Tag: Australian tax deductions

Posts Tagged ‘Australian tax deductions’

The GST and Low Value Goods

What is the GST?

The ATO has announced a new tax law on the goods and services tax (GST) before the 2018 tax season. You may be wondering, what is the GST? The GST is a tax of 10% on most goods, services and other items that companies or other entities sell to Australia. We actually consume most of these goods!

New Tax Law

From 1 July 2018, the GST will affect businesses that sell low-value goods who import to consumers in Australia. Low-value goods have a customs value of A$1,000 or less when the price is under the agreement with the customer. However, any tobacco products or alcoholic beverages do not have the GST tax since they will be charged at the border.

Here’s the breakdown of the changes.

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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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Airport Lounge Membership Tax Deduction

A businessman walks into a (airport lounge) bar…can he deduct that?

No, this isn’t a riddle and the answer is yes. Generally speaking, an airport lounge club membership can be claimed as a tax deduction.


What does the ATO have to say about this?

Funny you should ask. According to the ATO, “The primary function of Airport Lounge Clubs is to provide business facilities and prompt and efficient services relating to the travel of their members.

Now, you may be thinking the initial thought that also popped into my mind…what about the complimentary hors d’oeuvres and bottomless mimosas served to loungers? Don’t worry. It’s no huge secret and the ATO does in fact know what occurs. However, they simply state that this hospitality is ‘merely incidental to the primary function’ of the clubs’ business.  


Can the entire membership be deducted?

Taking a flight is not exclusive to business travelers however, it is essential to certain businesses. That being said, you can most certainly use your Qantas or Virgin memberships when you’re vacationing with friends or family too. With that in mind, you should be separating business use from personal, and only deducting the business percentage on your tax return. Read the rest of this entry »

ATO’s Dodgy Tax Deduction Crackdown

If it sounds too good to be true, it usually is.” –Graham Whyte

Tax agents will promise to maximise your refund if you choose to lodge your tax return with them. What you may not realize is that some will encourage you to claim too big of a refund – more than the ATO would deem you entitled to if they were aware of your actual tax situation. This definitely does not mean that they’re all out to get you. Just be wary, and don’t be too shy to ask the questions that you feel you need answers to.

Beginning this tax season, the ATO is really cracking down on certain tax deductions being claimed. If your tax return is “red flagged” by the tax office, the best that could happen is that your processing time is delayed because an ATO representative will need to review it further. The worst that could happen, in circumstances where a taxpayer has deliberately claimed an incorrect amount, is that an investigation could begin and you could be liable for multiple penalties.


Three Golden Rules to remember when claiming tax deductions.

Whether it’s a manual, e-book, or by word of mouth, there are a set of rules for almost everything. This even includes something that seems as simple as reporting tax deductions. When doing so, be sure to take into account these three rules of thumb:

  1. Make sure the expenses you claim have actually been incurred.
  2. Ensure that your expenses are 100% work-related.
  3. Keep the receipts to prove the claims are for valid expenses.


Let’s discuss some of the dodgy ones…

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Can I Claim Prior Year Deductions on My Current Year Tax Return?

No, you can’t. You will need to lodge an amended tax return.

Contrary to popular belief, you cannot just carry over prior year deductions from last year to your current year tax return. Whether you forgot to add up those weekly laundry costs for your uniforms or you just found the receipts for your work phone line, you’ll need to lodge an amended return to report these expenses.


How long do I have to lodge an amended tax return?

As an individual taxpayer or a small business, you can typically lodge an amended return within two years from the date of assessment or the date that your original return was lodged. Larger businesses typically have four years to lodge an amended tax return.


Is lodging an amended return worth the trouble?

Prior to lodging an amended return, you want to be sure of a few things:

  • The reported expense should be worth the tax preparation fees. You will most likely need to pay an additional fee to amend a tax return. The deduction you forgot to originally claim should at least exceed the price you will be charged for tax prep.
  • The expense cannot be claimed twice. You want to be 100% positive that you have not already claimed the expense otherwise the ATO will confirm that it wasn’t. If it was, your amended return will be rejected.
  • Have receipts to back up all expenses. Whether you are lodging an amended return or not, keep receipts and records of all expenses. You are not required to keep receipts for expenses under $300 but you still need to be able to account for them.


How do I lodge an amended tax return?

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Hairdresser’s Tax Deductions

As a hairdresser, you have to build your clientele and keep them happy so they come back for their next number 3. With big responsibility comes hefty out-of-pocket expenses. Read on to see which expenses you can deduct on your 2015 tax return.


Do you use your shears at home and in your salon downtown?

A home office doesn’t only mean a desk and fax machine, right?. If you bring clients to your home, there are certainly costs associated. These costs may dig into your bank account now but you’ll be able to claim most of these expenses as deductions come tax time. Such  deductible expenses include (but are not limited to):

  • portion of electricity used for work purposes
  • portion of internet used for work purposes
  • portion of heating and cooling used for work purposes
  • furniture used for work purposes (just in case you neeeeeed that 360 degree swivel chair!)


Keep your skills well honed!

It’s not just your shears that you should keep sharp. If you find that you haven’t quite mastered the asymmetrical sweep, you may want to head back for some schooling. The best part of it: the cost of the course or seminar that you attend could be deductible if the following applies:
  • The work related training course you’re attending is not run by a university or TAFE. Travel to and from is deductible too!
  • The self-education course you’re attending is run by a university or TAFE. The costs of books, stationery, travel and equipment required by the school is deductible also.

