Tax Return Due Dates

For those clients yet to lodge their 2009 tax return, it’s time to start seriously thinking about organising your information. For those Individual Tax Return clients with a good lodgement history (all previous returns lodged on time) the due date for lodgement is Monday 17 May 2010.  Don’t forget to allow adequate time for the interviews/post/email exchanges, review, and signing of your return, and please allow at least 2 weeks for us to complete and finalise the return. Naturally many people leave it until the very last minute and the office gets a little busy.

Prior years or outstanding tax returns? The longer you leave it, the more the ATO can financially penalise you (should they choose to do so).  If you are in this situation please contact me to discuss your options.  It may not be as bad as you think. With recent lodgements of outstanding returns the ATO have shown themselves to be incredibly understanding and lenient, choosing not to penalise many clients at all.

Christmas Trading Hours

Just a quick note to let you know that the office will be closing for the Christmas/New Year period, with the phones unattended from Friday the 18th of December. The office will reopen for business from Monday the 11th of January.

I’d like to take the opportunity to wish you all a Merry Christmas, and I hope that 2010 proves to be a successful year for everyone.

Cheers

ASHLEY

Complete your return by Phone, Email, Fax or Post.

Busy lifestyle? Simply can’t find the time to get to your accountant? Or perhaps you’ve moved interstate or overseas.

We now have an amazing amount of technology at our fingertips and clients shouldn’t be afraid to use it. Accountants are often ridiculously busy during July and August as everyone jostles for available appointments. By simply posting, faxing or scanning and emailing your work, you can sometimes even jump the queue!  If an appointment is late or finishes early, most accountants will look for simple work to complete before the next appointment arrives.  If your email has just arrived with all your PAYG Statements, and a summary of your deductions, chances are your return will be completed a little quicker than perhaps you expected.

Technology can also greatly help when completing your returns.  If I have a question for clients, I will normally send an email or SMS – this allows the client to respond in their own time, at their convenience.  Once the return is completed, it can be emailed or faxed for perusal and signing.

If you’d like to discuss getting your return completed by email, fax or post, simply contact me.

What do I need to complete my tax?

When completing an Australian Tax Return you need to provide all income earned, both in and out of the country. The ATO then allows you to claim deductions for items used in generating that income.  A simple list is given below as a guide.

You need to provide the following:

1. Personal details – name, date of birth, address, martial status, number of children, partners income and of course your Tax File Number
2. PAYG Summary Statements (Group Certificates)
3. Income statements from Centrelink
4. Income from other sources including bank interest earned, dividends paid (even when reinvested), managed investments “Annual Taxation Statements”, and all details of asset or investment sales
5. If you have a Rental Property you will need to provide a summary of all income and expenses. If it was purchased in the current tax year you should also provide the settlement statement and the loan setup documents. TIP: For most people, a Quantity Surveyor will provide a report allowing extra deductions for your return
6. Any other income received – Foreign Pensions, Super withdrawals, Employer Terminations
7. For work related expenses, you need to provide a summary of the items you wish to claim, noting those items you have receipts for
8. Ensure that a diary has been kept for a 4 week representative period to show the personal use of deductible items like computers and the internet
9. If claiming your mobile phone, ensure you have indicated which calls are for work so we can calculate the percentage to claim
10. If you are claiming the Education Tax Refund, please provide a summary of eligible expenses (a list of which can be found here)
11. If you are a member of a Private Health Fund, please provide your Annual Statement
12. If you have had a lot of medical expenses and your family are out of pocket more than $1500, contact Medicare and your private health fund and ask for an “Annual Statement of Benefit”.  This provides a summary of expenses and helps in the calculation of your rebate.  Don’t forget to also bring other medical expenses not claimed through the funds e.g. prescription drugs etc
13. Finally don’t forget to bring your BSB and Account details so we can have your refund credited to an account.

While certainly not an exhaustive list, for a Salary/Wage return this information provides the usual detail required. Naturally as we are completing your return we may request more information.

