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Personal Tax Returns

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Phone Scams at Tax Time
Scammers pretending to be from the ATO are always more common during tax time so be vigilant and protect your personal information.

It is important to remember that the ATO do not threaten jail or arrest and do not email, call or SMS asking for credit card or bank details to issue refunds.

Every year, scammers impersonating ATO (Australian Taxation Office) employees attempt to obtain personal information for financial gain from you. Generally, phone scammers demand payment for an unexpected debt or offer an unexpected refund or grant.

Phone scammers are likely to be pushy or aggressive. They may tell you that there is a warrant out for your arrest or offer to send a taxi to take you to a post office so that you can make a payment. There is even a recent scam where the “Tax Office employee” wanted to be paid with I-Tunes Cards.

Besides money, scammers will try to collect personal information to steal your identity, be wary if you are being asked for any of the following:

  •  tax file numbers
  •  names
  • addresses
  • dates of birth
  • myGov user name and password
  • bank account and credit card details
  • drivers licence, Medicare and passport details.

The above information is used or sold to other criminals to commit identity fraud. This can happen immediately or even months or years later.

The ATO has up to date info on their website here on recent and common scams .

31/07/2018 by The Power2 Team

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Tax Facts

Tax links and answers

We thought the following information on various tax issues would be useful to you. Personal circumstances always vary, so please ensure you contact us for specific advice.

(Now the Tax office loves to move their pages around so if you find a link that is not working, we apologise,  feel free to let us know and we will get it up and running again ASAP!)

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Tax FAQ

Tax FAQs

Some individuals don’t have to lodge a tax return it depends on your situation which can differ due to age, income and expenses. Your best option is to come in and have a chat with a Power2 Tax Consultant to get their view on whether or not you need to lodge a return.

At Power2 we lodge your return electronically within 24 hours of completion.

The ATO reports that most electronically submitted lodgments take around two weeks to process, however some lodgments require manual processing and may take up to a month to issue.

While you are welcome to contact Power2, the quickest and easiest way to check the progress of your tax is by using one of the ATO’s online search options.

For the 2019 year, your employer may be reporting your tax and super information directly to the ATO meaning you may not receive a payment summary at all.  As part of our preparation for your tax meeting we make sure to gather and prepare as much of your information from the ATO and other sources as we can, including Payment Summaries and Private health information if they are available.

If you are missing one or more of your Payment Summaries from previous years your best option is to contact that employer to see if you can get another copy. In the case your employer cannot supply a payment summary, check with Power2 and we will assist you.

In most cases, fees can be taken from your refund. – Once the refund is released by the tax office our payment is deducted and the balance is forwarded to your bank account.  Please be aware that there is an additional administration fee of $40 to use the fee from refund service.

Power2 can prepare and lodge as many previous years returns for you as necessary. If you do have several years tax returns to be completed, please let us know at the time of booking so we can allocate the correct amount of time for the processing of returns.

If you are lodging your own tax return with the ATO it is due by the 31 October each year, however, if you are a Power2 client you may benefit from our lodgement extension facilities meaning you have more time.

The ATO will penalise late lodgements through fines and interest charges so its always best to have your return lodged by the due date.

No, to claim any work-related expense you must have spent the money yourself and not received reimbursement from your employer. The expense must relate to the income you earn, and you must have a record to prove it.

If the expense was for both work and private purposes, such as usage of your private car, you can only claim the work-related portion of the expense.

Yes, You are able to claim expenses incurred in the purchase, repair or replacement of any tools and equipment you use working in the trade than you earn your income in. You can also claim the cost of insuring these items and any loan interest you paid on money you borrowed to buy these items.

If the cost of the tools or equipment, either as a set or an individual item, cost more than $300 these items will need to be depreciated, meaning an amount will to be claimed every year for that items effective life.

If your business has an annual turnover of $75,000 or more, or you wish to claim fuel tax credits, or you are a taxi driver you are required to register for GST. There are times whoever when, even if your estimated turnover is less than $75,000, there may still be some benefits in registering.

Talk to a Power2 tax consultant who will assist you with these decisions and your GST application.

