AMA - Round Two - Tax and Tax Return Questions - Ask Me Anything - GO!

Associatednicolemcmilllon @ Titanium Accountants & Advisors on 31/05/2017 - 09:15
Last edited 05/07/2017 - 10:20 by 2 other users

Edit % June 2017

I have now closed this thread.

I will think about posting a third round on the last week of June depending on how many people want me to do it.

I will be ready to prepare everyone's 2017 returns in July. I look forward to hearing from you.

For everyone else, thank you for participating and I hope you appreciated our answers.

Hi All,

I did a tax AMA a few weeks ago and got an overwhelming response (close to 700 replies).

I am going to do another one that will go from today 31 May to Sunday 4th June.

If you have any tax or tax related questions then ask below and I will do my best to get back to you as soon as possible.

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 previous forum post as we tried to avoid duplicate questions.

I will reply to this thread with a link to the previous post.

Look forward to answering all your tax queries.

Lets do this!

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closed Comments

  • djesr on 04/06/2017 - 13:31

    hey so, I am on a graduate vise (non permanent resident or citizen), to get my graduate visa and to apply for my PR I had migration agents fees and visa application fees, will I be able to claim these expenses?

  • webtonmoy on 04/06/2017 - 13:34

    Hi, Thanks for all the discussions.

    I am on student visa, and apart from my scholarship (which in not taxable income), I did some casual work at the Uni that earned me about 2-3k Aud a year for the last couple of years. Due to some oversight and misinformation, I did not submit tax return. Do I need to submit the tax returns for these years? What will be the possible consequences?

    Thanks for your help.

    • techboy on 04/06/2017 - 13:44

      If your total taxable income is less than $18,200 and you didn't pay any tax then you can call the ato and explain to them that you would like to do a non-lodgment advice for these years.

      However, if you paid any tax, that includes even $1, you need to lodge a tax return.

      This is of course assuming that you have a Tax File Number.

      • webtonmoy on 04/06/2017 - 14:32

        I believe the University withheld some portion of the payment as tax, and I have TFN. If so, then I require to submit the tax returns for previous years?

        Is there generally any penalty for this late submission? Thanks again.

        • techboy on 04/06/2017 - 14:39
          +1

          Ring them up and explain your situation to them and advise that you will be lodging all outstanding tax returns ASAP. They may overlook any penalties. I know that when I have done multiple tax returns for clients (some up to 10 years) they have been OK and not paid any fines.

          https://www.ato.gov.au/Individuals/Lodging-your-tax-return/P…

  • SydneySwan on 04/06/2017 - 14:10

    My son is 16 and still at school. This tax year he will earn about $428.60 in interest which is over the threshold of $416. He has had a TFN attached to his bank account for a couple of years because the bank kept deducting w/h tax even when he was well under the threshold. I calculate his tax liability as $12.60 * 66% = $8.32. Does he have to lodge a tax return for such a small amount? It seems the costs of processing would exceed the minimal tax to be paid. Or will the ATO come chasing if he doesn't?

    • techboy on 04/06/2017 - 14:23
      +1

      Yes he needs to lodge a tax return.

      You should try and get back the amount that was withheld in previous years.
      May be easier and cheaper to download paper tax returns for previous years and fill them in and post them for example :
      https://individuals.iorder.com.au/BrowsePublications.aspx and type in 2015 tax return etc

      I would suggest trying to not earn more than $416 in interest in future, move some money out or put it in your account?

      • Mad Max on 04/06/2017 - 21:12

        @techboy:
        So in this case if the income from bank interest is kept under $416 (no amount witheld from the bank as tfn for the child has been lodged with the bank) is there a requirement to lodge a return or a return not necessary form?

        • SydneySwan on 04/06/2017 - 22:00

          I would like to know the answer to this as well.

        • AAAB on 04/06/2017 - 23:35

          @SydneySwan:

          If a tax return is not required (ie, under tax free threshold, no tax withheld, no centrelink obligations) Then a NLA form will need to be lodged. Basically you have to let the ATO know either way.

