The Australian Taxation Office has released new resources to make it as easy as possible for small business owners to understand and meet their tax obligations at tax time. Below you can find links to their Tax Time Checklist and answers to their Top Questions asked at Tax Time.
Don't forget to also o your team at Symes Accountants about any tax time queries or concerns you may have. We're here to help you make doing business easier.
READ: Tax Time Checklist
READ: Top Questions asked at Tax Time
The Australian Taxation Office (ATO) has identified the Top 10 tax myths and misunderstandings it says are causing incorrect claims.
There are three golden rules to claiming deductions:
- You must have spent the money yourself;
- It must be directly related to earning your income;
- and you must be able to show proof of how you calculated your claim.
So what are the Top 10 Myths?
MYTH #1 Everyone can automatically claim $150 for clothing and laundry, 5 000km for car related expenses, or $300 for work-related expenses, even if they didn't spend the money.
FACT: While you don't need receipts for claims under $300 for work related expenses, $150 for laundry and 5 000km, you must still follow the three golden rules. These are also not automatic entitlements or 'standard deductions' for everyone.
MYTH #2 I don't need a receipt, I can just use my bank or credit card statement
FACT: To claim a deduction you need to be able to show that you spent the money, what you spent it on, who the supplier was, and when the purchase occurred. Bank and credit card statements usually won't contain this information.
MYTH #3 - I can claim makeup that contains sunscreen if I work outside
FACT: Cosmetics are generally a private expense, however it may be deductible if the primary purpose of the product is sunscreen and you were required to wear it because you work outdoors in the sun
MYTH #4 I can claim my gym membership because I need to be fit for work
FACT: Your job must depend of you maintaining a very high level of fitness, for which you are regularly tested. Only a very small number of people can claim these deductions, such as special operations in the Australian Defence Force.
MYTH #5 I can claim all my travel expenses if I add a conference of a few days' work to my holiday
FACT: You must apportion the travel expenses between the private and work-related components for it to be a valid deduction.
MYTH #6 I can claim my work clothes because my boss told me to wear a certain colour
FACT: Unless your uniform is unique and distinct to your employer, or protective or occupation specific clothing you won't be able to claim it.
MYTH #7 I can claim my whole Netflix or Foxtel subscription because I need to keep up to date for work
FACT: You must be able to show a strong connection between earning your income and your subscription, plus need to apportion the associated costs between business and private usage to claim your subscription as a deduction.
MYTH #8 I can claim home-to-work travel because I need to get to work to earn my income
FACT: Generally you won't get paid until you arrive at work, so you cannot claim your travel to work. There are limited circumstance where you may be transporting bulky equipment in which you can then make a claim.
MYTH #9 I have a capped phone plan, so I can claim both personal and private calls
FACT: Unless you only use your phone for work, you will have to apportion the cost between business and private usage and only claim the work-related portion of your expenses.
MYTH #10 If I use an agent, they will take responsibility for my claims
FACT: Ultimately you are responsible for ensureing the information in your tax return, including any deductions is correct.
Still unsure about what you can or cannot claim? Speak with your team at Symes Accountants today for assistance in preparing this years Tax Return.
If you have a small business with 19 or less employees, or an annual aggregated turnover of less than $10 million, the Small Business Superannuation Clearing House (SBSCH) is a free 24/7 service you can now use to meet your employer super obligations. Changes will be coming to the system in February 2018 as it joins existing Australian Tax office online services.
Integration will allow for better functionality including credit card payments and the sorting of employee listings. The updated SBSCH system will look different and will no longer be accessible with current user ID and password authentication.
Small businesses will be able to join the Business Portal where you can prepare and lodge BAS, manage accounts and update your business registration details. Access will be via your myGov Account using Manage ABN Connections or through AUSKey.
Contact us for any questions regarding these changes, or help with navigating the system.
Single Touch Payroll is a reporting change for employers. Employers will be required to report payments (salaries, wages, allowances, deductions eg.) PAYG withholding and super information directly to the ATO at the same time they pay their employees. Current payroll software systems will need to be updated to ensure the latest version integrates with the Single Touch Payroll system. Watch the ATO's short overview of Single Touch Payroll http://bit.ly/2iNlN18.
Employers with 20 or more employees will need to be reporting using Single Touch Payroll by 1 July 2018.
More information about the system can be found on the ATO's website. Further information for employers can be found here. Information on how the system will affect employees can be found here.
Employees with 19 or less employees may be required to use Single Touch Payroll from 1 July 2019 depending on legislation being passed. We will keep you updated with any changes and you can continue with current reporting practices until changes have officially been legislated.
Not sure if you need to use it? Don't know if you're already using? Confused how to navigate the system? Contact our team today and we'll help make the process smooth for you.
Running a business and use fuel in your truck? on the farm? or for other business machinery? A couple of tips for helping to claim your fuel tax credits correctly are below:
- Make sure you are using the correct and most updated rates, latest rates are from 1st July 2017. Calculator can be viewed here.
- Use simplified methods of claiming that best suit your business (if you are claiming less than $10K in credits per year);
- Use one rate in a BAS period
- Work out your litres
- Simplified record keeping
More details of these methods can be found at the ATO website here, or by chatting to our team who can walk you through everything you need to know about claiming fuel tax credits.
Were you aware that changes were made to the superannuation system from 1 July 2017?
Now is the time to contact us for more details if you're looking into your super. Changes affect those who earn less than $40,000 pa, are making extra contributions to your super, earning over $250k or are reaching retirement.
A detailed breakdown of the changes can be found on our Fact Sheet here. Contact us if you have any questions.
Claiming for a Donation or Gift
You may be able to claim a deduction on your tax return if you donated to a Deductible Gift Recipient (DGR).
For monetary gifts the whole value can be claimed (over $2AUD). Property gifts however are regulated differently depending on the type and value of the property. Chat to our team for more information.
Gifts or donations which provide you with a personal benefit cannot be claimed. These include;
- raffle tickets
- products e.g. chocolates or pens
- costs of attending fundraising dinners
- membership fees
- payments where you have an understanding with the recipient that the payments will be used to provide a benefit to you.
The ATO has a list of approved DGRs, and read more about claiming gifts and donations at https://ato.gov.au/giftsdonations
Deductions for Specific Industries & Occupations
You may be eligible to claim deductions for expenses that directly relate to your work as an employee.
The Australian Taxation Office has compiled some easy read guides for specific industries and occupations to help with correctly claiming work-related expenses that you are entitled to. Click through the links below for more information.
Learn more about claiming deductions for other industries at the ATO website here.
Travelling for Work?
If you're required to travel for work, you may be able to claim costs like meals, accommodation and car hire.
You'll need records to demonstrate:
- the travel was for work purposes
- your employer required you to be away from home for the night
- you spent the money and were not reimbursed
Learn more about travel expenses and whether you're eligible to claim at https://ato.gov.au/travelexpenses