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

  • JetLi on 05/07/2017 - 09:49
    -1

    Please advise your Tax Practioners Board registration number, you have not stated this in the past and there are no details of this on your website. If anyone provides tax agent services for a fee or other reward, they must be registered with the Tax Practioners Board.

    By stating this number, you will provide the ozbargain community with more confidence in your "general" advice provided.

    https://www.business.gov.au/news/is-your-tax-practitioner-re…

  • bobinv on 05/07/2017 - 09:53
    +1

    Hi Nicole,

    If I give a certification exam which is closely related to my job role and will help me get a better position at the place where I work. Is it claimable?

    Thanks
    Bob

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 05/07/2017 - 09:56

      Hi Bob,

      The course must have a sufficient connection to your current employment and:

      maintain or improve the specific skills or knowledge you require in your current employment, or
      result in, or is likely to result in, an increase in your income from your current employment.

      Therefore you have to be satisfied of one of the above. (Hint: Rather than a "better" position, it may be the same position with higher pay).

  • Ash-Say on 05/07/2017 - 10:27

    Hi,

    My partner receives carer payment which is not taxable as per payment summary. Does it needs to be reported under:
    1) Payment summary section as a carer payment(it becomes taxable income if included here); or
    2) Income test section as tax free government payment?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 05/07/2017 - 10:31

      If it is tax free per the payment summary then it will only need to be reported in the income test section for other calculation purposes. As you have stated it is not taxable, don't include it in the payment summary section.

  • AmpeD on 05/07/2017 - 12:03

    OK I see in my student loan (which was all paid off) that i have a HELP voluntary payment bonus $52.00 CR. How do i go about getting this credit sent to my bank account.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 05/07/2017 - 12:06

      Call the ATO and give them your bank details or have your accountant apply for a refund for you.

  • jche6075 on 05/07/2017 - 13:07

    Hello, I have a asset finance lease from the bank for the fitout of my new business. Is the monthly prinicpal and interest lease repayments tax deductible? Also can I claim the GST on the monthly repayments too?
    Thanks.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 05/07/2017 - 13:12

      There is no GST on the lease repayments or the interest. You would have already claimed the GST on the fitout when the contractors gave you the invoice.

      The interest on the fitout is tax deductible. The principal is not because you are depreciating/writing off the fitout itself.

      I definitely think you need to sit with your accountant and go through what you can claim.

      • jche6075 on 05/07/2017 - 13:17

        But the owner of the equipment is the bank. They just lease it to me for monthly lease payments and there is a residual value at the end of the asset finance lease?

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 05/07/2017 - 13:19

          That is called a chattel mortgage/hire purchase agreement. For tax purposes you are the beneficial owner of the equipment from the start.

        • jche6075 on 05/07/2017 - 13:23

          @nicolemcmilllon:

          On the lease agreement it says the bank is the owner and they get the depreciation.

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 05/07/2017 - 13:51

          @jche6075:

          Very rare but if that is the case then you should speak to your accountant and have them read the lease agreement. If you are purely paying lease payments then you can claim them as a deduction. There is no interest component because technically you don't own anything.

  • AmpeD on 05/07/2017 - 13:12

    OK next question deductions. If i put $150 for laundry, $85 sunscreen and $65 sunglasses totalling $300 do i need to show receipts?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 05/07/2017 - 13:13

      Nope. No receipts needed.

      If you claim $301 though, you will need receipts for the entire $301.

  • Orgazmo on 05/07/2017 - 13:36

    I'm waiting on my health insurance statement to submit my return. Is there anyway to bypass this and submit the return now? My household is not subject to the medicare surcharge

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 05/07/2017 - 13:52
      +1

      If you won't be subject to the surcharge and you are sure of it then just enter the policy number and enter "0" in the box for total paid and total rebate.

  • Polt on 05/07/2017 - 22:51

    Hi Nicole, thanks so much for taking the time to answer all these questions!

    My query is in relation to self-education expenses. I paid fees up front in Aug of last year and March this year for a Masters course. I changed jobs in February of this year: my old job was not related to my studies, my current job is.

