Your Tax Return

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  Personal Tax Rates 2014-15

  • Taxable Income             Tax on Income
  • 0 – $18,200                           Nil
  • $18,201-$37000                 19c for each $1 over $18,200
  • $37,001 – $80,000             $3572 plus 32.5c for each $1 over $37,000
  • $80,000 -$180,000           $17,547 plus 37c for each $1 over $80,000
  • $180,001 and over              $54,547 plus 47c for each $1 over $180,000

Key changes affecting your 2015 Tax Return.

Your income tax return has grown in both size and complexity over the past few years. Your personal information is being collected by the ATO through your personal tax return for use by the government.  As your accountant and tax agent we have to comply with these ever increasing regulations. We are happy to discuss your personal tax issues and assist you with any complex matters.

Travel Expenses

Small Business immediate write-off

Home office claims

 

Overnight Travel Allowance

An employee receiving travel allowance cannot automatically claim a tax deduction up to the ATO’s allowable amount. To be entitled to claim travel expenses you need to show that you incurred the expense.

This also applies to long distance truck drivers who are expected to be able to describe what meal would normally be purchased and provide details and menus of roadhouses or service stations.

Are you claiming your Travel Expenses to and from work?

In general, travel expenses between home and work are considered private travel and therefore are not an expense you can claim on your tax return. The exception to the general rule is if you are transporting equipment from home to work which you need to carry out your duties at work and which

  1. you either cannot carry because it is “sufficiently bulky and heavy” or,
  2. the employer does not provide a “reasonable secure storage area”.

What is a sufficiently bulky and heavy equipment? As a rule of thumb the tax office says it should be over 25 kg and bulky enough so you cannot carry it on public transport.  And for a particular storage facility to be reasonably secure it would need to be at least lockable. If you plan to claim your car expenses on your tax return because of the above reasons, you will need to be able prove both conditions to the tax office if asked.

The cost of transport incurred by fly-in fly-out workers are considered travel to and from work and are a non- deductible expense. However individuals working at remote sites for short periods of time may be able to  claim meals and accommodation.

SMALL BUSINESS (Turnover less than $2Mill)

$20,000 immediate write-off for Small Business

By far the greatest and most talked about budget measure is the introduction of an instant tax deduction for asset purchases of up to $20,000 (for small businesses only). The measure will apply to assets acquired from 7.30pm, 12 May 2015 until 30 June 2017.

This tax deduction is “accelerated depreciation” reducing your taxable income and replaces the previous $1000 immediate write-off. The $20,000 refers to the purchase price of the asset and not the business use of the asset which can be less than 100%. This $20,000 limit applies to each individual item. Small Businesses can apply this $20,000 rule to as many items as they wish.

You should only take advantage of this tax saving if you were planning to purchase an asset anyway. Don’t be lured into buying because of the tax advantage but make sure that the capital outlay fits within your overall business plan. Remember, the tax savings for a company will be 30cents in $1. Tax savings for unincorporated business can be more or less – depending your marginal tax rate. 

This tax measure for small business has also replaced the $5000 accelerated depreciation for motor vehicles which was introduced in 2013 and phased out 1 January 2014.

Tightening of Home Office Claims

If part of your home is your sole place of business, deductions can be claimed in general for expenses such as electricity, rent and other occupancy costs. If you are a house owner and your place of business is part of your home you could claim part of your mortgage, insurance, rates and water. However those deductions may be a trap for the unwary and we warn every client to be careful because the Capital Gain exemption for main residences may be affected when the home is eventually sold.

Also, if you are employed and your employer provided you with a desk and you choose to work from home a couple of days a week, the ATO will only allow deductions for part of your electricity, gas and phone.