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 18/06/2017 - 16:26
    +2

    Here are the two previous posts. Please read through them before posting.

    https://www.ozbargain.com.au/node/308427

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

    • ladis on 20/06/2017 - 14:07
      +1

      I have some accumulated capital gains losses fro selling shares carried forward over the last few years. About 4 years ago I omitted claimed a couple of thousand dollars losses. Is it a big hassle amending an old return to correct the CG loss amount?

      • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 20/06/2017 - 14:10

        What do you mean. From what I understand you already have some capital losses however 4 years ago you had further losses that you did not include in your return. Is this correct?

        How many thousand were the losses that you did not include in the return?

        Also, more importantly, in the last 4 years, since those losses were omitted, have you made any net capital gains in your return that you paid tax on?

        • ladis on 20/06/2017 - 15:33

          Correct I missed out on including some capital gains losses. The amount was close to $2000. Yes I am still carrying forward those losses ie no net gains in the period since that time.

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 20/06/2017 - 15:39

          @ladis:

          Probably not worth going back to amend a return which will cost you approximately $100. But it is up to you.

          If you believe you will have capital gains in the next few years it may be worth amending the return.

          Let me know if you want further assistance :)

  • [Deactivated] on 18/06/2017 - 16:38
    +5

    Let's say I buy a laptop off gumtree for my business and pay with Paypal. Can I claim it as a deduction/business expense despite not having a receipt because it was a private sale?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 18/06/2017 - 16:40
      +4

      Yes, as long as you have paid for it via paypal and there is a transaction receipt. Also best if you save the gumtree correspondence just in case.

      • [Deactivated] on 18/06/2017 - 16:52
        +1

        Thank you!

      • Fluffmeister on 20/06/2017 - 19:16

        Expanding on this a little bit as its a similar question.

        I've recently bought some camera equipment from private sellers for my photography business. I've got a mixture of things including hand written receipts. Am I able to depreciate these?

        Note that the equipment is used, whereby it was unclear if the previous user was buying something 'new'

        Likewise I'm purchasing equipment overseas with proper invoices, I assume no issues here?

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 20/06/2017 - 19:59

          It doesn't matter if they are new or old. No issues as long as you have something to show the purchase such as hand written receipts.

        • Macgyver on 20/06/2017 - 22:00

          What if I buy a laptop overseas new?

        • WhyAmICommenting on 25/06/2017 - 15:47

          @Macgyver: I think that only matters for gst not tax

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 26/06/2017 - 11:21

          @Macgyver:

          Doesn't matter where you purchased it from. Still same tax treatment.

  • whooah1979 on 18/06/2017 - 16:44

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

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 18/06/2017 - 16:47

      please explain rosca? as far as i know its a group of individuals saving together?

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 18/06/2017 - 16:52
          +2

          Yep as I thought.

          Your "winnings" aren't actually winnings, its just getting your savings earlier as you will eventually be paying the entire amount into the "pot".

          Therefore I would assume the capital part of the amount is not taxable, however the interest earned may be.

          Example 4 people each put $100 into the pot. When you get your $400 its not taxable. But at the end if they distribute to you any interest earned on the savings then that interest would be taxable.

          Hope that helps :) Thank you for your question

        • whooah1979 on 18/06/2017 - 16:54
          +1

          @nicolemcmilllon:
          thanks.

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 26/06/2017 - 11:21

          @whooah1979:

          You're welcome.

    • PAPower on 19/06/2017 - 11:52
      -1

      LOL. How long have you been with this type of investment? I've heard a lot of cases where one person just bailed with all the money and others lost. Is there any insurance on this ROSCA?

      • catbug on 21/06/2017 - 16:00

        Usually it's done between family and people you know and trust but in saying that there's no guarantees that someone won't dick everyone over. I know of workplaces where this is done too, it just depends on how close the circle of friends/family is :)

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 27/06/2017 - 15:45

          Certainly don't recommend these types of investments. Even with family members. Too many temptations :)

  • GangGang on 18/06/2017 - 16:51
    +1

    I have a gardening hobby/interest that i think will lead to a small business in the near future for myself. I want to study horticulture at tafe or online. Would i be able to claim the cost of the course as it will be for my business? I don't have a Business or ABN yet but i will have it when i apply for the course.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 18/06/2017 - 16:53
      +1

      Effectively, you would only be able to claim those costs against the business income (which I assume isnt much), not your other employment income.