    Can I claim both lots of fees? The ATO website talks about education being related to your "current" job. Is this current at time of lodging the return, or current at time of paying the fees?

    Edit: If it makes a difference, I received the job offer and signed the contract for my current job in June 2016.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 06/07/2017 - 08:47

      To be clear, you received the contract for your current job in June 2016 but did not start until 8 months later in February 2017? Guessing it was a grad position of some sort?

      Unfortunately as the fees you paid in August weren't related to your employment at the time the fees were paid/course was undertaken you can't claim them.

      Regarding the fees you paid in March, assuming they relate to the employment that you were currently in at the time (started in February) then they would be deductible provided they meet the regular self education expense rules.

      • Polt on 06/07/2017 - 20:31

        Yeap, grad position. Thanks for that, appreciate your help.

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 16/07/2017 - 10:34

          You're welcome.

  • vinzchang on 06/07/2017 - 08:40

    Do my partner and I need to have same private health insurance cover/policy to avoid paying medicare levy surcharge?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 06/07/2017 - 08:48

      No you can each have your own. To get the full exemption from paying the surcharge you would both have to have held it for the full financial year. If not, it will be apportioned.

  • tomleonhart on 07/07/2017 - 08:21

    Hi Nicole,

    Do you still take question ? :D

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 07/07/2017 - 08:29

      Sure. Ask away :)

  • stevtom27 on 08/07/2017 - 00:05

    If i buy an office chair for working from home $350 with bus use % 50% do i have to depreciate as asset is >$300 or can i claim as immediate deduction as bus % amount is $175 which is <$300? Thanks in advance

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 08/07/2017 - 01:56

      You have to depreciate it. But if it's 175 even though you're not supposed to you should just claim it now easier. It's not a big amount.

  • kyle on 09/07/2017 - 17:51

    Hello. I play a lot of redemption games (ticket games) at amusement centres. So far, I've redeemed an iPad, iMac, Macbook Pro and many other prizes. I use those items for work. Is there any way I can claim decline in value? The amounts I spent to get the prizes are a little under 1:1. Thanks.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 09/07/2017 - 18:35
      +1

      I wouldn't be claiming them because you did not actually incur the cost directly. It was as a result of winning the tickets that you were able to redeem the prize.

  • BlueGlass on 10/07/2017 - 15:33

    Hi,
    Say I have a HELP loan and am currently earing ~75k yearly and have a secure job. Would I want my HELP payment taken out of my fortnighlty pay, or would I be better off cancelling the HELP payment, taking the money and putting it in an offseet account ~4% and paying the bill at the end of the financial year.

    Is this possible/preferable/legal?

    Thanks

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 10/07/2017 - 15:42

      If you have HELP loan you work will be withholding it from your pay. One way you could have maneuvered around this is by not ticking the HELP debt question on your tax file number declaration form that is given to your work when you first start.

      Unfortunately as you have a loan you legally can't tell them that you don't have it anymore and for them to stop withholding it.

      However if you were to call your work HR/Payroll department and tell them that you don't have a HELP loan they don't have any way of checking and they don't really care. The ATO would care as they want the money regularly.

      I would not recommend this but it does happen.

      • BlueGlass on 10/07/2017 - 16:37

        Thanks for the response, does the ATO require a regular payment, or just requires the corresponding amount tied to gross income paid off at the end of the financial year.

        Additionally, does a HELP repayment reduce my taxable income?

        Thanks again

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 10/07/2017 - 16:42

          No it doesn't reduce your taxable income.

          They require the fortnightly payment however if you can get around it and pay it at the end of the year, its not the end of the world :)

  • goatmilk on 10/07/2017 - 23:35

    Hi!
    I use my phone quite a bit being on-call for work but predominately receive calls rather than making them. Am I able to claim a portion of the costs based on total usage? Or can I only portion for calls I have made myself?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 11/07/2017 - 09:28

      If you're not making calls youself, you're can claim the depreciation of the phone rather than the monthly costs.

      If you're on a phone plan then claim a smaller percentage to account for the fact that you don't make calls. Something around 10% or the monthly cost should be fine.

  • Sshanaz on 11/07/2017 - 06:45

    Can you please guide me with the following points?

