As a result of the COVID-19 pandemic and bush fires earlier in the year, the stakes are higher than ever for most businesses this end of financial year.

The ATO are rapidly preparing for a busy tax time with a range of additional measures being put into place to support businesses in processing their tax returns. A new ‘Tax Time Essentials’ resource has been released to assist taxpayers in understanding if and how their tax returns may change as result of COVID-19.

Below are some helpful tips when preparing for the end of financial year.

Working from home

There are many tax implications for employees who have been undertaking their work from home. To assist with this the ATO has launched a temporary ‘shortcut’ method that can be applied from March 1, 2020, to June 30, 2020. This shortcut allows taxpayers to claim 80 cents for each hour they work from home if they are fulfilling employment duties and have incurred additional expenses.

You will need to keep a record of the hours you worked from home as evidence of your claim. Although this is all inclusive, meaning you cannot claim for any other working from home expenses.

Your income may have changed during COVID-19

If you are a sole trader receiving JobKeeper payments, you will need to include those payments as assessable income for your business.

Most people have had their take home pay affected by the pandemic in one way or another.

Businesses need to make sure they’ve met their Pay-As-You-Go (PAYG) withholding obligations to claim deductions on salary payments.

Instant Asset Write-off

The increased instant asset write-off is designed to provide cash flow benefits and allow businesses to purchase the necessary equipment they require. By deducting the full expense in a single year, you can decrease your taxable income and the tax you owe.

For an asset to qualify in the 2019/20 financial year it will need to have been purchased between 12th March and 30th June and needs to be installed or used before the 30th of June. (The scheme will now be extended until the end of the calendar year, with all assets needing to be used or installed by December 31, 2020 and claimed in the 2020/21 financial year).

Get in early

With so many extra tax considerations this year, it pays to get in early. By being proactive and adequately preparing, rather then putting off your tax return means the faster you will get any refunds you are due.

As always, the best way to manage your tax time well is to speak to an accountant for advice on your business and assist you though this process.

More information and resources can be found in the links below.

ATO – Tax time essentials 2020

Essential tasks at end of financial year (EOFY)