What is a Living Away From Home Allowance?
A living Away From Home allowance is paid by employers when they require an employee to work in an area that is different to their normal workplace and the employer pays the costs to the employee for living away from home. For example, you live and work in Sydney and your employer sends you to Queensland for a few months to do some work there. They pay you an allowance for the costs of living in Queensland because they have requested you to work there for a time. You do not need to declare it as assessable income in a tax return. It is an allowance paid by an employer to an employee and is not subject to tax by the employee. No expenses can be claimed against this allowance.
Travel allowances for itinerant workers, on the other hand, may appear as assessable income on your PAYG Payment Summary. The cost of accommodation, meals and incidental travel expenses may be claimed against this allowance up to a certain limit without substantiation (receipts).
I won $100,000 on a game show this year, it this taxable income?
If you are a professional contestant it will be taxable. If someone appears as a regular contestant in these shows then they would be considered to be a professional. If your prize was from a one off appearance then it wouldn’t be taxable.
I have inherited some money. Is it taxable?
No. The inheritance is not taxable unless advised by the executor that part is taxable. However, if you invest the income from the estate then any earnings will be taxable.
Can my wife declare all the interest from our joint accounts in her tax return because her income is much lower than mine?
No. All income must be apportioned to each recipient on the same basis as the accounts are held.
My bank interest is only $10. Does this amount have to be declared?
Yes. You must declare all interest from all sources.
My 14 year old daughter has received $300 from a trust distribution. Does she have to lodge a tax return?
Not if this is her only income. A minor may earn up to $416 from investments before any tax would be payable on unearned income. Since 1 July 2011 minors are denied eligibility for the low income tax offset. Under previous rules, minors could earn up to $3,333 unearned income without paying tax.
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 credit refunded to me?
No. You can complete the Refund of Franking Credits for Individuals form which can be lodged by telephone or mailed to the ATO.
I have just received a letter from the tax office saying that I did not declare some interest from my bank account. What should I do?
You should contact your bank if you believe that this is incorrect, to verify the income details for your accounts. The bank should notify the tax office in writing if this information is not correct. You have 28 days to correct this information. However, if you have omitted the income you will not need to contact the ATO. They will amend your return and send you a new assessment requesting you to pay the additional tax, a general interest charge and, in some cases, penalties.
Do I need to declare my overseas pension?
Yes. In most cases overseas pensions are taxable. There are a few exceptions to this rule. Please call us if you are not sure.
Do I have to declare income from Centrelink (Newstart, Austudy) on my tax return?
Yes. It must be declared so that the tax office can determine how much tax is payable on other earnings for the year. At the end of the financial year you will receive a Payment Summary from Centrelink indicating how much must be included in your tax return (taxable amount). You may be entitled to a tax offset to ensure that no tax is payable on your benefit.
I have just moved permanently to Australia. Do I have to pay tax on the money that I have brought with me?
No. You will only have to pay tax on any earnings that you make from the time that you moved to Australia. If that money earns interest in a bank account you will have to pay tax on the interest.
I have to buy tools/equipment for my job. What can I claim and how much?
You are able to claim expenditure incurred in replacing, insuring and repairing tools of trade that you use for earning your income. The amount you can claim will depend on what records you have kept.
My job requires me to keep my knowledge up to date and I buy books and journals. Can I claim them all?
If technical books, trade books or journals are necessary to fulfil job function efficiently then the cost of their acquisition is deductible.
Can I claim a deduction for sun protection items?
A deduction is available for outdoor workers who buy sunscreen lotion, sunglasses and hats for use at work. The claim must be substantiated and adjusted for private use.
I have incurred travel expenses this year. What can I claim?
Your travel must be relevant to your job function for you to claim a deduction for those expenses. Where this is the case you can claim the cost of transportation and incidentals. If your travel involved an overnight stay you would be able to claim for meals.
I keep a room set aside in my house for a home office and would like to claim some expenses.
If a taxpayer carries on all or part of their employment activities from home, then a reasonable portion of the home office expenses can be deducted. A notional claim of 34c per hour for home office running expenses can be claimed instead of actual power usage. Where a home is a place of business, deductions can be claimed on the following items of expenditure – interest, rent, house insurance, council rates, heating and lighting, depreciation, insurance, repairs, cleaning, pest control, maintenance, decorating and telephone.
