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Are you behind in your tax returns?

This article explains to you the simple steps to take to catch up on outstanding tax returns or late tax returns. With the right assistance, you could be up to date with all your refunds within a month

 

1.   Find out how many years of tax returns are overdue

Best to contact your accountant and ask them to check your lodgement status. If you don’t have a current accountant send our office a message https://www.smbaccounting.com.au/contact/and one of our accountants will be in contact to discuss as tax agents, we have more access to your tax records via the tax agent portal. This is a 2 minute job where we can look back to 2001 to see which returns are outstanding.

 

2.    You may not need to lodge a return at all!

You need to lodge either a tax return or in many circumstances a non-lodgement advice as long as certain conditions are met eg your income was less than the tax free threshold and you had paid no tax.

Again your accountant can advise you on whether any conditions apply to your circumstances https://www.smbaccounting.com.au/contact/

 

3.    Get all your paperwork together

This is the most overwhelming step for most, and this is where we can assist as accountants by providing your ATO prefilling report. This is a report where the ATO collects information from various sources by matching up your Tax File Number.

Prefilling reports are available from 2007 onwards, however you will still need to collect your receipts if you wanted to claim any deductions. Just remember though, some deductions are available without substantiation which your accountant can assist you with https://www.smbaccounting.com.au/contact/

 

4.    Complete your returns

An accountant can prepare the returns for you as our software backdates to the year 2000, if not further beforehand. Otherwise you would have to manually lodge prior years and this can take a lot longer to finalise.

 

Your refunds could be back in your bank within 2 weeks!

 

If you are a business,  have outstanding returns and financial statements to prepare and you are avoiding due to the cost of getting them done, we will allow that cost to be paid over a 12 month period!

Contact SMB Accounting now! Phone 0437 726 731 or https://www.smbaccounting.com.au/contact/

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Six key requirements for tax compliant invoicing

There are a number of critical parts to your invoicing in order to make sure your invoices are tax compliant.

What are the must haves?

  1. Ensure the words ‘Tax Invoice’ are prominent
  2. Clearly display your full business name and address
  3. Your ABN (Australian Business Number) must be on the document
  4. The date of invoice is displayed
  5. The description of the product purchased by your customer, quantity and of course the price
  6. Display the total and the GST amount. You have 2 options of how to display this.
  • Display the GST separately and then the total value of what is sold (including GST) – Called a GST Exclusive Invoice
  • Total price of sale (including GST) with the wording “Total price including GST” – Called a GST inclusive invoice

 

NOTE: If you have sales of more than $1000 on your tax invoice you are also required to add your customer’s identity and their address or ABN.

 

If you would like any further information, please do not hesitate to conact our office 0437 726 731

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Interest Earned from the bank…

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If you have any money in a bank account, more than likely you have earned an amount of interest on your money. This interest is required to be declared in your tax return as part of your Taxable Income for the year.

The ATO compares the amount you have declared with the amounts reported by the banks to the ATO directly. If there is a difference, they will adjust your income, and this usually happens many months after you have received your refund. This adjustment may result in tax to pay to the ATO and will include a penalty as well as interest to be paid.

Therefore, it is important to ensure all the amounts of interest earned are declared in your Income Tax Return. SMB Accounting can easily ensure this when completing your return by using data available from the ATO

How to find out your interest amounts…

Usually you will receive a statement from your bank or institution which details the amount of interest earned on each account held with that bank. If not, you can always check your internet banking or go to the branch itself

Joint accounts…

If you have a joint account with a family member or an associate/friend remember to only include your share of the interest earned which is usually 50%. Eg if your joint account with your spouse earned $300 interest, then each of you would include $150 (50% of $300) in your tax returns.

Do not deduct account keeping fees from the interest amount

Trusts, Partnerships or other sources of Interest Income….

If you have earned interest from any of these sources, they are returned in a different section of your tax return which SMB Accounting can complete this when compiling your return.

Failure to provide a tax file number…

When opening a bank account you would have had the option to provide a tax file number (TFN) . If you didn’t provide your TFN, the bank is obligated by the law to withhold tax from your interest payments. If this has happened, you will be provided with the amount of tax withheld on your interest statement and this amount is to be included in your Tax Return as it will be offset against other tax payable or be refunded.

This can become quite complicated, so if you are unsure whether you need to include your interest or any other questions on your tax return? Contact us on mailto:stephen@blakeaccountants.com.au and we can provide you with guidance and advice based on your own particular circumstances.

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Self-Education deductions…

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With most universities now back hard at the study and attending classes, it is a great time to look at the available tax deductions for your self-education expenses which you have and will incur into the future.

What are Self-Education Expenses?

These are expenses incurred in relation to courses provided by a school, college, university or other training provider that you personally undertake. You must be undertaking this course to gain a formal qualification in your current profession, business or trade in order to be eligible for any tax deductions.

You can only claim if there is a direct connection between the course you studied and your employment at the time

According to the ATO, you must satisfy ONE of these four conditions.

You need to be:

  1. Upgrading your qualifications for your current role.
  2. Improving your skills or knowledge used in your current role.
  3. A trainee and the course you take forms part of the traineeship.
  4. Able to show the course you were taking led to, or was likely to lead to, an increase in your current salary.

