Archive for the ‘Tips on Maximum Return’ Category
Income Tests
The major change in this year’s tax returns is the inclusion of a number of income tests to determine your eligibility or liability for items such as certain tax offsets, some Government benefits, the medicare levy surcharge and HELP repayments. These tests will involve the calculation of a new concept known as your adjusted taxable income (ATI). The ATI will include your taxable income plus fringe benefits, reportable superannuation contributions, any tax-free pensions, net investment losses and target foreign income less any child support paid. The ATI will be calculated for yourself AND your spouse or partner where applicable. Confused?? Many people are, but not the tax consultants at ITP. Don’t take the risk of missing out on your entitlements, or worse, paying too much tax. Get the professionals at ITP to look after your 2010 return.
Keep Your Receipts & Records
Probably the number one tip for maximising your deductions is to keep your receipts and records. Almost every available deduction from your income needs to be substantiated with written evidence. Tax agents are bound by strict legislative provisions as to what they can claim for you including the requirement for documentary evidence of your expenses – either work-related (travel, uniforms, tools etc), donations, medical or business expenses. It is equally important to keep your records of major capital purchases (eg cars, computers or other long-term assets) so that the correct depreciation can be calculated. Similarly, for assets subject to capital gains tax, accurate records including contracts for purchase and sale, will enable ITP to minimise the tax payable. All receipts should be kept for five years after the lodgement date of the relevant return. ITP can help a lot with the best method of claiming deductions but it is up to you to keep the basic information.
Education Tax Refund
Are you missing out?? The ATO state that many eligible families did not lodge a claim for the Education Tax Refund (ETR) for the last tax year. The ETR allows you to get a refund of 50% of the cost of eligible education expenses up to a maximum of $779 pa for each secondary student and $390 pa for each primary student. Eligible expenses include computers & accessories, printers, educational software, internet connections, textbooks and stationery. (School fees, uniforms, transport and sporting equipment are not included.) You must be entitled to claim Family Tax Benefits Part A to be eligible to claim the ETR.
Tax Schemes
The ATO have issued a warning to all taxpayers regarding so-called tax minimisation schemes which tend to proliferate at this time of year. Before investing in any such schemes taxpayers should ensure that the scheme has a current ATO product ruling and that it is a sound investment in its own right. Any potential tax benefits should be viewed as an added bonus and not as the primary reason for investing. Remember the old adage: “If it sounds too good to be true – it probably is!!”
Tax Planning
It is not too early to start some basic planning to ensure you get the maximum refund possible in this year's tax return ... Keep your receipts for all expenses which you wish to claim - work-related, motor vehicle, donations, medical expenses exceeding $1,500 etc. If claiming a vehicle do you need to create a new log book? If you are selling (or have sold) an investment property or shares, make sure you have a record of all expenses associated with that asset. Consider sacrificing part of your salary into superannuation for the remainder of the year thereby reducing your tax payable.
Free Tax Advice
Until 30th June all ITP offices are offering FREE tax advice for existing and new clients. If you have any questions on your tax affairs for the current or future years, make an appointment to see a consultant NOW. Visit www.itpqld.com.au for your nearest office.
Common Errors
The most common errors detected in tax returns by the ATO are: Claiming work related expenses without the necessary substantiation. Not declaring interest and dividend income. Claiming full interest deduction on a loan which is used for both business and private purposes. Claiming expenses for an investment property which has not been available for rent. Not declaring allowances received from employers. The ATO’s checking and data matching capabilities have improved greatly in the last few years. Don’t jeopardise your good record with the ATO through a silly mistake – have your return prepared by a trained ITP consultant and ensure real peace of mind. Visit www.itpqld.com for your nearest office.
