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.

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Comments

      • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 26/06/2017 - 08:49

        Yes, provided you are running a small business and all assets under $20k are being written off.

  • Holidaymaker on 24/06/2017 - 17:25

    My brother and I do own a property (Property A) . This is our primary home resident. My brother is planning to move out into Property B and make Property A an investment and property B his primary home resident. However, I'll still be living at property A and this will still be my primary home resident.

    So can property A be 50% investment and 50% primary home resident? What are the tax implications of when we sale?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 24/06/2017 - 17:34

      Effectively, when the property is sold, your share will be exempt provided it has been your residence the entire time.

      Your brother will only have a partial main residence exemption for the period it was his PPOR to total period of ownership.

  • Jaff on 24/06/2017 - 17:43

    Hi, thanks for the effort in doing this.

    Me and my partner bought a block of land with 20 and 80% shares respectively. We paid the 5% deposit in Nov 2015 and exchanged contracts. Settlement of this land happened a month ago. What would be our capital gain tax if I am on 100k gross and wife on 20k working part time ?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 24/06/2017 - 17:50

      Capital gain? Are you selling the land? A capital gain would arise when you sell the land for a gain.

      • Jaff on 24/06/2017 - 17:57

        Yes, getting too difficult to build.

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 24/06/2017 - 18:06
          +1

          How much is the gain? The tax you pay is on the gain. You will pay your marginal rates on the gain. Your rate is approximately 40% and your partner's rate is approximately 20%

        • Jaff on 24/06/2017 - 19:46

          @nicolemcmilllon: profit is $140k

        • Jaff on 24/06/2017 - 21:59
          -2

          @rajy: any information ?

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 24/06/2017 - 23:56

          @rajy:

          I already told you.

          "You will pay your marginal rates on the gain. Your rate is approximately 40% and your partner's rate is approximately 20%"

  • DU99 on 24/06/2017 - 20:29

    retired on a gov pension and with industrial super added do i need to log a return..

  • iamnowhere24 on 24/06/2017 - 20:43

    Can I claim for tax if I purchased mobile or laptop outside the country… While I was in pleasure trip?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 24/06/2017 - 20:45
      +1

      Yes, when and where you purchased it won't make a difference.

      • iamnowhere24 on 24/06/2017 - 20:54

        Thanks….also, can I claim for travel/medical expenses for my spouse for her travel outside the country for medical -pregnancy ?

  • kobe8tang on 24/06/2017 - 20:57

    Hi thank you so much for your effort. My wife is working in the lab in a University, planning to buy a prescription safety glass for her work. Can she got full amount tax deduction of just a portion of it? Two options now, one is more than $300 and the other one is more than $500. Checked the ATO website, something below $300 and above $300 for deductions got me confused….Thank you again.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 24/06/2017 - 21:00

      If they're under 300 she can claim a deduction for the whole amount.

      If it is over $300 then she would have to depreciate it over a few years.

      It's not really a difference, just buy the ones she needs the most (don't let tax affect the decision).

      • kobe8tang on 24/06/2017 - 21:15

        Very clear, thank you. Then how can I determine the depreciate rate? Could you please make an example?

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 24/06/2017 - 21:19
          +1

          She should write it off over a 2 year period (3 financial years) based on days.

          For example if it is $500 and she buys it today she should claim it like this.

          2017 6/365 days x $500/2years
          2018 365/365 days x $500/2years
          2018 359/365 days x $500/2years

        • kobe8tang on 24/06/2017 - 21:54

          @nicolemcmilllon: Thank you, then claim it each year with current year's depreciation value right? For example in the case you made, for 2017 financial year, $4.11.

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 24/06/2017 - 21:58

          @kobe8tang:

          Yep.

        • kobe8tang on 24/06/2017 - 22:01
          +1

          @nicolemcmilllon: PROFESSIONAL, thank you.

        • kobe8tang on 28/06/2017 - 10:04

          @nicolemcmilllon: Hi Nicole, so eventually the principle question comes to my mind: does the deduction means 1). the deduction of the taxable income or, 2). the amount would be add to the tax return? I think there is a big difference between the two. Sorry, I am new to Australia, thank you again.