You cannot claim expenses if your intention is to change to a different job or you are looking at obtaining money from  different income stream eg starting a new business

Expenses you can claim

You can claim the following expenses in relation to your self-education:

  • accommodation and meals (if away from home overnight)
  • computer consumables
  • course fees
  • decline in value for depreciating assets (cost exceeds $300)
  • purchase of equipment or technical instruments costing $300 or less
  • equipment repairs
  • fares
  • home office running costs
  • interest
  • internet usage (excluding connection fees)
  • parking fees (only for work-related claims)
  • phone calls
  • postage
  • stationery
  • student union fees
  • student services and amenities fees
  • textbooks
  • trade, professional, or academic journals
  • travel to-and-from place of education (only for work-related claims)

Some travel for journeys cannot be claimed, but you may be able to offset the cost of these journeys against the $250 reduction.

$250 reduction

Self-education expenses are broken into five categories. If all of your self-education expenses are ‘category A’ items then you have to reduce your deduction by $250. Above are examples of category A items

However ‘category E’ expenses’ can be used to offset the $250. Some category E items are childcare costs, computer purchases and travel from place of study to home.

This can become quite complicated, so if you are unsure whether you need to reduce your claim on this year’s tax return? Contact us on stephen@blakeaccountants.com.au and we can provide you with guidance and advice based on your own particular circumstances.

 

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Your Most common Tax Deductions…

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With everyone now in the midst of compiling their information to complete their tax return or to give to their accountant/tax agent to complete, it is timely to be reminded of the common deductions available to most taxpayers.

  1. Mobile Phones

Almost everyone now uses a mobile phone for work purposes. Either calling a colleague or clients for information regarding your work performed as a convenience to you or the other person. Well, if you do, then you are entitled to claim the costs of those calls as a deduction. Remember though, you can only claim the costs of the work related calls, not private calls.

Example: if your mobile phone plan is $60 per month and you estimate that 45% of use is for work purposes, you can then claim 45% of $60 = $27 x 12 for the year, which equals $324 deduction

      2. Cost of Managing Tax Affairs

You can claim a deduction for expenses you incur in managing your own tax affairs, including:

  • preparing and lodging your tax return and activity statements
  • travel, to the extent it is associated with obtaining tax advice – for example, the travel costs of attending a meeting with a recognised tax agent
  • obtaining a valuation needed for a deductible gift or donation of property, or for a deduction for entering into a conservation covenant
  • an interest charge the ATO impose on you for any outstanding tax payable

generally these expenses are claimed in the year you paid for them

     3. Home Office Expenses Claim

If you ever have to do some work at home ie checking emails and responding, you may be entitled to claim deductions for home expenses including a computer, phone or other electronic devices you are required to use for work purposes, as well as a deduction for running costs.

As an employee, generally you can’t claim a deduction for occupancy expenses, including rent, mortgage interest, council rates and house insurance premiums. however as a self employed or home based employee, occupancy costs maybe a tax deduction.

How to claim these expenses can become complicated so best to contact SMB Accounting (Contact) and we can increase your tax refund.

      4. Claiming Work Related Car Expenses

You maybe required to use your own vehicle for work reasons which would enable you to usually claim fuel, maintenance and registration costs. Only two methods for calculating your deduction are available, either logbook method or cents per kilometre method.

the logbook method you are required to keep a logbook for a 12 week period to calculate the claimable percentage of your costs. Work-related kilometres are those traveled in a car you own while you earn your income eg driving between jobs. Cents per kilometre is an allowance of 66cents per work related kilometres up to a maximum of 5000km can be claimed

Example: if you traveled in total for the year 1254km for work, your claim would be 1254 x 66cents = $828 tax deduction

Depending on your circumstances, either method may result in a larger claim, so if you are uncertain contact SMB Accounting on our Contact page and we can help you out with which method is best for you!

These and many more deductions may apply to your circumstances, Contact SMB Accounting now and let’s increase your tax refund

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Company owners get ready for the price hike courtesy of ASIC..

imagesThe Australian Securities and Investments Commission (ASIC) has released details of the arrangements to be set in place to recover actual costs in performing their role as a regulator. Their costs for operating expenditure (excluding depreciation and fee-for-service activities) and capital expenditure will be recovered from the areas they regulate regulate.

All business which are regulated by ASIC eg Companies, are being encouraged to be conscious of the increase fees in this financial year 2017-18.

The new fees will begin to be billed by ASIC in January 2019 but will apply to this financial year and this is the reason it is imperitive that businesses be aware now.

For the larger listed companies, the annual fees will be calculated by a calculationinvolving their market value, whereas smaller listed companies under $5million will pay a fixed fee of $4000.

Small Proprietory companies are to be charged a flat levy, via an increase in the annual review fee for those companies from 1 July 2018. The amount of this increase to recover costs fro this sector is anticipated to be available later in the year in October.

If you have any questions in relation to these fees or other issues you may have, please message, email or call our office ph 1300 854 159

 

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End of Financial Year soon to be here

Another financial year comes to an end it is time to take stock of where you would like to go, where you have come from and the successes you have had throughout the last 12 Months.

Look at how you can improve and build on the successes of the past year.

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