  • RyanMK on 18/06/2017 - 17:00

    Would an auditor be able to claim his local car/travel expenses as tax deductible?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 18/06/2017 - 17:04

      Are you travelling from your workplace to client premises to audit?

      If so, use the cents per km method to claim those kms.

      If you are traveling from home to client workplaces, how often are you doing this?

      • RyanMK on 18/06/2017 - 17:07

        Occasionally from the office, but mostly from home. I would say it consists of 70% of the year?

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 18/06/2017 - 17:16

          It may be considered itinerant work if it is so regular that you are doing it 70% of the year. That would mean most of the year you are out at clients work performing audits.

          Does your employer not provide you with a travel allowance or reimbursement of travel expenses?

        • chobani4lyf on 19/06/2017 - 15:04

          @nicolemcmilllon:

          I am in a situation similar, travelling to client offices all over Sydney for 90% of the year. Employer reimburses 66 cents per KM traveled which is included in assessable income.
          Can I still claim any deductions RE: depreciation, fuel, etc?

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 19/06/2017 - 15:12

          @chobani4lyf:

          If you do that you are using a different method which is the log book method.

          What your employer is giving you is not a reimbursement but an allowance. That is why it is in your payment summary.

          Using the log book method means you will apportion all the expenses based on a the business percentage.

  • cooldude123 on 18/06/2017 - 17:16

    How should I best declare cash-in-hand income for a company I worked for (as Personal Services Income or otherwise)? - position for a tutoring company but was required to supply own materials and provide an ABN for an invoice.

  • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 18/06/2017 - 17:19
    +2

    By cash in hand I assume you just mean that they paid you in cash as opposed to via a bank transfer?

    If so there is no difference. You still declare the income you received regardless of the method it was paid to you.

  • Savas on 18/06/2017 - 17:21
    +1

    What is the most you can claim for account keeping if you are managing your own account?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 18/06/2017 - 18:19

      I don't understand your question. You can only claim expenses you actually incur (i.e physically pay).

      Therefore you can't claim deductions for your "time"

      • Savas on 18/06/2017 - 18:26
        +2

        Asking for a friend who runs a business, thanks

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 18/06/2017 - 18:32
          +2

          You're most welcome :)

  • bapo on 18/06/2017 - 18:45

    Just wondering if anyone has experience claiming international flights on Tax?
    I'm going to europe in August and will be going into my company office in the hague for a few meetings during what would normally be a euro holiday.

    Does this make the airfares at the least tax deductible?

    What does the ATO require me to show as proof the trip has a business purpose as well as leisure?

    All help greatly appreciated

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 18/06/2017 - 19:44

      Realistically its a holiday rather than a business trip so personally I wouldn't advise you claim the flights.

      However if you thought those days that you went in the office were work days you can apportion the flights for the work related days to total days and claim that percentage of flight costs.

      eg) 21 day trip with 2 days work related, then you could claim 2/21 = 9.5% of the flight costs.

      Hope that helps :)

    • abb on 20/06/2017 - 16:01
      +1

      get the boss to buy the tickets!

      • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 27/06/2017 - 15:45

        Yes that is what the ATO will ask too. Any legitimate work flight, especially overseas, will generally be paid by the employer :)

  • Sheila Dealer on 18/06/2017 - 19:48

    Our son began work in the USA in October 2015. He completed his 2015/16 tax return. Does he need to do one for the current financial year as he has a small amount of interest and dividends and no other Australian income? Many thanks.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 18/06/2017 - 19:55

      Yes he will. For a variety of reasons.

      If he is a non resident for tax purposes then he will have to lodge a return as his Australian income will be taxed in Australia (with no tax free threshold).

      If he is a resident for tax purposes then he will have to lodge a return as his worldwide income will be taxed in Australia.

      It is important to go through the residency tests on the ATO website to see whether or not he is a resident for tax purposes. In simple terms, if he plans to come back and he still has most of his things in Australia, then he will still be an Australian resident.

    • luxcurly on 19/06/2017 - 23:48

      Just got notified by a friend who is seconded to UK.