    1) If I work from home one day each week, what kind of deductions I could claim?
    2) What kind of evidence do I need to keep to demonstrate that I work from home 1 day each week?
    3) I purchased new equipment(desk, chair, monitor, keyboard and mouse) for my home office in Jan 2017 and the price of each item is less than $150. Can I claim full amount? If yes, where about it would be listed in tax form?

    Thank you for your assistance.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 11/07/2017 - 09:30
      1. Portion of electricity, internet, telephone.
      2. If ever asked then a letter from your employer would be enough.
      3. You can claim each if under $300 apportioned for work/private use. Claim in D5 in the tax return.
      • SomeGuyOnOzB on 16/07/2017 - 11:53

        Dear Nicole McMillon

        Does that change the home from 100% Owner Occupied and free of CGT on sale, to < 100% and needing to pay some CGT on sale?

        Kind regards

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 16/07/2017 - 12:06
          +1

          No it doesn't as long as you're not claiming occupancy expenses such as council rates etc.

        • SomeGuyOnOzB on 17/07/2017 - 07:38

          @nicolemcmilllon:

          Thank you Nicole :)

  • peterpeterpumpkin on 14/07/2017 - 09:48

    Hey!

    If you have an investment property that's raking in say 13000 per fy in rent and you have 12000 per fy in interest repayments, a capital works bill from strata of $10,000, utility bills and say $500 in repairs, and you make no other income that year (such that the 13000 is non-taxable), could you defer any of the deductions to a later financial year e.g. when you plan to sell the property?

    Thanks!

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 14/07/2017 - 11:20
      +2

      The capital works bill from strata might be capital and not deductible depending on what they are doing with the money. My guess is that because it is so high (nearly as much as the rental income) then they are doing works that are capital in nature. Therefore don't claim it as a deduction but add it to the cost base of the rental property to reduce capital gains when you sell it.

      • peterpeterpumpkin on 14/07/2017 - 11:57

        Thanks for the reply!

        So I take it only capital works can be deferred and added to the cost base? And I suppose the original cost would be indexed?

        What about everything else? e.g. the costs of owning the asset such as interest on borrowed money, rates and land tax, and the
        costs of repairing or maintaining the CGT asset. I understand they can't be indexed or used to work out a capital loss but can they be used to offset future income tax when the property is sold?

        Sorry if this is an ignorant question but the ATO always uses such words as "can be claimed immediately" or "can be deducted immediately", so I can't tell if it must be deducted immediately.

        If it is possible to deduct "anything" in the future then the next question would be can I make partial deductions? e.g. If my total income for the year (including rent) was $24,000 could I deduct only $4,000 in costs (from say $15,000 total) to avoid paying income tax and "use up" unused deductions (interest, repairs etc) on future tax returns?

        Thanks again.

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 15/07/2017 - 08:56
          +1

          You can't deduct a portion, if the item is deductible you must claim the entire amount.

          Interest on borrowed money, rates, land tax and repairs have to all be deducted in the year they are incurred.

          Don't bother using the index method, use the 50% discount method (worry about this if/when you sell the property).

          Some expenses can be deducted over their effective life if it is a capital expense. For example if you purchased an airconditioner for $1,000 you can deduct it over several years rather than the first year.

          It just depends on the type of expenses you have incurred. But for everything else (interest, rates etc) they have to be deducted in the year they are incurred.

        • peterpeterpumpkin on 15/07/2017 - 10:01

          @nicolemcmilllon:

          Thank you so much for all your help. It's much more reassuring coming from a professional.

          Just regarding the ATO help line, it was very surprising in many ways.

          The first shock is how friendly and informal it is. The first operator will normally just give you the document number to read but won't directly answer your question. I assume their level of training only permits such a response.

          If you still have trouble they will redirect you to a person that still won't give you a direct answer but will read through the document with you. I noticed they would only ever read the document verbatim and then ask "Does that answer your question?".

