With Financial Year End Coming up, Do You Have Any Tax or Tax Return Questions I Can Answer for You?

AssociatedLnicolemcmilllon @ Titanium Accountants & Advisors on 22/05/2017 - 10:35
Last edited 31/05/2017 - 09:17 by 1 other user

Edit final time:

Started a new thread for this to keep up with everyone's new questions. This is the link…

https://www.ozbargain.com.au/node/309978

Edit again:

Thanks for all the questions once again everyone. We have now reached over 600 comments.

I will do another Q & A in about a month when it is closer to tax time.

Hope you have all got a bit of extra general tax knowledge. ]]

If your inquiry is urgent then you can PM me.

Goodbye for now and see you in about a month!

Hi All,

I just thought with financial year end coming up in just over a month's time, many people have tax and specifically tax return related questions.

I am a tax professional and I am constantly getting asked similar questions coming up to tax time by family, friends and new clients. So I thought that I could be of some use and answer any tax questions you may have.

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.

Ok, start posting your questions :)

Edit: Thanks for all the questions. I am trying to get to everyone as soon as I can. If I miss your question please send me a PM or ask again so that I can see it. There are so many questions I am sure i've missed a few.

Financial

Related Stores

Titanium Accountants & Advisors
Titanium Accountants & Advisors

closed Comments

      • AC1223 on 23/05/2017 - 09:39

        Thankyou Nicole. Great advice.
        Much appreciated.

        I had these questions in my mind for a while now but wasn't sure who to ask. We use a company to lodge our tax returns each yr but they are only interested in that - not providing this sort of advice.
        So thankyou very much again.

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 09:42

          You may consider changing accountants to someone who knows how to structure your tax affairs rather than what is essentially a data entry company that lodges your tax returns.

          Remember, you get what you pay for :)

  • b-t on 23/05/2017 - 00:48

    Hi Nicole,

    Thanks so much for doing this!

    I have a question about capital gains on shares. Let's say I invested 20K into the stock market and today, the shares I bought are worth 25K.

    If I was to withdraw 20K worth of the shares (leaving the 5K still as shares), my profit/loss would be a balance of $0, however my shares are still worth $5K.

    Do I have to pay CGT?

    My impression is I only pay CGT later if I was to cash out the $5K worth of shares, correct?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 06:42
      +1

      That is incorrect.

      If you withdraw 20k worth of shares. Since they have gone up in value you are withdrawing a lower amount of actual shares. Therefore the cost base of those shares wouldn't be 20k it would be closer to 18k for example.

      You have to calculate it in terms of each individual share.

      • b-t on 23/05/2017 - 12:08

        Oh damn, so I have to match up the buy and sell together in order to calculate CGT?

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 12:11

          You dont have to sell the same amount of shares. You just have to assign a cost and sale price to each individual share.

          This is one of the reasons why you get an accountant to do complex tax returns that have capital gains.

          You will also be entitled to a 50% discount if you have held the shares for more than 12 months.

  • congo on 23/05/2017 - 01:29

    Thank you very much for your time.

    I am a contractor and I have a PAYG - business and personal services income group cert.

    Does this mean that I answer YES to 'Receive any attributed personal service income' (question 9) or YES to 'Receive income for personal services you provided as a sole trader' (question 14 PSI)?

    Am I a sole trader?

    Thank you

  • Vancomycin 1000mg on 23/05/2017 - 02:17

    My question is

    When I do my tax return I am always ending up having to pay extra tax, why is that? Last year I had to pay $333 the year before $158.77 and it has happened over the last couple of years. I work in retail as part timer while studying, I have checked with employee and everything seems to be normal. for your information, I have never owned ABN or received government benefits and Australian citizen.

    Thanks in advance.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 06:44

      Perhaps your employer isn't withholding the right amount of tax from you.

      Do you have an accountant doing your return. Doesn't hurt to check with an accountant to see if there is a way to make sure you're not paying additional tax at year end.

  • thisispete on 23/05/2017 - 04:49

    My wife is a stay at home parent for our 1yo and does not receive any income through work or Centrelink benefits for this Fin Year.

    I was told there was a way to claim her as a dependant which would lower my taxable income? I can't find anything on this and it seems to be related to carers not parents. Does this sound right to you?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 06:45

      That's because they phased out the dependent spouse offset. You're not able to claim it anymore.

