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Property investors to lose out from proposed budget changes

Property investors to lose out from proposed budget changes The 2017 Federal Budget, handed down by Treasurer Scott Morrison on Tuesday night, 9th May at 7:30pm AEST includes proposed changes which will affect residential property investors Australia-wide. The Australian Tax Office (ATO) allows owners of income producing property to claim depreciation deductions for the wear and tear that occurs to a building’s structure and the plant and equipment assets within. The proposed changes relate to the depreciation of plant and equipment assets and the eligibility to claim this deduction. Currently, investors are eligible to claim qualifying plant and equipment depreciation [...]

Small business income tax offset

Small business income tax offset The small business income tax offset can reduce the tax you pay by up to $1,000 each year. It is available from the 2015–16 income year. We will work out your offset based on the amounts you show in your income tax return. These are your: net small business income that you earned as a sole trader share of net small business income from a partnership or trust. To be eligible for the offset as a sole trader, you must be a small business entity. If you have a share of net small business income [...]

Seniors and Retirees -Tax Offsets

Seniors and Retirees -Tax Offsets Tax offsets – sometimes referred to as rebates – are not the same as tax deductions. Offsets directly reduce the amount of tax you must pay. Each dollar of tax offset reduces your tax payable by a dollar regardless of your taxable income. Mature age workers, seniors and pensioners may be eligible for tax offsets. If you are a low income earner, you may be eligible for an offset and, if your medical expenses pass the threshold limit, you may be eligible for the medical expenses tax offset too. You may also be eligible for [...]

Deductions you can claim

Deductions you can claim When completing your tax return, you have entitlement to claim deductions for some expenses. Most of the them directly link to earning your income. To claim a work-related deduction: you must have spent the money yourself and you haven't reimburse the money the money must relate to your job you must have a record to prove it (there are some limited exceptions). You can only claim a deduction for the work-related portion, even if the expense was for both work and private purposes. Follow the links below for specific deductions you can claim: Vehicle and travel expenses - including travel between work and home [...]

Car expenses

Car expenses From 1 July 2015 – two methods The government has simplified the car expense deductions for 2015–16 and future income years. From 1 July 2015, the one-third of actual expenses method and 12% of original value method have been abolished. The two methods available from 1 July 2015 are: cents per kilometre method (with some changes) logbook method (with no change to its rules) Cents per kilometre method The cents per kilometre method is available for use with some changes. Separate rates based on the size of the engine are no longer available from 1 July 2015. Under the revised method, [...]

Simpler ATO depreciation rules for small business

Simplified depreciation for small business You can choose to use the simplified depreciation rules if you have a small business with an aggregated annual turnover (the total normal income of your business and that of any associated businesses) of less than $2 million. Under these rules, you: immediately write-off – deduct their full cost in the year you buy them – most depreciating assets that cost less than $20,000* each that were acquired and installed ready for use from 7.30pm (AEST) on 12 May 2015 until 30 June 2017 pool most other depreciating assets that cost $20,000 or more in [...]

Furnish your pockets with the funds claimed from tax depreciation

Furnish your pockets with the funds claimed from depreciation Often property investors rent out their property fully furnished. Depreciating furniture can add thousands of dollars to the owners depreciation claim. The below table provides an example of the difference that claiming depreciation on a $16,000 furniture package could make to an investor who purchased a two bedroom two bathroom unit: It is important that a specialist Quantity Surveyor prepares a tax depreciation schedule for an investment property before the owner lodges their tax return. A Quantity Surveyor will carry out an inspection on the property to identify more plant and [...]

Depreciation for renovations made easy

Investment property owners often miss out on thousands of dollars due to two main reasons: They don’t know what depreciation entitlements they can claim for renovations or refurbishments to their investment property They don’t use a qualified Quantity Surveyor to prepare a tax depreciation schedule Follow the steps below to ensure your tax depreciation schedule is right the first time around. Understand scrapping Scrapping refers to the removal and disposal of any potentially depreciable asset from an investment property. When worn or old assets (like carpet and hot water systems) are replaced and scrapped, the owner of the property may [...]

