Category: Tax Tips | Blog

Let our team provide you with tax tips (and even a few tricks) that will get you through the tax season this year. We’ve got you covered whether you want your refund faster or prefer to spend less. Tax lodging doesn’t need to be stressful. With E-Lodge, you can lodge your tax return quickly and easily then get on with your life.

Questions? Leave us a blog comment or contact our tax team Monday-Friday!

Archive for the Tax Tips | Blog category

Hobby vs Business: What is the Difference?


Everyone enjoys a good hobby.

From photography, scrap-booking, cooking or even horseback riding, each of these hobbies can turn into a business. With that in mind, when it comes time to lodge your tax return, your hobby could possibly be your business. Taxpayers get confused about whether or not they should be reporting their hobby as a business. Of course, you want to avoid being penalised if you’re not declaring income to the ATO, right?

Find out if your hobby is actually a business by reading below!

What is a hobby?

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Lodge your 2017 Late Tax Return Online!

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Forgot to lodge your 2017 late tax return?

We get it. Life gets busy when you’re dealing with taking care of the kids or rushing to work to finish your proposal for that promotion you’ve been wanting. The deadline passed on 31 October for the 2016-2017 fiscal year, but you’re still in luck. No need to stress, you can still lodge your 2017 late taxes online right from your bedroom.

Read on to find out the consequences of lodging a late tax return and what steps you need to take.

Late Lodgement Penalties

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Accommodation Allowances & Your Taxes

Traveling for work? Deduct your accommodation costs!

Are you missing out on your friend’s barbie to travel for work? No doubt, we know that work can be a drag if you have to travel, especially if it isn’t for vacation time. On the other hand, you could enjoy being pampered for a few days and get away from home. Luckily, whether you enjoy traveling for work or not, you can deduct most of your accommodation costs on your tax return if you are responsible for all of your up-front business trip costs.

Let’s take a look if you’re eligible to deduct these expenses and how to do it.

 

Did your employer issue you a travel allowance?

First, if your employer issues you a travel allowance for accommodations, you need to report it as income on your tax return. In other words, you do not need to declare the allowance on your taxes if:

  • The travel allowance is not on your payment summary.
  • The allowance is a deductible accommodation cost.
  • You can count meal and incidental expenses.


So, if it’s not included as income, then you can’t report it. It’s as simple as that! 

 

Follow this 6 Rule Checklist:

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New 2017 Australian Tax Offsets!

Tax offsets are coupons from the ATO.

When we go grocery shopping, it makes sense to bring as many coupons as we can to lower how much we pay. Wouldn’t it be great if we could do the same for our taxes? Well, you can! Tax offsets are coupons from the ATO since they help to lower the amount you owe to the ATO. You might be able to qualify for more than one offset. Let us help you lower your tax due and determine which tax offsets are beneficial to you.

 

How do I qualify for an offset?

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How to Qualify for the Australian Family Tax Benefit

A new addition to the family is both exciting and overwhelming.

Once the “baby daze” subsides, reality begins to kick in. Suddenly, expenses begin to add up and you start to feel as though you’re in over your head. Don’t panic. We’re on your side. That’s why we’re here to discuss the Family Tax Benefit.

 

What exactly is the Family Tax Benefit?

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Backpacker’s Guide to Australian Tax

You’re a backpacker. That puts you somewhere between a tourist and a…resident?

Actually, yes. The Australian Tax Office may consider you an Australian resident for tax purposes under certain circumstances. As a backpacker, there are some other things you should know as well that could affect your tax return. We know you’re out and about so let’s not waste time getting down to the most frequently asked questions.

 

Are you a resident for tax purposes?

This sounds like a trick question. You don’t have a permanent residence here. Your family doesn’t necessarily live here. You left your dog with your mom when you came here. However, when it comes to taxes, residency is based on what you do while you’re touring the country. As a resident, you are able to lodge a tax return and claim tax back. If you are deemed a nonresident, then you are not eligible for a refund.

Generally speaking, the ATO considers you a resident for tax purposes if ANY of the following applies:

  • You have always lived in Australia.
  • You moved to Australia and live here permanently.
  • You have been in Australia for at least six months, and for most of the time, you have been working the same job and living at the same place.
  • You have been in Australia for more than half of the financial year, unless your usual home is overseas and you do not intend to live in Australia.

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Australian Wage Subsidy Programs and Your Tax Return

Sometimes the only thing missing between two end pieces is one middle piece.

That’s why the Australian government has decided to act as the middleman between job seekers and small business employers.

