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Tax FAQs

Do I have to lodge a tax return?
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. You can contact us here.


How long will my refund take?
At Power2, most tax returns are completed and then lodged with the tax office on the day you visit. The ATO, however, advises that once they have received the return it normally takes them 2 to 4 weeks to process it and prepare your refund. Last year the Australian Tax Office (ATO) was able to process almost 90% of returns within 10 working days. If you are having your Power2 fee taken out of the refund then this can also add a couple more days. If you get to 30 days and you still have not received your refund then please contact Power2 and we can look into it.


What if I am missing a payment summary from a job?
If you are missing one or more of your Payment Summaries your best option is to contact that employer to see if you can get another one. In the case your employer cannot supply a group certificate speak to Power2 and we will assist. By far the best solution is to always keep all payment summaries, even if you’ve only worked in a job for a couple of weeks.


Can I have the fee taken out of my refund?
In most cases fees can be taken from your refund. – Once the refund is released by the tax office your payment is deducted and the balance is forwarded to your bank account. Please be aware that there is an additional administration fee of $35 added to fee from refund returns…


Can I get more than 1 years tax returns done at the same time?
Power2 can prepare and lodge as many previous years returns as necessary. If you have several years tax returns to be done please let us know at the time of booking so we can allocate the correct amount of time for the returns.


What happens if I don’t get my tax return lodged?
If you leave it too late and miss the deadline then you may receive a fine or interest penalty charge from the ATO. At Power2 we have lodgement extension facilities which can minimise these charges and, as a Power2 client, you will be benefit from this with extended dates to get your tax return completed.


When do employers legally have to issue PAYG Payment Summaries?
Generally employers are required to supply a payment summary within 14 days of the end of the financial year – i.e. 14 July. If an employee ceases employment part-way through the year, one must be supplied within 14 days of receiving a written request from the former employee and the request must not be made any later than 21 days before the end of the financial year. If a former employee has been receiving reportable fringe benefits (RFB) and leaves before the end of March then the 14 day limit may need to be extended.


How long do I have to keep my tax documents for?
You must keep all the records, receipts and other documentation you have 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 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. If you are 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 year period, you are involved in a dispute with the Commissioner (an audit, for example), the five year period is extended.

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 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.


I have shares and received franked dividends this year but have no other income. Do I have to lodge a tax return to get the franking credits refunded to me?
You do not have to lodge a full tax return. Power2 can complete the Refund of Franking Credits for Individuals form at a substantial discount to the price of a normal return.


Do I have to declare income from Centrelink (Newstart, Austudy) on my tax return?
All income must be declared. This is because the tax office needs to determine what tax rate applies to your other earnings for the year. You may be entitled to an offset to ensure that no tax is payable on your benefit.

You can access the information required from Centrelink online services, Express plus mobile apps and at self-service terminals at Dept. Human Services Service Centres. We can also look up the required information for you.


Is there a limit on how much I can claim as a tax deduction each year?
There is no limit on the amount claimed each year, provided the expenses are necessarily incurred in earning your income. The expenditure must be work related and you may need receipts to substantiate the expenditure. Power2 are happy to advise clients on appropriate record keeping that will enable them to maximise their allowable deductions.


Can I claim the fees paid to my tax agent?
Fees paid to a registered tax agent for 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.


Am I entitled to claim $300 for work related expenses as this does not have to be substantiated?

You cannot just claim $300. You must actually incur any expense before it is claimable. Whilst, in some instances, you may not need receipts for expenditure up to $300 you must have spent the money and it must be relevant to your employment.


I have to buy tools and equipment for my job. What can I claim on my tax return?
You are able to claim expenditure incurred in replacing, insuring and repairing tools of trade that you use for earning your income. If the cost of any item is more than $300 then it will have to be depreciated (i.e. claimed over its effective life). The amount you can claim will depend on what records you have kept and to what extent you use it for income producing purposes.