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 29/06/2017 - 15:35

          @kobe8tang:

          I am not sure what you mean. A deduction is applied against income to form taxable income. Then tax is paid on taxable income.

        • kobe8tang on 30/06/2017 - 10:37

          @nicolemcmilllon: Sorry about that. Anyway it is clear to me now. Thank you.

  • mr marley on 25/06/2017 - 11:32

    Hi Nicole.

    Quick question about claiming using the KM method.

    I'm aware of the 66 cents that I'm allowed to claim up to 5000km.

    The award that covers my industry (Security Services Award) says that our vehicle usage is at 78 cents a KM.

    Am I allowed to claim at 78cents instead of 66?
    Or does the 78 cents only apply if I claim from my employer?

    Thanks in advance.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 25/06/2017 - 15:55

      For tax purposes you can only use 66 cents per km

      If you claim the kms from work then you are effectively being reimbursed for your travel therefore you can't claim the deduction as you haven't spent anything out of your own pocket.

      • mr marley on 26/06/2017 - 04:22

        Thanks Nicole.

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 27/06/2017 - 15:38

          You're welcome :)

  • Fluffmeister on 25/06/2017 - 15:11

    Last year I bought a roofbox (like one of those Thule things you put on the roof for skis etc). I now rent it out via OpenShed for anything from 50-100 at at time and the overall box cost 1k.

    Firstly. I assume I need to declare the income, but ontop of that am I able to depreciate the asset, its not my core business so its a side thing…

    I'll def be looking into using Titanium being looking for an accountant for a while but I hope your effort here has been recognized by many and brings in a lot of business.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 25/06/2017 - 15:54
      +1

      Do you have an ABN i.e are you running a business?

      • Fluffmeister on 25/06/2017 - 16:44

        I have an ABN, but its completely unrelated.

        I bought the box for personal use and just found its able to generate some income for me against its original sunk cost.

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 25/06/2017 - 17:11

          Prob not even worth including the income then, its not much and you're not running a business. Just don't worry about it.

  • brainactive on 25/06/2017 - 21:43

    Any rough guidelines on who usually gets audited (e.g. Greater than $100k income? Greater than $10k deductions?).

    I don't want to get audited, not because I've done anything dodgy, but because I don't want the inconvenience of having to dig up receipts and putting things together. Got enough things to worry about. Obviously, I want to claim as much deductions as I am entitled to, but if it means it increases my chances of getting audited, happy to leave some out. So knowing some rough guidelines would be helpful.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 26/06/2017 - 08:51

      You should obviously only claim what you are entitled to.

      There are many things that go into who gets audited. Mostly its the luck of the draw. However if they do audit you for one year and find that you can't substantiate your deductions, they are likely to go back a few years and get you for more.

      Most people don't claim deductions of more than one or two thousand for the simple fact that if you are an employee, your employer generally provides you with everything you need.

  • rav_stk on 26/06/2017 - 11:21

    Hi Nicole. Thanks for all the answers you have provided. I too have some query for you. I work for an insurance company where I have flexibility to work from home. I work 2 days from office and 3 days from home. If I buy new office equipment like desk, chair, modem etc., Can I claim deduction for the total amount purchased? Also apart from claiming deduction for a portion of the utility bills is there anything which I can do to maximise the deductions
    Thanks

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 26/06/2017 - 11:23

      If each asset costs less than $300 then you can deduct the full amount (provided it is used for 100% work purposes).

      Other than that you can claim internet, electricity and mobile phone costs apportioned for work purposes.

      Do not claim house rates etc.

      • rav_stk on 26/06/2017 - 11:43

        Thanks Nicole, appreciate your help.

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 27/06/2017 - 15:38

          You're welcome :)

  • blessupnico on 26/06/2017 - 13:35

    I have recently started working from an ABN doing PR work in association with a firm. I was wondering if I could purchase a laptop and claim it under this work?

