How to Lodge Your Tax Return Online
Business| By Nina Hendy | September 15, 2020
Get your financials in shape faster – read our easy guide on how to lodge your tax return online from home with the ATO (Australian Taxation Office) this year.
Been putting off doing your tax return? It’s worth getting this essential life admin task off your list sooner rather than later. Not only will putting this big tick on your to-do list help you feel productive and in control, you could also potentially pocket a refund.The Australian Taxation Office (ATO) has made it simple for you to handle the process yourself, with all the tools you need to lodge your tax return online. There are clear instructions and explanations at every stage, so it’s easy to give it a go.
Before You Lodge
You will likely need to lodge a tax return each year. However, if you weren’t working or didn’t have any tax withheld, you may not need to. If that’s the case, submit a non-lodgment advice form. Not sure? Use this tool to check if you need to lodge this year.
Doing Your Tax Return Online With myGov
The first step to lodging your tax return online is setting up your myGov account, a secure, password-protected portal that links you to a range of federal government services online such as Medicare and the ATO.
If you don’t have a myGov account, set one up here. You can contact the ATO if you need assistance linking your myGov account for the first time.
If you already have a myGov account linked to the ATO, you can log in and prepare your return here. Follow the prompts and enter the required information and you’ll have your tax return calculated in no time. If online feels daunting, then yes, you can lodge a paper return via post, but bear in mind you could be waiting about 50 days for your return.
What Can I Claim?
You might know you’re entitled to claim deductions for some expenses incurred when earning your income, as long as you have records to prove it. If the expenses were for both work and personal purposes, it’s important that you only claim for the work-related portion of that expense.
“There are a few golden rules for any expense,” says Susan Franks, senior tax advocate at Chartered Accountants Australia and New Zealand. “Firstly, you need to have actually paid for it. It also needs to relate to earning an income, and if you've been reimbursed for the expense by your employers, you cannot claim it.”
Work-related expenses (depending on your occupation) may include:
- Vehicle and travel expenses
- Clothing and dry-cleaning expenses
- Home office expenses
- Self-education expenses
- Tools, equipment and other assets
- Professional membership fees
- Personal super
- Gifts or donations
- Cost of managing tax affairs
If you’ve been working from home this year – and let’s face it, that’s a large portion of Australian taxpayers – you can potentially claim a deduction for expenses incurred relating to that work, such as phone and internet charges, and even costs such as electricity. And if you are running a business from home, you may be able to claim occupancy expenses (such as mortgage interest or rent and house insurance premiums).
Hot Tip: The ATO has a simple tax calculator, which takes between two and 10 minutes to use.
What Can’t I Claim?
Work expenses reimbursed to you by your employer – such as a phone or laptop – are not deductible. Employees can’t claim occupancy expenses such as rent, mortgage interest, water and rates – that’s only available for those running a business from home. And just because your employer provided tea and coffee in the office, doesn't mean you can claim those if you are now working from home.
“Expenses have to be directly related to your work,” says Franks. “Sustenance, like coffee or lunch, can’t be claimed.”
She also points out that with your household working and learning from home, you should be careful to distinguish what portion of costs such as internet bills are for work purpose and what portion is for remote learning – you can’t claim the latter.
Can I Claim if I’m on JobSeeker or JobKeeper?
If you’ve received JobKeeper or JobSeeker payments, the ATO will automatically include these in your tax return. Sole traders will need to include JobKeeper payments as business income in their tax return.
“JobKeeper is assessable income, but the main question is whether you are receiving it because you are working or because you've been stood down,” says Franks. “You can only claim work-related deductions for the hours you work.” Refer to your timesheet or your work diary to confirm how many hours you have worked while receiving JobKeeper.
There are three ways to calculate your home office expenses, depending on your circumstances. You need to meet the record-keeping requirements to use each method.
In response to the volume of taxpayers now working from home due to COVID-19, the ATO introduced a temporary shortcut method, which offers a simple way to calculate expenses with minimal record-keeping requirements. This method allows you to claim 80 cents for each hour you worked at home from 1 March 2020. The ATO will review the end date for this shortcut method in the 2020-21 financial year, depending on the COVID-19 situation. At press time, it is available until 30 September 2020. Remember, if you claim under this method, you can’t claim any other expenses for working from home and you should keep a thorough record of the hours you have worked.
Fixed Rate Method
Using this option, you could claim a deduction of 52 cents for each hour you work from home for the work-related expenses you incur. This rate covers expenses for the decline in value of home office furniture and furnishings, such as a desk, as well as heating, lighting and the cost of repairs to office equipment and furniture. To calculate this method, you must keep records of your actual hours spent working at home for the year, or a diary showing your usual pattern of working from home over a four-week period. Franks says this method might be suitable for those who worked from home regardless of COVID, or who have invested in new office resources such as chairs, desks or laptops during this period – check with your tax agent on which method is best for you.
Actual Cost Method
This method allows you to claim running costs directly related to working from home, such as internet costs or printer ink. Just hang onto your receipts!
Need Help? How to Find an Accountant
A growing number of tax agents have started offering virtual appointments via videoconferencing platforms, with many adding online forms allowing you to book appointments or begin your tax return online. Ideally, you send your paperwork to them prior to the appointment via email or a Cloud platform so you can work through the form together during the call. Some tax agents also use tools such as Xero to allow you to sign documents digitally, rather than printing out and scanning reams of paper.
“Tax agents do a lot digitally, so dealing with clients over videoconferencing apps has been done really well,” says Franks. “The most important thing is to check if your tax agent is registered with the Tax Practitioners Board.” You can search the register to find an agent you’d like to work with.
Other Tax Time Tasks
Once you’ve lodged your return, it’s time for a bit of financial housekeeping. Here are some good places to start.
Consider a better filing system There are far better ways to store receipts than shoving them in a shoebox. Document box files and expanding files can help with the organisation of paper receipts, or consider an electronic receipt-storage solution that can integrate with online accounting software.
Review finance options Make sure they meet your current needs, and any future needs you’re aware of.
Assess your tech Take a look at the latest solutions that can help improve your efficiencies at the office. Possible tax-deductible office upgrades could include updating your laptop or printer, new software, a second monitor, filing cabinets, or perhaps changing to a sit-stand desk or investing in a new chair.
Make a new financial year resolution It’s (sort of) a new year, and a chance to set your financial future on a different course. If you’re spending more time at home, use that time to look at your expenditure and consider whether there are ways to save more. Perhaps also consider funnelling an extra few dollars a week into your superannuation savings, which could provide tax savings.
* This is general information only and does not constitute taxation or legal advice. Other requirements under the tax law apply. Seek professional tax and/or legal advice to determine whether you are eligible to claim a deduction for any purchases.