Posts Tagged ‘business tax deductions’

ATO Limits Car Expense Calculation Methods for 2016

Thursday, 5 May, 2016

Less is more when it comes to home decor, your golf score… and calculating your vehicle expenses?

That’s right! The ATO has decided to try out the minimalist trend and limit us to only two car expense calculation methods. Up until 2015, we were able to choose between the following methods:

  1. 12% of the original value
  2. Cents per kilometre
  3. ⅓ of actual expenses
  4. Logbook for 12+ continuous weeks


Don’t get too cozy with the list above. This year, the ATO is narrowing down our options to the following:

  1. Logbook method
  2. Cents per kilometre method


It’s important to know the ins and outs of these methods in order to choose the one that works best for you. Let’s take a look.


The Car Logbook Method

This method is the more popular choice among business owners and sole traders. Why, you ask? It will typically give you a bigger refund than other methods.

How does it work? Read the rest of this entry »

Top Tax Deductions for Teachers

Friday, 5 June, 2015

Since teaching isn’t the typical office gig, you may want to pay close attention to those extra expenses you’ve acquired. With the proper receipts and documentation, they could be deductible.


Travel expenses

You’re a teacher. Chances are you’re not racking up airfare and room service costs. However, there are specific travel expenses that teachers should keep track of and deduct on their tax return. Teachers who drive can typically use the kilometre method to track their travel costs. Receipts or a logbook are not required unless you are a regular commuter. Some examples of what you could claim as a deduction include:

#1. You travel from work and home. Your school does not provide a safe place for storage so you carry bulky or heavy equipment in your car for work purposes. ie: an art easel or a musical instrument

#2. Are you an itinerant teacher who travels between a different number of schools daily? Maybe you are a language teacher who helps specific students in three different schools each day. Travelling expenses incurred from school to school can be claimed on your tax return. Since you are travelling regularly, you will need to  keep a full logbook and/or receipts.

#3. You travel after you have started work for the day. Let’s say you’re employed at the high school and are required to attend a district-wide meeting mid-school day across town at the elementary school. Travelling to and from is deductible.

#4. If you are required to travel to a work-related event after your typical school day has ended, you can deduct the costs incurred using the kilometre method. For example, there is a district-wide teachers conference that you are expected to attend on Tuesday night across town and you’ll be driving there from your school. This is deductible.

Read the rest of this entry »

7 Overlooked Real Estate Agent Tax Deductions

Thursday, 21 May, 2015

The number of Australian households who own their homes has gone up more than 10% since 1996.


With such steady demand, it’s no wonder that real estate is one of the fastest growing employment industries. While this profession allows for flexible hours and client lunches, many don’t pay close attention to the out-of-pocket expenses that add up.

Here are seven deductible expenses that you should report on your tax return this year:


Home Office Costs

This industry runs on deadlines. Deadlines can involve working round-the-clock at times, which is where a home office comes in handy. The ATO allows employees to deduct costs including heating and cooling, work-related phone costs, depreciation of office furniture, and equipment costs up to $300. For a more in-depth list, take a look at our article, “How to Claim Home Office Expense Deduction”.


Business Cards

An oldie but still a goodie! Business cards are a form of advertising that will never truly vanish from our culture. Sure, they may be tweaked a bit but the basic idea is bred in us. They work. Report these as an advertising expense on your taxes this year.

Read the rest of this entry »

Budget 2012 Recap: SMEs lose something, gain something

Thursday, 14 June, 2012

Company tax rate stays fixed but some small businesses will benefit from the new loss carry-back tax scheme.

If you are a business owner the new budget unveiled last month will probably have come as a bit of a disappointment.

Indeed, the hoped for reduction in the overall corporate tax rate from its current 30% to 29% turned out to be a mirage after all. The government effectively chose to jettison it for the more targeted, not to say cheaper, option presented by its the loss carry-back measure.

This new scheme, operative from July 1st 2012, would allow a business, irrespective of size, to claim a refund of tax paid in the previous two years against a loss in revenue in the third year.

For example, if a shop selling  tourist goods made a profit in its first couple  of years of operation and paid $300,000 in taxes on its earnings, but then found itself in difficult financial straits the following year, say, because of a decrease in the tourist market, it would be able to get a refund of the money it had previously paid to the tax office.

The loss carry-back measure aims to minimize the cash flow pressure undergone by companies that suddenly find themselves in the red after a period of profitable business.

This said, it is essential to note that the losses eligible to be carried back under the measure would be capped at $1 million of lost revenue. In other words, given the company tax rate remaining unchanged at 30%, the maximum amount of refunded tax would be $300,000. Furthermore, the scheme would only apply to a business that is structured as a corporation, leaving quite a few small companies out of the loop.

Also, the scheme may not make the tax refund available if the profits gained in the previous year have been distributed to the company’s shareholders as franked dividends on which tax has already been paid, a distinct possibility in numerous cases.

Read the rest of this entry »