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Why your tax refund could be bigger than ever this year

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With millions of us taking a financial hit from COVID-19, there's never been a more important time to get your taxes right.

Tax time 2020 is looming: here's what you need to know to get the best outcome from this year's return.

If you lost your job or had your hours reduced, it's likely that your employer will have over-deducted tax earlier in the year in relation to your wage or salary. That could mean you're entitled to a bigger refund than normal.

coronavirus tax refund bigger than ever

If you received the $1500 per fortnight JobKeeper payments from your employer or through your business, this is included in your taxable income for the year and will need to be added to your return.

Most employers are no longer obliged to provide you with a payment summary. Instead, they report your year-end details directly to the ATO.

To obtain the equivalent of a payment summary (now called an "income statement"), talk to a tax agent who can download the information for you direct from the ATO when you complete this year's tax return, or obtain it yourself via myGov.

You may be entitled to the low and middle income tax offset if your taxable income is below $126,000.

The base amount is $255, rising to a maximum of $1080. The amount you receive will depend on your circumstances, such as your income and how much tax you have paid through the year.

We're cutting through the confusion to help you manage your money during the coronavirus outbreak. Click here for more on how COVID-19 could affect your job, budget, super and investments.

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Mark Chapman is director of tax communications at H&R Block, Australia's largest firm of tax accountants, and is a regular contributor to Money. Mark is the author of Life and Taxes: A Look at Life Through Tax.
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