TAX IQ 2009 TAX RETURNS SPECIAL
I
SPECIAL
TA
X
A
T
IO
N
BONUS SPECIAL TWO:
SEVENTH EDITIONTHIS MIGHT BE THE
MOST TAX
EFFECTIVE
INVESTMENT YOU
MAKE THIS YEAR!
ALLOWABLE
DEDUCTIONS
SELF EDUCATION
LEGAL EXPENSES
ADVISORY FEES
EMPLOYEE BONUSES
NEGATIVE GEARING
EARLY INTEREST CLAIMS
AND HUNDREDS MORE
INDUSTRY & ASSET
CLASS DEPRECIATION
TABLES
MANUFACTURING
MEDICAL
RETAIL
PERSONAL SERVICES
RENTAL DEPRECIATION
MAXIMUM TAX BENEFITS ON
YOUR PROPERTY
INVESTMENTS
THIS IS A EASY TO USE
TOOL THAT EVERY
BUSINESS TAXPAYER &
PROFESSIONAL
SHOULD HAVE IN THEIR
RESOURCE STATION
HUNDREDS OF DEDUCTIONS
AND DEPRECIATION RATES
TO REDUCE YOUR TAXABLE
INCOME & BOOST YOUR TAX
EFFECTIVENESS
TAX IQ 2009 TAX RETURNS SPECIAL
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SECTION ONE:
YOUR TAX RETURN AND TAXES 3
Lodging Tax Returns 3 Auditing and Amending Tax Returns 3 Who Must Lodge? 3 When Must You Lodge? 4 How Much Tax? 4 Medicare Levy 4 Medicare Levy Surcharge 4 Health Insurance Tax Offset 4 Baby Bonus 4 Child Care Benefits 4 Low Income Tax Offset 5 Education Tax Offset 5 First Home Saver Accounts 5 Mature Age Worker Tax Offset 5 Entrepreneur’s Tax Offset 5 Dependent Offsets 5 Senior Australians Tax Offset (SATO) 5 Pensioner Tax Offset 5 Employment Termination Payments 6 Accrued Leave 6 Higher Education Loan Programme (HELP) 6 Film Production Incentives 6
SECTION TWO:
TAX DEDUCTIONS FOR BUSINESS 6
A listing with explanations of numerous items which you can utilise to reduce your tax.
Accountant’s Fees 6 Accrued Leave 6 Advertising and Sponsorship 7 Bad Debts 7 Balancing Charges 7 Bank Charges 7 Bill Discounts 7 Black Hole Expenses 7
Boats 7
Body Corporate Fees 7 Bona Fide Redundancy Payments 7
Books 7
Borrowing Expenses 7 Bribes 7 Building Leases 7 Business Capital Costs 7 Car Expenses 7 Childcare 7 Cleaning 7 Clothing 7 Commission 7 Computer Expenses 7 Computer Operating Costs 7 Conferences and Seminars 7 Consumable Stores 8 Copyright and Patents 8 Credit Card Charges 8 Death and Disability Benefits 8 Debt/Equity Swaps 8 Defalcations 8 Director’s Fees 8 Education 8 Electricity 8 Electricity Connection Costs 8 Employee Benefits 8 Employment Agreements 8 Entertainment Expenses 8 Environmental Impact Studies 8 Environmental Protection Expenses 8 Exchange Gain and Losses 8 Farm Management Deposits 8 Freight and Courier Expenses 8 Fringe Benefits 8 General Interest Charge 8 Gifts 8 Home Office Expenses 9
Insurance 9 Interest 9 Lease Instalments 9 Legal Expenses 9 Licences 9 Losses From Prior Years 9 Misappropriation 9 Motor Vehicle Expenses 9 Newspapers and Magazines 9 Parking Fees and Tolls 9 Primary Production Expenses 9 Rates and Land Tax 9 Relocation Expenses (Staff) 9 Relocation Expenses (Business) 9 Rent 9 Repairs 9 Replacements 9 Research and Development 9 Retiring Allowances 9 Salaries and Wages 9 Seminars and Conventions 10 Shortfall Interest Charge 10 Sickness and Accident Insurance 10 Stationary 10 Subscriptions 10 Superannuation 10 Superannuation Guarantee 10 Tax Audits and Appeals 10 Tax Shelters 10 Tax Related Expenses 10 Telephones 10 Tender Costs 10 Trading Stock 10 Transport 10 Travelling Expenses 10 Website Operating Costs 10 Working Lunches 10
SECTION THREE:
CHECK LIST FOR PRIMARY PRODUCTION BUSINESSES 10
A check list of expenses which can be claimed by farmers.
SECTION FOUR:
CHECK LIST FOR EMPLOYEE DEDUCTIONS 11
A check list of expense items which may be claimed by wage and salary earners.
SECTION FIVE:
SMALL BUSINESS CONCESSIONS 13
Advantages Disadvantages
SECTION SIX:
DEPRECIATION AND EFFECTIVE LIVES 13
An explanation of depreciation and detailed lists of effective lives as determined by the Tax Office so you can calculate depreciation rates on plant and equipment.
SECTION SEVEN:
EFFECTIVE LIFE TABLES -
TABLE A (INDUSTRY CATEGORIES) 15 SECTION EIGHT:
EFFECTIVE LIFE TABLES -
TABLE B (ASSET CATEGORIES) 31 SECTION NINE:
DEPRECIATION - RENTAL PROPERTY 35
Tax IQ 2009 Tax Returns Special published by
Media IQ Pty Ltd
PO Box 9007 GCMC QLD 9726
Email:
info@miq.com.au
Web:
http://www.miq.com.au
TAX IQ 2009 TAX RETURNS SPECIAL
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LODGING TAX RETURNS
More than 11.5 million Australian residents lodge personal income
tax returns each year.
Business entities are also required to lodge returns. For 2005/06
these included:
•
728,196 companies
•
415,279 partnerships
•
569,593 trusts
•
285,784 superannuation funds
During 2006/07 the Government collected $135 billion from
individuals and paid out $17 billion in tax refunds. Other taxes
collected included:
•
Companies $58
billion
•
Superannuation funds
$ 7 billion
•
Fringe benefits tax
$ 4 billion
•
Excise and customs duty
$28 billion
In addition, the Taxation Office collects goods and services tax and
remits this to the States. During 2006/07 a total of $40 billion was
collected. This is a lot of money and it is only natural that a great deal
of importance is placed by the Government and the Tax Office on the
need to ensure accuracy in completion of income tax returns and
assessment of taxes payable.
Taxpayers also want to ensure that taxes payable are not
over-stated, that all legitimate tax deductions are claimed and amounts
are only included as taxable income where this is required by law.
