Countless people around the world have been influenced by the COVID-19 pandemic. And, almost every country is encountering a financial difficulty with an economic drawback. In response, governments have executed help measurement programs to give some relief to the country’s people.
So, when we talk about tax deductions during the lockdown where some businesses are shut down for some time and most of the people have started work from home, governments around the globe have taken relief measurements. For example, many Australians have been influenced by the pandemic. Accordingly, the government has executed a program of help measures to help those encountering financial trouble.
But most of the people are still in a dilemma about their tax deductions. For those, here are some points that can help those are confused about their pay charge:
Get updates
In Australia, the ATO (Australian Taxation Organisation) works in the matters of deductions and annual payments of taxes. Likewise every country has its own department related to the same. These tax departments regularly update the notices regarding the new policies and help measurements. Tax payers need to check for these updates on a regular basis regarding any new update. For example, what are the tax deductions you can claim while working from home and so on.
Address your issues to tax department
Also, in the event that you experience monetary challenges as an immediate consequence of the coronavirus pandemic, you can request additional chance to pay a tax obligation that you owe to the ATO or your country’s tax department. They will guide you accordingly so that you do not feel hassle and get the maximum relief of mind.
Follow the guidelines
Another thing to do is to follow the government guidelines issued for the tax payers. And, if you wish to claim any deduction you have to follow the new rules provided by authority. As the pandemic rise and the situation of businesses shifted, most local governments have issued some new policies and guidelines to counter with problems faced by people during the COVID-19 pandemic. So, one has to follow the same.
What are the tax benefits you can claim?
As the last few months were pretty difficult for everyone, most of the people with jobs stuck at home and trying to work while they are away from their offices. It surely is inefficient to do your regular job from home but it looks the situation might continue for some time.
There are also certainly additional expenses including telephone, internet, computers and so on. And, you wish your expense load reduced by some tax benefits.Let’s check what tax benefits you can claim or what is not:
Tax benefits for an employee
Different countries offered different benefits to the employee section. While the ATO has issued the guidelines to accept to calculate deductible work from home expenses, the United States consider it miscellaneous itemized deductions, which are not deductible on 2018-2025 tax returns.
As above mentioned, the WFH have additional expenses that are borne by the employee itself. So, where the pandemic already affected the monthly budget, bearing this extra expense may be difficult for some people. Having some tax relief can reduce the burden, so one should check the official websites of tax departments and post queries to know what employee tax deductions you can claim in your country.
Tax benefit for self-employed
For the self-employed persons, things might little change. Most of the countries are giving maximum relief to the people having home offices. As a self-employed worker, there is variety of home office expenses that you can claim in tax deductions now. There are some common tax deductions you might be missing. For this, you need to go through the updates given by country government.
Before the COVID-19 situation, the access of these tax deductions was limited but now the things have changed. More people can claim home office deductions and several expenses e.g. internet, cell phone service, etc. are now deductible.
Automobile expenses
In some countries, the business related car use is not a deductible expense. But in the pandemic situation many countries have included this expense in deductible taxes. In Australia, the ATO announced the fringe benefit tax treatment rules for work related automobile use.
In United States also the Internal Revenue Code imposed strict rules to keep log records of where you are going (for business purposes) and the deduction can be made on the actual business cost spend over it. Meanwhile other developed countries also following the same.
Expenses over meals
If the employers are giving their employees, accommodation and meals that will not be deductible in taxes, even ATO has exempted it from the FBT (fringe benefit tax). Meal is a complex requirement to add in tax benefits, so the meal at home cannot be claimed as deductible tax. However, in offices, the meals are provided through the company’s expenses. But in the case when you are working from home, the benefit you cannot get for now.
Other benefits and exemptions
With the rise of work from home during corona virus pandemic, many employers have provided their employees the laptops, printers and portable devices for an ease. These types of costs are not included in tax deduction benefits. And, for the employers as well as employees, these expenses have to be borne by themselves only. Right now, there is no government relief is indicated to provide benefit on such expenses.
Now, you are aware of the recent tax deduction benefits that you can claim and feel relief during this pandemic situation which is for unpredictable time. So, go through the latest announcements and updates to know more about your country’s guidelines on tax benefits.