Last AMA of The Financial Year - Tax and Tax Return Questions - Ask Away!

Associatednicolemcmilllon @ Titanium Accountants & Advisors on 18/06/2017 - 16:25
Last edited 05/07/2017 - 10:16 by 1 other user

Hi All,

With the end of financial year coming up - most of you will be looking at lodging your returns in July and getting those refunds as soon as possible.

If you have any tax or tax related questions then ask below and I will answer them for you.

Disclaimer: Any advice or answers given will be general in nature and you may need to speak to a tax adviser for more personalised advice.

P.S Please see my two previous forum post as we try to avoid duplicate questions.

I will reply to this thread with a link to the previous posts. Please go through them to make sure you're not asking the same questions.

Look forward to answering all your tax queries.

Ask Away!

Mod: Removed solicitation.

Financial

Related Stores

Titanium Accountants & Advisors
Titanium Accountants & Advisors

Comments

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 21/06/2017 - 18:32

      will you have any Australian sourced in come, such as shares, interest etc. You will still need to lodge a tax return if you do. In that tax return you can elect that you are a non resident.

      • WestCoastOZ on 21/06/2017 - 20:55

        Hey Nicole,

        I may leave some cash in the bank which will generate some interest. But apart from that, no shares, real estate, etc.

        What would I have to do prior to leaving the country?

        Thank you.

        Ray

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 21/06/2017 - 21:16

          Just get an agent to lodge a final tax return for you which will let the ATO know that no returns in the future will be lodged.

          Please note you still need to lodge returns if you have HELP debt :)

        • WestCoastOZ on 22/06/2017 - 17:59

          @nicolemcmilllon:

          Thank you so much! Really appreciate your help. And no HELP debt for me thankfully :)

  • chaseme on 21/06/2017 - 18:10

    Hello OP,

    I've recently become an Uber driver, keeping a log book to work out the percentage of fuel used to claim deductions with lodging my tax return.

    I know that the logbook method is what I use to calculate the fuel deductions (as mentioned prior), is the same percentage used for expenses such as vehicle registration, car insurance and cleaning/maintenance expenses? Or do I have to use a different method (or percentage) to calculate a percentage estimate like I do with my phone?

    Thanks!

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 21/06/2017 - 18:32
      +1

      Same method is fine for all motor vehicle expenses.

  • Toons on 21/06/2017 - 18:21

    sorry if this has been asked and answered before

    Above average property in decent area but not worth selling at the moment due to market

    Was told to put it up for rent rather than wait to at least stop the flow of money going out.

    Is there a financial reason or any benefits that can be had by getting it signed up and marketed for rental before the end of financial year. given 9 days left or can other benefits come into play by getting it in now irrespective of date signed with property manager.

    Considering the whole year has been a loss

    Or are we looking at this the wrong way ?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 21/06/2017 - 18:34

      There is no difference if you start renting it this financial year or next.

      If the property is positively geared (meaning the rental income exceeds expenses) then you will pay tax on the net rental income in your tax return.

      • Toons on 21/06/2017 - 19:26

        thanks,

        I wasn't sure if they were insinuating getting depreciation cap table etc. and all set up costs would at least be something that could be claimed usefully this year to more benefit now rather than whilst it's generating an income next year bearing in mind anything earned will be taxed at maximum rate

  • drprox on 21/06/2017 - 19:01

    i will have to pay some capital gains this year so…
    1.) how late can i do my return?
    2.) any sort of payment plan or way to postpone payment? :D think payment plans have plenty of interest these days..

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 21/06/2017 - 19:11
      +1

      If you have an accountant prepare your return in the coming months. They can let you know of the estimate payable. Then we get extensions so we don't have to lodge until May next year so you could have 11 months to save up :)

      • drprox on 21/06/2017 - 20:10

        thanks very much :)

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 21/06/2017 - 21:13

          You're welcome. PM me if you would like us to prepare and lodge your 2017 return in the future :)

  • MathNerd on 21/06/2017 - 19:04
    +1

    Hi Nicole, I don't have a tax question/s but just wanted to chime in and say a big thanks again for doing this, you helped me out back in your first AMA and I find it wonderful that you're doing this for free.
    May many bounds of good luck and good karma come your way!