Hence, the purpose of this Special Bonus Issue. It is designed to
help you master the complexity of completing your personal income
tax return or to assist you to provide all necessary information to your
accountant.
Australia operates under a system of self-assessment. This means
that it is your responsibility to lodge a tax return which is complete
and correct. The Tax Office does not verify your tax return, but
simply issues an assessment based on figures which you have given
them.
AUDITING AND AMENDING TAX RETURNS
At a later date, the Tax Office may have another look at your return –
perhaps some of its computer driven data matching or verification
systems have highlighted something out of the ordinary. It may look
at some specific information in your return and make an enquiry or
decide to conduct a full scale audit. The Tax Office has only a limited
time in which to review your return and make any amendments.
If you are an individual without complex tax affairs or are operating
an eligible small business the normal amendment period of four
years is reduced to two. You will not be eligible for the shorter period
of review if you:
•
Are a trustee of a trust;
•
Are a beneficiary of a Trust not eligible for the small business
concessions;
•
Carry on or are a partner of a business not eligible for the small
business concessions;
•
Entered into or carried out a scheme for the sole or dominant
purpose of obtaining a tax benefit;
•
Are involved in a non
‑
arm's length tax related transaction with a
related entity which does not enjoy the shorter period of review;
•
Are involved in transactions to which Division 7A of the 1936
Tax Act applies;
•
Are an employee shareholder of a company affected by the
anti
‑
avoidance provisions relating to employee share schemes;
•
Have omitted income from foreign transactions;
•
Have become involved in offshore transactions involving deemed
transfers of property or services or tainted services income;
•
Have been involved in transactions which are caught by specific
anti
‑
avoidance provisions.
The 6 year period of review for Part IVA cases has also been
reduced to four years.
Because there are limitations on the period during which the
Tax Office may amend an assessment, the actual date of the original
assessment is very important. For companies and superannuation
funds the Tax Office does not issue a formal notice of assessment.
Hence, the tax return itself is deemed to be a notice of assessment
issued on the day the return is lodged. Individual taxpayers who
have not received a notice of assessment within 12 months of
lodging a return may request in writing that the Tax Office issues an
assessment. If the assessment is not received within 3 months of
receipt of such a notice, the Tax Office is deemed to have issued an
assessment. Hence, any assessment issued thereafter will be
deemed to be an amended assessment.
Transitional rules apply in respect of returns relating to years prior to
2004/05. The Tax Office will have 6 years from date of lodgement
for returns with carry forward losses and 4 years for non
‑
taxable
returns without losses (or until 31 October 2008, whichever is the
later).
Limited periods of review do not apply where there has been fraud or
evasion. In such cases, the Tax Office can issue amended
assessments at any time.
WHO MUST LODGE?
There are a number of circumstances which could require you to
lodge income tax returns. The requirements are published in the
Register of Legislative Instruments as TPAL 2008/1. In simple
terms, the Commissioner of Taxation requires that you must lodge an
income tax return for 2007/08 if:
•
You had PAYG withholding amounts deducted;
•
You incurred a loss or net capital loss or are entitled to a
deduction for a prior year loss;
•
If a company or trust, you had unapplied tax losses or capital
losses exceeding $1,000;
•
You carried on a business;
•
You are a beneficiary of a primary production business trust;
•
You were a partner of a primary production business partnership;
•
You were under 18 and had non personal exertion income of
more than $1,666 or had income from dividends and trust
distributions plus imputation credits of more than $416;
•
You received overseas income under Sections 23AF or 23AG
together with other income;
•
You paid a PAYG Instalment amount;
•
You are an author, inventor, performing artist, production
associate or sportsperson under Division 405 of the 1997 Tax Act
•
You are eligible to claim a private health insurance tax offset;
•
You had a reportable fringe benefit amount shown on your PAYG
payment summary;
•
You received assessable income from dividends or distributions
and franking credits that exceeded $6,000;
•
Made a personal superannuation contribution and are eligible for
super co
‑
contribution;
•
Received a lump sum super payout while aged under 60;
•
You received a notification from the Tax Office high wealth
individuals task force that you are required to lodge a detailed
form of return;
•
You were a resident of Australia for the whole of the year and
your taxable income exceeds $6,000;
•
You were a non
‑
resident but derived income (including capital
gains) subject to Australian tax other than income subject to
withholding payments;
•
You were an Australian resident for part of the income year and
your taxable income exceeds $500 multiplied by the number of
full or part months that you were a resident;
•
You are a company which derived income taxable in Australia
other than income subject to withholding payments;
•
You are a super fund which derived income taxable in Australia
other than income subject to withholding payments;
•
You are a head company of a consolidated group;
•
You are an agent for non
‑
resident insurers, ship masters, owners
or charterers or in control of a non
‑
resident's money;
•
You are a trust or partnership which derived income (including
capital gains) during 2006/07.
YOUR TAX RETURNS AND TAXES
TAX IQ 2009 TAX RETURNS SPECIAL
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You are not required to lodge if:
•
You received social security benefits and had no other
assessable income or your taxable income was less than or
equal to $11,000;
•
You qualified for Senior Australian's Tax Offset (SATO) and your
income was below SATO thresholds;
•
You are a pensioner who did not qualify for the SATO but your
taxable income was below pensioner offset thresholds;
•
You are a resident, non
‑
profit company whose taxable income in
Australia does not exceed $416;
•
You are a non
‑
profit association, organisation, institution, society
or club whose income is exempt from tax;
•
You are a subsidiary of a consolidated group.
WHEN MUST YOU LODGE?
The tax year runs from 1 July to 30 June and you have until
31 October to lodge your tax return unless it is prepared by a
registered tax agent. Normally, your income tax will be payable
21 days after 31 October, however longer time will be allowed if you
lodge through a registered tax agent.
The Tax Office has power to apply a failure to lodge on time penalty
if your return is incomplete or lodged late. The penalty is $110 for
every 28 days (or part thereof) your return is overdue up to a
maximum of $550.
The Tax Office can apply this penalty even when there is no tax
payable, however, it would normally not apply the penalty where the
tax return:
•
is lodged voluntarily; and
•
does not result in any tax payable.
The penalty is in addition to any interest charges that may apply for
late payment of tax.
HOW MUCH TAX?
MEDICARE LEVY
The general rate of the Medicare levy is 1.5% of your taxable
income. If your taxable income is below the threshold you will be
exempt from the levy. There is also a phasing in range and higher
exemptions for taxpayers with children. The higher family thresholds
relate to family income. Where the threshold is exceeded, Medicare
levy is charged at the rate of 10% on the excess above the threshold
until the amount reaches the normal levy of 1.5% on taxable income.