The secret to minimising your tax bill is not leaving your questions until after the end of the financial year.

Your Power2 tax consultants are available throughout the year to assist you with tax preparation and planning to ensure you have the most current information regarding the most effective way of saving tax for your business.

If you are leaving Australia to travel overseas and you are not intending to be back before the due date for lodgement of your return – 31 October, contact Power2 to arrange for an extension of time to lodge.

Previously, employers were required to supply a payment summary within 14 days of the end of the financial year but from the 2019 year, your employer may be reporting your tax and super information directly to the ATO meaning you may not receive a payment summary at all.

As part of our preparation for your tax meeting we make sure to gather and prepare as much of your information from the ATO and other sources as we can, including Payment Summaries and Private health information if they are available.

If you are an individual, you must keep proper records relating to your tax affairs for at least five years from the date you lodged your tax return. You must keep all records, receipts and other documentation you used to prepare your tax return. If you are claiming deductions, you must keep written evidence to verify your claims for those deductions.

If you have a small business, you must keep proper records relating to your tax affairs for at least five years from when the business record is prepared or the transaction is completed, whichever occurs later. If at the end of the five years period, you are involved in a dispute with the Commissioner (an audit, for example), the five year period is extended.

If you own an asset which will be subject to capital gains tax on disposal, you will need to keep records covering the entire period of ownership until 5 years after lodgement of the tax return recording the disposal of the asset.

If you use information from your records in a later tax return, you may have to keep records for longer. So, if you carry forward a tax loss, you must keep the records until the end of any period of review for the income tax return in which the loss is fully deducted.

If you have no other assessable income you do not have to lodge a full tax return.  It is always best to be sure so contact Power2. We can complete the Refund of Franking Credits for Individuals form  at a substantial discount to the price of a normal return.

All income, whether it be government assistance payments such as Newstart and Austudy must be declared on your tax return as the tax rate applied is based on your total income for the year. You may be entitled to an offset to ensure that no tax is payable on that benefit income.

There is no limit on the amount claimed as expenses each year provided that; the expenses are necessarily incurred in earning your income, must be work-related and you can supply receipts to substantiate the expenditure.

Our Power2 Tax Consultants are happy to advise you on the appropriate record keeping which will ensure you maximise your allowable deductions claims.

If you owe tax and lodge your return late, any amount owing will be payable on 21 November this year and a general interest charge will be calculated from then until payment is made. The ATO may charge a penalty of $170 for every 28 days that the return is outstanding. Unless you use a registered tax agent, you have from 1 July until 31 October to lodge your return. If you need an extension of time either contact the ATO or Power2 for assistance on here.

Fees paid to a registered tax agent for the preparation of your return, amendments and generally handling your tax matters are all deductible. Registered tax agents are the only people legally able to receive payment for the preparation of tax returns.

Your return must contain all relevant income information, so if you are missing a payment summary which is not available through the ATO prefill system you can supply a letter from your employer detailing the information from this summary or review your pay slips for that period you worked and use those figures.

If payment summary details cannot be obtained from an employer a Statutory Declaration may need to be completed. One of our Power2 Tax Consultants will be able to assist you with assessing this information for you.

A payment summary can only be included in the year to which the income earned relates to. If you have discovered a payment summary that has not been included, you will need to submit a amendment to that year’s tax return. Our Power2 Tax Consultants can assist you with lodging an amendment if this has occurred.

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4 popular tax time topics

Below are the four topics we get asked the most about at tax time by clients who are trying to increase their wealth and save on tax.

It is very important to get advice on the following before deciding they are right for you. In some cases they may not be suitable to your circumstances and may even leave you worse off if not approached with the proper level of understanding.

 

Private health insurance

Private Health Insurance is an insurance cover which assists in paying for costs relating to an individual’s treatment as a private patient in an Australian hospital.

The Medicare Levy Surcharge (MLS) is a Federal Government initiative designed to encourage individuals to take out private hospital cover, and where possible, to use the private hospital system to reduce the demand on the public system.