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 21/06/2017 - 19:09

      Duplicate

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 21/06/2017 - 19:10
      +3

      Perhaps I should start a GoFundMe page considering how many questions are here. IF everyone donated $1 perhaps we could raise money for a charity! Doubt anyone would contribute though lol! Thanks for your kind words :)

      • MathNerd on 22/06/2017 - 10:43

        If you do decide to one day do this, count me as one of the first donors :)

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 10:49
          +1

          Far too kind :)

  • Starbuck888 on 21/06/2017 - 19:43

    Hi Nicole,

    If I co-own an investment property (10% my share / 90% my uncle) and I pay 100% of the mortgage interest, running costs i.e. water, gas, electricity, internet etc do the costs get consolidated into 1 pool and then split out based on the percentage share i.e. I can only claim 10% in my tax return and my uncle can claim 90%? Or am I able to claim the entire 100% of the expenses (I doubt it but wanted ease of mind)?

    Thanks!

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 21/06/2017 - 19:53

      Everything apart from interest has to be split per the ownership percentage regardless of who is paying the expenses.

      With interest, each person deducts their share of interest on their loan. If you have the one loan, then I assume it would be still 90/10. If however you each had your own loans then you would deduct 100% of your own interest.

  • [Deactivated] on 21/06/2017 - 22:28

    Hey. I did a first aid course to help me find a new job as mine has expired and it is required for security officers. I'm assuming I can claim that cost as a work expense if I was currently employed, but not sure as I was unemployed at the time. However since it is a 100% required thing for my field, can I claim that? Thanks for your help.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 02:46

      No because you were unemployed at the time it can't be related to your current employment.

  • prinzw on 21/06/2017 - 23:01

    Hi OP!

    First thing first, thank you so much for doing this for the community!

    I have three questions about my new SSD. I am a programmer and I brought a new SSD for about $300 for my PC at home. I need this because I need the SSD performance for my work and improve my productivity when I work from home. However I use the SSD to store my personal data as it is my private PC. so my questions are 1> can i claim this? 2> if I can how would i rate the portion to claim?

    Another question is about some stationary for work at home. As I work at home from time to time, it is my company's policy to enforce my work environment at home to meet the company work safety and erogonimic requirement. To do so, I bought a new chair, desk lamp and screen stand. The total cost is about $350. Should I rate the portion as how many hours I worked in that environment or if there is any other way/title to claim it? (e.g. if I worked 20 days this year, it will be $350 * (20 days * 8 hrs ) / (365 days * 24 hrs) = $6.39 only?)

    Thank you in advance!

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 02:41

      Regarding the ssd you just need to estimate the work purpose and private purpose. For example 50% sounds like a good number. So claim half of it.

      Regarding your stationary. You estimate how often you use the chair for work purposes so 20 days a year. And how often you use the chair for private proposes. Once again it might be 50%. Therefore claim 50% of the chair lamp and stand. It will be $175 so it's not too much anyway you will be fine.

      • fomal on 23/06/2017 - 13:27

        Wait I dont think he could claim $175 if he only work for 20 days this year?
        And 50% usage for work is: $350 * 20/365 * 50% = $9.58?

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/06/2017 - 13:29

          Cost of each asset is less than $300, just claim it in one go x50% rather than depreciating it.

  • StonedWizard on 21/06/2017 - 23:06

    I use my gym bag to transport my laptop to and from work cause I don't like my work provided laptop bag. Can I claim the cost of my gym bag as a tax deduction ?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 02:41

      Yes provided it's not a $5000 prada bag. If it's a normal reasonable bag then yes.

  • archkesha on 21/06/2017 - 23:22

    I am an employee. I went to a conference in Europe for work and was paid for travel and accommodation by a third party (supplier). I made changes to my itinerary while in Europe to attend to non conference related business but still in line with my work. Can I claim local airfares? Can I claim food and local travel expenses, i.e. taxis? Thanks!

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 02:44

      You should only claim taxi and meals for the conference days.it will most likely not amount to more than a couple of hundred. You can't claim anything that was paid for by the supplier such as travel and accommodation

  • justcallmeboss on 22/06/2017 - 00:28

    Hi, if I use one of my free AMEX flights for educational purposes related to my job, can I use the flight as a deduction? If yes, and the flight was a reward flight, how would I quantify the amount?