Resident Individuals (2007/08 Year) Taxable Income Tax Payable $0-$6,000 Nil
$6,001-$30,000 Nil + 15% of excess over $6,000 $30,001-$75,000 $3,600 + 30% of excess over $30,000 $75,001-$150,000 $17,100 + 40% of excess over $75,000 $150,001 + $47,100 + 45% of excess over $150,000 Resident Individuals (2008/09 Year)
Taxable Income Tax Payable $0-$6,000 Nil
$6,001-$34,000 Nil + 15% of excess over $6,000 $34,001-$80,000 $4,200 + 30% of excess over $34,000 $80,001-$180,000 $18,000 + 40% of excess over $80,000 $180,001 + $58,000 + 45% of excess over $180,000
The thresholds for 2007/08 are:
MEDICARE LEVY SURCHARGE
If not covered by private patient hospital insurance, a surcharge of
1% is payable by individuals with a taxable income over $50,000
(couples and families $100,000). The $100,000 threshold for
families is increased by $1,500 for each dependant child after the
first. The Government has announced that the threshold levels will
be increased to $100,000 for singles and $150,000 for couples and
families for the 2008/09 year.
HEALTH INSURANCE TAX OFFSET
You can claim this either as a direct reduction of your health
insurance premium or as a tax rebate. The rebate is normally 30%
of the premium. If you were eligible before 1 January 1999, it would
be the greater of 30% of the premium or the incentive amount in the
following table:
The health insurance tax offset increases to 35% where one person
covered under the policy is aged 65 but under 70 and to 40% where
at least one person covered under the policy is aged 70 or more.
BABY BONUS
You are entitled to a Maternity Payment of $5,000 for each newborn
child. This payment increased from $4,000 for children born from
1 July 2008. This payment will be indexed on 1 July in each year.
From 1 January 2009 the payment will be made in fortnightly
instalments over a six month period.
There will also be an income test available only where family income
is not greater than $150,000. (Assessed as not more than $75,000
in the six months after the birth of the child.)
CHILD CARE BENEFITS
There are a number of benefits available for parents, most of which
are administered by Centrelink. Firstly, there is a parenting payment
available if you have at least one child aged under six (if partnered)
or eight (if single) wholly or substantially in your care.
Taxpayer Threshold (No Levy) Phasing In Range Full Levy $ $ $
Individual 17,309 17,310-20,363 20,364 Individual with Spouse
and no dependants 29,207 29,208-34,361 34,362 One dependant 31,889 31,890-37,516 37,517 Two dependants 34,571 34,572-40,671 40,672 Three dependants 37,253 37,254-43,827 43,828 Four dependants 39,935 39,936-46,982 46,983 Five dependants 42,617 42,618-50,137 50,138 Six dependants 45,299 45,300-53,292 53,293 Additional child +2,682 +3,155 Eligible for Pensioner
Offset 22,922 22,923-26,967 26,968 Eligible for SATO 25,867 25,868-30,431 30,432
Person Covered Ancillary Cover Hospital Cover Hosp./Anc. Com-bined Individual $25 $100 $125
Couple $50 $200 $250 Family (with
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This benefit, which is subject to an income and assets means test,
can be a maximum of $405.40 per fortnight if partnered and $562.10
if single.
Child care benefits are available for working parents who have a
child attending child care to assist in meeting child care fees.
Maximum payable for a non-school aged child is $173.50 per week
for approved care or $29.05 per week for registered care.” This
benefit is subject to an income test.
The child care tax rebate for 2008/09 will be 50% of child care fees
(after deducting the child care benefit). This rebate is to be paid
quarterly up to a maximum of $7,500.
LOW INCOME TAX OFFSET
Low income earners can claim a rebate up to a maximum of $700
(2007/08) or $1,200 (2008/09). This is available if your taxable
income does not exceed $30,000. The rebate is reduced by 4 cents
for every dollar by which your taxable income exceeds $30,000.
Minors can claim this offset and therefore the $416 tax free threshold
for unearned income is effectively increased to $1,555 (if no other
income) for 2007/08 and $2,666 for 2008/09.
EDUCATION TAX OFFSET
From 1 July 2008 you can claim an education tax offset if you have
children attending primary or secondary school and are receiving
Family Tax Benefit Part A. The claim will be for up to 50% of the
cost of education expenses including laptops, education software,
school text books and stationery. Maximum claims will be $375 per
child per year for primary school children and $750 per child per year
for secondary school children.
FIRST HOME SAVER ACCOUNTS
First Home Saver Accounts can be opened with banks, building
societies, credit unions, life insurance companies, friendly societies
and public offer superannuation funds.
These are special purpose accounts similar to term deposits. When
you buy or build your first home you must withdraw all the money
from this account and close it. The funds can be used to pay:
•
a deposit on purchase of an existing home;
•
a deposit or instalments for a house and land package;
•
for the purchase of vacant land on which your home will be built;
•
a deposit or instalments on the construction of a home on land
you own;
•
incidental costs incurred in buying or building the home such as
legal expenses, Council fees and stamp duty.
To open a First Home Saver Account you must:
•
be over 18 and under 65 years old;
•
have a tax file number which is quoted in your application;
•
have not previously owned a home in Australia or Norfolk Island
that has been your main residence; and
•
have not previously opened a First Home Saver Account unless:
•
you are transferring all the funds from one First Home
Saver Account to another; or
•
you have closed a First Home Saver Account but the
purchase or construction of your home did not eventuate
and you are opening another First Home Saver Account
within six months; or
•
you have closed a First Home Saver Account within the
14 day cooling off period.
The Government will make a co
‑
contribution equal to 17% of
contributions made in each year up to a maximum of $850 (indexed
after 2008/09). Interest earnings will be taxed at 15% which will be
payable by the financial institution and which will not have to be
reported in your tax return. The accounts will have a cap of $75,000
(indexed after 2008/09).
MATURE AGE WORKER TAX OFFSET
If you are aged 55 or over at the end of the financial year and your
income is less than $63,000 you can claim a tax offset (maximum
$500) or 5% of the following types of earnings:
•
personal services income;
•
income from a business carried on personally or in partnership;
•
income from a company or trust that is personal services income
attributed to you;
•
farm management withdrawals;
•
reportable fringe benefits less related tax deductible expenses
The offset begins to phase out when your earnings reach $53,000.
ENTREPRENEUR'S TAX OFFSET
There is an offset for people operating small businesses where
turnover is not more than $75,000. From 1 July 2008 eligibility will be
subject to an income test – annual adjusted taxable income not more
than $75,000 (or $120,000 for families). When turnover is $50,000 or
less the offset amounts to 25% of tax payable. It phases out
progressively when turnover is between $50,000 and $75,000.