Getting a job is difficult enough imagine trying to get your hands on a gig when you’re not the classic candidate. Many Australians are in the same boat, and this boat is getting smaller by the day (and by the resume). This is where wage subsidy programs come in.

 

What are wage subsidy programs?

These programs are, most literally, payments made to employers to encourage them to hire job seekers who may otherwise be overlooked as candidates. The big-picture goal is to create more jobs in Australia and boost the economy overall.

These payments are intended to lessen the burden of wage and training costs and are paid to employers based on hours worked by qualifying employees.

 

Who qualifies as an eligible employer?

To become a participating employer, the business must:

  1. Be a legal entity
  2. Be registered, with an Australian Business Number
  3. Not be a part of an Australian, State or Territory government agency
  4. Not have previously received a wage subsidy payment of the same type for the same job seeker

 

Who qualifies as an eligible job seeker?

Since these programs are powered by employment services providers, those looking to be employed must be active with one of the following:

Typical contenders for employment are those over 50 years old or under 30 years old, parents, indigenous job seekers, disabled persons, or those who have been unemployed long-term. Those that fall into one of these categories and also qualify for the position at hand must be considered along with other qualifying applicants.

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Income to Declare on your Tax Return

They say that money makes the world go ‘round. Are you reporting all of yours?

If you work (and even sometimes if you don’t), you lodge a tax return. On this tax return, the ATO requires you to declare your income. And you do. But are you sure you’re declaring all that you should be? It’s easy to miss a number or two. To help make sure you don’t, we’ve compiled a list of all types of income that should be declared on your tax return. Let’s take a look.

 

Employment Income to Declare

This is simply the money you earn from working. You’ll need to report this income whether you are a part time or full time employee. This type of income includes all of the following:

  • Salary and wages which include your normal pay, commissions, parental leave, etc.
  • Allowances such as car, travel, clothing, jury attendance fees, etc.
  • Lump sum payments which include payments when you leave a job and payments made in arrears for prior income years.
  • Fringe benefits such as a low-cost loan or work car for private use provided by your employer.
  • Super contributions that are made on your behalf by your employer.

 

Investment Income to Declare

Investments are important, not to mention expensive. You don’t want to leave these in the dust when preparing your tax return. These 5 types should be declared:

  1. Interest. Interest typically accrues on financial accounts, term deposits and foreign sources of income.
  2. Dividends. These are paid to you as money, shares, and other property. A company issuing shares to you will inform you of whether the issue is considered a dividend or not.
  3. Rent. This is to include the full amount of any rent and rent-related payments that you become entitled to or have received. That being said, you cannot declare defaulted rent unless it is in the form of an insurance payout or rental bond money.
  4. Managed investment funds. This would be any income or credits you received from an investment product.
  5. Capital gains. This amount is the difference between how much you paid for an asset and how much you sold it for.

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Can I Claim the Tax-Free Threshold at Two Jobs?

Over the past decade or so, we’ve seen shifts in the workplace. One of these shifts is an increase in multiple-jobholders.  

It’s no longer odd to see a father at home with the kids on a Monday afternoon, a woman owning a billion-dollar company, or people (male or female) working for more than one employer at a time. No matter what the job situation may be, we all have one thing in common that we need to prepare for; taxes.

The ATO has created an income limit known as the tax-free threshold. This allows Australian workers to not be taxed on income earned up to a certain point. That limit is $18,200.

So, how do you claim this tax-free threshold at two jobs? Well, it depends.

How much of an income are you earning?

The ATO typically allows you to only claim the tax-free threshold from your primary source of income, or in other words, the job that earns you the higher salary.

If you have a secondary job that earns you a bit less income, that employer will withhold tax at the higher, ‘no tax-free threshold’ rate.

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How to Lodge a Tax Return after the Tax Deadline

Wake up and smell the coffee. You’ve missed a tax return deadline. 

It happens to the best of us! Remember the former prime minister, Paul Keating?

So now what? First, it may not be the smartest decision to keep putting it off. If you owe money to the ATO, you’ll want to lodge your late tax return before waiting for a personal invitation. That’s because once the ATO reaches out to you, your chance of being hit with a penalty fee increases.

 

How the late lodgement penalty works

If you lodge your tax return after the deadline, the penalty fees increase by $170 every 28 days. This accumulation begins 1 November. To put that into perspective for you, here is a breakdown of how quickly these fees add up:

 

# Days Past Deadline

Amount Owed in Penalty Fees *

1-28

$170
29-56

$340

57-84

$510

85-112

$680

113 and up

$850

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