- Income Tax Returns.
We offer a personalized, friendly and efficient service when preparing your income tax return. Whether you are an individual or you run a business, we will endeavour to maximize your refund or minimize your tax liability by including all deductions available to you.
We understand that every one is unique. What works well for one client may not fit the next, which is why we pride ourselves on taking the time to understand your needs, so we can tailor a solution that works for you.
Taxation is a complex area. If you have questions, then please ask. It is our job to help you understand your taxation needs and we will answer you questions as simply as we can, so you can better understand what you can and can’t claim and the reasons why.
Substantiation of your deduction is very important in this day of ATO audits. The government is throwing money at the ATO so we can expect more “Tax Audits” in the future. With this in mind we will advise you about the retention of documentation and show you how to maintain the different diaries that maybe a part of your claim.
If you are not able to provide receipts etcetera, when requested by the Tax Office, they may disallow those claims and impose penalties
Forms of Substantiation:
To read more about Forms of Substantiation click on the headings below, to close just click again.
If you make a claim for a work-related expense you must have spent the money yourself and were not reimbursed; it must be directly related to earning your income; and you must have a record to prove it. If you incurred an expense that was both work-related and private in nature, you can only claim the work-related portion of the expense.
The record must have the name of the supplier, the amount of the expense, details of the expense and the date the expense was incurred.
You do not need to provide substantiation if your total deduction claim is $300 or less; your deductible laundry expenses does not exceed $150 and is part of the $300; if you receive an overtime meal allowances covered by an award and it does not exceed the ATO reasonable amount and is fully expended; and any small expense under $10 each, up to an amount of $200 (the expenses are to be recorded in an expense diary).
If you are required by your employer to perform work from home, you are entitled to make a claim against the income you earn. The tax office has a specific hourly rate that is used to calculate this claim.
In order to substantiate your claim, you must keep a diary for a minimum of one month in each year. This should be a representative pattern of the work you perform at home for the year. If your work pattern changes, we recommend completing an additional month to demonstrate the change in claim. The diary entry should record the date, the number of hours worked and a description of the work performed. From these diary entries we can ascertain the number of hours worked on a weekly basis and calculate your expense claim for the year.
If you are required to use your personal computer for work purposes, then you must keep a diary for at least one month in each income year, as evidence for the work usage percentage. We suggest during that month that you record all computer usage and mark the usage as either personal or work, so we can ascertain the work percentage. When documenting the usage in your diary, the work portion should record the date used, the number of hours of use and a brief description of the purpose of use.
If you are required to use your phone and internet for work purposes and your claim will exceed $50, then you will need to keep a diary for a minimum of one month in each year to demonstrate the business use percentage. Alternatively, you can choose a representative month of your telephone accounts and calculate the percentage of business usage, by using the detailed call information and separating the business and personal calls accordingly.
If you are required to use your car for work or business purposes then there are two methods to calculate your claim:
- The cents per kilometre method can be used for a claim of up to 5000km genuine work related travel. A rate per kilometre, provided by the tax office is used to calculate your claim. You need to keep a diary entry of the work-related trips you make, including the date of travel, the reason and the number of kilometres traveled.
- The logbook method requires that you keep a logbook for a continuous period of at least 12 weeks, including start and end odometer readings; as well as receipts for any expenses incurred in running and maintaining your vehicle. If you are using the logbook method, you need to complete a new logbook every five years, for each work-related vehicle, or if your work travel has changed. You also need to record your odometer reading at the start and end of each year.
Please note, in most cases, traveling to and from work is considered to be a private expense by the tax office and is therefore not work-related travel.
if you run your own business you also need to substantiate both income and expenses. These could include records for income, such as tax invoices, receipt books, cash register tapes and records of cash sales. For expenses your records may include receipts, tax invoices, cheque book receipts, credit card vouchers and diaries to record small cash expenses. A secondary form of substantiation are your bank statements. If you purchase something for your business, but sometimes use it for private use, you also need to keep records showing how you worked out how much of its use, is private.