DEPENDANT TAX OFFSETS
You can claim rebates for dependants if they have low separate net
incomes (SNI). The rebate is reduced by $1 for every $4 by which
the SNI of the dependant exceeds $282. The rebates for 2007/08
and 2008/09 are:
Dependant spouse and housekeeper rebates are not available for
any part of the year during which there is eligibility for Family Tax
Benefit Part B. From 1 July 2008 these rebates will be subject to an
income means test.
SENIOR AUSTRALIANS TAX OFFSET (SATO)
If you are of age pension age (even if not receiving a pension) you
can claim SATO. This effectively allows a single person to have
income up to $25,867 without paying tax whilst couples can earn up
to a total of $43,360 combined without paying tax. The thresholds for
2007/08 are:
PENSIONER TAX OFFSET
If you are a pensioner below age pension age and therefore not
entitled to SATO, you can claim a Pensioner Tax Offset.
Category Maximum Rebate $ Maximum Rebate $
2007/08 2008/09 Spouse or de facto 2,100 2,159 Child housekeeper 1,711 1,759 Invalid relative 770 792 Parent of taxpayer or spouse 1,540 1,583 Housekeeper with
de-pendant child 2,051 2,108 Housekeeper 1,711 1,759
Status Maximum Rebate $ Shading Out Income $ Single person 2,230 25,867-43,707 Couple (each) 1,602 21,680-34,496 Couple separated because of illness (each) 2,040 24,600-40,920
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The rates for 2007/08 are:
The tax offset is reduced by 12.5 cents for each dollar of income in
excess of the lower threshold.
EMPLOYMENT TERMINATION PAYMENTS
Special tax rates apply to Employment Termination Payments
(ETPs) in respect of amounts accrued after June 1983 (referred to as
"post June 1983 components"). The rate also depends on whether
the ETP arises from a taxed element (eg a superannuation benefit
which has borne superannuation contributions tax and
superannuation income tax) or an untaxed element (eg a "golden
handshake" paid direct by the employer, which has not previously
been subject to tax).
Medicare levy is charged in addition.
ACCRUED LEAVE
Special rates of tax apply to accrued leave payments on resignation,
redundancy or retirement. The rates payable depend on the type of
payments made and when they were paid. They also depend on
whether termination was due to resignation or retirement or whether
it was due to redundancy, invalidity or an early retirement scheme.
Rates of tax payable are shown in the table below:
These rates only apply to payments on termination. Medicare levy is
charged in addition. Whilst paid on termination, accrued leave
payments are not Employment Termination Payments (ETPs).
HIGHER EDUCATION LOAN PROGRAMME (HELP)
Previously known as HECS, this programme requires past university
students to repay part of their higher education costs through the tax
system.
Status Maximum Rebate $ Shading Out Income $ Single person 2,129 20,194-37,226 Couple (each) 1,610 16,734-29,614 Couple separated because of illness (each) 1,982 19,214-35,070
Taxpayer's Age when ETP
Paid Taxed Element (Max Tax Rate) Untaxed Element (Max Tax Rate)
Under 55 Up to $145,000 Over $145,000 Nil 20% 30% Marginal Rate 55-59 years Up to $145,000 Over $145,000 Nil 15% 15% Marginal Rate
60 years and over
Up to $145,000 Over $145,000 Nil Nil 15% Marginal Rate
Maximum Tax Rate Payment Type Resignation/Retirement
Pay-ments
Redundancy/Invalidity/ Early Retirement Scheme Long service leave:
Pre 16/08/78 5% at marginal rate 5% at marginal rate 16/08/78-17/08/93 30% 30% Post 17/08/93 Marginal rate 30% Annual Leave:
Pre 18/08/93 30% 30% Post 17/08/93 Marginal rate 30%
Payments are based on a percentage of annual income up to a
maximum of 8%.
Repayment income is calculated by adding the following items together:
•
Taxable income;
•
Net rental loss claimed in the tax return;
•
Total reportable fringe benefits shown on PAYG Payment Summary;
•
Any exempt foreign employment income.
FILM PRODUCTION INCENTIVES
Commencing from 2007/08 a 40% refundable tax rebate is available for
eligible domestic feature films and a 20% refundable tax rebate for other
eligible domestic media productions including TV series and
documentaries. Eligible international films will receive an improved
location rebate of 15% on qualifying expenditure. Qualifying
expenditure over $5 million on post production and visual effects will
also be eligible for the international tax rebate.
Under Section 8-1 of ITAA 1997 you can claim a deduction for an
expense to the extent that:
•
it is incurred in gaining or producing your assessable income; or
•
it is necessarily incurred in carrying on a business for the purpose of
gaining or producing an assessable income.
However, the expense cannot be deducted if:
•
it is capital or of a capital nature; or
•
it is of a private or domestic nature; or
•
it relates to the gaining or producing of exempt income; or
•
another provision of the Act prevents it from being deductible.
If the payment has been made for a dual purpose – partly private and
partly business, the expense can be apportioned. There are a number
of other specific provisions in the Act which expand or limit deductions
which can be claimed. If you are operating a business as a sole trader
or partnership, you must substantiate your car expenses and travel
expenses. If you are operating a business you can claim a deduction for
expenses incurred in running the business. Here we list numerous
types of business expenses which are deductible if incurred in the
relevant tax year.
ACCOUNTANT'S FEES:
If related to your business. Expenses related to management of your
income tax affairs are also deductible under Section 25-5.
ACCRUED LEAVE:
Only deductible when actually paid to the employee or to a business
purchaser.
Repayment Income Repayment Rate Below $39,825 Nil $39,825-$44,360 4% $44,361-$48,896 4.5% $48,897-$51,466 5% $51,467-$55,322 5.5% $55,323-$59,915 6% $59,916-$63,068 6.5% $63,069-$69,405 7% $69,406-$73,959 7.5% $73,960 and above 8%
TAX IQ 2009 TAX RETURNS SPECIAL
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ADVERTISING AND SPONSORSHIP:
Advertising costs to promote your business, goods and services. Also
advertising for staff and for entertainment for promotional or
advertising purposes, provided the entertainment is available to the
public. Sponsorship expenses promoting your business are also
deductible.
BAD DEBTS:
If there is no likelihood of recovery, you can claim a deduction if the
debt was previously included as taxable income and is written off in
the year in which it is claimed.
BALANCING CHARGES:
If you sell a depreciating asset for less than its written down value,
you can claim a deduction for the difference which is called a
"balancing charge". If sold for more than written down value, the
difference is assessable income.
