Accounting for Tax

[Sears Family]

Hi

 

What accounts to we need to keep in regard to income and expenditure?

Do we need to list and keep receipts for everything?

May as well get right from the start!

 

Regards

Von

[lorluc]

Any expenses who have relating to your work, you should keep all receipts.

 

This link for the ATO will give you all the information you need...as there are lots of things you can claim for...wouldnt do any harm to have a good read.

 

Individuals

 

At the end of the financial year, your employer/s will issue you with a group certificate which will show your total income and tax...this will be required for you to submit your tax return.

 

Are you on a permanent visa? If so, as you have kids, get in touch with centrelink as you may be entitled to family assistance & rent assistance...

[Guest Mark Xpnsit]

You've got the right idea, if you can work out what deductions and expenses you are entitled to now, you'll know what you need to keep.

 

What do you do/are you doing for work?

 

Some deductions are occupation specific and others are general.

 

With general work related expenses for example, you would normally just need the receipt, however you can claim up to $300 in work-related expenses with no receipts required, as well as up to $150 for laundry claims above the $300 no-receipt limit.

 

But if you are only claiming $300 you are probably doing something wrong. Most people could be getting more tax back then they do - think about self study expenses, uniforms and protective clothing, home office expenses, travel, acommodation, overtime meals, magazine subscriptions, general work related expenses.....

 

For some expenses you might need a logbook or diary, you can just keep this for a part of the year and then use this as the basis for your claim. Its basically about being able to explain to the ATO, if they asked, how you calculated your figure:

 

Laundry - $1 for work related clothing and 0.50 cents if a mixed load

Home office expenses 0.26 cents per hour to cover general costs (you can still claim internet use, phone calls etc on top of this)

Car use - various methods for deductions, including center per kilometre (most people use this)

 

Hope that helps, but please ask if you have any further questions. I can also advise if there are any occupation specific deductions you might be able to claim.

 

Cheers, Mark

[Guest agnex99]

Any ideas if PR visa holders will be taxed for transferring money from home country?? Are PRs entitled to family tax benefits on its first arrival to Oz?

 

Thnx

agnes

 

You've got the right idea, if you can work out what deductions and expenses you are entitled to now, you'll know what you need to keep.

 

What do you do/are you doing for work?

 

Some deductions are occupation specific and others are general.

 

With general work related expenses for example, you would normally just need the receipt, however you can claim up to $300 in work-related expenses with no receipts required, as well as up to $150 for laundry claims above the $300 no-receipt limit.

 

But if you are only claiming $300 you are probably doing something wrong. Most people could be getting more tax back then they do - think about self study expenses, uniforms and protective clothing, home office expenses, travel, acommodation, overtime meals, magazine subscriptions, general work related expenses.....

 

For some expenses you might need a logbook or diary, you can just keep this for a part of the year and then use this as the basis for your claim. Its basically about being able to explain to the ATO, if they asked, how you calculated your figure:

 

Laundry - $1 for work related clothing and 0.50 cents if a mixed load

Home office expenses 0.26 cents per hour to cover general costs (you can still claim internet use, phone calls etc on top of this)

Car use - various methods for deductions, including center per kilometre (most people use this)

 

Hope that helps, but please ask if you have any further questions. I can also advise if there are any occupation specific deductions you might be able to claim.

 

Cheers, Mark

[Guest fredhargreaves]

Hi Von, Agnes

 

One thing that is different here is that most people use a tax accountant. It's best to ask folk at work etc what they do and follow a recommendation for a small private one - i.e. a genuine person, often working from home and much lower fees than the flashy and franchised ones which advertise a lot.

 

Travel to and from work for ordinary employees is almost never allowable but if you use your car for your job at your employer's request you can claim a mileage rate if you are not reimbursed. Clothing is not normally allowable except for genuine safety gear but if it has the firm's logo on it (even if the firm is just you ) then it is - so get embroidering.

 

The tax year here runs from 1 july to 30 june.

 

Expenses are only allowable if the receipts are kept so the short answer is to keep receipts for everything that might be. Where it is not possible to keep a receipt (e.g. car mileage) make a written record i.e. a diary entry, but any piece of paper will do, just make sure you write it down.

 

I strongly suggest that you follow up on getting a tax accountant but you will also find that the ATO here are much more helpful than the revenue back home. You can ring in and ask questions and often get very well informed answers. Anything big where you are not sure whether it will be allowable (e.g. a trip back home for business and pleasure too) you can apply for a private ruling before you make the expenditure - otherwise it is all self-assessment.

 

If you are self-employed there are more deductions allowed and it may pay to make your wife a partner in the business, but if e.g. you work on contract for just one client the whole time the range is limited.

 

Agnes - not sure - certainly not income tax but it does pay to have professional advice.

 

Ask around for who's good - don't use the ones that advertise on the telly etc - often they don't use properly trained staff.

