JUNE EDITION JUNE EDITION JUNE EDITION JUNE EDITION JUNE EDITION JUNE EDITION JUNE EDITION
JUNE EDITION JUNE EDITION JUNE EDITION JUNE EDITION JUNE EDITION JUNE EDITION JUNE EDITION
DEADLY TAX SINS!
As we approach a new financial year, it’s worthwhile
noting some areas where people can miss out on
substantial deductions. Here’s some:
1. Tax apathy: The Australian Tax Office (ATO) says
around 500,000 taxpayers who may be eligible for
the tax bonus payments have yet to lodge their
2007-08 tax returns. Taxpayers can still obtain a
tax bonus of up to $900 from the ATO but they
must lodge an income tax return for the 2007-08
tax year by 30 June 2009. If you’re eligible, there’s
no excuse not to claim.
 Other forms of tax apathy
include: Not claiming all your
work-related expenses such as
uniforms, certain laundry and
dry cleaning costs, telephone
costs, home office expenses,
work related motor vehicle
expenses, subscriptions, union
fees, tax agent fees and
donations.
 Not claiming all your rental property
deductions including advertising, bank charges,
body corporate fees, cleaning, council rates,
depreciation, electricity and gas, gardening,
insurance, interest on loans, land tax, lease
preparation expenses, legal costs, pest control,
postage and stationery, property agent fees
and commissions, repairs, secretarial and
bookkeeping fees, security patrol fees,
telephone calls and water rates.
2. Failure to claim a temporary investment break: If
you’re self-employed or in business you still have
an opportunity to get an extra 50 per cent
deduction this year under the investment
allowance tax break by entering into a contract to
buy and install eligible depreciating assets costing
$1,000 or more before 30 June 2009. This includes
new cars used principally for business.
3. Neglecting your super: You have a few weeks left
before the window of opportunity closes to make
tax-effective superannuation contributions of
$50,000 (or $100,000 for the over 50’s). These
contributions will be capped to $25,000 and
$50,000 respectively from next year onwards.
4. Ignoring the blue moon: There is once in a blue
moon opportunity to defer income or bring
forward deductions because of the 40 per cent tax
rate reduces to 38 per cent from 1 July 2009. This
means there is a rare opportunity to get tax savings
by either deferring assessable income or bringing
forward deductions, provided action is taken by 30
June 2009.
5. Robbing Peter to pay Paul:
Paying private
expenses through your company and either not
paying the money back, or not putting an
appropriate loan agreement in place in time.
6. Failure to review your trading stock: Failure to
review trading stock on hand to determine
whether you can value your stock at the lowest
possible allowable value at year end.
7. Failure to maximise car expenses: Where you have
used your car for work-related travel, and your
claim for kilometers traveled for the year does not
exceed 5,000 kilometers, you can claim a
deduction for your car expenses on a cents per
kilometer basis. Any such work-related travel
claims must be based on reasonable estimates.
Alternatively, if you have used your car for a
significant amount of work-related travel you may
be able to claim a deduction for your total car
running expenses to the extent you have used it
for work. However, such claims are only available
where you have the required log book, odometer
readings and receipts.
Where business travel exceeds 5,000km, it may be
possible to claim one-third of actual car expenses
or 12 percent of the original value of the vehicle
without a log book.
You may wish to compare which of the above
methods gives you the maximum deduction.
Work-related travel includes travel between two
places of work or employment, or travel to shifting
places of employment. It may also be available
where you have to carry bulky tools or equipment
with you to work. It does not, however, include
direct travel between a person’s home and a place
of work.
8. Failure to optimize your tax offsets: Tax offsets
directly reduce your payable tax and can add up to
a sizeable amount, so it pays to know all the offsets
you are entitled to. Eligibility for offsets will
generally depend on your income level, family
circumstances and satisfying specific conditions for
each offset.
Examples of tax offsets include the dependent
spouse offset, low-income offset, mature aged
worker offset, the senior Australian tax offset, the
medical expenses offset, the private health
insurance offset and the offset for superannuation
contributions made on behalf of a low income
spouse.
Additionally, there is a 25 per cent entrepreneur’s
tax offset if a sole-trader has elected to enter the
small business tax system and their business
income for the year does not exceed $75,000.
An education tax offset is available for families who
receive Family Tax Benefit Part A for 50 per cent of
the cost of items such as education software,
home computers and associated costs, home
internet connections, laptop computers, printers,
school texts, stationery and trade tools used in
school. The maximum amount of the rebate is
$375 for each child in primary school and $750 for
each child in secondary school.
9. Failure to seek advice: The structure in which you
buy property or other investments is vital. The
wrong structure can cost you thousands! Always
seek professional advice before you buy – after is
too late.
10. The same advice applies to work vehicles – do you
lease, buy outright or use HP? Each has its own
advantages and disadvantages.
DUNLOPS TARINGA
PO Box 345
INDOOROOPILLY QLD 4068
Phone: (07) 3871 1522
Fax: (07) 3871 1533
Email: advice@dunlops-taringa.com
Web: www.dunlops-taringa.com