    Thanks in advance

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 02:44

      No you can't. And even if you could as you are not actually paying for the flight the cost would be 0.

  • concento on 22/06/2017 - 01:50

    Hi Nicole, just wondering if I have some shares that I know will likely end up being a loss, am I able to get tax offsets or income reduction as a result of my loss on shares? Therefore is it better to sell them within this financial year so it can help reduce my income for this financial year?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 02:46

      Capital losses can only offset capital gains. They can't offset your other income. I can't provide financial advice on when to sell your shares but if you don't also have capital gains then the losses would just sit there indefinitely. They can't offset your other income

      • concento on 22/06/2017 - 11:54

        Great thanks for the info. So if I sell my shares with a capital loss this year, can they be used for offsets in the next finanacial year? Or are they only able to offset against any capital gains incurred in the same financial year? Thank you so much for your advice.

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 11:57

          The capital losses will sit there indefinitely (forever) until you have capital gains to offset them against. This can be many years down the track until you make a capital gain. Just make sure to show the loss in your tax return this year and it will carry forward to future years.

        • concento on 22/06/2017 - 12:00

          @nicolemcmilllon:
          Great thanks. So that means there is no real need to rush to sell the shares before FY end if I have no urgent capital gain to offset against? Great advice thank you.

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 12:19

          @concento: Correct

  • totalgadget on 22/06/2017 - 05:08

    Hi

    Not sure this was asked earlier. I could not find specific details. Appreciate your help in clarifying doubts for the forum members.

    I'm IT contractor (PAYG). Also a ABN registered sole trader for Trading (Financial instruments)

    I bought a SSD, HDD but uses my laptop for this sole trading purpose. Can i claim it as expenses?

    Also a desk chair(costing around 500) for this purpose. Purely business. Planning to buy a PC next year to separate my work and personal stuff until then using my personal laptop.

    My Sole trading is at my home,i kept study room as my office. At the moment i haven't made any profit this year, indeed i was on loss side and this is my first year as sole trading.

    I work as IT contractor for few months in a year and rest focus on my sole trading. So my question is this chair and other misc computer parts can be claimed under sole trading or as IT contractor? Also any part of the rent like 10-20% of rent for expenses for office at home? Is it reasonable?

    Thanks

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 08:30

      SSD, you can claim it against your trading income.

      The desk and chair you can claim against your business income on the percentage that is business use.

      Just read that you haven't made any profit, the losses can't be offset against your PAYG income, they must be carried forward until the business makes a profit.

      You can apportion the costs of the desk/chair/parts based on work related/business related/private use.

      Don't claim rent expense as the sole trading business won't need it. Unless your employer specifically needs you to work from home (not just after hours) then I wouldn't claim the rent against PAYG income either.

      Also, see an accountant rather than trying to do the return yourself :)

  • Guybrush- Threepwood on 22/06/2017 - 06:30

    Hi. I've moved out of a PPoR and rented it out. Just before I moved I changed the carpet (due to damage) and had some maintenance completed.

    A) is the carpet and maintenance tax deductible?

    B) can i claim moving expenses or any expenses moving into my current rental?

    Thank you. you've been very generous with your time and knowledge .

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 08:26

      You can depreciate the carpet and if the maintenance is a small amount you can include it in your tax return against rental income.

      Any moving expenses are not deductible.

  • Limegreen on 22/06/2017 - 07:47

    If i work as both an employee (2 jobs both part time) and as a contractor (with my own abn) on the side, which is the best way to get most of my tax return back ?

    Also my main employer hasn't paid me super properly over the last 1 year that i have worked for them, will this effect my tax return at all ? ie. on my payslips every week they would incidate how much super is going into the account. long story short he did not know that his accounting software didn't do the transfer to the super accounts automatically so now he is stuck back paying us super from April 2016 ie. once a month a lump sum payment will go into the account from last year, if that makes sense :)

    Thanks in advance !

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 08:26
      +1

      The superannuation may affect your future year tax returns due to paying more than the 9.5% this year as he is trying to catch up. However no need to worry about it in your tax return for now.