BANK CHARGES:
Taxes and charges debited on your business bank statements.
BILL DISCOUNTS:
When you obtain finance through commercial bills, the discount is the
"interest" or the price you pay for the finance. If the proceeds are
used for working capital, claim the amount over the life of the bill. If
the proceeds are used to discharge existing liabilities, claim the
discount in full. Do not use bill finance to acquire capital assets, as
there is a risk that the discount will be treated as part of the capital
cost of acquiring the asset.
BLACK HOLE EXPENSES:
See Business Capital Costs.
BOATS:
Boat operating expenses, depreciation, interest or leasing charges if
the boat is used in a business – transporting goods or passengers,
fishing, chartering, etc. Owners of boats which are not used in a
business but are hired or leased out can only claim expenses up to
the amount of income generated. Excess deductions are quarantined
and can be claimed against income from the boating activity in future
years.
BODY CORPORATE FEES:
If the property is used for business purposes or to produce
assessable income.
BONA FIDE REDUNDANCY PAYMENTS:
Bona fide redundancy payments to retrenched employees.
Employees can receive these amounts on a tax-free basis up to a
maximum of $7,020 plus $3,511 for each completed year of service.
BOOKS:
Trade books, textbooks and professional books can be depreciated.
Eligible small business taxpayers may claim the cost of individual
books in full provided they, or the set to which they belong, cost less
than $1,000. Non business taxpayers (employees) may claim in full if
cost is $300 or less.
BORROWING EXPENSES:
These include legal expenses, stamp duty, valuation and survey fees,
etc. and are deductible if the funds are used for income producing
purposes. The deduction is spread equally over the term of the loan
up to a maximum of five years. When the loan is repaid you can claim
a deduction for expenses of discharging the mortgage.
BRIBES:
You cannot claim a deduction for a bribe, but you can claim payments
to
foreign public officials
if:-
•
the payment is not against the law of the foreign country; or
•
the amount is paid to expedite or secure performance of a routine
Government action of a minor nature.
BUILDING LEASES:
Expenses of repairing, registering or stamping of a lease agreement or
its assignment or surrender can be claimed.
BUSINESS CAPITAL COSTS:
Capital expenditure incurred in relation to a past, present or
prospective business being, or to be, carried on for a taxable purpose
can be deducted over 5 years if it is not otherwise deductible or
included in the cost base of an asset for CGT purposes.
The claim is made in equal instalments over 5 years and includes:
•
Business capital expenditure incurred in relation to an existing
business
•
Expenditure incurred in relation to a past or prospective business;
•
Expenditure incurred in terminating a lease or licence if the
expense is incurred in the course of carrying on or in ceasing a
business.
Expenditure deductible under this heading will include costs of
establishing a business structure, converting it, raising equity,
defending it against a takeover, liquidating the business and other
costs incurred in ceasing to carry on business.
CAR EXPENSES:
All car expenses incurred in operating your business. These include
interest and leasing charges, petrol, oil, repairs, registration, insurance,
motorist's association fees, tolls and parking (but not when the car is
used to commute from home to work and parked at or near the
workplace). If you are operating as a sole trader or partnership, you
must substantiate all car expenses. If the car is garaged at an
employee's home, you must maintain fringe benefits tax records
required to ascertain whether FBT is payable.
CHILDCARE:
All expenses incurred in providing recreation or childcare facilities for
employees on your business premises. These are exempt from FBT.
CLEANING:
Cleaning costs of business premises or of business plant or machinery
and vehicles.
CLOTHING:
Cost of buying, renting, replacing and maintaining clothing, uniforms
and footwear if it is:-
•
protective in nature;
•
occupation specific and not conventional in nature;
•
a compulsory uniform; or
•
a non-compulsory uniform or wardrobe that has been entered on
the Register of Approved Occupational Clothing.
COMMISSION:
Commission paid in the normal course of operating your business such
as commission payments to sales people. Commission payments on
sale of capital assets form part of the cost base of the asset.
COMPUTER EXPENSES:
Costs of maintaining computers, testing and minor alterations and
modifications including remedying of defects. Website maintenance,
content updating, web hosting and service provider's fees, annual
domain name registration costs are also fully deductible. If your
website is updated with new content or design changes involving "new
functionality" the cost will be treated as software and can be
depreciated over 2.5 years. The cost of computer hardware can be
depreciated over the effective life.
COMPUTER OPERATING COSTS:
Costs of maintaining your computer systems and software, internet and
email access, are deductible if business related.
CONFERENCES AND SEMINARS:
The cost of holding a seminar (or conference, lecture, meeting or
training session) can be claimed if the function is held for business
purposes. Food and non-alcoholic drinks provided are deductible and
exempt from FBT provided the function lasts at least four hours.
TAX IQ 2009 TAX RETURNS SPECIAL
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If you hold a public fee paying function, you are conducting the
function as a business. This means that the subject of the function
need not relate to a particular business.
CONSUMABLE STORES:
These include such items as stationery, computer discs, oils and
greases. Farmers need to acquire fertiliser, fuel, fencing materials,
etc. Expenses that are incurred in acquiring consumable stores are
fully deductible and you do not have to account for any unused items
at the end of a financial year.
COPYRIGHTS AND PATENTS:
These costs are treated as capital costs to be amortised over the
effective life of the property. The effective lives of different types of
intellectual property are:-
•
standard patent - 20 years
•
innovation patent - 8 years
•
petty patent - 6 years
•
registered design - 15 years
•
Copyright - the shorter of 25 years or time to expiry date
•
licence (excluding copyright) - years to expiry
•
copyright licence - the shorter of 25 years or time to expiry
date
CREDIT CARD CHARGES:
Merchant fees paid for provision of credit card or EFTPOS facilities
to customers. Credit card charges relating to the use of credit cards
for business purposes.
DEATH AND DISABILITY BENEFITS:
Premiums paid for death and disability benefits for members are
deductible to complying superannuation funds.
DEBT/EQUITY SWAPS:
If you have a substantial debt owed to you by a company and swap
that debt for shares in the company, you can claim a loss if you later
dispose of those shares at a loss.
DEFALCATION:
Losses arising from the theft, embezzlement or defalcation of money
by an employee or agent if the money has previously been included
in your taxable income. Deductions for stock losses are automatically
generated when you next undertake a physical inventory.
DIRECTOR'S FEES:
Fees paid to directors for their services. You should deduct PAYG
withholding amounts before payment. If the fees are authorised by a
shareholder's resolution, you may claim the amount accrued even if
unpaid at year end.
EDUCATION:
Costs of providing work related training or skills to employees
including costs of obtaining technical or professional qualification.