      If your son has HECS/HELP loan, he may need to make repayment if his Australian plus foreign sourced income is over the repayment threshold.

      He needs to update his foreign sourced income via myGov.

      • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 26/06/2017 - 11:24

        Correct

  • VIV33 on 18/06/2017 - 20:39
    +1

    What are you thoughts on missing two years of tax returns with about 10K due to tax office (estimate)…only excuse was sickness in family and lack of finances. How does penalty works?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 18/06/2017 - 20:50
      +5

      You should lodge as soon as possible. Then you can arrange a 6 month payment plan with the ATO. The longer you wait the more chance of penalties and interest.

      Please PM me if you want to discuss preparing your returns and lodging them as soon as possible :)

  • VIV33 on 18/06/2017 - 20:42

    Personal services Business : How much do people usually claim on cost of running a home office. I do understand the limitations / rules around defining PSB vs PSI.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 19/06/2017 - 08:42
      +1

      You claim what you are entitled to. It depends on the circumstances of your home office such as how often you use it etc.

      Estimate a percentage (either by size compared to house or your usage eg 15%) and claim that percentage on electricity, internet, phone bill).

      Do not claim occupancy expenses such as rates etc

  • nowlan on 18/06/2017 - 21:05

    I worked a 6mo contract which required safety boots and a new phone. I bought a Samsung for 750. How much can I claim back?
    Further will this just complicate doing the online mygov tax or do i use etax etc?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 19/06/2017 - 08:40

      I haven't used mygov so I can't comment on how difficult it is to enter deductions on there. I have heard that eTax is relatively simple to operate if you are comfortable doing your own return.

      You can claim the cost of your safety boots.

      You can also depreciate the mobile phone over 2 years x the percentage of work use.

      For example, if you bought the phone on 1 January 2017 and you used the phone 20% for business purposes then you would claim as follows in the 2017 tax return.

      $750 x 181/365 days x 20% work related = $75

      • congo on 28/06/2017 - 15:02
        +1

        Etax is no longer supported. I think.

  • Lando on 18/06/2017 - 21:19

    I'm in a graduate job.

    I currently have received $13500 in the last financial year and my employer pays in the first week of every month. I know this is a question for my employer, but have you ever seen employers give new employees (~2 months into the job) a salary/payroll advance? I would have to pay less tax on next month's salary if I get it before June 30th. Is that right?
    My monthly salary is $7000 - $7500 (excluding super).

    My mother is also recovering from open heart surgery that she had last week. I need to buy her certain equipment, such as a special arm chair for the home, a new car (current one is too big, engine problems and difficult to drive), and some railings for the house. She may also need some medical equipment (<$1000).

    Is my father or am I able to claim any tax deductions for these items? My mother does not work and has a disability.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 19/06/2017 - 08:35
      +4

      Whilst your idea is correct, I would not be asking my brand new employer for an advance on my salary. It will be difficult for the payroll to process your pay in advance and have to not pay you in July.

      Obviously this is something for you to discuss with them. I definitely would advise against it though.

      Sorry to hear about your mother. You or your father may be able to claim a carer offset. Have a read of this page from the ATO website which explains it.

      https://www.ato.gov.au/Individuals/Tax-return/2016/Supplemen…

  • Unorthodox on 18/06/2017 - 23:51

    If a photography business purchases SD cards for storage of photos, content for clients etc, would this be deductible?
    SD cards costing say $70 per one and it is retained by the business. (ie: SD cards bought to hotswap during events or as back ups).

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 19/06/2017 - 08:33

      Yes that would be deductible as it is a business expense :)

  • Cupcount80 on 19/06/2017 - 06:49

    I am established here in Australia but I am financially looking after my retired elderly parents overseas(i.e not in Australia).
    Even tho I have been sending them money for the past few years, I have not mentioned this in my tax returns submission before.
    Can I claim the "dependent relative" tax offset even if my parents are not in Australia?
    What evidence (if any) do I need to have to show that they are dependent on me? Thanks.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 19/06/2017 - 08:32

      Unfortunately as your parents are not living in Australia, they are most likely non residents for tax purposes and therefore you will not be able to claim the carer offset.