      As a contractor with your own ABN any of the income you earn you will have to pay tax on. Therefore depending on the amounts and withholding of your 2 jobs, and the net income as a soletrader, you will most likely end up paying tax not getting a refund.

      • Limegreen on 22/06/2017 - 09:06

        Thanks Nicole ! What if my sole trader income is less than $1000 over the FY ? :)

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 09:08
          +1

          Depending on whether or not you are claiming the tax free threshold on both jobs. If you are, you will probably have some tax payable. If not, you may have some tax refundable.

  • aurotaro on 22/06/2017 - 07:57

    I own an overseas property and will settle in less than a month. It would require me to fly overseas to make the final payments, sign documents view and inspect the property etc.

    Are my travel costs tax deductible on my PAYG income for the FY?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 08:23
      +1

      The costs will form part of the cost base in the capital gains calculation on the sale of the property. They are not deductible.

  • ohsotight on 22/06/2017 - 08:43

    Hi there. In terms of an IP if both my wife and I are on the title but only I pay for the mortgage can I claim the entire interest payment on the loan against my income or is it 50/50 given the ownership structure.

    Apologies if this has been asked before and thank you for your help.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 08:51

      It has been asked a few times so I guess its a popular occurrence. All income and expenses (apart from interest) are accounted for in proportion to ownership structure.

      With regards to interest however, it depends on who's name the loan is in. For most people, the loan is in the name of both owners in the same proportion as the ownership of the property.

      In some cases however, one person might have had the cash to buy the deposit and the other person is the only one borrowing. That is when they can claim their entire portion of interest. Rare but does occur sometimes :)

      • ohsotight on 22/06/2017 - 10:40

        Thanks for that. It makes sense.

        However, would this scenario work then. Assume property is in wife’s name and rental income minus expenses (excl interest) is 10k per year and wife isn’t working and has no other assessable income. Therefore as the net rental income is under the 18k threshold there won’t be any tax to pay on this.

        Assume the interest payment is 30k and the husband pays for this loan and it’s in his name. If his salary is 100k then does he offset the 30k of interest payments against this 100k income? I must be missing something here as it sounds too good to be true!

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 10:42

          Yeh that is definitely not allowed. You will have no property to claim interest on if the property is in your wife's name. The interest has to be for the property which generates income. And changing the percentage now will also taint the loan so prob not worth bothering with it.

        • ohsotight on 22/06/2017 - 10:56

          I think the following comment has got me intrigued and also a bit confused!

          In some cases however, one person might have had the cash to buy the deposit and the other person is the only one borrowing. That is when they can claim their entire portion of interest.

          Hypothetically assume it’s a new purchase of a property hence the loan wont be tainted. Both in wife and husband’s name 50/50. However the loan is only in husband’s name and he pays 100% of the interest payment. In this instance can the husband claim 100% of the interest at his marginal tax rate?

          Apologies for a few questions and if I am overstepping your generosity there is no need to reply. You just have got me very intrigued!

        • cheapm8 on 22/06/2017 - 11:14

          @ohsotight:

          i think the answer is yes. You and your wife both split the income and expenses (apart from interest) 50/50 for this new property.

          Most likely your wife would be in surplus and most likely will be under the 18k threshold, so she would not pay tax on this.

          Since the loan for this new property is under your name, you can claim the interest against the income generated from this new property. And most likely you will be negatively geared and get a tax return.

          Now another question to consider is, can the husband claim 50% of the depreciation while the wife claims 0%? I ask because claiming depreciation for the wife is not tax effective as her income does not reach the 18k threshold. If they both claim 50% depreciation each, then the cost base will reduce when it comes time to sell and they have to pay more CGT.

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 12:21

          @cheapm8:

          No, depreciation has to be the same portion as the ownership.

          What everyone is missing is that for example, if the house costs 1,000,000 and the split is 90 to the wife and 10 to the husband, then the husband only has a 100,000 loan. The husband can't take out a 1,000,000 loan for a property that he is buying for only 100,000.

  • eapster on 22/06/2017 - 08:53

    Hi Nicole,

    With the government doing away with claiming of travel expenses to visit a rental property from 1 July onwards, is it possible to prepay flights and accommodation for use later this year or early next year and claim on this years tax returns (provided the flights and accommodation are apportioned correctly)?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 09:03

      Should be fine to prepay as long as they are within 12 months of when you pay. Remember to apportion them conservatively as the ATO will be monitoring travel.