  • MathNerd on 23/05/2017 - 07:06

    Hi Nicole,
    Firstly I'd like to say a big thanks for doing this, taking time out of your day and work and answering questions here, I'm sure the community appreciates it!
    I've always had a 'straightforward' tax return process, I get a pre-fill done, submit and forget about it. I know that I can claim many deductions.

    Now, as a maths teacher, I pretty much spend all my time, both at work and at school, doing school work so I know that I can claim internet and laptop expenses, however the percentages would be so high that they'll be suspect.
    Any tips on going about this? The ATO might think I'm bluffing when I tell them how much I actually work!

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 07:46
      +1

      Work out the percentage of internet and laptop use that is for work purposes.

      Remember you may use the internet for work purposes 80% of the time. But you would have to half that if you live with your partner. And further if you have kids. It's all about making a reasonable educated estimate.

      You can also claim running expenses such as electricity and the depreciation of your laptop, desk, chair.

      Please let us know if we can assist you further to prepare your return.

      • MathNerd on 23/05/2017 - 09:04

        Thank you once again Nicole.
        I live with my partner so I'll claim 40% of my internet bills. Is there a law that says that the maximum is 80%, even if I know that I reasonably use the internet for doing work around 95% of the time (the other 5% would be for paying bills and checking personal email)?

        If things get a bit complex, I'll certainly PM you to get some more assistance in preparing the return!

        Thank you once again.

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 09:09
          +1

          You can claim based on your estimate. So using 95% / 2 is fine :)

        • MathNerd on 23/05/2017 - 09:18
          +1

          @nicolemcmilllon: Thanks once again Nicole. Really appreciate your help with these complex tax matters!

  • Patkin on 23/05/2017 - 07:15

    Hi there!

    I have a bicycle that I ride almost exclusively between my place of work and my uni (degree highly relevant to current job). Would I be able to deduct the bike servicing costs?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 07:44
      +1

      Your can deduct a portion of the expenses. Apportion the amount of time you ride to uni from work. And divide it by the time u ride from home to work, uni to home and visa versa. As well as any other private rides you do.

      Then come up with a percentage and claim the maintenance costs.

  • TimboSlice on 23/05/2017 - 07:43

    I have a small website that makes about 2500 a year I have a ABN registered for this as a sole trader. Would I be able to buy a new laptop or something (relating to the business) with this money and claim the whole amount? Is this what the "20,000 small business write off" is?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 07:46

      That is correct. Assuming the laptop is used 100% for business purposes.

  • Scab on 23/05/2017 - 07:49
    -6

    Hi OP, a few questions:

    Is there a way I can get a tax refund if I'm on welfare and don't pay any?

    Can I claim back the GST on KFC nuggets?

    • [Deactivated] on 23/05/2017 - 16:47
      +1

      Sorry, but Nicole is busy.
      Let me help.

      1. No. You need to have paid tax in order to get a tax refund. It's a bit like herpes.

      2. No. You do not get any refund on GST for his type of sinful conduct (yeah, i know - username checks out).

      • Scab on 23/05/2017 - 16:49

        User avatar checks out.

        • gimli on 24/05/2017 - 07:36

          Don't mess with an angry chicken

        • Scab on 24/05/2017 - 07:44

          @Gimli:

          I'm not scared of angry hens but I'm always wary of mean cocks.

  • Zawoooo on 23/05/2017 - 08:30

    Hi OP,

    I'm planning to claim 5000km of travel this year just wondering if it's actually legit or not.

    This is on the basis that I have a tool bag which I take with me to work evevery day. The tool bag is quite heavy.

    There is a free bus which runs into work everyday but I sometimes choose to drive which would easily make up the 5000km

    There are no facilitys to lock and leave the tool bag at work and I need them to effectively do my job.

    Thanks

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 08:50

      If you deem the tools heavy and bulky then you may be entitled to claim the deduction.

      However if you are taking the bus most days, perhaps the tools might not be that heavy otherwise you would be doing it everyday? Just playing devil's advocate here.

  • keepa on 23/05/2017 - 08:43

    Hi Nicole,

    Thanks for the AMA.

    My Q is more of a general property tax enquiry which I hope you can assist with.

    I have been using my PPOR offset to finance the construction of a new investment property. The signed contract was on the original land which will settle upon subdivision which is to occur after the construction of 2 units - this was done as a deal with some family who were the original owners of the land.