I have started my own business – do I need to register for GST?
Australian businesses with an annual turnover of $75,000 or more are required to register for GST. However, if your estimated turnover is less than $75,000 there might still be some benefits in registering. Power2 can assist you with your application.


I run my own business and want to know how I can minimise my annual tax bill?
The secret to minimising your tax bill is not leaving your questions until after the end of the financial year. Speaking to a Power2 consultant before the end of the financial year and planning the year to come is the most effective way of saving tax…


Can you complete my tax return if I am missing a PAYG Payment Summary (group certificate)?
Your return can be completed using the details from a copy of the PAYG Payment Summary, a letter from your employer detailing the information on the PAYG Payment Summary or by reviewing your pay slips for that period. If you are unable to obtain the payment summary details from an employer a Statutory Declaration may need to be completed. Call us to see if we can access this information for you.


I received an additional PAYG Payment Summary (group certificate) after I completed last year’s tax return. Can I put it in this year’s return?
No, you cannot do that. A PAYG Payment Summary from a past year cannot be included with the current year tax return as the income on it was not earned in the current year. It can only be included in the return for the year to which it relates. You will need to submit an amendment to last year’s tax return. Power2 can assist you to lodge an amendment.


I usually lodge my own return but will be unable to get it in to the tax office by October 31 this year. What can I do to avoid getting into trouble with the tax office?
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.


I am leaving to travel overseas; do I need to complete my tax return before I leave?
It isn’t necessary to complete a return before leaving Australia unless you will not be back before the due date for lodgement of your return (31 October). If you won’t be back until after that date contact the Australian Taxation Office or a registered tax agent such as Power2 to apply for an extension of time to lodge.

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4 popular deductions

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

The Medicare Levy Surcharge (MLS) is a Federal Government initiative 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. The cost of cover varies depending on factors such as age, occupation, smoking status and existing medical conditions. There are also a number of options available relating to waiting periods and benefit periods which alter the cost.

In most cases income protection premiums are tax deductible and policy payments are assessable income.

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 buy an asset such as Property or Shares. Negative gearing means that the interest you are paying on the loan (along with other expenses) exceeds the income from the investment.

Here is an example:

Your purchase a $440,000 investment property with a $400,000 loan
You make annual repayments of $33,925 of which $28,000 is interest in the first year (at 7%).
Other expenses for the year add up to $5,000
$430 per week in rent adds up to rental income for the year of $22,360.
So you have annual deductible expenses of $33,000 ($28,000 + $5,000) but income of only $22,360 (rent) which means there is a shortfall (a loss) of $10,640 for the year.

Depending on your other income the $10,640 loss incurred could lead to a refund of up to $5,000.

It is important to understand that even after any tax refund negative gearing still results in an annual loss. The investor is simply hoping that the growth in their assets value over time will be more than their annual loss in income.

If you would like to understand how negative gearing could affect your 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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Calculators

Mortgages / Debt

  • Reverse Mortgage
  • Basic Loan Repayments
  • Extra Repayments
  • Lump Sum Repayments
  • How Long to Repay?
  • P&I / Interest Only
  • Split Loan
  • Complete Loan Comparison
  • How Much Can I Borrow?
  • What Can I Afford to Borrow?
  • Remaining Balance
  • Bi Monthly Calculator

Other

  • Millionaire Calculator
  • Income Tax Calculator
  • GST Calculator
  • Car Lease
  • Savings
  • Achieve My Savings Target
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Tax Facts

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.

  • Activity Statement
  • Australian Business Number
  • Capital Allowances
  • Capital Gains Tax
  • Excise
  • First Home Saver Accounts
  • Fringe Benefits Tax
  • Fuel Schemes
  • General Value Shifting
  • Goods and Services Tax
  • Imputation
  • Income Tax
  • Medicare Levy
  • Paid Parental Leave
  • PAYG Instalments
  • PAYG Withholding
  • Rates and Calculators
  • Rental Properties
  • Small Business Entity Concessions
  • State Taxes
  • Superannuation Guarantee
  • Tax Payer Penalties
  • Wine Equalisation Tax
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Personal Tax Return Checklist

We all could do with a helping hand when it comes to organising our annual tax return. The Power2 tax preparation checklist will help you get organised and ensure you have all your paperwork in order, in time for your tax appointment.This will help avoid unnecessary lodgement delays and additional fees and charges. It will also help you to meet your ATO substantiation obligations. Download your PDF “tick box” copy by clicking on the image opposite or carry on reading the information below.