DON’T FORGET…… It is your responsibility to provide all information for your tax return. If you have any doubts about information that may be missing or incorrect, please contact your accountant for assistance.

The difference a diary makes……

Naturally if you wish to claim a tax deduction, you need to keep receipts. What happens if a receipt is not issued, or is not available?

The ATO states that you can claim small items under $10 by recording the details in your diary. You can claim up to $200 of items in this way. Older style coin fed parking meters are a great example of this type of expense.

A diary actually becomes a very important tax tool for a number of people. If you wish to claim your internet or computer use, or perhaps the use of a home office, you need to prove to the ATO how you calculated the deductible claim.  By using a diary over a 4 week representative period, and recording all the use (both business and private in the case of computers and internet), you can establish the deductible claim and prove your use to the ATO under an audit situation.  Without any written records,  the ATO will deny your claim, impose penalties and possibly review previous years returns.

Your diary is also useful for recording irregular travel for work. It’s easy to show a regular pattern of work travel (weekly meetings etc) but it is difficult to prove the “one off” trip you made to a supplier or customer.  By recording the trip in your diary, showing the total kms travelled, the purpose of your trip and the location (perhaps the street address), you have a ready reference at tax time to maximise your deductible claim, and proof for the ATO should any questions arise.

A diary seems so old fashioned to many people, but it is an exceptionally important tool to maximise your refund and provide the necessary proof for the ATO.  As we move to smart phones and better technology, all the detail discussed above can be recorded electronically. Just make sure you maintain all your tax information (whether electronic or written) for the minimum period of 5 years from the date of lodgement of your return.

Education Tax Refund

Many people are wondering what they can claim under the new Education Tax Refund.

To make things a little easier I have listed the main items below:

• Laptops and computer purchases
• Computer related equipment including USB drives, and printers and disability aids
• Home internet connections
• Computer software for educational purposes
• Software including word processing, spreadsheets, database, filters and antivirus protection
• School textbooks and stationery
• Trade tools

Remember to list all the expenses separately and keep all your receipts.

More information can be found at:

http://www.ato.gov.au/individuals/content.asp?doc=/content/00174278.htm&page=1&H1

What can I claim?

Need a nice big refund?  Take a look at the latest ATO Industries and Occupations guides.  These guides provide tips on what you can and can’t claim, and help you to prepare the appropriate information for your next tax return.  Remember….. the more receipts you keep, the greater the chance of a bigger refund!

http://www.ato.gov.au/individuals/pathway.asp?pc=001/002/010/007/002

Changes to Income Tests

Do you have a HELP debt? Do you have a child support debt? Are you over 55? Are you currently Salary Sacrificing into Superannuation? These are just a few of the people that may be affected by the new income tests. From July 1 2009, a range of Government agencies will change the way they view your levels of income. Your Taxable income will continue to be used to work out your general taxation liabilities, however the new income tests will affect a range of offsets, surcharges and hence the tax payable for many people. To check and see if you will be affected, take a look at the following link:

http://www.ato.gov.au/individuals/content.asp?doc=/content/00189164.htm

Do you have a HELP debt? Do you have a child support debt? Are you over 55? Are you currently Salary Sacrificing into Superannuation? You may be affected by the new income tests. From July 1 2009, a range of Government agencies will change the way they view your levels of income. Your Taxable income will continue to be used to work out your general taxation liabilities, however the new income tests will affect a range of offsets, surcharges and hence the tax payable for many people. The following link provides detailed information of the changes:

Same Sex Relationships

From July 1 2009, all couples regardless of gender will be treated equally for taxation purposes. These laws were introduced into Parliament in September 2008 receiving royal assent on Tuesday 9 December 2008.

For more information, please check the following links:

http://www.ato.gov.au/individuals/content.asp?doc=/content/00174077.htm

http://www.ato.gov.au/taxprofessionals/content.asp?doc=/content/00177620.htm