    To settle the final amount we will need to re-finance a new investment loan. My question is, that given most of my costs incurred on the investment have come from my PPOR loan, and I have evidence such as builders invoices to support this. Will I be able to shift the costs incurred from my owner occupier loan into the new investment loan? Is this the correct way to structure things?

    This is being done with my partner.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 08:57

      You are probably better off discussing this with your bank representative and seeking structuring it where there is an entirely new investment loan.

      See if the bank can can transfer the funds from the PPOR loan into a new loan.

      If they can't, you may be able to apportion the interest on that loan if you can clearly identify the portions of money used for the original loan and the new investment costs.

  • fullmetal on 23/05/2017 - 08:55

    Hi Nicole,

    I have a question, I have bought some 2nd hand furniture off GumTree for my home office (work from home arrangement with my employer), they were cash only transactions amounting more than $300. How do I substantiate the cost of my purchase as I do not have any invoices? Is written records or website prices sufficient?

    Thank you in advance.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 08:59

      Yes written records should be fine. I am assuming the costs aren't too high so you most likely won't have a problem with claiming depreciation on the furniture. Most of the furniture will have a effective life of 5 years so you can depreciate it over that period of time (i.e do not claim the entire cost in the first year).

  • GangGang on 23/05/2017 - 08:56

    We just leased our property that we built 2 years ago. Reason for leasing it was to sell this property and look at buying another property while leasing or the other idea pay it off as much as we can and move back in. We will be going to the tax man soon, is there anything to keep an eye out to increase the tax return? Or anything to ask them that would help us?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 09:00

      Do you have a depreciation report. If it is a new property a depreciation report will provide you with more deductions. And the cost of obtaining the report (approx $7-800) is tax deductible too.

      • GangGang on 23/05/2017 - 09:04

        Thanks alot for your reply. I was going to make a appointment for them to do it in the next few weeks.

  • kazzman on 23/05/2017 - 09:16

    We just built a new house and moved into it. Our old house which still has a mortgage is being turned into a rental. Do I need to convert the mortgage on the old property into an investment loan? or can I continue using the mortgage? ( the interest rate on an investment loan is much higher than the current mortgage).
    Also can I use this a a principal and interest loan or should I convert it to interest only?

    Cheers.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 09:20

      I can not advise you if you should convert it to an interest only loan as that is a decision you will have to make yourself.

      You can continue the same mortgage and start deduction the interest expense from the time the property was available to rent.

      • kazzman on 23/05/2017 - 13:52

        Thanks for the advice.

        There house was built in there 70s. Is it worthwhile getting a depreciation report?

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 14:07

          No wouldn't be worth it.

  • luffyex2010 on 23/05/2017 - 09:31

    Hi OP,

    Its very nice of you to provide us your services and I hope you can help me with this scenario.

    Based on the personal income tax schedule (as below), what is the total income that I can maximized (less tax) for this financial year to prevent the last tax bracket of 45 cents for each dollar earn, as I have approx 400K to split this financial and next financial year if this make sense.

    Taxable income
    Tax on this income
    0 – $18,200
    Nil
    $18,201 – $37,000
    19c for each $1 over $18,200
    $37,001 – $87,000
    $3,572 plus 32.5c for each $1 over $37,000
    $87,001 – $180,000
    $19,822 plus 37c for each $1 over $87,000
    $180,001 and over
    $54,232 plus 45c for each $1 over $180,000

    Thanks so much.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 09:36
      +1

      I am not sure exactly what you mean. If you are somehow able to control your taxable income and want to avoid being in the highest tax bracket (which is 45% plus another 2% medicare levy plus another 2% budget levy) then you would keep your taxable income lower than $180,000.

      • luffyex2010 on 23/05/2017 - 09:40
        +1

        Yup you just answered my question, so 180K is the maximum to avoid the last bracket.

        Guess thats what I will splitting

        175K 2016/2017
        225k 2017/2018

        Thanks mate.

  • [Deactivated] on 23/05/2017 - 09:32

    Hi Nicole, thanks so much for your post & time spent answering everyone's questions - I have learnt a lot already!

    Question on negative gearing: I wont have a taxable income for the next 2 years, but my spouse does. We are just about to settle on an investment property that we have built, and planning to put the title & loan under both our names. For negative gearing, can my spouse only claim 50% of the loss? I understand I might be able to retrospectively claim the remaining 50% in a couple of years when I begin to generate taxable income - is this correct? Is this wise/practical, or should we just consider putting the title under my spouse's name?