          Every ATO example for a person on a working holiday was for a foreigner working here and not vice versa. Since I had a rental property here while working abroad I was wondering how to include my income from the UK since the financial year runs from April and the companies I worked for no longer have my payslips. From speaking with the ATO it seems you use a statutory declaration whenever you have an uncertainty. I'm just hoping too many stat decs don't look bad. Since I was already told to use a stat dec for my casual jobs on AirTasker.

          Anyway, thanks again for all your help!

  • SomeGuyOnOzB on 16/07/2017 - 11:51

    If I spend some of my time on:
    - personal investments
    - SMSF investments

    are there any expenses I can claim?

    eg Phone is used some of the time for accountants, auditors, conversations with banks and discussing investment opportunities etc
    Transport to and from conferences (typically in the city)
    I have invested in one of the products offered and it is generating an income stream.
    Computer, mobile and tablet have been used to research investments and also do some financial modelling.

    Also, are there any travel expenses I could claim? (eg going overseas and to an investment conference or looking into the property market there regardless of whether I make a purchase or not)

    Kind regards and thanks again for any help you can offer.

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 16/07/2017 - 12:09
      +1

      Time is not deductible.

      Phone/Transport yes
      Computer mobile tablet depreciation yes (apportion it for time spent on investment purposes such as 10%)

      Travel overseas or looking at properties is no deducitble

      • SomeGuyOnOzB on 17/07/2017 - 07:35

        Thank you for your help Nicole :)

  • fozzie on 17/07/2017 - 07:23

    Hi I'm a high school teacher of Italian. I bought a ticket in November and travelled to Italy in July and spent 3 weeks there. Main reason of my trip was to see my family but also to keep my language skills and knowledge of the culture alive. Do you know if I can claim any portion of the ticket? Will it need to be claimed for 2016-2017?Ta

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 17/07/2017 - 11:43

      No don't claim it. The ATO has clamped down on private trips. If you went to a museum/tour maybe you can claim them. But not the flights/accommodation.

      • fozzie on 17/07/2017 - 14:57

        Ta

  • cocomelon on 17/07/2017 - 15:03

    Hi, last year i bought a 49 year old house, so i figure it was built in 1967, is it worth for me to do tax depreciation report through BMT?
    thanks!!

  • Fanatic on 17/07/2017 - 20:07

    Hi I am a dental hygienist. I work at two different practices. Just had a few questions
    - what kind of other expenses can I claim back and is it usually the full amount? eg. safety glasses, practitioner registration, continuing education seminars
    - is there any point in saving petrol receipts? I've only ever travelled from one workplace to another once
    - I have a 25k loan approved by the bank and am thinking of purchasing a new car, can I use a portion of my tax in the next financial year to pay it off?
    Thank you so much in advance

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 18/07/2017 - 23:43

      Yes safety glasses registration seminars etc. All expenses directly related to your work that are not reimbursed by your employer.

      You can use log.book or cents.per km method assuming you drive from one work place to another. Travel to and from home is not deductible.

      Speak to your accountant and see.which method, if any, will be beneficial to you.

  • simouny21 on 18/07/2017 - 22:55

    Hey nick

    Do you still take questions?

    If so please help me and my missis

    I have salary sacrificed this fy. And my reportable gross fringe benefits was 23k plus.

    Way more than what my partner claimed last fy (15k)

    My question is would this affect her in any way when lodging our tax this year?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 18/07/2017 - 23:44
      +1

      Not sure what your question is. But each financial year is on its own. It doesn't matter what happened last year.

      • simouny21 on 19/07/2017 - 11:36

        Correction she lodged it for the 2016-2017 financial year which I think means she underestimated my income.

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 19/07/2017 - 11:39
          +1

          Depending on if you were close to the thresholds then it may affect your private health insurance rebate etc.

        • simouny21 on 19/07/2017 - 13:02

          @nicolemcmilllon:

          Our combined income is 85000

          She does rely a lot of her income from centrelink. So I'm afraid she might lose some of the centrelink money if they look at the fbt to be over what we estimated

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 19/07/2017 - 13:10
          +1

          @simouny21:

          Yes might be an issue. You could amend her tax return.

          Or just wait and see what happens.

        • simouny21 on 19/07/2017 - 13:26

          @nicolemcmilllon:

          Thanks Nick.

