5 things to do now to be 2020 tax ready

Checklist: 5 things to do now to be 2020 tax ready

  • The key number you need
  • Know what you can claim
  • Organise your paperwork
  • Learn key tax time dates
  • How to skip the queue

The end of June marks the start of tax season in Australia and for those banking on a fast refund, now is the time to get your affairs in order.

While you may not be able to officially lodge your tax return until next month, there is some legwork to be done to see that cash land in your account.

It pays to take some time this month to collate records, receipts and paperwork so that you’re ready to roll come lodgement time.

And when is that exactly?

Read on to learn the key lodgement dates and what you need to do now in order to receive your return sooner.

Find your Tax File Number

It may sound obvious, but your Tax File Number (TFN)  is the key that unlocks all of the information a tax professional will need to lodge your return.

With group certificates and payment summaries no longer supplied to workers, employers lodge that information using the Single Touch Payroll System.

“Your TFN allows the accountant to access all of that information on your behalf,” says eTeam Tax Director Ross Morello.

How to Find Your Tax File Number (TFN):

  • A previous year’s tax return
  • A PAYG summary (issued by your employer)
  • A previous year’s Notice of Assessment
  • Ask your employer (they should have your TFN on file)
  • Your superannuation member statement

Understand what you can claim

While expenses such as work-related travel, accommodation, clothing and professional development are common to most sectors, there will be other claimable expenses relevant to your industry, such as licence fees, insurances and memberships.

“We provide our clients with a handy list of the more common deductions most employees may incur as well as those which are specific to your industry,” says Mr Morello.

Those workers who were sent home to do their job during COVID-19 will likely have incurred additional running expenses which can be claimed back at tax time.

For the period that you worked from home, you can claim a portion of your electricity, lighting and cooling costs as well as the work-related use of your mobile phone and internet.

If you had to purchase tools and equipment to do your job from home - such as a laptop, desk, chair, monitor or headset - those items are tax deductible too, as long as you’ve kept the purchase receipts.

“We encourage our clients to lean on the expertise of the accountant handling your claim to understand what your entitlements are,” says Mr Morello.

Get your records in order

In order to claim expenses as tax deductions, the onus is on taxpayers to keep accurate records, receipts, bank statements and invoices as proof.

Now is the time to get those in one place such that you can reference the figures to generate a detailed list of deductions for your tax return.

While the days of handing your accountant a shoebox full of receipts are over, workers still need to retain those records in the event of an audit by the Australian Taxation Office (ATO).

“Getting your paperwork in order now avoids delays in processing your return,” says Mr Morello, who advises taking photos of your receipts as the costs are incurred and saving them into a digital folder.

For those lodging online, you will be asked to provide a list of the deductions you wish to claim for by naming the item and the cost incurred.

“Those who are able to provide a full and complete list of deductions can expect the eTeam Tax agents to complete that phase of their return within 24 hours,” says Mr Morello.

The key tax dates

The ATO will start the processing of 2019–20 tax returns on 5 July 2020 and expects to start paying refunds from 16 July 2020.

However, workers are advised to wait until their final pay for the 2019-2020 tax year has been submitted by your employer before lodging a return.

Employers with less than 19 employees have until July 31 to submit all wage information while those with 20 or more employees must finalise by July 14.

“If you lodge too early and those figures change, you could end up with an increased refund in the best-case scenario or having to pay tax back in the worst case,” says Mr Morello.

Similarly, leaving it too late to lodge can have consequences too —an $850 late lodgement penalty is payable if you miss the cut-off.

While the final deadline to lodge your tax return is generally October 31, taxpayers who lodge through a tax agent have until May 15 next year to lodge without penalty.

The ATO aims to finalise electronically-lodged current year tax returns within 12 business days of receipt and released refunds take up to three business days to show up in your account.

Register to lodge online

While you may not be in a position to lodge your return until July, those who wish to be at the front of the queue can register online now.

Taxpayers have this year been warned of a ‘bottleneck’ as inundated tax professionals grapple with the chaos caused by COVID-19 changes.

The good news is that it’s an easy process to get your lodgement in line early in the season.

Registering to lodge your 2019-2020 tax online typically involves completing a form which asks for basic details such as your name, email address, phone number and Tax File Number.

“That information is enough for a tax agent to get started on your return,” says Mr Morello.

“By the time a list of deductions has been prepared, we may then be in a position to access your final payroll figures and lodge your return.”

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All information provided on this webpage is general information and may not meet your needs. While every effort is made to maintain and update this article where necessary, you should confirm that the information is current and relevant to your needs first. If you have any questions or want personalised tax advice, please get in contact with us.

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