    Also, we are considering how to structure our loan going forward, as our current home has a small debt on it - about 80% of our debt will be on the investment property. Who would you recommend we see to organise this (financial advisor, mortgage broker, accountant etc.) as I have no idea…

    Thanks in advance!

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 09:39
      +1

      If your spouse makes more than you will make in the future you may consider putting the title of the property as well as the loan in his name.

      However you are giving up ownership of the property and it is essentially his property.

      If you keep things joint, he will be be claiming 50% on the net rental income/loss in his personal tax return and so will you.

      Assuming the property is negatively geared then you will incur tax losses that you can offset against future income when you start earning income.

      If you want to restructure your loan its best to speak to a mortgage broker (perhaps after getting some advice from a financial planner).

      • [Deactivated] on 23/05/2017 - 09:47
        +1

        Great thank you very much

  • Praneesh on 23/05/2017 - 09:51

    Hi
    I have two questions. How do I utilise 400 k in a quick return investment . This is for my mum who will use this when she retires in 5-6 yrs maybe earlier.
    Also looking at using my super to invest in property. What are the associated costs and does any costs come out of my pocket or they all come out from my super fund?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 10:12

      First question should be aimed at a financial planner as accountants do not advise on financial products.

      Second question, setting up your own SMSF will cost you approximately $2,000 with ongoing costs of approximately $1,500 per year for the accounts, tax return and audit.

      All costs will come out of your superannuation fund and you will not need to spend your personal money.

      There are many things to consider when buying property in super, especially if your superfund has to borrow money (this will be very costly)

  • eunnip on 23/05/2017 - 09:53

    Hi Nicole,

    Say I borrow say 100k on my home loan (make it into a new account with to buy shares, at 4% interest.
    If my shares pay less than 4% in dividends a year, what can I claim?
    If it pays more than 4% in dividends a year, can I claim anything (like interest on the loan)?

    Second question is, say I am retired or planning to retire in the next financial year, and I have shares that pay me $40,000 a year (fully franked) and no other income. What would be my tax on that?

    Thanks for the help!

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 10:09
      +1

      Shares will be deemed a long term investment and you will not be able to claim interest against the income regardless if the dividends are greater or less than the interest paid. You will be able to include the interest paid in the cost base of the shares when it comes time to calculate the capital gain/loss of the shares upon sale.

      Second question, $40,000 franked dividends will include franking credits of approximately $17,000. Assuming no other taxable income, the tax on $57,000 will be approximately $11,000 so you will get a refund of your franking credits of approximately $5-6,000.

      To ensure your return is being processed correctly, especially with such a big franking credit, it would be advised to contact an accountant (such as us) to prepare your return.

      • goms on 23/05/2017 - 17:34

        Did I hear it correctly that you said you cannot claim the interest on money that you borrowed to ourchase shares?

        ATO website says otherwise unless I misunderstood it..
        "You can claim a deduction for interest charged on money borrowed to purchase shares and other related investments from which you derived assessable interest or dividend income"

  • balotelli14 on 23/05/2017 - 09:57

    I have a office job in the finance industry. What are the most popular deductions that people claim from your experience ?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 10:05

      Your deductions should be the expenses you have incurred in the course of your employment that are not reimbursed by your employer.

      Such as your suitcase, some percentage of your phone bill, the financial review.

      There aren't too many deductions available to most employees because realistically, your employer will pay for anything that you require to do your job.

  • frewer on 23/05/2017 - 10:08

    First of thank you for spending time to read and response to our question. Here is mine

    If I spend $130 to do my tax return, I wont really get it ALL back the next year, will I ? Because $130 will be deducted to my taxable income, therefore I only get a portion of it back.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 10:10

      Don't ever spend money just to get a tax deduction.

      As you mentioned you are spending 100% of the money to get a deduction which may result in you getting back 30% of it.

      You will only "get it back" if you have paid tax.

      Long story short, spend the money on your tax return to ensure peace of mind and to have someone who is knowledgeable in the field so that you don't have stress in the future.

  • rickxs on 23/05/2017 - 10:21

    ..

    Hi I sold nearly all my shares & put into Super to minimize assets ,had them about 10 yrs or so
    CBA , APA etc
    whats the deal on capital gains please

    .

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 10:24

      You will tax on the net capital gain (proceeds less purchase price). As you have held them for over 12 months you will be entitled to a 50% discount.

      Example

      CBA shares purchased 10,000 sold for 14,000. There will be a 4,000 gain and with the 50% discount your net gain will be $2,000 which you enter into your tax return.