The MLS is levied on Australian taxpayers who do not have private hospital cover and who earn above a certain income. Holding Private health cover may reduce your Medicare surcharge levy amount.

If you are considering Private Health cover or already hold some make sure you talk to your Power2 Tax Consultant about the potential tax savings.

Income protection

The main purpose of this type of insurance is to make sure you and your family are not financially disadvantaged due to your wage ceasing when you are injured or ill.

In most cases income protection pays a monthly benefit to help replace your lost income for a set period or until you return to work. The cost of cover varies depending on factors such as age, occupation, smoking status and existing medical conditions. Options relating to waiting periods and benefit periods can also alter the cost of premiums.

In most cases, the cost of your income protection premiums are tax deductions, while any insurance claim payments are treated as assessable income in your tax return for that year.

A Power2 Financial Planner can help you to understand what insurance is right for you as well as the costs and benefits.

Negative gearing

Gearing simply means borrowing money to invest in an asset such as Property or Shares. Negative gearing is when the expenses you pay out ( loan interest, rates etc) are more than the income (rent, dividends) you receive. Basically, you lost money.

Here is a simple example:

Purchase an investment property with a $400,000 Loan
Total income for the year (Rent)$22,360
Less Expenses
Loan Interest$28,000
Other Rental Expenses$5,000
Total Expenses$33,000
Total Loss on your Rental property for the year$10,640

Depending on your other income the $10,640 loss you took will result in a refund somewhere between $0 and $5,000.

So even after a tax refund negative gearing still  means your investment lost money for the year. The strategy behind Negative Gearing is that the above rental property will increase in value over time and that will make up for all the years of losses along the way.

If you would like to know if negative gearing is something that suits your financial situation speak with a Power 2 Financial Planner.

Superannuation

Superannuation is a way to save for your retirement. The money comes from contributions made into your super fund by your employer and, ideally, topped up by your own money. Sometimes the government will also add to it through co-contributions and the low income super contribution.

For most people, super will be taxed at a lower rate than a similar investment outside super and making contributions can significantly reduce the amount of tax you pay.

Of all the different ways to increase your assets and reduce your tax burden we believe superannuation provides the most efficient vehicle.

In some cases you can also hold death, disability or income protection insurance through your super account at a cheaper price and more tax effectively than if you bought it outside of super.

There are many different strategies available related to superannuation that can significantly increase your assets and reduce your tax. Talk to a Power2 Financial Planner about the ones that suit you.

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Why Choose Power2

Why choose Power2 to do your tax?

Life’s too short to stress over a boring tax return.  Let Power2 do the bulk of the work! Our aim is to make your experience as quick and painless as possible.

Why should you come to Power2 for your Tax return?

  • You get a refund sooner!
    • Most of the tax returns we do are lodged with the tax office the day of your appointment!
  • You don’t have to pay on the day of your appointment
    • If you wish your fee can be paid from your refund.
  • We have specialists to suit you
    • Rental properties, managed funds, salary packaging, redundancy and shares, our team know it all!
  • An experienced Local team 
    • Power2 is a locally owned business who lodges over 3500 tax returns every year. We employ experienced people and use quality systems to ensure we claim every legitimate tax deduction and rebate for which our clients are eligible.

So if you are a wage or salary earner; have ABN income; run a small business, have investments such as property, shares or managed funds, then talk to Power2 we have the specialist team for all your taxation needs.

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Tax time Checklist

Personal Tax Return Checklist

Now days the ATO provides a lot of the information we need and in many cases this includes payment summary’s and private health documents. Bringing in your own details however ensures things are correct and reduces the possibility of any delays.

We have provided the following lists to help you get your tax completed as quickly as possible. If you are missing, or unsure about, any of the below or your situation isn’t covered bring in what you can and discuss it further with your accountant.