          Might look at amending her return just in case

  • boom2017 on 18/07/2017 - 23:09

    Hi, I earn 1500 through my ABN every month. Is that PSI or business income? thanks

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 18/07/2017 - 23:45

      What kind of work do you do? There are a variety of tests on ato website to see if the income is psi

      • boom2017 on 18/07/2017 - 23:47

        i am a bookkeeper, work from home.

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 18/07/2017 - 23:48

          Do you have more than one client. If you have numerous unrelated clients and you don't earn income of 80% from one source then it is most likely a personal services business and not personal services income.

          Clients have to be unrelated to you and to each other.

        • boom2017 on 19/07/2017 - 12:04

          I have one client and 100% comes from that client. So it is PSI?

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 19/07/2017 - 13:06

          @boom2017:

          Yep.

          Also, if that client is your spouse and their income is PSI as well, they may not be able to pay you for admin/bookkeeping services

  • Orgazmo on 03/08/2017 - 11:57

    Regarding UBEReats delivery income, what is the best way to maximise vehicle deductions?

    Specifically, if I was to use more than 1 vehicle, the log book ATO page states that I need to complete a logbook at the same time for each vehicle. What if it was the case that earlier in the year I drove one vehicle, then used a different vehicle in a different part of the year. Reason being I didn't want too much wear and tear on my main vehicle.

    Or should I claim the cent per KM method on 1 vehicle and logbook on the other?

    • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 03/08/2017 - 13:49

      Log book will usually give you a higher deduction whilst cents per km will give you the easiest method. But cents per km is limited to 5,000km.

      Keep in mind ATO is cracking down on Uber income so make sure you are claiming everything correctly :)

      • Orgazmo on 03/08/2017 - 14:07

        Thanks - in your experience, what creative deductions are you aware of?

        So far I'm thinking:

        Car - logbook or cent per km
        Phone and phone plan
        Home office - phone/internet & general home office deduction (cent per hour method?)
        High vis clothing and steel cap boots
        Sunglasses
        Sunscreen
        Cleaning
        Stationery

        Re: logbook, is it better to buy a newer car rather than old for depreciation?

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 03/08/2017 - 14:22

          Are you an uber eats delivery driver? If so, I wouldn't be claiming home office or stationary expenses. Why do you need high vis clothing and steel cap boots? Maybe you have another job doing factory work or something?

          Depreciation is the same 25% per year x days you owned it in year x written down value regardless of how old the car is.

        • Orgazmo on 03/08/2017 - 14:35

          @nicolemcmilllon:

          I am referring to Uber eats delivery only. High vis to be seen in the dark for the time outside of the vehicle. Boots for proper footwear but I would be leaning more towards high vis clothing

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 03/08/2017 - 14:55

          @Orgazmo:

          Sounds good :)

        • Orgazmo on 03/08/2017 - 15:10

          @nicolemcmilllon:

          Are you able to clarify on the logbook for >2 cars rule please? ATO is talking about the logbooks need to be completed over the same period for both cars which may not be applicable in my example.

          Thanks

        • Associatednicolemcmilllon @ Titanium Accountants & Advisors on 03/08/2017 - 15:21

          @Orgazmo:

          If you are using the log book method for 2 cars yes it should be completed over the same period of time.

          However you may consider just using the same % for both cars.

          At the end of the day it won't matter because the depreciation has to be apportioned for part of the year. i.e you can't claim depreciation for the full year for both cars.

          Same with registration/insurance and other expenses which relate to yearly payments.

          Whilst this is not technically the correct way, it provides a more reasonable way for you to calculate your car expenses.

          Example 4 months with Car 1 = (depreciation + rego etc) x log book % x 4/12 months

          Also, you have to have done 5,000 work related km with each car to use log book method.
          Car 2 = same except x 8/12 months.

        • Orgazmo on 03/08/2017 - 15:50

          @nicolemcmilllon:

          What if let's say, I complete a log book for 12 weeks with 1 car, then I buy another car and complete a logbook with that. I would continue to use the 2nd car only from that point.

          Or should I stick to cent per km with 1 car and logbook with the other? No doubt it depends on how much use either car would have…

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