        • techboy on 05/06/2017 - 09:22

          @SydneySwan:

          Once you have a Tax File Number the ATO will expect either a tax return to be lodged or a non-lodgment advise every year until you let them know it is your final one.
          https://www.ato.gov.au/individuals/tax-return/2016/in-detail…

          With respect to a 'thresh-hold' for a minor :
          A resident minor (under 18 years old on 30 June) who received income from dividends or
          distributions greater than $416 and franking credits were attached, or tax was withheld due
          to their TFN not being quoted.

      • SydneySwan on 04/06/2017 - 21:59

        @techboy:
        Thanks for the response. I can actually prevent him going over the $416 this year by reducing his balance for a few days. I was just hoping I could avoid doing this.

        BTW, the bank refunded the w/h tax when we got him a TFN and had it added to the account. I wasn't sure that that was correct process but didn't complain.

        • techboy on 05/06/2017 - 09:26
          +1

          The bank can do that for the current financial year only. Anything that was with-held from prior years will need a tax return to claim it back.

  • emiko on 04/06/2017 - 15:02

    Hi,

    I am a contractor and working for two different companies for regular basis (3 days a week) .
    I recently purchased a new car and I drive my car to work ( 2 different locations)
    Can I claim my new car for work related travel expense.
    What sort of percentage will be fair and how do I calculate how much I can claim ..
    Many thanks

    • techboy on 04/06/2017 - 15:10

      if you are just driving to the two locations every week, then none of your travelling expenses can be claimed.
      You would have to be travelling between the two locations daily or other work locations to make a claim.
      Normal costs of travelling to/from work is a private expense and can not normally be claimed. Unless you are carry heavy/bulky work tools that are required for work AND there is no secure lock up at either location.

      Do you have an ABN?

      What business are you running?

      If it is indeed business income then you should be keeping a logbook of all your expenses including opening/closing odometer readings at the beginning/end of the financial year. You should keep a record for a continuous 12-week period noting business v personal travel to arrive at a business use %. You can then claim that % of all running expenses including depreciation on the car. Claiming the car outright would be at the business use % and under $20,000, if it costs more then it would go into a general small business pool at the % business use.

      You really need to discuss this with a tax accountant to see exactly what type of income you are receiving eg PSI or business income.

      • emiko on 04/06/2017 - 15:38

        I do go to other companies too to work as contractor and I have my own Abn … I still can't claim car as expenses ?
        Just recently those two companies need me regular for a few months .

      • techboy on 04/06/2017 - 15:41

        Sounds like a PSI Income.

        This means that people receiving PSI cannot claim business expenses as if their income was
        derived through business activities. They are thus treated as employees for taxation
        purposes.

        using an ABN, Company or Family Trust for invoicing for an individual’s personal
        services does not make an individual compliant at all. Doing so does not convert Personal
        Services Income into business income.

        so No travel deductions to/from work.

        Use this to see if it is PSI income https://www.ato.gov.au/Calculators-and-tools/Host/?anchor=PS…

  • Booyah on 04/06/2017 - 16:22

    Hi there, Sorry if this question has been asked before and thanks heaps for answering in advance :)

    I work in an IT sector and occasionally work from home using my work laptop, just wanted to know if I buy a laptop/tablet for my personal use - can I claim any amount from it when lodging the tax ?

    • techboy on 04/06/2017 - 16:28

      If you are using them 100% for personal use then no. How could you?
      You may be able to claim for internet and home office expenses.
      You would need to keep a diary for 4 weeks and work out how many hours is spent doing work v personal use.
      Then claim that % of your internet.

      For home office, if you are alone in a room, you can claim the number of hours spent x .45 cents. But you must be doing work related activities.

  • Donaldhump on 04/06/2017 - 16:42

    if my work required a drug and alcohol test before commencing employment can this be claimed?

    • techboy on 04/06/2017 - 16:54

      No.

  • J4ckSp4rrow on 04/06/2017 - 17:23

    Hi

    I'm thinking of cashing in my long service and annual leave balance when I resign. Is there a way to minimise the tax on this?

    Thanking you in advance.

    • techboy on 04/06/2017 - 17:32

      Not really, if you are not planning on working anymore then it may be best to wait until the end of the financial year and then get paid in the new financial year because you total taxable income will be lower if you do not get anymore income.