      • eapster on 22/06/2017 - 15:40

        Thanks Nicole. I would think that I can apportion aggressively as its a prepayment and ATO wouldn't be able to prove my intentions otherwise.

  • Hunt1 on 22/06/2017 - 09:04

    Hi there, just want to know i have heard if u are in ur first job ever then u wont get any deductions in ur tax, u will get whole money, is that true?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 09:09

      No idea what you mean. There is no difference from your first job to any other job.

      I think you are referring to not having worked the full year therefore may have income of less than $18,200. IF that is the case you will get all tax withheld refunded to you.

  • AlphaSquid1604 on 22/06/2017 - 09:06

    Hi Nicole,

    Not directly a tax question for this financial year but more for next year in regards to Medicare Levy Surcharge.

    Is MLS based on pre tax annualised salary or post tax salary?

    Obviously, below is redundant if it is post tax.

    If it is pre-tax, I will exceed $90,000. However since I live with my partner (we are consider to be de facto), and when we combine our pre-tax income is going to be below $180,000. How does the ATO know we are defacto? Address?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 09:11

      MLS is based on adjusted taxable income. Which is your taxable income (pre tax) and other adjustments such as reportable super contributions/fringe benefits, adding back investment losses etc.

      If you are a defacto living with your partner, you include your partner's taxable income in the spouse section of your tax return. That is how the ATO knows that as a "family" your income is lower than $180,000 and you won't be liable for MLS. Ensures your spouse does the same in their return :)

  • Tech5 on 22/06/2017 - 09:26

    If I am looking to buy a car soon which will be used for home-work-home 50%, and private 50%, is there any benefit changing from Sole Trader —> Company before I do so?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 09:27

      No, travel to and from home is not deductible.

      • Tech5 on 22/06/2017 - 09:28

        When I was told, if it was bought as a company car, It would be able to be depreciated just like any other asset. Was that wrong?

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 09:33

          If it is purchased by a company it is not your car. Because of private use, you will be subject to FBT or an employee contribution as an employee.

          There are too many things to consider then just to say yes its deductible or no its not.

          Probably best to sit with your accountant so they can explain them to you.

  • Oz-Bogan on 22/06/2017 - 09:50

    Hi, Could you pls advise on the foll:

    Dividend income approx $8000 (100% FF). Will apply for refund of franking credits.
    Exempt income approx $20000.
    No other income. Wife needs to lodge.

    I believe the dividends are considered taxable income but though they are below the threshold. Therefore no tax is payable.

    Am I required to lodge a tax return? Is an application for refund of franking credits considered a tax return? Seems the only way to claim FCs this year is MyGov or some new pilot scheme. Is the phone or paper method still available?

    Can I "advise non- lodgement of tax return"?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 09:55

      What is the exempt income? I think you may need to lodge because of that. Contact the ATO and ask them for various methods of getting your franking credits refunded.

      If your income is that simple, you should probably just have accountant lodge it for you. They shouldn't too much (about $100) as it is relatively simple.

  • [Deactivated] on 22/06/2017 - 10:12

    My wife is doing an English course to improve at her job. Is this a deductible?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 10:16

      It is up to her to assess whether or not there is sufficient link between her current role and the English course. For example, much easier to prove a connection between a language course when you work as a receptionist than someone who works in a construction job.

      • [Deactivated] on 22/06/2017 - 10:20

        She is a pharmacy assistant, usually helping people with questions about products, so I think it has an impact. The course is also meant to help her personally and to find a better job which requires better English skills. In that case, should the deduction be proportional as well?

        Thanks for the answer!

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 10:21

          There is no proportion available. The course either helps her current job or it doesn't. If you want to argue that it helps her perform her current duties better then that is fine.

          I would not be mentioning that it will help her find a better job :)

  • Ozdennis on 22/06/2017 - 10:44

    Hi
    I understand it need receipt for expenses to be deductible but just wonder am I able to claim reasonable cost without receipts or invoice? (I am doing uber and use the coin self car wash once or twice every week so maybe claim 52week x $5 each)

    Thank in Advance!!