      Thats the simple version of it, obviously there are other rules to consider. Probably best to discuss with an accountant when doing your tax return.

      You probably shouldn't have put all the proceeds into super as you might have a huge tax bill this year.

      • rickxs on 23/05/2017 - 14:27
        +1

        ok thank you,:)

  • Praneesh on 23/05/2017 - 10:42

    Do you do SMSF? If so PM me as I need to arrange.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 10:47

      For some reason I am unable to PM you.

      Are you looking at establishing a Fund?

      The cost of establishing your own SMSF range from $800 with individual trustee to $2,000 with company trustee. It is recommended that you use a company trustee to ensure your personal assets are not at risk.

  • Associatedziaxk87 @ Titanium Accountants & Advisors on 23/05/2017 - 10:43

    1. if my salary is 90k what tax rate is it currently.

    2. If I salary sacrifice this year to 20-25k to utilise govt scheme for buying first house. How will it affect my tax rate.

    PS: I do not own a house yet, planning to buy it in next year or so.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 10:50

      The proposed incentive you are talking about only allows you to salary sacrifice $15,000 per year.

      The result will mean that your taxable income is reduced by $15,000 meaning you will be saving approximately 34% of that 15,000 in tax. The superfund will pay tax of 15% on that 15,000 which is 2,250.

      Effectively you will be saving approximately 19% x 15,000 = $2,850 in tax.

      However you need to weigh up the fact that you won't have access to that money unless you withdraw it to purchase your first home. So your take home income will be much lower each pay cycle :)

  • Praneesh on 23/05/2017 - 10:54

    Ok can you email me [email protected] as I need SMSF setup and also do you do home tax returns.

    • Scab on 23/05/2017 - 12:13
      +3

      Can't help with a SMSF but I just signed you up for a GrindR account.

  • ycon on 23/05/2017 - 10:57

    Hi, I've been trading CFDs (shares) over 2016/2017. My account was in USD. When closed my positions, my earnings were still in USD.

    My trades were only open a few hours/days at a time- but the account has been open over a year. I took all the money out of the account at 13 months and converted it back to AUD.

    I consider the fact the account was in USD as an investment itself. In saying that- can I take advantage of the 50% capital gains discount for holding it over 1 year?

    Hope that makes sense

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 11:01

      2 things to consider here. There are two different types of gains occuring.

      Each share transaction will have its own capital gain/loss

      When you take all the money out at the end that will be a realised foreign exchange gain/loss

      • ycon on 23/05/2017 - 11:05

        So if all my trades were under 12 months- there is no possibility to get the 50% discount at all?

        My reasoning is that what's the difference between investing in USD on the Stockmarket? Im essentially doing the same thing…

  • ilikethebargains on 23/05/2017 - 11:13

    I am employed casually but work around 48hours a week. I work from home but my job requires a lot of travel in my own car for which my company pays me 70c per km travelled. I can sometimes travel up to 4000km per month so the km rate constitutes a fair part of my pay.

    My question is, should I be paying tax on this payment? It doesn't appear to be listed as taxable on my payslip but the last tax accountant I had seems to have included it in my taxable income.

    Thank you!

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 11:15

      Your employer should be including the motor vehicle allowance they give you in your payment summary.

      Contact your employer to find out why they are not doing it.

      They may not deem it to be an allowance but instead a direct reimbursement of expenses. If that is so then they are not required to put it in your payment summary and you are not required to pay tax on it.

      However since it is set at 70c per km, it is more likely an allowance.

      • ilikethebargains on 23/05/2017 - 11:20

        So if it is an allowance, I'll need to pay tax on it?

        It is listed on the payslip but not on the "Allowances & Reimbursements" side, it's on the same side as the payment for hours worked.

        Thanks so much for taking the time to help out us confused people! :)

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 11:39

          If it is on the payments side then they are just simply providing you with extra payment which is the same as wages/salary.

          How much is the overall payment for the kms you travel. Does it exceed $10,000 per year?

          If so you may want to see an accountant about claiming work related deductions by using the log book method.

        • ilikethebargains on 23/05/2017 - 11:55

          In the 2015/16 financial year, I did over 37,000 km so was paid around $26,000 in travel.

          I'm confused because they list a GROSS amount then they list a TAXABLE INCOME amount which is just the GROSS minus the travel payment. So it seems like it's not a taxable payment but it's also not an allowance.

