Tax time is coming up so just wanted to start a discussion on tips and tricks to maximise efficiency of your tax return.
What are some things which you do or intend to do that is either very useful and/or not very well known.
Some common things:
The cost of your tax accountant to do your tax is deductable, so it makes sense that the trip to see him is also deductable.
However unless your tax accountant is in another city or state the deduction would not be much. If that is all the value added by the tax accountant you may be better off doing your return by yourself.
Nah, it's for other reasons too I use him.
Always claim the tax charge from them but this was first they mentioned travel to from. $20 extra is better than nothing.
A friend of mine moved to Brisbane from near Sydney years ago, but retained his tax accountant near Sydney.
Once a year he goes to see him for his tax and since he prefers to drive there he puts the km for the whole trip (per km calculation) plus meals plus accommodation (only the one night near Sydney) as a BIG tax deduction.
That makes a nice long weekend (4-5 days) to see his family there and on the way back he stops for a few nights holiday along the way (that part of accommodation/meals cannot be a tax deduction though).
Unless you're seeing your agent before the end of the financial year i.e pre 30 June, his fees and travel costs are deductible the next year.
That's correct.
We are always doing the year before in April.
Tax deduction for computer is also possible if used for work. However, does anyone know if "parts" of a computer counts (e.g. if I purchased a CPU or some RAM that will be used for work purposes)?
no idea, but accountant said to claim new modem and printer
Yes it would be counted. Just remember if it is for both personal AND business use, you will need to apportion it.
Disclaimer: This does not constitute to any advice legal in nature. Please check with your tax accountant otherwise use at your own risk.
It would be added to the tax written down value of your computer and depreciated over the remaining tax useful life
It's all here
Under $300 deductible full amount, over $300 depreciation over a number of years. Includes spare parts and external hard drive and software etc.
Also if you use the your PC for private use as well as researching financial decisions and investments etc, deduction is reduced by 50%
Just to clarify tax deduction for educational courses - whatever you're studying and want to claim needs to have a sufficient connection to your current employment I.e you can only claim expenses incurred in earning that income, or likely to increase that income in the same field.
https://www.ato.gov.au/Individuals/Income-and-deductions/Ded…
For example if I'm an accountant, I can't go and take surfing lessons and say I'm training to be a surfing instructor.
Or a less far fetched example, if I'm an accounting student working at the supermarket, I can't claim the cost of my accounting studies.
Don't forget to keep your one month diaries recording your work/private use of your phone/compomputer/Internet to work out your portion lol
Washing/dry cleaning is only on uniforms/clothes with logos/occupation specific/protective clothing. Normal clothes (suits, pants, business shirts, blouses etc) can't be claimed
Do they ever ask you to prove it? For example, if I use my computer 75% of the time for work, do they ever ask for the mathematical derivation of the figure?
IF you were to get audited, then yes they would ask you what you claimed as a deduction, and all substantiation. so for computer depreciation you would need the receipt to prove cost base, your depreciation calculation and your one month representative diary to prove your work relation portion i.e. the 75%. You may even get asked for a letter from your employer confirming that you do work from home.
Thanks for the info. Just to confirm, the 75% refers to "75% of the time spend on my computer is used for work" and not "75% of time spent on work is on my computer". Is that correct?
I am no expert/this is not 'official/professional advice' (please consult your tax-agent before making a decision on this), BUT:
The CAR could potentially be a biggy, especially if you work from home (mostly), but sometimes need to drive from home (i.e. your primary place of work) to somewhere else, in the course of completing your work. To my mind, that qualifies as 'traveling from one work-place to another (and back again)'.
Even if you do this just once a week, the deductions could add up to a substantial amount.
For example, let's say you tutor students from home, and once a week (or so) you travel to the nearest university library to access the university's online collection of journals/resources/etc. My assessment of the 'rules' is that you could then claim quite a sizable proportion of all of the costs associated with your car as a tax deduction.
I may well be wrong about this, so again I stress, if you think this may be applicable to you please check with your tax-agent before actually including this in your tax-return. If they decide that it is valid though, it is big because it includes a percentage of all of the costs associated with petrol, car maintenance (repairs/servicing), insurance, road-side-assistance etc.
If you claim c/km, you can claim the first 5000km without substantiation.
No substantiation required, but you still need to be able to explain why the 5000kms relates to your 'work'.
Are you still able to claim this if you get travel allowance from your company for use of your own car.
I vary between working in the office and the site office on site which is 22kms away so do a fair bit of travelling.
I get the travel allowance sheet signed off by my boss so this could be evidence and keep reciepts of all fuel.
I would say no, if your getting an allowance that is compensation for the expense of using your own vehicle. Tax deductions are for reasonable expenses out of your own pocket.
Then there is also the ambiguities surrounding what you can claim when you work from home, re 'the home office'. Currently the information available to 'Joe-public' is quite vague in this respect. For example, if I work about 6 hours per day from home, can I claim 1/4 of the costs of keeping that 'work-place' functioning (I'm talking heating/cooling, water bills, building insurance, etc.)? This is something I'd really like some expert (bystander?) advice on. My current understanding is that if I attempt to include a proportion of the interest charged on the mortgage on the property I work from (my home), then I run a real risk of 'capital gains tax' complications arising in the future, if I decide to sell the joint. But I am undecided as to whether such complications should/would also arise/be applicable merely based on the fact that I had included deductions such as power/water/etc. in prior tax returns relating to that same property (which happens to be my place of residence, 3/4 of the time).
Difference would be if it's a home office vs a home business.
Office is very restricted. Business, you basically can work out the sq m taken up by the business and claim everything proportionally from there (within reason).
It's as you say, if you claim your home proportionally of the actual expenses or by the space used then you run the risk of not being able to sell your private home completely tax free. IMO a very foolish thing to do if you haven't planned or calculated your intentions, risk tens of thousands of dollars just to save some bucks now.
Stick to fixed rate home office deductions (something like 45c per hour?) and you will not have the issues.
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A slight shift in topic, but does anyone know of a good tax accountant in Sydney (north west suburbs)? Need to do last 3 years tax return.
Hi guys
I'm an office worker. catch PT to and from work. do my hours and go home. no uniform. not studying. I pay PAYG tax
I do my own tax return and I barely get $100 back - and thats only because i made up some deductions that "slightly" relate to my work. I really can't think of anything to claim. Not sure what an accountant could come up with either?!
Am I missing something?? or does that sound about right for my situation??
When you say "slightly" related to work, what do you mean? Can you give some examples?
ummm maybe eg. I say I work from home "sometimes" and claim some electricity…. even though I probably work from home "rarely"…
overall my question is whether it is normal or not to get hardly anything back? or is there something I have missed?
thanks
Yes it is normal to get hardly anything back, some people even have to pay the ATO back (e.g. if they have multiple jobs). It all depends on how much you paid over the year as PAYG tax compared to what you are required to pay in terms of your total taxable income level over the year.
and usual things like
donations
stationary
internet at home if you use it for work
union and professional membership fees
one i didnt ever claim (never thought of it) except last time with my new tax accountant - driving to and from seeing the tax guy.