TAX RETURN NOTES FOR 30 JUNE 2009 - TAX YEAR 2008/09 - RETURNS DUE JULY - OCT 2009.
By Hugo Schouten Accountant, Adelaide, Australia.
Information mainly for Individuals and Small Business.
TAX RETURN NOTES FOR 30 JUNE 2009 - TAX YEAR 2008/09 - RETURNS DUE JULY - OCT 2009.
1. AUDIT TARGETS FOR 2009.
Deductions for work expenses will be under scrutiny. Mainly car claims, travel claims, uniform claims and self-education. If your claim is higher than the average for your occupation then expect a follow up from the ATO.
Many occupations do not readily have car or self-education claims available and if you claim, expect some action.
Occupations to be targeted are
Chefs (especially home to work travel),
Nurses and Carers (especially Self Education expenses, allowances and travel costs)
and employee medical practitioners.
2. CLAIMING FOR PERSONAL SUPERANNUATION CONTRIBUTIONS.
The 10% rule for mainly Self-employed needs to be carefully calculated before you claim your super deduction. The danger is also in the paperwork required and the timing of the new written Section 290-170 notice to the Super Fund.
3. RENTAL PROPERTY CLAIMS UNDER SCRUTINY.
Interest deductions are often overstated. Many times the property is not genuinely available for rent for the whole year. Travel expenses are incorrectly claimed for inspecting an Interstate property when it is mainly a holiday. Initial repairs are incorrectly claimed when they are capital. Capital improvements (eg kitchen, bathroom) are incorrectly claimed as repairs. Expect to hear from the ATO.
4. NEW EDUCATION TAX REFUND
A new Education Tax Refund is available for education expenses of Children from 1/7/08 to 30/6/09. This claim is made in the 2009 Tax Return.
To make this claim a person must be entitled to receive Family Tax Benefit Part A. Only this person can make the claim.
The claimant can claim eligible education expenses up to $750 for a Primary child or up to $1500 for a Secondary school child. The refund is 50% of the expenditure i.e. $375 for a Primary and $750 for a Secondary school child.
Receipts must be available to verify the eligible education expenses and the receipt of FTB part A must be verified.
A claim can only be made for the time that the child was at school during the Tax year.
Any excess expenditure can be carried forward but only for one year.
Where the taxpayer entitled to claim the offset does not need to lodge a tax return, an ATO form 'Education Tax Refund' must be sent to the ATO or by phone.
Eligible education expenses which qualify for the Refund are ver limited. Check carefully the list of eligible Education expenses at the ATO.
5. NEW FIRST HOME BUYERS SAVINGS ACCOUNTS APPLY.
The interest received is taxed by the bank but deducted from your account.
The interest is not shown on the Tax return.
6. INCOME LIMIT TO CLAIM DEPENDENT OFFSET.
The income limit where someone can claim the dependent offset has been limited to $150,000.
7. NEW RULES FOR STAFF SHARES.
Where a staff members is granted shares in the company at a discount, there are 2 ways of taxing the discount: (1) up front in the year the shares are granted. OR (2) at a later date, known as the cessation time, which may be 10 years in the future.
In the Tax return for 2009 an election must be made which of the 2 methods the taxpayer wishes to apply.
8. INVESTMENT ADVICE AND INVESTMENT SEMINARS
Many people expect investment advice and investment seminars to be tax deductible. However this is generally not so.
Investment advise to establish a plan (even where investments have already been owned) are capital.
Investment seminars on buying properties and negative gearing are not deductible.
Travel costs for inspecting potential properties are not deductible.
Costs for managing a portfolio are deductible (generally this is an annual charge).
Go to Australian Tax Questions and Answers. Includes current TAX RATES FOR 2008/09.
Maintained by Hugo Schouten, Accountant and Tax Agent