ELECTRICITY:
Light, power and heating costs for business or office premises.
ELECTRICITY CONNECTION COSTS:
Costs incurred in connecting mains electricity or in upgrading an
existing connection to business premises can be claimed over 10
years. The amount is claimed in 10 equal instalments.
EMPLOYEE BENEFITS:
Benefits provided to employees, but be aware that most of these will
be subject to fringe benefits tax. Benefits exempted from FBT are
contributions to complying superannuation funds and employee
share schemes. Laptop computers, mobile phones, electronic
organisers and briefcases are also exempt. If you provide shares to
employees under Division 13A and the shares are qualifying shares,
you can claim a deduction for the market value of the shares (less
any amount received) up to a maximum of $1,000 for each
employee. The deduction can be claimed when the share or right is
actually acquired by the employee.
EMPLOYMENT AGREEMENTS:
Expenses incurred in negotiating and/or preparing employment
agreements.
ENTERTAINMENT EXPENSES:
These are not deductible unless you are in the business of providing
entertainment to fee paying customers. You can also claim
entertaining expenses incurred to promote or advertise your
business or its goods and services to the public generally. If
entertainment is provided to employees, the cost will be deductible,
but FBT will be payable.
ENVIRONMENTAL IMPACT STUDIES:
You can claim such expenditure over the lesser of 10 years or the life
of the income-producing project to which it relates. If your project
ends or is abandoned, the remaining amount of the undeducted
expenditure can be claimed in that year.
ENVIRONMENTAL PROTECTION EXPENSES:
Costs of combating or rectifying pollution or waste arising from an
income-producing activity is generally fully deductible.
EXCHANGE GAINS AND LOSSES
If you are involved in international transactions, perhaps through the
importing or exporting of goods, you may incur losses or achieve
gains arising from foreign currency fluctuations. Any losses are
deductible whilst gains are assessable.
FARM MANAGEMENT DEPOSITS:
If you are a farmer with not more than $65,000 in non-primary
production income, you can make an investment in a farm
management deposit with an approved financial institution. The
deposit will be tax deductible, whilst withdrawals are subject to tax.
FREIGHT AND COURIER EXPENSES:
If incurred in the normal course of running your business.
FRINGE BENEFITS:
Benefits provided to employees (see Employee Benefits).
FRINGE BENEFITS TAX:
The amount of fringe benefits is grossed up, then taxed at 46.5%.
(This is to make the FBT equal to the tax, at maximum rates, that
would be payable on increased wages paid to enable the employee
to acquire the benefit from after tax wages). FBT payments are fully
deductible on an accruals basis. You can claim the actual FBT
liability for the FBT year ending on 31 March plus the June
instalment, but you must deduct the instalment you paid in the
previous June.
GENERAL INTEREST CHARGE:
If you are late paying your income tax or PAYG, there is a general
interest charge (GIC). This charge is tax deductible. Interest on
borrowings to pay personal income tax are not deductible, however if
a business overdraft facility is used to pay the tax, the ATO accepts
that the borrowings are connected with the carrying on of business
and therefore tax deductible.
GIFTS:
If you are operating a business and pay subscriptions or make
donations purely for business purposes and as a form of advertising,
you may claim these in full. Gifts of $2 or more to charitable
organisations registered as Deductible Gift Recipients are deductible.
Gifts of works of art can be deductible under the Cultural Gifts
Program and may be spread over five years if required.
Gifts of heritage properties made to the National Trust also qualify for
deductions and may be spread over five years. Such gifts need to
be valued. The valuation fee is deductible. Such gifts can also be
made by will and a deduction will be allowed in the year the taxpayer
dies. Gifts to employees are deductible. If for less than $300 and
made only on an irregular and infrequent basis, they will be also be
exempt from FBT. Deductibility for contributions to a registered
political party was abolished from 1 July 2008.
TAX IQ 2009 TAX RETURNS SPECIAL
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HOME OFFICE EXPENSES:
Expenses incurred in operating an office from home. Power, lighting,
etc will need to be apportioned on the basis of actual expenses
incurred or can be claimed at the rate of 26 cents per hour. If a
particular part of your home is set aside for business purposes you
can claim occupancy expenses but that will affect your main
residence exemption for CGT purposes.
INSURANCE:
Premiums paid for all types of business insurance including fire,
burglary, public liability, motor vehicle, professional indemnity, loss of
profits, workers' compensation. Keep in mind the need to apportion
premiums paid in advance if you are not an eligible small business
taxpayer and the pre-payment exceeds $1,000.
INTEREST:
Interest on moneys borrowed for the purpose of gaining or producing
assessable income or carrying on a business is deductible. It is the
purpose for which the borrowings are used that matters, not the
security provided. Interest incurred before or after the business
commences or ceases may still be fully deductible.
LEASE INSTALMENTS:
Where you acquire vehicles or equipment for business use by lease,
the lease payments are fully deductible. Your final residual payment
will normally be treated as the purchase cost of the asset. You can
then claim depreciation on that amount over the remaining effective
life.
Lease payments on luxury motor vehicles (costing $57,123 or more)
are deemed to be hire purchase agreements for tax purposes.
Instead of claiming the lease instalment you can claim imputed
depreciation (up to the depreciation cost limit) and interest.
LEGAL EXPENSES:
If incurred in relation to business operations. Debt collection
expenses, preparing or reviewing contracts, preparing leases,
mortgage documents are business operating expenses. If in relation
to the purchase or sale of capital assets, legal costs are not
deductible and should be included in the cost base of those assets.
LICENCES:
If you have to take out an initial licence when you start the business,
you cannot claim a deduction for that unless it is in the nature of an
annual licence fee. Renewals of licences can be claimed in full.
LOSSES FROM PRIOR YEARS:
Tax losses incurred in prior years, not yet recouped, can be carried
forward and deducted from income in the current year.
MISAPPROPRIATIONS:
Losses arising from the theft, embezzlement or misappropriation of
money by an employee or agent if the money has previously been
included in your taxable income.
The relevant section has been extended to allow deductions for
misappropriations arising from the disposal of a depreciating asset or
a CGT asset.
MOTOR VEHICLE EXPENSES:
All expenses incurred in respect of vehicles required to operate your
business whether cars, trucks, buses, motor cycles, etc. These
include interest and leasing charges, petrol, oil, repairs, registration,
insurance, etc.
NEWSPAPERS AND MAGAZINES:
Newspapers and magazines purchased for business use – perhaps
to have available at reception or needed to check contracts and
tenders.
PARKING FEES AND TOLLS:
Parking fees and tolls paid for the operation of worker vehicles.
