for their general use, cannot claim these items.”

That means that if you’re trying to claim hand sanitiser, but you’ve been working from home, you’re going to raise some red flags.

“People also cannot claim for the costs of setting their children up for homeschooling. These costs are private expenses.”

Home-to-Work Travel

Unless you’re required by your employer to transport bulky tools or equipment to and from work, and there’s no safe place to store this equipment at work, you can’t claim your commute. “If you are working from home due to COVID-19, but need to travel to your regular office sometimes, you still cannot claim the cost of travel from home to work as these are still private expenses. Even though you are working from home, your home is still a private residence – it is not a ‘place of business’,” Foat said.

Standard deductions

Foat said the ATO regularly sees people believing they’re entitled to a standard deduction of up to $300.

1. Using the Shortcut for Working from Home

“While you don’t need receipts for claims of expenses up to $300, you must have actually spent the money and be able to show us how you worked out your claim.”

Source: YahooFinance

Call us on 0434 391 331 or book an appointment to prepare your tax return correctly so the ATO will not be knocking your door.

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