The end of the year approaches, and while people are getting ready for the festivities ahead, professionals are crunching numbers to prepare for the 2021 tax returns. However, the factors to consider for writing a tax return is trickier now in a post-coronavirus world.
Speaking of the impact of the coronavirus outbreak, the ATO now set their sights on the boom in home-bound, work set-ups, and other areas that received the most impact from the months-long lockdowns.
As Australians prepare for the impending tax season to meet the November 1 deadline, the ATO finally unveiled their primary targets, so professionals like you don’t make the mistake of reporting unsupported deductions.
ATO’s Focus Areas: Key Points for Tax Returns
ATO puts the spotlight on the effects of the pandemic; that’s why they will be targeting the following for 2021’s end of the financial year:
Work from Home Offices
There’s no doubt that COVID-19 put a wrench in everybody’s plans, but the biggest impact it made on the economy is its sudden demand for work from home set-ups as home office expenses skyrocketed to a whopping 4.42 million.
Even business leaders had to unlock their creativity to turn a relaxed environment into a perfect space for productivity, be it investing in ergonomic equipment or turning kitchen tables into a makeshift desk. Nonetheless, that doesn’t mean you can add a new bed as part of your deductibles.
The ATO will crackdown on specific home office expenses, from basic essentials such as phone, internet, HVAC, lighting, and other business-related costs for an all-inclusive claim of 80¢ per hour. Meanwhile, the ATO also calculator a fixed rate of 52¢ an hour for dedicated workspaces, including computer consumables.
Investment and Rental Properties
The real estate industry took one of the biggest hits as COVID-related restrictions disrupted their operations, particularly Australians with investment and rental properties. This means their means of income have fallen short due to the little-to-no willing renters when the time for social distancing was at its peak; that’s why the ATO encourages to declare income from all real estate resources and get deductibles for income-producing spaces only.
One of the most revolutionary digital assets that paved the way for blockchain technology in transaction-related activities, the economy’s shift to digital solutions solidified the advent of cryptocurrency.
Businesses that use cryptocurrency to obtain goods or services can get capital gains events, but the tricky part is that cryptocurrency exchange lacks clearly defined records.
The Bottom Line: Unveiling the ATO’s Top Targets for 2021’s End of the Financial Year Tax Returns
Tax season can often feel like a bane to all working individuals; that’s why getting a head start on your obligations to the Australian Taxation Office (ATO) can save you from dealing with costly consequences as the COVID-ridden financial year draws near.
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We offer various accounting services, such as individual tax returns, small business accounting, SMSF audits, trust account audits, special financial statements, and more. Learn more about how our accountants can help your business today!