Ready to book your appointment? Contact us now

General information

  • Payment Summaries (previously called Group Certificates)
  • Bank account details – BSB & Account Number for refund purposes. See Message One above
  • Details of interest earned in bank accounts for the financial year
  • Dividend Statements for any dividends received throughout the financial year
  • Employee Share Scheme Payment Summaries
  • Tax Statement for any managed fund investments
  • Receipts for work related expenses
  • Receipts for any donations to registered charities
  • Receipt from a registered tax agent for your last year’s tax return preparation if not at Power2
  • Full details of your partner’s income
  • Private Hospital Insurance Annual Tax Statement. See Message Two above.
  • Letter or statement detailing your tax deductible income protection insurance premiums
  • Medical Expenses – out-of-pocket medical expenses relating to disability aids, attendant care or aged care expenses.
  • Details of any business income and expenses

If you have sold shares we will require the following:

  • Contract for the sale of the shares
  • Contract for the purchase of the shares
  • Purchase price for shares sold that were acquired via dividend re-investment
  • Details of any share consolidations, demergers, mergers, rights issues that affected the shares
  • Details of any brokerage costs in acquiring or selling the shares

If you’ve received rental income throughout the year:

  • Date first rented
  • Real Estate Agents Annual Statement
  • Details of rental income received
  • Receipts for rates, water, insurance, body corporate, pest control and advertising
  • Details of interest incurred on loans used for the purchase of the rental property
  • Receipts for repairs or improvements or appliance purchases
  • Your last years’ tax return if not at Power2 (if this property was rented last year)
  • All purchase documentation (for newly acquired rental properties)
  • Depreciation Report if you have one
  • Receipts for travel associated with property – 2017 is the last year you will be able to make a claim (i.e. airfares, accommodation – please note:excludes fuel costs)

If you have sold an investment property or vacant land:

  • Purchase contract and settlement statement
  • Legal fees and stamp duty paid on purchase
  • Receipts for Building and Pest Reports
  • Receipts for improvements
  • History of Rates paid, (vacant land only)
  • Sale contract and settlement statement
  • Receipts for Advertising
  • Receipts for Real Estate Agents commission paid and other selling cost

The list above is not an exhaustive list. As we prepare your return other information may be required that is relevant to your particular circumstances.

Important Note: The tax agent prefill report that may contain some of the information above, like interest and dividends, is often not available due to ATO technical difficulties and may also be incomplete, particularly early in the tax season. Power2 recommends that clients obtain their own records to support the information they declare in their tax returns.

Please read these two important messages too:

Message One: Bank account details must be entered into all Income Tax Returns for refund purposes. Where a refund is expected the ATO will not allow us to lodge the return without your BSB and account number. Please bring these details to your appointment to avoid unnecessary delay to the lodgement of your return.

Message Two: Recent changes to tax law means that if you are covered by a private health insurance policy we must have the “Health Insurance Tax Statement” for that policy to complete your return. If the policy is in your partners name but you are covered by that policy we will still require a copy of the statement. If you were not covered by a private health insurance policy for any part of the income year then this message is not applicable to you.

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Why choose Power2 to do your tax?

Life’s short! Don’t waste your weekend stressing about a boring tax return! Delegate to us. We aim to make the experience as quick and painless for you 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 locally owned and lodges over 4000 tax returns every year. To do this we use experienced people and quality systems. We make sure we claim every possible tax deduction, rebate and family payment for which our clients are eligible.

So if you are a wage or salary earner; have ABN income; investments such as property or shares, or a small business, then talk to Power2 or request an appointment with us

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