  • Spending2Much on 19/06/2017 - 07:55

    Is it correct? The first $250 of training course or work training isn't deductible?
    (I'm going to pay for courses this financial year and do them later otherwise)

  • pandabear on 19/06/2017 - 08:48

    My Mum who is 59 years old sold an investment property this year with a capital gains of $500,000. She is retired but with the 50% discount she will still need to pay Capital Gains Tax on $250,000. She would like to minimise CGT where possible. Would she be able to put some of the money into Super and pay a lesser amount of tax? If so how much can she put in? Are there any other effective ways other than super that she might be able to use to minimize or reduce her capital gains tax? Note: she has no capital losses to offset against it.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 19/06/2017 - 09:24

      I don't believe she will qualify for the superannuation rollover as she is retired and the asset wasn't a small business asset (you may want to look this up further on the ATO website
      ( https://www.ato.gov.au/General/Capital-gains-tax/In-detail/S… )

      She may be able to sit with her accountant and find further costs to increase the cost base and reduce the capital gains. Might also be worth finding out if the property could have been classified as her primary place of residence for any period of ownership.

      Apart from that, she is looking at tax of about $90-95,000 on the $250,000 income.

      • pandabear on 19/06/2017 - 09:37

        I heard somewhere that she can put $35,000 into super and she will only get taxed at 15%?

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 19/06/2017 - 09:41
          +1

          Yes that is separate to rolling over the entire amount into superannuation.

          If she contributes $35,000 into super (she only has 11 more days to do it) she may be able to claim a deduction for that $35,000 in her personal return.

          Disclaimer: Please note: As an accountant I do not make recommendations or give advice on superannuation contributions amounts.

        • pandabear on 19/06/2017 - 10:08

          @nicolemcmilllon: thank you for your replies! She can rollover the entire amount into super? Would this still be taxed at 15% I thought the cap was $35,000?

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 19/06/2017 - 10:30

          @lemonsunrise:

          No she can't rollover the entire amount. I was saying that I thought that was your initial intention so that's why I said she can't.

          Her concessional contributions cap is $35,000 for the year ended 30 June 2017.

          She would have to also advise the Fund that she is intending to claim a deduction for this contribution by filling out a "notice to claim a superannuation deduction".

          Call the Fund and discuss with your accountant before doing anything :)

  • ohsotight on 19/06/2017 - 08:51

    Hi, if an investment property is about 60 years old I believe the depreciation I can claim will be minimal. However if a kitchen renovation was done ten years ago but I bought it only bought the property last year I believe I can still claim some depreciation on this.

    Do I need a surveyor to assess what I can claim or can my Accountant claim a conservative amount on this? Also do I need to be sure when the renovation was done? Thank you.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 19/06/2017 - 09:05

      The kitchen renovation costs would have formed part of your cost base when you purchased the property.

      If a surveyor assesses this, the maximum write off you will have on the renovation will be 2.5% per year.

      If the renovation was $10,000 for example you would only be looking at $250 per year. In my opinion it is probably not worth it unless the renovation was a substantial amount (such as $50,000)

  • klftpg on 19/06/2017 - 08:56

    Hi Op. Thanks for taking the time to answer all these questions. My question relates to Family Tax Benefit and the time requirements with lodging tax returns. My understanding is that if a tax return for 15/16 is not lodged by 30 Jun 2017 all family tax benefit received in 15/16 must be paid back. Is this correct?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 19/06/2017 - 09:03

      I am not sure of centrelink's policy of this. However, I would recommend lodging 2016 return as soon as possible as it is already late and you may incur penalties and interest (if you haven't already done so).

      If you would like us to prepare your return please do not hesitate to PM me.

  • Brendanonymous on 19/06/2017 - 09:19

    Thanks for answering all these questions.

    I have gotten a new car in this financial year, on a novated lease. Before this, I had a car that I was paid a Motor Vehicle Allowance for.

    My question is - can I use the log book from the old car to claim my business use %? It's the same job, and the log book is from 2015. Thanks again.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 19/06/2017 - 09:25
      +1

      If you believe the same estimates apply then yes.

      I would also recommend doing another 12 week log book in the coming year.

      • fantacular on 19/06/2017 - 18:39

        can you claim car expenses for a car on a novated lease?? all the expenses are incurred pre-tax?