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 10:51

      That's fine its ok to claim it without a receipt. Keep a really simple diary where you just state the date, the place and the amount spent for your car wash if you want to have better record keeping :)

  • cheapm8 on 22/06/2017 - 11:33

    Hi Nicole,
    Thanks again for this, very helpful for many people out there as you clear things up for everyone. I have a question about deductible interest for using existing equity to pay for costs (stamp duty, 20% deposit, legal fees) associated with purchasing a new investment property for existing properties and Off the plan properties.

    1. If you want to purchase a new existing investment property and you have equity in your current home or equity in another investment property to use. The best way to set up a loan would be to get your bank to set up a separate loan for this equity to pay for 25% of the cost of the new IP. On settlement can you start claiming the interest payable for this loan of 25%?
    2. For Off The Plan properties, usually you pay 10% as a deposit first, then you have 15 months to pay for stamp duty. Same as above, you goto your bank before you buy and tell them to set up a new loan to cover 25% of the purchase price using your existing equity. Now when you purchase the property, first you take out 10% to pay for the deposit and then another 5% to pay for stamp duty down the track and finally the remaining 10% when you settle (of course assuming you will have another new loan to cover the remaining 80% that will be fully tax deductible). Question is, when is the interest tax deductible on this new loan that was setup to cover 25% of the purchase price of the new property? Is it whenever there is interest payable, or is it only after settlement?
    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 11:50
      +1

      1. Always set up a separate loan so as to ensure it is not tainted. However, you can only start claiming the interest as a deduction from when the property is available to rent. Therefore any interest paid before then is not deductible but is added on to the cost base of the property for capital gains purposes in the future.

      2. Same thing. Any interest paid prior to the property being available for rent is not deductible but added to cost of property for tax purposes.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 12:22

      To follow up on that. If you can prove it was your intention to rent the property the whole time, and it was never your intention to move in and you took all necessary steps to ensure the property was available for rent as soon as possible then the interest MAY be deductible.

  • jche6075 on 22/06/2017 - 11:42

    Can you please tell me why a physiotherapist who is a contractor for a company has to pay GST on the income earned whereas a physiotherapist who has their own company does not need to pay GST on the income earned?
    Thanks.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 11:52

      I wouldn't have a clue where to start there are so many factors that come into consideration. Paying GST has nothing to do with being a contractor/having a company.

      If you are registered for GST then you must charge GST.

      Maybe in the scenario you were looking at, the contractor was registered for GST and the company was not.

      • jche6075 on 22/06/2017 - 13:00

        The company is also registered for gst as well. And physiotherapy is a gst free service so i am a bit confused.

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 13:05

          I think what you mean is billing someone for a physiotherapy session is GST free that is why the company does not pay GST on the fees they receive.

          However the contractor is not being paid by the clients, the contractor is being paid by the company, therefore if the contractor is registered for GST then GST is charged on contracting fees.

        • jche6075 on 22/06/2017 - 13:35

          @nicolemcmilllon:

          Ah i see. But if the company is registered for GST does the company have to pay GST on the fees that they receive too then?

          Also what kind of taxable service is the physiotherapist actually providing to the company though that makes them need to pay GST on it?

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 13:44

          @jenchic321:

          The company is not charging GST for those services so it doesn't pay GST on the income.

          I am not sure of the circumstances to answer what services the physio is providing to the company. You would have to discuss with the person.

          Thanks.

  • [Deactivated] on 22/06/2017 - 11:50

    How are dividends from shares taxed? Is it different from capital gains tax?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 11:53

      Someone has already asked this question.

      Dividends plus the franking credit is included in your tax return as income and taxed at your marginal rates. You will receive an offset for franking credits.

      Capital gains will come from the sale of the shares themselves. The net capital gain is also included in your tax return.

  • angusngon9 on 22/06/2017 - 12:34

    I have a day time office job and work as a mystery shopper as a fun side job. What sort of deductions can I get back? I go to different shops so travelling, internet, phone use(recording), phone plans, can I get some money for my new laptop/computer that I got at home as well?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 12:39

      Traveling from shop to shop yes. Traveling from your home to the shop and the shop to your home is not deductible.

      The laptop is only depreciated if you are using it for work related purposes, whether it be your office job or your mystery shopping job.