  • bargainbargain on 04/06/2017 - 18:37

    hi there

    My employer for some reason contributed portion of my bonus into super which resulted in excess concessional contribution

    In regards to excess concessional contribution, isn't it best to release the money from the superfund to pay tax as anyhow i will be getting slugged with the marginal rate?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 04/06/2017 - 18:50

      It seems to me that you already know the law, I can't give you advice on which to choose it is a matter of preference

      • bargainbargain on 04/06/2017 - 19:24

        ok. On the basis that I release money from fund which I understand will be 85% of ECC - I assume I still get the 15% that has been taxed in super fund as an tax offset?

        If so, then certainly better paying off super fund (locked in for few more decades for me) as compared to using my after tax money from bank account.

    • chumlee on 04/06/2017 - 21:29

      Some of my bonus also goes into my super but this is because it makes up part oc my package value and super is paid on value of my total package value. Is it not the same for you?

      • bargainbargain on 05/06/2017 - 09:01

        Don't think so as it hasn't gone into super every year !

  • heremo on 04/06/2017 - 20:33

    Hi thanks so much for your help. Just wanting some help with tax deductions for overseas travel for a work conference. Not all the overseas travel is for work as I will go to two different countries for holiday while I am there. How do I split the air fare and taxi fares (there will be lots of taxi fares between hotels and airports as I am traveling to three different countries but the conference is only in one country). Thanks in advance.

  • katatoniq on 04/06/2017 - 20:37

    Thanks for doing this Nicole.

    I have a quick one. I have been studying communications at uni for 2 years and am now in my final year. I have been working full time in my field for the past 2 years and I am thinking - can I claim against my HELP loan? I am incurring about $6000 pa in uni fees and my work is definitely related… I am in the 90k+ bracket.

    Thanks!

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 04/06/2017 - 21:07

      HELP repayments are not deductible.

      • katatoniq on 05/06/2017 - 20:53

        Sorry I didn't mean my repayments, I was referring to my university fees

  • gavbagg on 04/06/2017 - 20:47

    Hi

    I am in Australia on a working holiday visa. I have been searching online and am hearing conflicting reports on whether I 'am a resident of Australia for tax purposes' and therefore whether I am entitled to benefit from the tax free threshold. I arrived in Australia in October 2016, have had one continuous job for 6 months from the start of December and have applied for, and been approved a second year's visa. Planning on staying in Australia beyond my two years if I can, either by sponsorship or permanent residency.

    Can you advise whether I 'am a resident of Australia for tax purposes' or would you need further info?

    Many thanks in advance

    • AAAB on 04/06/2017 - 23:43

      Hard to say for sure, have you stayed at the same address for a continuous 6 months? (have a signed lease document to substantiate it too?). Furthermore, would be hard to be 100% certain as the ATO have become quite strict with WH visas.

      I would probably see an accountant and relay all the relevant information to them so they can make an informed decision. I do hope you're getting tax withheld at the foreign rate though just in case…

  • kokoboko on 04/06/2017 - 21:20

    My friend is a nurse, she was asked to work on-call on some of the days on the weekday and weekend however she is required to have a car and a driving license. I want to ask if the driving lesson is tax deductible if it is required to do her job.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 04/06/2017 - 21:48

      No

  • blade on 04/06/2017 - 22:19

    HI

    I have just started to do contracting work just wanted to know what are the some of the things i can claim ?

    • Travel cost to work car / petrol / toll ?

    Thanks

    • Pizdets on 06/06/2017 - 12:26

      None of those things.

  • jeka1103 on 04/06/2017 - 22:37

    Hi!

    Sorry if you've been asked this before in either of the threads!

    I'm interested in this scheme that the federal government proposed in this years budget for first home buyers, the scheme where one can salary sacrifice money into their super (up to 15k per year for a total of $30k) and withdraw the money plus any interest earned to put towards a house deposit. I have been doing my research and I understand that super contributions are taxed at 15%, however, I cannot seems to find a consistent answer as to how much the contributions are taxed when they are withdrawn before retirement. One website mentioned that there was a tax but also a 30% offset, and another website mentioned a 22% tax but no offset.

    So my question is, how much is the tax to withdraw money from superannuation before retirement and is there any offset?

    Thanks!!

    • techboy on 05/06/2017 - 09:40

      From 1 July 2017, first home buyers will be able to make voluntary concessional (before tax) and non-concessional (after-tax) super contributions in order to save for a deposit.