[Guest jimanG]

Hi

 

I'm an accountant and will be migrating to Adelaide in late january. I'm in the process of converting my current qualifications to the australian CPA membership. As i'll be paying this Australian professional subscription for the next twelve months whilst i'm in the UK, will i be able to claim the tax on this, or should i wait until i'm resident in australia before paying?

[cliffy]

You can only claim work expenses (and memberships) against income earned or paid in this country. When you start work here, you can claim your membership fees against your assessable income .

[Sears Family]

Any ideas if PR visa holders will be taxed for transferring money from home country?? Are PRs entitled to family tax benefits on its first arrival to Oz?

 

Thnx

agnes

 

as far as I know you can get family credit of sorts but must sort out a Tax File Number first.

[Sears Family]

You've got the right idea, if you can work out what deductions and expenses you are entitled to now, you'll know what you need to keep.

 

What do you do/are you doing for work?

 

Some deductions are occupation specific and others are general.

 

With general work related expenses for example, you would normally just need the receipt, however you can claim up to $300 in work-related expenses with no receipts required, as well as up to $150 for laundry claims above the $300 no-receipt limit.

 

But if you are only claiming $300 you are probably doing something wrong. Most people could be getting more tax back then they do - think about self study expenses, uniforms and protective clothing, home office expenses, travel, acommodation, overtime meals, magazine subscriptions, general work related expenses.....

 

For some expenses you might need a logbook or diary, you can just keep this for a part of the year and then use this as the basis for your claim. Its basically about being able to explain to the ATO, if they asked, how you calculated your figure:

 

Laundry - $1 for work related clothing and 0.50 cents if a mixed load

Home office expenses 0.26 cents per hour to cover general costs (you can still claim internet use, phone calls etc on top of this)

Car use - various methods for deductions, including center per kilometre (most people use this)

 

Hope that helps, but please ask if you have any further questions. I can also advise if there are any occupation specific deductions you might be able to claim.

 

Cheers, Mark

 

Hi I'm a security consultant, work is very good and will pay for flights/hotel/food etc, but I need to log my own mileage and put that in the return. I would need to get my suits dry cleaned so can I claim for that? Gonna soon add up!

As far as memberships & mags my company also pay for those (thank goodness!!!).

I think I will pay for an accountant, at least for the first time, so please send me your details & fees!

 

Cheers

Von

[Guest fredhargreaves]

@jimanG - in general you would be best to wait until you are actually working or in business here as an accountant. Expenses incurred in getting you ready to do business are often not allowable, once in business lots of things are allowable. Obvious example, a medical student can't claim education expenses, but once set up as a doctor ongoing self-education is allowable. Watch out also for the trap that they don't allow interest against your domestic house mortgage as a deduction against a rental property, so even though that's accounting nonsense you have to be careful how you borrow to avoid that trap in some other scenarios.

 

In general you will find the ATO (i.e. the oz revenue) very helpful, accessible and well run compared with the UK revenue, except that they do want their money in the end. You can find out a lot by trawling their website if you have the time.

 

oops - I just noticed cliffy's post above - that's absolutely correct.

[Guest Mark Xpnsit]

@jimanG - in general you would be best to wait until you are actually working or in business here as an accountant. Expenses incurred in getting you ready to do business are often not allowable, once in business lots of things are allowable. Obvious example, a medical student can't claim education expenses, but once set up as a doctor ongoing self-education is allowable. Watch out also for the trap that they don't allow interest against your domestic house mortgage as a deduction against a rental property, so even though that's accounting nonsense you have to be careful how you borrow to avoid that trap in some other scenarios.

 

In general you will find the ATO (i.e. the oz revenue) very helpful, accessible and well run compared with the UK revenue, except that they do want their money in the end. You can find out a lot by trawling their website if you have the time.

 

oops - I just noticed cliffy's post above - that's absolutely correct.

 

Just a quick note on your example above - you say a medical student can't claim eduction expenses, a month or two ago that would have been spot on, but the situation has changed as a result of a recent high-court battle. It means that students claiming austudy or youth allowance should be able to claim back self-study expenses

 

You can find out more here - Tax Allowance Victory For Students Receiving Austudy or Youth Allowance - XPNSIT

[Guest fredhargreaves]

@mark xpnsit - That is correct - I did not choose a good example. Although it remains to be seen if the ATO will allow that to prevail for long. They were obviously surprised by the ruling.

 

The more general point of relevance to migrants setting up business here or buying rental property etc is that there can be expenses incurred ahead of trading (or renting) which cannot be written off because the ATO view is that they were not incurred in the generation of income - i.e. they have to be treated as capital.

 

Simple example (I hope this time - vet this one if you will mark xpnsit) - don't buy a rental property, renovate it, and then rent it out. Buy it, rent it out, then renovate it gradually, calling the renovations repairs.