PRIMARY PRODUCTION EXPENSES:
Expenses such as agistment fees, service fees, droving, fertiliser,
fodder, insecticides, weed killers, vehicle costs, mustering, shearing,
power, fuel, stationery, rates, farm rents, repairs, wages, telephone,
vet expenses, water rates and charges, insurances and worker's
compensation. (See later for checklist)
RATES AND LAND TAX:
Rates and land tax charges on land and buildings used to produce
income. Where premises are partly used for business purposes, the
deduction must be apportioned. If you have a room in your dwelling
used only for business purposes, you may claim a deduction for
rates and other expenses by apportioning the total cost on a floor
area basis.
RELOCATION EXPENSES (STAFF):
If paid by the employer. These are not subject to fringe benefits tax.
However, if associated with employment agreements, a fringe benefit
may arise where the employer pays or reimburses an employee's
costs.
RELOCATION EXPENSES (BUSINESS):
Costs of relocating a business including costs in moving stock and
plant. Purchase costs of new fitouts and premises are capital.
Depreciation and capital works allowances can be claimed.
RENT:
Rent incurred for use of business premises or other assets. Also
lease outgoings such as rates, maintenance, insurance, etc. You
can also claim rent applicable to that portion of your rented home
which is used as a home office, provided the area is set apart for
business use.
REPAIRS:
Repairs to business vehicles, plant and machinery, premises and
improvements. Sometimes it is difficult to determine whether the
work done is a repair (deductible) or an improvement (non-deductible
capital cost). If the item is substantially improved, added to, altered
or modernised, it will be treated as an improvement. If the work is
simply bringing the asset back into its original condition, it will be a
repair. (But you cannot claim for repairing a run-down property that
you purchased cheaply.)
REPLACEMENTS:
Costs for replacing small items, tools, etc if under $100, can be
claimed in full. Items costing between $100 and $1,000 must be
treated as plant and applied to the low cost pool. Items costing more
than $1,000 must be individually depreciated. If you are an eligible
small business taxpayer you can fully claim all such items costing
less than $1,000. If you are a non-business individual taxpayer you
can fully claim such items costing less than $300.
RESEARCH AND DEVELOPMENT:
Companies can claim expenses incurred in R&D at the accelerated
rate of 125%. Where companies increase their level of R&D
expense, the rate is increased to 175% for the additional
expenditure. These claims are subject to a $20,000 threshold and
must meet strict criteria and be subject to approval by the Industry
Research and Development Board.
RETIRING ALLOWANCES:
Retiring allowances paid to retiring employees, directors or to their
spouses, widows or widowers are generally deductible under Section
25-50 if paid in relation to past services.
SALARIES AND WAGES:
Salaries and wages paid to employees are deductible when these
are incurred. You can therefore accrue any wages (including
bonuses) accrued but unpaid at the end of the financial year. Annual
leave, sick leave and long service leave can be deducted when
actually paid.
TAX IQ 2009 TAX RETURNS SPECIAL
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SEMINARS AND CONVENTIONS:
Registration fees and travel expenses incurred in attending seminars
and conventions which relate to your business. You may have to
apportion the expenses if you undertake a sight seeing trip as well.
SHORTFALL INTEREST CHARGE:
This is the interest rate charged by the Tax Office where returns have
been amended producing tax shortfalls relating to income tax
assessments for 2004/05 and later years. The shortfall interest charge
(SIC) is tax deductible.
SICKNESS AND ACCIDENT INSURANCE:
If the policy provides income benefits during a period of disablement,
the premium is deductible. Premiums for policies providing
non-taxable lump sum benefits are not deductible.
STATIONERY:
Printing stationery office supplies used for business and promotional
purposes.
SUBSCRIPTIONS:
Subscriptions paid to trade, business or professional associations
directly related to the business. Also subscriptions to technical or
trade journals and other similar publications which, in appropriate
cases, may include newspapers, internet use and even pay TV.
SUPERANNUATION:
Superannuation contributions made on behalf of employees to
complying superannuation funds. Contribution limits are $50,000 (if
under 50) or $100,000 (if 50 or over). Super funds are not permitted to
accept contributions in respect of employees aged 75 or over unless
they are mandated.
Employers can claim full deductibility for all contributions irrespective
of the amount. However, the super fund will be taxed at 15% up to the
above limits and 45% on any contributions in excess of those limits. If
your employment income is less than 10% of your total income, you
can claim a deduction for a personal superannuation contribution
made on a similar basis to the above.
SUPERANNUATION GUARANTEE:
Superannuation guarantee support amounting to 9% of ordinary time
earnings provided it is paid within the time allowed. All contributions in
respect of each quarter must be paid to the relevant superannuation
funds by the 28th day of the following month. Claims can only be
made in the year that the payments are actually made.
TAX AUDITS AND APPEALS:
Professional costs incurred in assisting in a tax audit or in objecting or
appealing against a tax assessment.
TAX SHELTERS:
Primary production, forestry, films and research and development
projects become available each year as tax advantaged investments.
If contemplating investment, make sure that the project has been
approved and a valid product ruling has been issued by the Tax Office.
Check with your accountant or investment advisor before proceeding.
TAX-RELATED EXPENSES:
All costs incurred in managing your tax affairs are deductible under
Section 25-5. This includes costs of preparing your income tax returns
(whether business or personal), taxation audits, appeals and
objections, tax consulting. Deductible expenses include your
subscription to
Tax IQ
, travelling costs and accommodation if needed
to see your tax consultant.
TELEPHONES:
Telephone expenses relating to business operations. If working from
home, you need to apportion costs between business and private use,
preferably by dissecting your telephone account or keeping a four
week diary.
TENDER COSTS:
All tender costs (whether or not the tenders were successful) if related
to your business operations.
TRADING STOCK:
Section 8-1 enables you to claim a deduction for the cost of acquiring
trading stock provided the items have either been sold in the year of
purchase or have been included as trading stock on hand at the end
of the year. Costs of moving trading stock from one location to
another are also deductible.
TRANSPORT:
Costs of moving and transporting staff between business premises or
work sites. Costs of transporting materials, trading stock and
equipment.
TRAVELLING EXPENSES:
Travelling expenses directly related to your business. If you
undertake a trip, partly for business purposes and partly for private
purposes, you must apportion the expenses. You must keep
receipts for all expenses, which include meals and accommodation,
incidentals, airline tickets, motor vehicle costs, taxis, etc. If the trip
lasts more than five nights, you must maintain a travel diary, which
must include the time, place and nature of each business activity and
the duration of that activity.