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 19/06/2017 - 19:01

          Yes regardless of how the expenses are incurred (pre or post tax) you can still claim the deductions using either the cents per km or log book method.

  • Edsanwong on 19/06/2017 - 09:31
    -1

    My partner and I have an investment property under both name. Every year we claim 50:50 for negative gearing. Payment for interest from our joint account.
    In the last 12 months wife stopped working. I cover all the interest loan payment using my salary. Can I claim all 100% interest payment for negative gearing under my tax return this year?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 19/06/2017 - 09:37

      No you can't. Income and expenses are per the ownership of the property regardless of who pays the expenses.

      • techboy on 20/06/2017 - 08:17

        Except for interest if it is taken out under one name only.
        Hi Nicole..

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 20/06/2017 - 08:21
          +1

          Hi Hun :) Nice to hear from you again.

          Yes except for interest if the loan is in one person's name (which is rarely the case since they would usually apply for the loan jointly).

    • [Deactivated] on 19/06/2017 - 10:02

      Every year we claim 50:50 for negative gearing

      You can change the property ownership percentage to 99:1 and there's no stamp duty payable between spouses, which would let you change the portion each person can deduct.

      • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 19/06/2017 - 10:56
        +2

        There are so many reasons I can think of why that inst a good idea. However as I am not a lawyer, I won't comment on changing the ownership percentage to save a few hundred dollars in tax :)

        • [Deactivated] on 19/06/2017 - 10:57
          -3

          There are so many reasons I can think of why that inst a good idea.

          Like what? Marriage breakdown, etc?

          However as I am not a lawyer, I won't comment on changing the ownership percentage

          Just insert the <general advice disclaimer>

          to save a few hundred dollars in tax

          It adds up, especially if there's a big income differential between spouses (eg single income family).

          Multiply it out by 10 or 15 years and it's a serious amount of money.

        • Edsanwong on 19/06/2017 - 11:09

          Understood your point. Sorry didnt refresh the page.
          Thanks for your valuable contributions to this community.

      • Edsanwong on 19/06/2017 - 10:56

        Thanks you Nicole and sp00ker.
        Solicitor should be able to help me with that?

        • [Deactivated] on 19/06/2017 - 11:01

          Solicitor should be able to help me with that?

          Do your own research on the pros/cons of this, before going to a solicitor.

          A solicitor/conveyancor can help you do the actual transaction.

        • Edsanwong on 19/06/2017 - 11:10

          @sp00ker:

          Definitely will research and weight the pros n cons.

          Thanks for the idea.

        • chumlee on 19/06/2017 - 11:13
          +1

          @Edsanwong: how long do you anticipate your partner being out of the workforce for?

    • konazz on 22/06/2017 - 08:18

      Assume you've bought it as joint tennants (so automatically 50:50).

      In order to do this, you will need to:
      Convert the holding from Joint to In Common - you will need a conveyancer / solicitor to do this. Your bank may also need to be notified (probably not). Some fees payable.
      https://www.google.com.au/url?sa=t&rct=j&q=&esrc=s&source=we…

      Now that you have seperate interests, your partner can sell down 49% of their holding to you (although banks usually require 10% - just saying!). For this you'll have to notify the bank.
      Your partner will need to pay CGT on the increase in the property value
      You will need to pay Stamp Duty on the market value of 49% (or 40% if mortgaged).

      Do the sums… it may not (probably won't) add up honestly! Then if you're the breadwinner, later on you'll cop the larger capital gain.

  • danielkcheung on 19/06/2017 - 09:57

    I want to close a pty ltd (less than 2 years old) as the requirements and processes are too involved for the revenue it makes (or doesn't make lol). What is the best way to do this? Quite happy with an existing sold trader ABN and running everything through it (although registering for GST doesn't seem to be possible via the portal).

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 19/06/2017 - 10:32

      You can go through the process of closing the company first by ensuring all debts are paid. The company trial balance should be cleared out as well as the company bank account. A final tax return should be lodged with the ATO for 2017.

      You will need to fill out forms with ASIC to formally deregister the company.

      You should probably send the company's trial balance to your accountant so they can outline the steps to clear all the assets/liabilities etc.