    Thanks very much!

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 26/06/2017 - 13:37

      Yes its fine. As you will most likely be earning personal services income you will have to claim depreciation on the laptop over 2 full years (3 tax return years)

  • cr7 on 26/06/2017 - 13:52

    Hi there,

    If I sell property overseas and have the money transferred to Australia. Will I pay tax of any kind?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 26/06/2017 - 13:56

      Are you an Australian resident for tax purposes? If so, you will pay capital gains tax regardless of whether or not you transfer the money to Australia.

  • c64 on 26/06/2017 - 16:28
    +1

    a question regarding deductions for capital improvements on a rental property

    if i wasn't going to pay tax in a given year then claiming a deduction for depreciation for that year isn't going to be advantageous to me is it? (as it will be added when i come to sell it)

    it is possible to selectively to claim deductions for depreciation for certain years only? say years 3 & 5 while not claiming for years 1, 2, 4

  • Macgyver on 27/06/2017 - 21:25

    If I buy a notebook but for myself not for work, but do work stuff on it(but in my cause I wouldn't do barely any if any at all.) would I be able to claim that notebook on tax? From reading stuff online seems unlikely but what would you opinion of that be?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 28/06/2017 - 08:50

      You can claim a depreciation percentage that is work related. If you arent using it for work then you can't claim the deduction.

      • Macgyver on 28/06/2017 - 20:28

        How do they know it is for work use or not?

  • congo on 27/06/2017 - 21:49

    Hi Nicole,
    I am with Australian Super and I can use my super to buy & sell Australian shares. The money gained goes back into my super account.
    I assume that these will have capital gains implications?
    Thank you

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 28/06/2017 - 08:50

      I don't understand what you mean. Australian Super is not an SMSF, you won't have the ability to tell them what exact shares to buy and sell. They do as they please and they pay the tax for you in the Fund.

      • congo on 28/06/2017 - 11:06

        Hi Nicole.
        This was true, but they have introduced "Member Direct investment option" a couple of years ago.
        With this option, I can log into my super account and pick which shares to invest in. I can place buy and sell trades on Australian big cap stocks.

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 28/06/2017 - 11:25

          OK, If what you are saying is true, and all this is done through your superfund, then the fund will pay tax (using your money) on capital gains, income etc.

        • congo on 28/06/2017 - 11:45

          @nicolemcmilllon: thanks. So I don't need to declare any of it in my return?
          Thank you.

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 28/06/2017 - 11:59

          @congngo:

          Not if it is done through your superfund.

  • [Deactivated] on 28/06/2017 - 07:28

    If a family member gave me money informally to invest in their behalf using trading account in my name) how would capital gains tax and diviends tax work? do i have to pay them?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 28/06/2017 - 08:49

      Yes you would have to pay the tax as the investments are in your name.

  • Ninja9 on 28/06/2017 - 20:18

    Op,

    How do capital gains and loses work in industry superfund? Do losses carry forward until it is fully offset by gains in future years?

    And does the 50% CGT discount apply in superfund for holding on to assets for more than 12mths?

    Thanks

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 29/06/2017 - 08:35

      Superfund have a 33.33% CGT discount which brings the effective tax down from 15% to 10%.

      If you have an industry superfund they will work out all the gains/losses. Yes losses are carried forward in the Fund the same way they are for other entities.

      • Ninja9 on 29/06/2017 - 09:46

        What happens to capital losses if one to switch to another industry superfund or SMSF? Thanks

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 29/06/2017 - 11:34

          It is difficult to explain because it is not as simple as each member owning individual assets.

          Effectively if you roll it over, capital losses will be lost.

        • Ninja9 on 29/06/2017 - 21:03

          @nicolemcmilllon: Do interest received, employer contribution count toward capital gains? Or only gains from investment assets are qualify as capital gains? Thanks

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 29/06/2017 - 21:18

          @Nois:

          Only gains from assets sold.

          Interest, dividends, contributions are not included.