  • Your bank details (BSB & account numbers), without these, we are unable to lodge your return.
  • PAYG Payment Summaries (if your employer still issues them)
  • Private Health statement (if they are still being issued)
  • Bank interest statement (available through online banking)
  • Other income (see below for some examples)
  • Details of your partners income, including salary sacrifice and investment losses
  • Receipts for items purchased for work
  • Receipts if you made donations to charities
  • Last year’s accounting fees (if you’re new to Power2)
  • Other expenses (See below for some examples)
  • Employee Share Scheme tax statement
  • Dividend statements for dividends received or reinvested
  • Annual Tax Statements from Managed Funds
  • Lump Sum and Termination Payment Summaries
  • Capital Gains on investments -require purchase and sale details of sold asset/s
  • Other Income -Foreign income, Airbnb income, Cryptocurrency transactions required
  • Details of deductible Superannuation contributions
  • Income Protection tax summary (if held outside of super)
  • Dependant Details (spouse and children)
  • Motor Vehicle expenses (logbook)
  • Deductible Travel – fares and accommodation
  • Uniforms-Protective and Occupation specific work-wear expenses
  • Self-education and professional development expenses, Subscriptions & membership fees, Seminars and conferences
  • Telephone & Internet, home office and computer expenses
  • Any other costs incurred in earning income – union dues, tools and equipment etc
  • Income and Expense Details as per above along with…
  • Details of your business income
  • Details of business expenses
  • Purchase and sale details for any assets sold during the year
  • Stocktake value as at 30 June (if any)
  • New purchases > $1000 (details are required for depreciation purposes)
  • A copy of last years return (new clients only)
  • Property manager statement (or total income and expenses if rented privately)
  • Expenses not overseen by your property manager (Gardening maintenance, pool cleaner, etc)
  • Bank statements for investment mortgage – Interest charges and bank fees
  • Council rates and water charges
  • Insurance
  • Body corporate fees
  • Details of repairs and maintenance carried out (each invoice)
  • Replacing capital items (costs may need to be allocated over the effective life of the asset)
  • All other expenses for the property (e.g. legal fees, mortgage discharge costs)
  • Depreciation report
  • Rental income and expense details
  • Contract and settlement statement of property purchase
  • Details of when you first used the property as a rental
  • If you’re new to Power2 – Last year’s rental property schedule and return
  • Contract documents for property/land purchase and purchase expenses incurred (legals, stamp duty etc)
  • Settlement documents for sale of property including selling expenses incurred (real estate commission, legals etc)
  • If you’re new to Power2 – Last year’s rental property schedule and depreciation report
  • Details of other properties you owned, including if you lived in them and how long they were rented.
  • Dividend statements for all shares (or an old statement for shares that didn’t pay a dividend)
  • Managed fund annual tax statement
  • Details of any expenses for investments, including financial planner fees
  • Interest on investment loans
  • Contract documents for purchases and sales of shares
  • Full transaction history of managed fund
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Tax FAQ

Where is my Payment Summary?

Many of us will not get a payment summary this year but don’t worry, Power2 has you covered!

For the 2019 year, your employer may be reporting your tax and super information directly to the ATO meaning you may not receive a payment summary at all.

As part of Power2’s preparation for your tax meeting we make sure to gather and prepare as much of your information from the ATO and other sources as we can, including Payment Summaries and Private health information if they are available.

If you are missing one or more of your Payment Summaries from previous years your best option is to contact that employer to see if you can get another copy. In the case your employer cannot supply a payment summary, check with Power2 and we will assist you.

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Power 2 is open for business

But its your call! You can do everything from home!

Income Tax Returns, Business Accounting or Financial Advice, no matter where you are we are here to help.

Read on below to get all the details.

Debbie did it…

After Cyclone Debbie shut us all down a few years ago we decided to make sure Power2 could support our clients even if the  physical offices had to close.

Now, Power 2 staff regularly work at full capacity from outside the office and its rare that we, or you, even notice a difference.

 

What can you do from home?

Income tax appointments? – YES!

Business accounting needs? – YES!

Financial Advice? – YES!

Income Tax Appointments

Just email or call as usual (07 49 577 574).

We will book your appointment and one of our consultants will contact you. We have systems in place to allow your return to be completed and lodged as usual.

Business Accounting and Financial Planning

Meetings happen, problems solved and all with minimal fuss

At your end it is as simple as clicking on a link, after that a web page opens and there we are.