          In order to get this payment, we keep very very strict records of travel, so I have a full log book of every KM travelled. My car's use is around 80% work related.

  • thierry on 23/05/2017 - 11:21

    Great post!

    I'm interested to know what are common ways IT Contractors get around the Personal Services Income laws - which say if 80% of income comes from one source, then you can't run as a company.

    Could a family trust provide 20% of the income to get over the PSI?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 11:38

      Has to be unrelated to you. Once you pass the 80% test there is another test you must pass as well.

      Here is details of the tests https://www.ato.gov.au/Business/Personal-services-income/Wor…

      As an IT contractor they are all trying to get around PSI laws which is the very reason the laws were brought into place.

      You are effectively an employee.

    • [Deactivated] on 23/05/2017 - 12:21
      +1

      I'm interested to know what are common ways IT Contractors get around the Personal Services Income laws

      Get 2 jobs - call it a personal services business.

  • imurgod on 23/05/2017 - 12:01
    +1

    I just want to say thanks to the OP for offering assistance that they could easily charge for.
    I hope karma or whatever comes back and your kind gesture is reciprocated.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 12:05
      +7

      I was thinking of starting a GoFundMe page where you could all deposit $2 or $3 for the help.

      But then I remembered that this is OzBargain lol

      • imurgod on 23/05/2017 - 13:28
        +1

        Needs to be tax deductible, be available through Cash Rewards and come with free Eneloops

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 13:33
          +1

          I have absolutely no clue what any of those words after tax deductible mean :)

        • imurgod on 23/05/2017 - 16:03

          @nicolemcmilllon: get out!

  • kingSlayer on 23/05/2017 - 12:10

    Nice post!
    I just want to ask I am working as a consultant in IT areas.

    I am doing a master course (currently holding a bachelor degree) and is approved by work that is to support my development at work.

    I drive from work to University 3 times a week, (I have recorded the kms for each drive from home to work , work to uni, uni to home etc)

    I also use my home computer for study work and my own phone to manage work communication such as email and calls (maybe around 10%)

    Questions are:
    1) How much of the travel cost can I claim back ? and what is other common claim items for a work related studies ?

    2) Also, for work related travel cost (not study but to go to a secondary site for the company) can I claim those back as well ? (some time i used public transport from work site 1 to work site 2) does it mean I need to show to record on my opal card ??

    3) And for home computer/ private phone, how would you justify the % use for work purpose ? Do i need to show the phone bills ? I mainly use it to send work email, how to i justify what % of that is for work ? and for the computer i run codes for work at home sometimes, I didn't record the time and the length that i ran but I do do it regularly from home as I have setup a remote work station from home. What is the best practice to claim ?

    • kingSlayer on 23/05/2017 - 12:12

      Oh , and just an additional question
      do you think it's worth a while for me to go to an accountant ?
      I don't think I have much complicate tax claim , its just the work related travel study cost that i need to calculate or maybe some depreciation on home computer devise that i need to replace etc.

    • kingSlayer on 23/05/2017 - 12:13

      Oh i also wondering,
      If i replace my crack iphone screen that i used part of it for work purpose , i paid 160 to fix it, how much can i claim back ?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 12:14

      1. The easiest way is to use the cents per km method which means you can claim a deduction of 66 cents per km up to 5,000 km which is a maximum deduction of $3,300

      2. If you are claiming the car expense, prob do not claim other travel expense.

      3. This is all estimated. So you can estimate that you use the phone for 20% work purposes. Then claim 20% of your phone bills as a deduction.

  • tik tok on 23/05/2017 - 12:29

    I have a mortgage on PPOR so non deductible debt. Say, I let it out for rent using a website (I can create my own) - airbnb typically. And I rent from myself for the year. Can I then claim deductions on the property as it is effectively an income producing an investment property ?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 12:34

      You want to rent it to yourself? No

      If you rent the property you will lose your PPOR exemption.

      Keep it the way it is and live in it!

      • tik tok on 24/05/2017 - 09:45

        The only PPOR exemption is on CGT. I can still sell the property without having to pay CGT if I sell it within the 6 years of first renting it out - which will most probably happen.
        Does that change your answer ?

  • ash79 on 23/05/2017 - 12:37

    Hi Nicole,

    This space is great help and I gained so much of knowledge just by reading different queries and their answers.