  • ArnoldSchwarzenegger on 28/06/2017 - 23:23

    I have a question about spousal tax offset and calculating assessable income. My understanding is that I can claim a tax offset of up to $540 (by contributing $3,000 to my wife's super fund) as long as her total income is less than $13,800. My question is how do I treat rent when calculating assessable income? For example, we have an investment property and my wife's portion of rental income is $8000 but she is able to deduct $6000 via repairs, rates, interest, depreciation, etc. (Therefore net gain is $2000). Now assume my wife has earnt $9,000 from working for an employer. For the purposes of calculating my eligibility for claiming the spousal tax offset, would my wife's assessable income be $9000 + $8000 = $17,000? Or would it be $9000 + $2000 = $11,000?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 29/06/2017 - 08:33

      As long as the net rental income is a positive (i.e the rental property is not negatively geared) then your wife's assessable income is $11,000 per your example.

      If the property was negatively geared then the net rental loss would be added back.

  • chichi on 29/06/2017 - 09:25

    My husband currently works for an Australian not for profit organisation and part of his job involves travelling a couple of times a year to Cambodia taking small groups on tours and doing volunteer work with a local not for profit. I'm just wondering what kinds of things (if any) he can claim in regards to this travel. His accommodation and flights are paid for but not entry visa, meals or everyday transport. Also can he claim luggage or clothing/footwear (he has clothing and hiking boots that are only used on these trips)?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 29/06/2017 - 11:36

      Yes he can claim all of these. I wouldn't bother with the meals but everything else such as transport, luggage, footwear can be claimed.

      • techboy on 03/07/2017 - 15:33

        Footwear & Clothing? I Don't think So nicole….And how do you think luggage is claimable?

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 04/07/2017 - 08:19

          Necessary expense for traveling to carry all of the things he uses for work. Same as a laptop bag is deductible. Footwear too because in Cambodia he may require hiking boots to go up to these places (also its such a small amount I'd claim it just to keep the client happy).

        • techboy on 04/07/2017 - 08:28

          @nicolemcmilllon: Footwear as safety maybe, Luggage would be difficult if only claiming to transport clothing, look at flight attendants..

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 04/07/2017 - 08:31

          @techboy:

          I'm in a generous mood. Im claiming everything today :p

        • techboy on 04/07/2017 - 09:21

          @nicolemcmilllon: Good Luk with the audits…..:)

  • Orgazmo on 29/06/2017 - 09:49

    Hi there,

    For the purpose of keeping the ABN active and carrying forward the loss, should an attempt at some last minute sales in this case be made: a sole trader 'activity' has had no activity for this financial year but is still holding stock and running at a loss carried from previous years.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 29/06/2017 - 11:35

      Sell a few things for a few hundred dollars and keep it "active"

      • Orgazmo on 29/06/2017 - 11:36

        Thanks but are the sales absolutely necessary in this case though?

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 29/06/2017 - 11:37

          It is the easiest way to show the ABN is still active.

  • Momo Fuko on 30/06/2017 - 10:03

    Hi
    A quick questoin- If I buy an item for business purpose online today(end of June), the transaction time on my credit card will be shown 4-5 days later( in July).Can I claim that item from this year taxable income? Many thanks.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 30/06/2017 - 13:07
      +1

      Yes as they will send you an invoice with today's date on it.

      Even if they don't its fine because you incurred the cost today.

  • DBBROS on 30/06/2017 - 20:45

    I have been salary sacrificing my rent and also my car through novated leasing since last. Is this going to have a positive or a null effect on my tax return? Would I be eligible for the zone tax offset although it is included in the fringe benefit in my tax return?

  • LoCure on 02/07/2017 - 13:26

    Hi,
    If my annual gross income is $100000 and my payslip being taxed $30500.
    Under the current tax rate https://www.ato.gov.au/rates/individual-income-tax-rates, l should be paying 19822 + 0.37(100000-87000) = $24632

    Will l get the return of 30500 – 24632??

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 03/07/2017 - 08:11

      You're forgetting the medicare levy of $2,000.

      Do you have any HELP debt?

