Over the next couple of months many people will potentially receive assistance and increased payments from Centrelink under the Covid-19 stimulus packages. This extra cashflow will be of great benefit to many taxpayers, however, if you are someone who is receiving these additional benefits, you need to remember that many of them will be considered taxable income when it comes time to lodge your 2020 income tax return. As this will be additional income earned on top of other income or Centrelink payments there could quite likely be a shortfall in tax withheld.
People receiving these payments, especially those who may have been employed up until earlier this year, and now expect to receive these benefits for the remainder of this year will be at risk of receiving a tax bill with the lodgement of their 2020 income tax return. Therefore it is important that those receiving or expecting to receive these payments consider whether they should request to have tax withheld from their payments. We expect this will be something that is widely overlooked and will more than likely result in many nasty unexpected surprises come July 2020.
If you have any questions regarding this don’t hesitate contacting our office.
From your team at Elite Accounting