Meetings can be as involved or basic as you are comfortable with. We can share our screen, talk face to face, even pass documents back and forwards.

We also understand that while all this is normal for us, its may be a bit daunting for some. So we make it easy and take things slow.

Our experience is that it only takes a short while before you will be completely comfortable with the process.

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Tax FAQ

COVID19 Tax FAQs

Office matters!

At Power2 we have put many measures in place to protect both our staff and clients during these unprecedented times and particularly during the busy tax Season. Our clients can rest assured that the office is being constantly cleaned and sanitised and that we are following all the necessary guidelines to keep us all safe.

If you are unwell on the day of your appointment please let us know as we have alternative measures in place to make sure you are not inconvenienced and your tax return is still completed on the day.

For any questions regarding our COVID 19 protection measures feel free to contact our office.

COVID tax questions

Following are some COVID specific tax questions. Due to the rapidly changing and ongoing nature of the outbreak, legislation and rulings are shifting constantly meaning the below information can quickly become out of date. Although we try to keep you informed with the below please don’t rely or act on these answers. Make an appointment to discuss and be sure that the answer you act on is the best one for you.

You can now claim 80 cents per hour for every hour worked between March 1 to June 30.

This method is the simplest way to claim for your working from home expenses. You can claim expenses such as phone and internet, lighting, heating and depreciation on equipment. One requirement is a log of hours worked such as a timesheet.
Multiple people living in the same house can claim the rate, and there is no requirement to have a dedicated work-from-home space.

While this method is the simplest it may not be the best calculation in every circumstance, and it is best to check with your consultant to be sure one of the other methods is better for you. (see next section)

The other two methods to calculate your working from home deductions require that you have a dedicated office space at home.

The fixed-rate method – you can claim 52 cents per work hour for heating, cooling, lighting and the decline in value of office furniture, plus the work-related portion of your phone and internet, stationery and decline in value of laptop or computer.
The actual expenses method – a calculation of the work-related portion of all your running expenses.

One of these two methods may suit your situation better, but it is important to confirm this with your tax consultant to be sure.

This will vary for each person

Most government benefits are taxed meaning that JobSeeker and the coronavirus supplement do need to be declared as income on your tax return. The amount of other income you have received throughout the financial year will decide if you have to pay any tax or not. If for instance your total income for the year including Job Seeker was less than $18,200, you won’t pay tax.

Employees will not need to keep track of the Job Keeper payments as their employer should include it in their income statement as part of wages.
Sole traders who have received JobKeeper on behalf of their business will need to include the payments as assessable income for the business.

Additionally, if your employer has already withheld tax at a higher rate through the year and your income has now reduced you may find you are due a refund.

Redundancies are complicated and should be discussed carefully with your consultant.

Redundancies can have up to three parts.

  • Some of the money will probably be tax-free (based on years of service),
  • some of the payment will be concessionally taxed (taxed at a lower rate than your marginal tax rate), and
  • some will be taxed at your usual marginal tax rate.

Most of the time employers will work out these calculations

Perhaps.

People working within healthcare and hospitality may be able to lodge some extra claims this year.

Roles that require physical contact may enable a claim for the cost of sanitiser, gloves, facemasks and anti-bacterial spray. As usual receipts are necessary and you cannot claim if your employer has already reimbursed you.

No – The good news is that you don’t have to pay tax on the early super withdrawal offered by the government as part of the COVID19 response or even declare it in your tax return.

This should not be confused with other early withdrawals from super, check with your consultant if you are unsure.

If new rental arrangements have been made with tenants the lower rent received in this financial year is declared as usual along with all normal deductions.

Interestingly, this amount can include interest on mortgages, even if payments have been deferred. This is because although the interest has not been paid yet the expense was still incurred in this financial year.

If tenants have moved out and the property has remained vacant due to a lack of tenants, regular claims for deductions can still be made as long as the property is still available for rent.

If you are completing your own Individual Tax Return, it is due on October 31.

Using a tax agent (such as Power2!) provides you with an extension.

You can lodge a return at any time from July the 1st but be warned the ATO normally takes a week or so to have all the required information on site.

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