      • angusngon9 on 22/06/2017 - 12:45

        The mystery shopping job requires me to use the laptop to apply for jobs, read briefs and then submit reports. They sometimes call me to ask if I’d take a job. So a portion of my electricity, laptop, internet connection and mobile plans?

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 12:46

          Yes thats fine. Don't go overboard with your deduction as you most likely aren't using them for more than couple hours a week as you're not actually doing work at home which is what most people claim

        • angusngon9 on 22/06/2017 - 12:49

          @nicolemcmilllon:

          I am only going to clock a couple hours a week- thanks.

          Do I have to provide the receipt for the laptop, and must it be in my name, say I bought it with my mum's credit card because I don't have one?

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 12:54

          @angusngon9:

          That's fine. Just keep a copy of the receipt in case of an audit.

        • angusngon9 on 22/06/2017 - 12:56

          Thanks so much for your help!

  • BNP1 on 22/06/2017 - 13:14

    Hi Nicole,

    I have 3 questions regarding my tax return. Hope they are not too silly for you.

    1. Regarding tax deduction on parental support. We sponsored my dad on parental contribution visa, which we need to support him financially for 10 years. Some friends told me that you can actually deduct the financial expense on parent from your taxable income. Is it true?

    2. I am earning $92k this financial year, Is it better of to contribute $8k into superannuation to bring it down to the lower tax bracket, so I can get taxed at lower rate and without paying the extra Medicare levy?

    3. We are planning to buy a block of land for commercial use, should we transfer the land under our own names or would it be better under a family trust or other type of trust for tax-saving purpose in the future?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 13:20

      1. You may be entitled to a carer offset, here is the link to the ATO website https://www.ato.gov.au/Individuals/Tax-return/2017/Supplemen…

      2. I can't advise what to contribute into super. One thing to consider is that any amounts contributed you will no longer have access to until you reach a condition of release, on top of that the superfund pays 15% tax on those contributions so the difference in tax is not as big as you think.

      3. I don't know enough about your circumstances to tell you which structure is best. A trust can't distribute losses so its important to take that into consideration. This would be a good thing to discuss with your accountant.

  • 21StBlader on 22/06/2017 - 13:19

    I am a travelling locum pharmacist. I normally go on the payroll, but now most places are expecting me to invoice with an ABN + Super. I was told this was good, as I make my deductions off what I earn, and then pay my tax on the remaining. I'm not sure if this is correct, and whether the ABN method is beneficial over PAYG. Additionally, not sure if I am registering as an Individual or as a Company ie. The John Smith Locum Company, and whether it makes a difference. Nor whether I pay GST or not? Thanks in advance.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 13:22

      Do you earn more than $75,000 per year? If you do you must register for GST.

      There is no real difference from a company or individual for you as you are earning personal services income.

      PAYG is better because they withhold the tax from you so there is no huge bill at the end of the year. ABN invoicing means you will have to pay your own tax.

      • 21StBlader on 22/06/2017 - 13:59

        Thanks for your swift reply, Nicole. I'm not sure my p.a. earnings yet, so should I register for GST, to be safe? And do I charge this on the invoices? In terms of paying my own tax using the ABN method, is that paid once annually still, or will I have to do BAS?

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 22/06/2017 - 14:06

          Calculate what you are making now, and project to see if it will be over $75,000 per year.

          If so, you will need to register for GST. By registering you will do BAS quarterly. You will need to charge GST on your invoices (which shouldn't be a problem because the company paying you will claim that GST back).

          For the first year you will still pay annual tax, but the second year the ATO will most likely get you to pay tax instalments quarterly with your BAS.

          Do you have an accountant that can help you with all this?

  • Omega8 on 22/06/2017 - 13:23

    Here's one for you. My wife and I have private hospital and extras cover and we each get a tax statement to include details in our tax return. On the tax return there is a question along the lines of "do you want to claim your spouses portion" (I can't remember the exact details) but we always answer no. My wife works and I am retired with no income except share dividends and bank interest. If my wife answers yes to that question does that improve her refund in any way by claiming my portion of private health insurance benefit, or does it have no effect on her tax return. My wife earns $100k+ and pays a hefty medicare levy, my income is below the tax free threshold.

Login or Join to leave a comment
Login Join