WEBSITE OPERATING COSTS
Costs of website maintenance, content updating, web hosting and
service providers' fees, annual domain name registration costs. If
your website is updated with new content or design changes
involving "new functionality" the cost will be treated as software and
can be depreciated over 4 years.
WORKING LUNCHES:
The provision of tea and coffee and meals on work premises during a
working day to employees. These are also exempt from FBT.
• Accounting Fees
• Agistment charges
• Animal husbandry costs
• Bookkeeping costs
• Broker's charges
• Commissions (on sale of livestock and farm produce)
• Computer operating expense
• Depreciation
• Dips, drenches, etc.
• Droving
• Electricity
• Employee keep (food)
• Farm management deposits
• Fencing repairs
• Fertiliser
• Fodder
• Freight and cartage
• Fuel
• Fumigants
• Grapevines established pre 1/10/04 (4 year write off)
• Grapevines established from 1/10/04 (effective life write off)
• Horticulture establishment (effective life write off)
• Insecticides
• Insurance premiums (farm risks)
• Interest (farm borrowings and hire purchase)
• Landcare expenditure
• Lease payments (farm equipment and vehicles)
• Livestock (but must include value as income at end of year)
• Mains electricity connection
• Motor vehicle expenses
• Mustering
• Printing and stationery
• Protective clothing
• Rates and land taxes
• Rent (employee accommodation)
• Rent (farm property)
• Repairs and maintenance
• Rural newspapers and journals
• Seeds
CHECKLIST FOR PRIMARY
TAX IQ 2009 TAX RETURNS SPECIAL
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• Service fees (animal breeding)
• Shearing expenses
• Software (2.5 year write off or 30% if small business)
• Soil conservation
• Subscriptions (farm organisations)
• Telephone
• Telephone lines (10 year write off)
• Timber depletion
• Trading stock (but must include value as income at end of year)
• Veterinary fees
• Wages and salaries
• Water charges and levies
• Water facility expenditure (three year write off)
• Weed killers
• Wool tax
• Worker's Compensation
• Working dogs
• Working up (land preparation for crops)
TAX OFFICE COMPLIANCE FOCUS:
Again this year the Tax Office will focus on deductions for work
related expenses, rental property expenses and capital gains from
sale of property and other assets.
Work related expenses claimed employees in the following
occupations will receive special attention:
• Tourism, travel consultants and tour guides
• Fitness and sporting industry employees
• Construction trades people employees
• Guards and security employees,
• Mining site employees;
• Nurses, medical practitioners;
• Chefs;
• Those occupations with a pattern of large and/or rising claims
The Tax Office has also embarked on a project focusing on the
compliance behaviour of high income earning executives and
directors. The Tax Office has announced that it has cross-checked
tax returns against a range of data including financial institutions,
State and Territory revenue and property sales information and
Australian Stock Exchange data. In particular it will be looking for
capital gains from assets sold to contribute to superannuation and at
assets transferred into super funds.
The Tax Office will also pay particular attention to correct disclosure
by investors relating to:
• income and expenditure of rental properties;
• dividends and interest;
• sale of investments;
• avoiding dodgy tax schemes;
• superannuation contributions.
CHECKLIST:
Here is a checklist of work related expenses which may be claimed
by employees if incurred.
• Bank charges (if account used for earning interest or receiving salaries)
• Briefcases (used for work, fully deductible if cost less than $300)
• Calculators and electronic organisers
• Car expenses (must be fully substantiated)
• Clothing – must be:
• protective;
• occupational specific;
• a compulsory uniform; or
• a non-compulsory uniform registered with the Registry of Occupational Clothing.
• Computers and software (depreciable if used for work purposes – may need to apportion between business and private)
• Credit card charges – if card used for work-related purposes
• Driver's licence (extra cost relating to special endorsements)
• Drycleaning (if clothing is deductible)
• Election expenses (local Government or parliamentary members)
• Employment agreement expenses (but not for a new employer)
• First Aid courses (if relating to work)
• Fitness expenses (if high degree of physical fitness required, eg physical training instructor – but not physical education teacher)
• Gaming licence (if needed for work)
• Glasses (of a protective nature only)
• Home office expenses
• Internet and data access (if work-related or related to share investing)
• Laundry and clothing maintenance (if cost of clothing is deductible)
• Overtime meal expenses (if an award allowance is received)
• Parking fees and tolls
• Practicing certificates (for professionals)
• Professional books (claim in full if under $300 otherwise depreciable)
• Self-education expenses (subject to criteria)
• Sickness and accident insurance (if proceeds are of an income nature)
• Stationery (required for work purposes, eg time planners, log books, etc.)
• Subscriptions to professional or business associations
• Sunscreen, sunglasses and hats (outdoor workers)
• Tax agent fees (including travel and accommodation and related tax return costs)
• Technical and trade journals
• Telephone expenses (if work-related)
• Tools of trade (fully deductible if under $300, otherwise depreciable)
• Travel expenses and meals (must be work-related and substantiated, not to and from work)
• Union fees
Claims for work-related expenses, car expenses and travelling
expenses, must be substantiated and you need to be able to show
that the expense was incurred in earning your income and that it is
not of a private or capital nature. Keep in mind that you can only
claim deductions if the cost comes out of your own pocket. If
reimbursed by your employer, he claims the deduction not you. If
work-related expenses exceed $300 the expenses must be
substantiated.
SPECIFIED OCCUPATIONS:
Here are some special deductions for employees of specified
occupations.
JOURNALISTS AND RADIO/TV PRESENTERS:
• Costs of accessing internet and pay TV for researching stories.
• Newspapers and magazines used in researching stories.
• Social functions where you are reporting on them.
• Sunglasses, sunhats and sun screen lotions where the nature of your work requires you to work in the sun for all or part of the day.
NURSES:
Traditional uniforms of cap, white uniform dress, cardigan and
special non
‑
slip shoes, laboratory coats, aprons, admissions to
nursing agencies, annual practising certificates and nurses fob
watch. Cost of buying, renting, repairing and cleaning work related
uniforms, occupation specific clothing or protective clothing,
laboratory coats, aprons and special non
‑
slip shoes, commissions to
nursing agencies, annual practising certificate and nurses fob watch.
Self education expenses if it is to maintain or improve specific skills
or knowledge required in your current employment.
FACTORY WORKERS:
• Safety glass, goggles, gloves, helmets, hearing protection and breathing masks
• Wet weather gear or safety boots worn when using chemicals or high pressure hoses
• Boning and filleting knives
• Forklift licence and cost of special licences
• Thermal underwear if working in extreme environments such as a chiller or freezer
• Sunglasses, sunhats and sun screen lotions if you are required to work in the sun for all or part of the day
• Depreciation on work related equipment
• Licence renewals
