1 November 2018

If you rent out part or all of your home, the rent money you receive is generally regarded as assessable income. This means:

• you must declare your rental income in your income tax return, and you can claim deductions for the associated expenses
• you may not be entitled to the full main residence exemption from capital gains tax (CGT), which means you’ll have to pay CGT on part of any capital gain made when you sell your home.

Goods and services tax (GST) doesn’t apply to residential rents, so you’re not liable for GST on the rent you charge, but also you can’t claim GST credits for associated costs.

Continue reading “Renting out part or all of your home” →

15 September 2018

If you or anyone you know are earning income at lower or middle income levels, there’s a new tax offset that has been available since July 1 that was originally announced in the 2018 federal budget last May. But no-one will see any benefit from the new Low and Middle Income Tax Offset (LMITO) until about a year from now, when a lump sum credit will be recorded in next income year’s tax assessment, courtesy of the ATO.

Continue reading “A tax boost for low and middle income earners” →

18 August 2018

The value of a good education is widely accepted, and it is a common experience over one’s working lifetime to find that further learning is required along the path of one’s chosen career.

Changing technology and evolving workplaces means that at some stage in every taxpayer’s life, an educational re-boot could become necessary — as the adage says, “you’re never too old to learn”. Therefore supplementary education mid-career is a valuable, and hopefully income-boosting, pursuit.

Funding for that education however is another consideration, although this is generally also seen to be worthwhile pursuing — to use another quote, “if you think education is expensive, try ignorance”. Fortunately, Australia’s tax system is set up to provide some breaks to help the motivated among us get ahead.

To be able to claim certain expenses relating to self education is a tax concession that is not to be overlooked, but to be eligible your present employment and the course you undertake must have sufficient connection for the self-education expenses to qualify as a work-related tax deduction.

Continue reading “Claiming self-education expenses” →

30 July 2018

Businesses in the building and construction industry, take note – the deadline is August 28, 2018 to report the total payments you made to each contractor you enlisted the services of in 2017-18. You will need to report these payments to the ATO on the Taxable payments annual report.

The taxable payments reporting system was initially introduced to address longstanding compliance issues by contractors in the building and construction industry. Tax compliance issues that were identified included non-lodgement of tax returns, income being omitted from tax returns that were lodged, non-compliance with goods and services tax (GST) obligations, failure to quote an Australian business number (ABN), and use of an invalid ABN.

Note that the most recent Federal Budget announced that from 2019-20 three additional industries on top of building and construction will be required to lodge taxable payments reports with the ATO — security providers and investigation services, road freight transport, and computer system design and related services.

Continue reading “Builders: Get your taxable payments report ready before August 28” →

5 July 2018

efore we sit down with you to go over your tax return, certain information will be needed. Of course these days pre-filling takes care of a lot of the “paperwork”, and if you wait until late-July or mid-August the ATO’s systems will most likely be able to provide most of the information from employers, banks, government agencies and other third parties. We will then be able to double-check the information is correct and enter any deductions you want to claim.

However to be thorough, before coming in for your tax appointment here are the sorts of information needed to enable us to complete your tax return:

Continue reading “Tips for your Tax Return” →

27 May 2018

Airbnb is one of many examples of the “sharing economy” — connecting buyers (users) and sellers (providers) through a facilitator that usually operates an app or a website. Airbnb acts as this facilitator by allowing individuals, referred to as “hosts”, to rent out a room of their house or their whole house for a short-time basis via its online platforms.

While the focus here is on Airbnb, the tax concepts outlined could be applied in a more general sense to anyone seeking to rent out a part of their home, whether through Gumtree, Realestate.com.au, Flatmates.com.au and so on.

The tax issues raised relate to hosts who:

• own their own home;
• live in it full time; and
• want to generate some dollars by putting up an identifiable area of their home for rent.

As a host, the three major tax considerations that you need to be aware of are rental income, rental expenses, and capital gains tax.

Continue reading “Dealing with tax and renting via Airbnb” →

10 May 2018

Duties and taxes when you buy online from overseas

Items that you buy over the internet from an overseas source are generally required to abide by the same rules and screening processes that apply to any other “import”. Also the usual duties or taxes should apply.

Customs duties are regulated by the Department of Home Affairs (a recently formed body from December 2017, which now oversees the Australian Customs Service as well as Immigration and Border Protection).

Relevant facts to keep in mind include:

• For goods that are worth $1,000 or less, there are at the present time no duties, taxes or charges to pay (however see below*).
• For goods that are worth more than $1,000, you are generally required to fill out a special form called an Import Declaration, and pay duties, taxes and charges.
• You will need to pay duties and taxes on some goods (like tobacco or alcohol) regardless of their value.
• Certain types of goods are not allowed to be brought into Australia, such as firearms, or else need special permits.

The Department of Home Affairs may screen, x-ray or examine your goods just like any other imported items to make sure the goods are allowed into Australia. The Department of Agriculture may also need to clear and inspect items before they can be delivered to you.

Continue reading “Duties and taxes when you buy online from overseas” →

 14 May 2018

By Ashleigh Donaldson – Senior Accountant at i2 advisory

HELP Debt Recovery from Non-resident Australians

If you have a HELP (Higher Education Loan Program) debt, from 1 July 2017, should you choose to pack your bags and intend to, or have already relocated overseas for more than 183 days in a 12-month period you must notify the Australian Taxation Office.

With what was estimated as $20-$30 million each year lost due to graduates moving overseas, the government is no longer prepared to foot the bill for your education should you choose to ditch Australia and chase the sun or snow overseas. For years it’s been known that should you relocate overseas with the view to never return it’s very likely your HELP debt would never catch up with you, I mean how could it? You’re no longer an Australian resident for tax purposes and based on the previous criteria, you were under no obligation to make any repayments…. Hallelujah! Continue reading “Have a HELP Debt? Leaving Australia? Worth a read” →

12 March 2018

Below is a list of tips from the Australian Taxation Office (ATO) that should help rental property owners avoid what it has found are the 10 most common tax errors made by rental property investors. The ATO says that avoiding these tax mistakes will save many taxpayers both time and money.
Continue reading “Top 10 Tips for Rental Property Owners to Avoid Common Tax Mistakes” →