COVID-19 Tax Deduction

COVID-19 Tax Deduction Deadlines Approach

Tax deductions introduced by the Australian Taxation Office to lessen the impact of COVID-19 are approaching the end of their eligible timeframe.  To ensure that you or your business do not miss out, here are some of the deductions you could claim at the end of this financial year (if eligible).

Loss-Carry Back Rules

Eligible businesses with an aggregated turnover of less than $5 billion or corporate tax entities that meet an alternative $5 billion total income test are able to use the temporary fill-expensing measure again this year. This will allow them to deduct the full cost of eligible depreciating assets acquired from 6 October 2020 and first used or installed ready for use by 30 June 2023. The original deadline of 30 June 2022 was extended for an additional year, so make sure to make use of this in your business!

Shortcut Method

If you have had to work from home over the last year between 1 July 2021 to 30 June 2022, you can claim a deduction for working from home.

This is to address expenses that you may have had to make in order to work from home, such as paying for electricity or equipment to work from home. These expenses cannot have been paid by your employer, you need to have paid for them yourself.

You can claim $0.80 for every hour that you worked from home, but you are not able to claim for anything else if using this method.

To claim this, you need to:

  • keep a record of how many hours you worked from home
  • work out your deduction amount
  • write the deduction amount in your tax return in the ‘Other work-related expenses’ section
  • write ‘COVID-19 hourly tax rate’ in your tax return.

If you are consulting with a registered tax agent for your return, they may recommend this as your best course of action.

If you have any queries about your COVID-19 tax deductions or need further assistance, please don’t hesitate to contact our team for expert guidance and support.

The information contained in this publication is for general information purposes only, professional advice should be obtained before acting on any information contained herein. The receiver of this document accepts that this publication may only be distributed for the purposes previously stipulated and agreed upon at subscription. Neither the publishers nor the distributors can accept any responsibility for loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this publication.

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