    I would appreciate if you can help finding answer to few small queries in my case:

    My wife usually make some money by buying stuffs through auctions and selling them on Gumtree/facebook/to friends & family. She roughly made around 6-7k this financial year. Although the amount she earned is less than taxable threshold i.e. 18K, do you recommend a file for her? What is benefit of filing even if her income less than threshold? What is the best way to maintain records of her income considering most of her transactions are done in cash.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 12:40
      +1

      She can record her transactions in excel. That would be the easiest.

      Also I would recommend lodging a return for her because if she ever ends up making more than $18,200 and you all of a sudden lodge a return, there may be an ATO query as to why she hadn't lodged the previous X number of years.

      Does she have an ABN? You can argue that it is a hobby and not a job. The fact that she doesn't have any other income will mean that this is her job in essence.

      I would consider getting an ABN. writing down all of the sales and purchases on an excel spreadsheet and lodging a tax return at the end of the year.

      An accountant may only charge you $60 to lodge if it is that simple :)

      • ash79 on 23/05/2017 - 13:57

        Thanks for your response. Never maintained any record so far, but we can note down the ones which she can track through her email communications. She has got one dormant ABN registered as sole trader, which she made couple of years ago but never used it.

        One more thing to clarify, does she need to use the same excel sheet to update in her ABN Activities?

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 14:06
          +1

          Put all the activities under the one business. It will be easier than trying to separate everything.

          It could be as simple as giving an accountant an income figure, example 10,000 and an expenses figure 5,000 at the end of the financial year.

  • battler on 23/05/2017 - 12:51

    I have a friend who I think is being bent over by their current tax agent.
    What price range should they be looking at for 2 tax returns: 1) office worker, salary (could probably do etax but they are too lazy) + 2) self employed person in services industry with minimal turnover.
    ?

  • KingJuf on 23/05/2017 - 12:56

    I bought a house in Aug 2014 in WA and have had it on rent since Feb 2015. The house was built in 1988 so I figured it was not worth getting a depreciation report, is this right? the only thing I have claimed is a new aircon unit via depreciation and general invesment expenses.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 12:58

      Probably best to call a company that deals in depreciation reports and explain to them the type of appliances the place has. Considering it is 1988 it would probably be too old to bother with it but depending on whether or not any major construction was undertaken, it could be beneficial.

      • KingJuf on 23/05/2017 - 13:04

        Yeh thats what I figured, no major contruction aside from a patio out back.

        Another question I have is that last year I was running as a sole trader on the side of my full time job and this year I have begun a partnership with my brother for the same type of business. As I have been engaged in two different business structures will my tax return be complex to complete?

        Our income is cash and previously as a sole trader I was depositing it into my personal account but we have now setup a business account for the partnership. Income is probably on the low end between 10-15k per year.

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 13:06

          The partnership will have to do a tax return.

          In your tax return you will include income from your sole trader, income from your partnership and income from your salary.

          You should get an accountant to do both returns, probably including your brothers return. To ensure continuity between the amounts reported.

  • congo on 23/05/2017 - 13:01

    Hi there.
    I am a contractor and I have a 'PAYG - business and personal services income' group cert.

    Does this mean that I answer YES to 'Receive any attributed personal service income' (question 9) or YES to 'Receive income for personal services you provided as a sole trader' (question 14 PSI)?

    Thank you

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 13:12

      I am a bit confused by your question.

      You work as a contractor and then another position that gives you a group certificate? or are you saying that you work as a contractor and they have given you the group certificate?

      If they have given you a payg payment summary then you are not a sole trader. so dont do question 14, only do question 9.

      you select income type is P - personal services and payment type is S - labour hire (i am assuming by contractor you meant labour hire)

      • congo on 23/05/2017 - 15:07

        Thanks!
        Sorry it is not a group certificate, but a Payment Summary.

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 23/05/2017 - 15:08

          They used to be called group certificates, now they call them payment summary. They are the same thing.

  • phoenix17 on 23/05/2017 - 13:13

    I'm an engineer who does quite a bit of travelling for work using my own car. When it comes to deducting the expenses I'm using the cents per km method. I have a log book that keeps track of where I go (distance to and back to office in kms), but I haven't not been logging the kilometre reading in the car. I also sold a car and bought a new car about November last year.

    Just want clarification if that 5000 km max is per car? That is, could I claim expenses on both cars (one car that was previously owned then sold, and the new car) with roughly 3500kms travelled each car? Or is it 5000 km max per car per person?

Login or Join to leave a comment
Login Join