FBT exemptions for work-related electronic devices

FBT exemptions for work-related electronic devices From 1 April 2016, your small business clients can provide their employees with multiple work-related devices without incurring a fringe benefits tax (FBT) liability. The devices can include: laptops tablets calculators GPS navigation receivers mobile phones. Your clients can purchase the devices at any time, but can't give them to their employees until 1 April 2016 or they will be liable for FBT. This benefit may be in addition to or part of the employee’s salary or wages package. To be eligible, your client's business must have an annual turnover of less than $2 million. You should [...]

Earn more from your holiday rental – Tax Depreciation

Earn more from your holiday rental - Tax Depreciation It’s that time of year when many investors take a well earned break by booking a holiday away from home with their family or friends. While they are away from home, property investors might be tempted by opportunities to purchase a holiday rental as an investment. Before making a decision to dive in and purchase a property, investors should seek advice from relevant professionals such as a Property Manager, an Accountant, a Financial Advisor and a Quantity Surveyor. This is because investors often decide to purchase a holiday rental [...]

Hairdresser – claiming work-related expenses

Hairdresser - claiming work-related expenses This summary outlines some of the deductions you can and cannot claim as a hairdresser employee. Other work-related expenses Capital allowances You can claim a deduction, called a capital allowance, for the decline in value of equipment used for work. If the equipment is also used for private purposes, you cannot claim a deduction for that part of the decline in value. You cannot claim a deduction if the equipment is supplied by your employer or any other person. Generally, the amount of your deduction depends on the effective life of the equipment. Equipment costing [...]

Nurse, midwife and direct carer – claiming work-related expenses

Nurse, midwife and direct carer - claiming work-related expenses This summary outlines some of the deductions you can and cannot claim as a nurse, midwife and direct carer employee. Firstly, look at the particular rule of reportable fringe benefits for this field. Reportable fringe benefits Your employer is required to report the total grossed-up amount of certain fringe benefits exceeding $2,000 provided to you or your relatives on your payment summary. Car expenses There are four ways to work out your car expenses. The four methods are: Cents per kilometre Logbook 12% of original value One-third of actual expenses For [...]

Attribute Personal Services Income (PSI)

Attribute Personal Services Income (PSI) Before attributing Personal Services Income. What is PSI Personal Services Income is the income you received as a sole trader, including: A pay as you go (PAYG) voluntary agreement An amount was withheld because you did not quote your Australian business number (ABN) Working under a labour hire arrangement as an independent contractor Specified payments for Tutorial services you provided for the Indigenous Tutorial Assistance Scheme of the Department of Education, Employment and Workplace Relations Translation and interpretation services you provided for the Translating and Interpreting Service National of the Department of Immigration and Border [...]

Deductions for Specific Industries

Introduction to Deductions When completing your tax return, you're entitled to claim deductions for some expenses depending on employee industries, most of which are directly related to earning your income. To claim a work-related deduction: you must have spent the money yourself and weren't reimbursed it must be related to your job you must have a record to prove it (there are some limited exceptions) If the expense was for both work and private purposes, you can only claim a deduction for the work-related portion Deductions you can claim for Specific Industries In order to get the best Tax Refund, [...]

Truck drivers – claiming work-related expenses

Truck driver - claiming work-related expenses This summary outlines some of the deductions you can and cannot claim as a truck driver. First of all, three types of truck driver need to be determined before look into those deduction rules. Short-haul or local drivers and long-haul drivers Short-haul or local drivers usually return home at the end of a day's work. A long-haul driver usually sleeps away from home in the course of driving the truck. Allowances The most common allowances paid to an employee truck driver are: Overtime meal allowance Travel allowance includes meal In the trucking industry, a [...]