  • IceCreamBandit on 19/06/2017 - 09:58

    Hi OP,

    I'm looking at getting a laptop before the end of the financial year, and have skimmed the Guide to Depreciating Assets.

    I have the following questions based on buying a $1000 laptop on 25/6/17 with 77% business usage (am a school teacher using it for work, so 77% comes off 40 school weeks/year) with an estimated effective life of 3 years.

    1) Do you recommend the prime cost or diminishing value method to calculate deductions?

    2) Given the hypothetical purchase date and the chance that the laptop may require shipping, how do I go about keeping documentation that it will be used for work if I may not even receive the laptop until the next financial year? Should I just hold off the purchase until the next financial year so I have more time to collect and keep documentation?

    3) If I purchase accessories in the same transaction ($50 laptop bag for example), can I claim an immediate deduction on the accessories or should that be added to the total cost of the laptop?

    4) Does the amount of work affect the expected business usage percentage calculations? Say I am only a temporary teacher at the moment and my work fluctuates between 3 days a week to 5 days a week, can I still use the 77% usage or would that amount have to drop if I am not fully employed for the 40 school weeks each year?

    Thanks in advance!!!

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 19/06/2017 - 10:35
      +1

      1. Diminishing value.

      2. Depreciation starts from the day you receive the laptop. Even if you received the laptop today, you would depreciate it starting today, so you would get 11 days out of 365 of the depreciation. You can't depreciate it for the full year as you haven't had it for the full year.

      3. Can be claimed immediately.

      4. You are the one making an estimate. As long as your estimate is honest at the time you make it then that should be fine. 77% seems kind of high though, are you not going to be using it for private purposes after hours and on weekends? Most people use 50% as a general guide.

      Just to further detail question 2. You won't get much of a depreciation deduction this year if you purchase it today as you will only have held it for 11 days this year. Therefore don't buy a laptop just because you want the depreciation deduction this year.

      Hope that helps :)

      • IceCreamBandit on 19/06/2017 - 12:14

        Perfect, thanks for your response! Will hold off my purchase until I see the right deal then :)

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 19/06/2017 - 12:15
          +1

          you're welcome :)

        • moonphase on 20/06/2017 - 14:20
          +1

          but do you have any sale that you could get better value than EOFY sales?

  • t_c on 19/06/2017 - 10:24

    As a sole trader if I sell a business vehicle for 40k how does this effect my taxable income? Will this put me into a higher tax bracket and ill loose alot of money invested in the vehicle to tax?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 19/06/2017 - 10:37

      Did the business purchase the vehicle?

      The vehicle would have a written down value for tax purposes. i.e the cost you purchased it for less the depreciation that has been claimed over the years. If that written down value is more than what you sold it for, you will effectively claim a deduction for the difference.

      If you sold it for more than the written down value, then you will have to include the difference as income.

      Speak to your accountant or have a look at the depreciation schedule if you have one :)

      • t_c on 19/06/2017 - 13:53

        So if 30k has been depreciated so far, and I sell for 40k, does this mean 30k will be treated at taxable income? So would it be a smart thing to sell after july then take the rest of the financial year off and with the tax free threshold of around 18k ill effectively only pay tax on around 12k?

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 19/06/2017 - 13:57

          If you sell it for $40,000, you have to determine the written down value. That will depend on what you have purchased it for and the depreciation already claimed.

          Only the difference is included as income.

          Also, I will assume you were being serious. Are you planning to take an entire year off just to avoid paying too much tax on the income? That doesn't sound like a smart decision.

        • profhawk on 20/06/2017 - 17:24

          @nicolemcmilllon:

  • Orgazmo on 19/06/2017 - 10:27

    Hi there,

    1. How is currency trading activity taxed (if at all). I have read various sources some say it's treated like gambling.

    2. A sole trader activity is carrying a loss for a number of years. This activity may cease in the near future. Can this loss be used for anything or will the loss be lost?

    Thanks!

  • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 19/06/2017 - 10:46
    +1

    1. Depends on your circumstances. If you are trading daily and it is a business, then it may be on revenue account. If you are trading for long term investments it may be on capital account. Most people investing will be on capital account i.e capital gains/losses.

    2. The losses will be lost.

    3. There doesn't seem to be any reporting requirements as the company is an overseas company and it hasn't paid any income to the Australian resident.

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