Guest Article from our valued partner MDB Taxation and Business Advisors
Many people we see often leave their tax planning until it is too late. Tax time is fast approaching and we’ve been advising our clients to get prepared for some time already.
The following list of expenses should be reviewed and checked to see if they are appropriate work related expenses that can be claimed in your income tax return.
Work related deductions
Expenditure records related to a taxpayer’s employment, such as work-related motor vehicles, self-education, protective clothing, uniform expenses, telephone, computers, internet use and home office expenses.
Professional subscriptions (not including sporting or social clubs)
Travel allowance
Each year the Australian Taxation Office (ATO) releases rulings setting out the amount that the ATO considers a reasonable travel allowance. This ruling actually states the amount that you can claim against a travel allowance paid to you by your employer. Therefore an employee can claim the allowance paid with out keeping written evidence providing other requirements are met such as keeping a travel Diary.
Kilometre Car Expenses
The Cents per kilometre is limited to 5000 kms per car per owner. In other works the owner can claim more than one car if they are the owner of one or more cars and uses it for work related purposes. Also if two taxpayers own the same car they can each claim 5,000km providing they are not the same 5,000kms.
Other deductions
- Investment and property expenses
- Donations of $2 and over, depending on the recipient Tax agent’s fees and other accounting and tax audit fees associated with managing tax affairs
- Un-recouped prior year losses
- Non-commercial losses [Individuals must satisfy one of four tests to offset losses from certain non-commercial business activities against other income. A prime example is an employee who seeks to offset hobby-type farming or other business losses against salary or investment income].
- Sickness and accident insurance premiums provided the premium incurred is against the loss of income.
Keep in mind that the above expenses can be bought forward by prepaying up to 12 months worth of tax deductible expenses. Deductible expenses may include interest outlays on an investment property loan, subscriptions and premiums for income protection insurance.
2009 New tax refunds, rebates and changesEducation tax refund, families receiving Family Tax Benefit (Part A) with children undertaking primary or secondary studies or whose school children receive Youth allowance will be eligible. The refund applies to expenses incurred from 1 July 2008 and will be claimed in the 2009 income tax return.
Childcare rebates will increase form 30% to 50% and will be paid quarterly instead of annually.
The government has increased the Medicare levy surcharge threshold for singles from $50,000 to $70,000 and families from $100,000 to $140,000 effective from the 1 July 2008.
Baby Bonus will now be means tested the threshold being $150,000.
Family tax benefit, commence from 1 July 2009 the option of claiming and receiving payments of family tax benefit (FTB) from the Tax Office has ceased.
This also means from 1 July 2009, Tax Office shop-fronts will no longer handle family assistance enquiries.
Lump sum FTB claims, end-of-year top-ups and FTB fortnightly installments will continue to be available through the Family Assistance Office (FAO) located at Centrelink Customer Service Centres and Medicare Australia offices. I would urge tax payers to make sure you are registered so you do not miss out on any benefits you may be entitled to.
Planning for 2010 Salary SacrificeSalary sacrifice into superannuation can also be a tax effective strategy for tax payers with marginal tax rates over 15%. Keeping in mind the employer contribution limits, employees can salary sacrifice and save tax on an up and coming bonus payment or other work related benefits. For this to be effective the agreement must be put in place before the tax payer becomes entitled to the benefit.
Other options is to salary sacrifice other work related expenses, such as lap top computers and other electronic devices. Even with the added expense of Fringe Benefits Tax, certain expenses are concessionary taxed and can provide tax savings even after taking into account Fringe Benefits Tax.
MDB Taxation and Business Advisors