The Australian Tax Office (ATO) acknowledges that workers across Australia continue to face huge challenges in regards to the covid-19 pandemic and various natural disasters which have occurred over the past 12 months.
Here is some advice to help Australian taxpayers prepare for the upcoming End of Financial Year.
JobKeeper payments are not tax free. As the payments were deducted under the same legislation that your normal take-home pay packet is. If you’re an employee, you don’t have to do anything different come tax time because your employer should have included your tax in your income statement, either as part of a salary, wage or an allowance.
If you are a sole trader who received JobKeeper on behalf of your business, you will need to include the payments as assessable income for the business if you haven’t already paid the relevant tax.
If you were an employee that is paid more than $1,500 per fortnight, the employer’s superannuation obligations to you during this period did not change, and therefore you received the same superannuation contributions.
However, if you were an employee that was having their wages topped up to $1,500 per fortnight by the JobKeeper payment, it was up to the discretion of the employer if they wanted to pay superannuation on any additional wages paid by the JobKeeper payment.
If you have received JobSeeker payments, this information will also be included in your tax return at the Government Payments and Allowances question once it’s ready. If you are lodging before this information is there, you will need to add it yourself. It is important to be aware that leaving out income will slow your return.
Stand Down Payments
Some Australian workers might have received a one-off or regular payment from your employer after being temporarily stood down due to covid-19. These payments are taxable and should appear in your income statement and will be automatically included in your return. If you are unsure about whether these payments have been included in your income statement, check with your employer.
Covid- disaster payments for people impacted by restrictions
The Australian Government (via Services Australia) covid-19 disaster payment for people impacted by restrictions is taxable. When lodging your return, you must ensure you include this income.
Early Access To Superannuation
More than 2 million Australians took money out of their retirement savings early under the superannuation Early Release Scheme in 2020. If you If you accessed your super early under the special arrangements due to covid-19, you do not need to declare this in your tax return. Any eligible amounts withdrawn under this program are tax-free.
Lost, damaged or destroyed tax records
The ATO understands that many taxpayers are facing lasting impacts left in the wake of natural disasters. Some Australians have unfortunately have discovered that their records have been lost or destroyed, as a result of cyclones, floods or bushfires.
If you have a myGov account linked to the ATO, you’ll be able to view some of your records, including income tax returns, income statements and previous notices of assessments. If you lodge through a registered tax agent, they can also access these documents on your behalf.
Government agencies, private health funds, financial institutions and businesses provide information to the ATO which is available to your tax agents and automatically included in returns by the end of July.
If you have lost receipts, we can accept reasonable claims without evidence, so long as it’s not reasonably possible to access the original documents. You may be required to tell us how you calculated the claim. It is important to note this is not our general approach, but it can apply if your documents were destroyed in a natural disaster.
The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 07 36086800.
The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 1300 1 VAULT (1300 182 858)
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