      • LoCure on 03/07/2017 - 09:06

        Thanks for the reply, even after taking the levy of $2000 into account which adds to $26632, l should still be getting a refund right? But ATO has being asking me to pay quarter tax installments on top of my income tax? why's this the case?
        BTW no HELP debts!

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 04/07/2017 - 08:13

          The tax instalments relates to your previous year's lodgement. It has nothing to do with this years estimated income. Therefore you should get most of it back.

          If you need someone to prepare the return for you, please PM us :)

  • R1ngSt1nger on 03/07/2017 - 09:43

    Hi Nicole, for my work I travel to country centres a fair bit for a week at a time and I understand I can claim the difference that my employer pays me for reasonable expenses and meals as per ato document TD2016/13 compared to what I actually paid (I.e more)

    What section of the tax return do I claim the deduction?

    Is there a travel expense type section? This will be my first time doing this kind of claim, so not 100% sure where to do it.

  • BargainHunterKD on 03/07/2017 - 13:39

    Hi Nicole,

    I've previously asked a question but now that I have my payment summary I am not sure what to do. I got paid some meal allowances and on my standard payslip it comes up as non-taxable. On my payment summary though it just has the gross payments which is the sum of my normal earnings plus the meal allowances. Do I need to deduct this myself?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 04/07/2017 - 08:15

      Are you sure that your payment summary gross payments includes the meal allowances? Check that to be sure.

      If so, just deduct the same amount in D5 in your tax return (assuming you spent all of the allowance on meals).

      • BargainHunterKD on 04/07/2017 - 08:19

        Yes definitely sure which is why it has me confused. Meal allowance totalled $235 which was spent, does this mean that the initial $300 of deductions that don't require receipts is now mostly taken up by meal allowances? Thanks.

    • techboy on 04/07/2017 - 09:23

      No these are part of an enterprise agreement and have been rolled into your Gross Salary. Non taxable is confusing. As such no meal allowance can be claimed as a deduction either.

      • BargainHunterKD on 04/07/2017 - 09:41

        My payslips say Gross Earnings, Non Taxable Earnings and then Taxable Gross which is Gross Earnings less Non Taxable. My payment summary has the gross earnings figure. I did not pay tax on my overtime meal allowances so are you saying that I don't deduct them and therefore I will end up paying tax on them?

        • techboy on 04/07/2017 - 15:31

          Yes

  • Mad Max on 03/07/2017 - 18:06
    -1

    Hi Nicole

    Do you know if the $50 sign up bonus for the Complete Freedom Account with St.George is taxable?
    This deal:
    https://www.ozbargain.com.au/node/316338

    It does not show in the interest report for the financial year, but on the statement they tag it as "bonus (income)".

    Should it be shown anywhere on the tax return?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 04/07/2017 - 08:17

      It most probably is taxable and would probably be shown on item 24 in the tax return. But its only $50. No one's going to care if you don't show it.

      • techboy on 04/07/2017 - 09:26

        Not sure how it would show up on the ATO portal - Definitely not as interest, so how would they know.

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 04/07/2017 - 09:32

          Whether or not it shows up on the ATO portal has no bearing on whether something is taxable or not and also has no correlation to whether or not the ATO will know. There is plenty of information that doesn't show up on the portal that the ATO uses to data match.

          That being said $50 - no one is going to care if you don't include it as income.

  • rayyuman on 04/07/2017 - 13:23

    HI Nicole

    I have investments in Contracts for difference (CFDs) which I have to pay withholding tax for US shares at 15% (W-8BEN). Can you please advise if I can claim it as a foreign income tax offset in my tax returns?

    Thanks

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 04/07/2017 - 13:25

      How regular are you trading? Is it just a hobby or are you running a business of trading?

      If you are claiming the income from your trading, you should be able to claim the tax paid.

  • Orgazmo on 04/07/2017 - 14:00

    Regarding share dividend statements, the record date is listed as May but the payment date is listed as July. As these dates cover 2 FY's, how should the information be listed on a return?

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