I need to have a telephone for making and receiving business calls and would like to know what I can claim.
Installation costs are not deductible. However, part of the rental costs are deductible where a taxpayer is required to make calls from home. Call costs would be deductible and a log of calls must be kept. Mobile phones are claimed in the same way. We can recommend how to apportion your claim most appropriately for your circumstances.
I have had to pay for child care during the year. Is this claimable on my tax return?
These expenses are not claimable as a tax deduction. Eligible taxpayers may be able to claim the Child Care Benefits and Rebates through Centrelink.
Can I claim anything for the cost of my children’s education?
No. Child education costs are not a deduction for tax purposes.
I am expected to maintain a well groomed appearance. Can I claim these expenses?
Expenditure on personal grooming and haircuts are generally not deductible. There are exceptions for taxpayers involved in the performing arts fields.
My employer expects me to wear specific clothing for work? What would I be able to claim?
Compulsory uniforms are generally deductible provided they identify you as an employee of that organisation. A requirement to simply wear specific colours is not enough to make the clothing deductible. Corporate wardrobes are also deductible if certain conditions are met. The uniform design must be registered with AusIndustry. You may also claim maintenance costs (laundry, dry cleaning and repairs) for tax deductible clothing. The cost of protective clothing and safety footwear is deductible.
Can I claim 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. You can also claim travel to your registered tax agent. Registered tax agents are the only people legally able to charge for the preparation of tax returns.
I buy tea towels from a charity each year when they ring me. Can I claim this as a deduction?
No. You are receiving something for the money expended. This is considered to be a purchase not a donation. The same applies to the purchase of raffle tickets.
Am I entitled to claim $300 work related expenses as this does not have to be substantiated?
No you cannot just claim $300. You must actually incur any expense before it is claimed. Whilst you may not need receipts for expenditure up to $300 you must have still spent the money and it must be relevant to your employment.
Can I claim for the maintenance I pay my ex wife for my children?
No. Maintenance payments are not claimable.
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. The expenditure must be work related and you may need receipts to substantiate the expenditure. Keeping incomplete, incorrect or no records at all may be limiting your ability to claim deductions. Advice can be obtained from a registered tax agent. We are happy to advise our clients on appropriate record keeping enabling them to maximise their allowable deductions.
Is a credit card slip acceptable as a receipt?
Yes, provided it gives full details of the supplier and date of purchase. Taxpayers can make a notation on the receipt indicating the type of goods that were purchased. Many taxpayers use the internet to purchase or pay for their work related expenses. The ATO will accept Bpay or email receipts provided they contain the necessary information: date, supplier, nature of the goods and the amount. It’s a good idea to back up copies of all your online statements and e-receipts to disc for safe-keeping.
How long do I need to keep my receipts?
Documentary evidence should be keep for five years from the date of lodgement of the tax return in which the claims are made.
Can I claim my Self Education costs?
There needs to be the necessary nexus (connection) to your current income for these expenses to be claimable. This means that the Self Education needs to help you in your current job and not be undertaken to open up new job opportunities.
Andy is a retail sales assistant who is studying for a Pharmacy degree so that he can become a pharmacist. The expenses related to the study are not allowable as the study is designed to open up a new income-earning activity.
Tina, a trainee accountant, is studying commerce part-time at university. She is allowed a deduction for the costs associated with the course because the course enables her to maintain or increase the specific knowledge required in her current position and to carry out her duties more effectively.
Are my education expenses claimable against AUSTUDY?
No. The tax office has ruled that deductions for education expenses are not deductible against AUSTUDY income.
Can I claim the costs of seminars?
Yes. The costs are tax deductible provided that they relate to your current income producing activities and are not of a private nature.
If you have slow moving stock which is unlikely to sell, then the best option is to bite the bullet and physically write it off prior to the 30th June to obtain a tax deduction. For the remaining stock on hand you have the choice of valuing it at actual cost, replacement cost or market selling price. The closing value of trading stock effectively forms part of assessable income, so a lower value will result in a deferral of income and therefore tax. Similarly, for capital assets that can no longer be used. You can claim a tax deduction for the written down value of any obsolete assets that are actually written off in the fixed asset register on or before 30th June.