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Top Tax Deductions for Teachers

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.

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7 Overlooked Real Estate Agent Tax Deductions

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.

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What You’ll Need In Order to Lodge Your Taxes

Knowing exactly what you’ll need to lodge your 2014 tax return will save you a lot of time and hassle.

Feeling overwhelmed is awful. The chaos of a busy day can make your head feel like it’s reached it’s maximum capacity. Luckily, we’ve found a way to reduce the chaos and stress in your life.

We’ve created a tax preparation checklist to make your tax season a little easier.

Checklists are awesome. Here’s why;

  1. Lists help us remember: Instead of keeping everything inside of your head, writing it down will prevent it from being forgotten.
  2. List bring order to chaos: Let’s face it- we are all part of an overstimulated era. Lists help re-focus our attention.
  3. Lists help us save time and even relieve stress: Without a list, we often procrastinate what needs to be done. Writing out a list allows you to plan effectively.

Without a checklist, you’ll waste time running around searching for documents.

Instead, staying organized with a checklist will allow you to have everything you need upon starting to lodge your taxes.

In fact, you won’t even need to write the list yourself. We’ve done the hard work for you and made the list. Feel free to download it, save it, print it or share it with your friends.


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Can I Claim A Gym Membership on My Tax?

 Is that gym membership tax deductible…or just taxing on your bank account?

New Year’s day came and went. Brimming with good resolutions plus one too many Carlton Draught’s, you went out and dropped a pretty penny on a pricey gym membership.


How did that go? Did your NAB account number also get a nice little work-out taking care of your online shopping carts at LuLu Lemon, GNC and Nike? Have a six pack you can now trade for that one in the cooler? If yes, then congrats and good going!


But it’s likely earning those extra muscles made a dent in your wallet as big as your newly-defined glutes. And if so, you’re as likely wondering if you can claim your gym membership fees as a tax deduction come lodgment time. It seems only fair given all the hard work, right?


It turns out the ATO is not so keen to offer a reward for a good cardio workout. In fact, while it’s a common misconception among gym-goers, especially if keeping fit was somehow required by their job, that their gym fees are deductible on their tax return. Only a few among us will prove eligible.


According to the ATO, one can only claim a tax deduction for a gym membership if the employee can demonstrate that strenuous physical activity is an absolute essential and regular factor of his or her income earning activities and that the costs were directly incurred to maintain a fitness level WELL ABOVE the profession’s general standard.
In other words…be prepared to pay full price for that Black Label Fitness First Membership.


What is WELL ABOVE the general standard of being fit?

Generally speaking, there are two professions that allow a gym membership deduction IF they are required by their employer to maintain a fitness level well above the general standard. These are as follows:

  1. Defence Force Members
  2. Professional Sportspersons


Now, in each of these categories, there are many different types of workers. Not all of them will be able to claim a gym membership as a tax deduction. It is more of a case-by-case situation. To break things down a bit more, let’s take a look at some examples.


Defence Force Members

The most commonly known  among this group would be a police officer. We’ll use Roger as an example:


Roger graduated from the police academy three years ago and has been employed ever since with his local department. As an entry level officer, Roger was encouraged to keep up with his fitness as he would be required to pass a standard physical fitness test once a year. With this in mind, Roger decided to join a gym. Being that Roger was only encouraged (not required) to maintain his fitness for a standard annual test, the ATO would not allow him to claim a gym membership as a deduction on his tax return.

So, when could a police officer claim a deduction for a gym membership?

Let’s stick with Roger…

After his three years as a police officer, Roger was promoted to a police academy physical training instructor. Along with other new responsibilities, Roger would also be required to maintain a superb level of fitness in order to sustain his position as an instructor. At this point, Roger’s job duties require him to have a fitness level “well above the general standard” which means that claiming his gym membership and gym fees as a tax deduction would be permitted by the ATO.


See the difference? The same would apply to other defence force members with fitness requirements that are also above average.


Professional Sportspersons

This profession is slightly more self-explanatory. According to the ATO, deducting the cost of fitness for a professional sportsperson is allowable because earning an income in that position goes hand in hand with maintaining a very high level of physical fitness. If this fitness level cannot be maintained, employment is in jeopardy of being terminated.


So who cannot claim gym membership fees?

Although the ATO has acknowledged that the following professions are encouraged to maintain a high standard of general physical fitness, these professionals are NOT required to reach and maintain a fitness level WELL ABOVE average. The following professionals will therefore not be able to deduct their gym membership fees according to the ATO:

  • a model
  • a dancer
  • a physical education teacher
  • a standard police officer
  • a firefighter
  • an ambulance officer/paramedic
  • an adult industry worker
  • a fitness instructor (unless they are able to prove that they are required to maintain a fitness standard WELL ABOVE the average)
  • a personal trainer  (unless they are able to prove that they are required to maintain a fitness standard WELL ABOVE the average)


Are you still unsure if you can claim your gym fees as a tax deduction?

Not to worry! The ATO can easily see which occupation codes match with claiming a gym membership tax deduction. This makes it a bit impossible  for those of us without a corresponding occupation code to claim those fees but it is convenient for those who can and would like to confirm with the ATO.


OH! And sorry, but regardless of whether you can claim your gym membership, keep in mind that those new slim-fit yoga pants and protein powders will never be deductible on your tax return.


Happy Bulking!

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