      You can start drawing down on these contributions from July 2018 at your marginal rate (including the Medicare levy) minus a 30% tax offset.

      • jeka1103 on 06/06/2017 - 19:10

        What would my marginal tax rate be if I'm in the $37,001 – $87,000 bracket? Would it be 32.5%……?

  • Serrenity on 04/06/2017 - 22:50

    Hi,
    Is the AHPHRA registration fees tax deductible?
    I needed the registration for my work

  • pratikshah2003in on 04/06/2017 - 23:21

    Hi,

    what are the most common ways to reduce tax for a company/business runs from home and manage/run by one person and earn approx 90K a year?

    How much max. % of expenses of home can be claim?

    Any common tricks to reduce tax for a very small company/business?

    Thank you

  • hummel on 05/06/2017 - 08:55

    Can I claim a Dropbox subscription as an expense? I'm a full-time employee and they don't provide a good backup solution so all my work files (some personal, maybe 10%) are backed up into dropbox. Costs me $14/month so anything back would be great!

    • techboy on 05/06/2017 - 09:59

      If you are using it for genuine work related reasons then yes you could claim 90%.
      I notice that you are paying for it monthly at AU$13.99, it is cheaper to pay yearly (works out at AU$11.58 per month).

      Do you really need the 1 TB for work?

      I use Microsoft Onedrive and the 5 GB provided (for free) is more than enough.

      • hummel on 05/06/2017 - 12:48

        Thanks for the feedback. Yeah do need 1TB, work with a lot of CAD drawings etc, 5gb is nothing unfortunately.

        • techboy on 05/06/2017 - 13:27

          No problems. Find an exact business use percentage as 10% personal seems a lot.

  • AussieDolphin on 05/06/2017 - 21:52

    Hello,

    Thank you for such a wonderful forum. I work casually, study full time, recently divorced and have 3 children. Is there any students can claim at tax return time? Or does this depend on how much tax I have paid throughout the financial year?

    Thank you.

  • Haminacan on 05/06/2017 - 22:38

    Hi, as a recent graduate and current full-time high school mathematics teacher who pays rent etc. What can I claim on tax? I recently purchased a $2600 Dell laptop (ozbargain got me :P) and only use it for work. Just want to know as I also heard something about a grant but never received anything. Is that a tax perk? Cheers in advance. Would love to know if I can get a new phone and claim it on tax (or at least 50% of it).

  • whooah1979 on 05/06/2017 - 23:54

    could you please tell us if pots winnings from a rosca is taxable income?

  • pootietang1986 on 06/06/2017 - 09:10

    Hi, I own shares have made a gain this year and sold a small parcel for 3000 dollars profit. Is it best to sell out of the ones im losing on now to claim a loss against the 3000 profit so I don't have to pay the 40% tax???

    Can you do my tax return??

    Thanks :)

  • PAPower on 06/06/2017 - 10:57

    Thank you very much for this post.

    I had few business trips this FY, company always reimbursed all expenses. If I claim these expenses against my taxable income, apparently it's not right, but can ATO find out?

    Does ATO have the power to audit employer regarding reimbursements paid to me?

    • AAAB on 06/06/2017 - 18:46

      Wouldn't do it. One it's wrong and two your company has to lodge a tax return too so guess who now has that expense information?

  • poyme4 on 06/06/2017 - 11:26

    If I go on a self-paid overseas conference and my partner comes along, do I need to divide my accommodation cost in 2 to account for this?

  • Dr Prepper on 06/06/2017 - 17:15

    side business question.

    I only made $22,000 turn-over. I rent vans /utes from time to time and that eats a lot into any profits. Can I claim car loan for a little Kangoo van and offset this against my income tax from main job?

  • hahaboy on 06/06/2017 - 20:57

    I bought an ASX stock during the financial year. It's made losses, and don't see it recovering until next year or beyond. Can i sell off to realise a tax loss…is there any waiting period? I would like to still buy the stock in the new financial year, as i see some potential upside in it.

  • superjquando on 06/06/2017 - 20:59

    Hi,

    I am planning to get braces which is quite expensive around $4-5k. Apparently in the past, it could be listed down as medical expenses and therefore be deducted at tax time. I was wondering if this is still the case

    Thanks

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