If you’re coming in soon to discuss your tax return for yourself or your business, try not to turn up completely empty handed, or at least to turn up prepared with some records or electronic access to them.
To “be prepared” is not just a great scouting motto, but
a wise approach for everyone, especially at Tax Time. It will also save a lot of time and effort for both yourself and for us.
If you are a new client, it is always smart to arm yourself with last year’s tax return or access to it if online. This should have your personal details, tax file number, income streams, tax offsets, deductions, and other relevant information previously claimed. Also have your bank account details in the event that you’re entitled to a refund.
If you use an online accounting solution, all or most your data should be available online for us to access. Most packages capture business transactions, and allow
you to record data in real-time and in a format that we understand (as well as giving us access to it 24/7 so we can keep working on your return if we need to after the appointment is over).
What to bring?
Here is a brief general checklist of things to prepare for your tax return appointment. Not all of the following will be relevant for everyone, but will depend on your own circumstances. Many of these items will be pre-filled, but it can’t hurt to check.
- PAYG summaries from employers
- Bank statements for any interest received during the financial year
- Distributions from trusts, partnerships, managed super funds
- Allowances (car, travel, entertainment, meals etc)
- Government pensions and allowances
- Foreign income
- Capital gains – for example, sale of shares or property
- Personal services income
- Net income/loss from business
- Rental income – for example, from an investment property
- Lump sum termination payments
- Superannuation lump sum payments
Expenses for tax deductions
- Motor vehicle expenses based on business use percentage and kilometres travelled (include your log book if applicable)
- Travel and accommodation information – domestic and overseas
- Work uniforms and other clothing expenses
- Courses, education and seminars
- Home office expenses
- Computer, software and repairs
- Tools and equipment
- Employee costs
- Superannuation contributions
- Rent/lease payments
- Interest paid – say on an investment property loan
- Dividend deductions
- Bank fees
- Low value pool deductions/depreciation
- Telephone and internet costs
- Freight and transport costs
- Utilities – electricity, gas, water
- Legal and accounting fees
- Income protection insurance
- Details of any asset purchases
It is highly recommended that you keep receipts for
all expenses and possible tax deductions you are considering claiming for you or your business. It is also a good idea to scan and file them electronically so that they are accessible should you need them for audit purposes.
If you’re in business
Further to the above information, we may also require the following information for review, so it is recommended you scan or photocopy these:
- Bank and credit card statements
- Lease, hire purchase, chattel mortgage or other loan
- agreements to your business
- Business Activity Statements and Instalment Activity Statements and working papers
- Stock valuation figure after performing your June 30 stock take.
We will work through every allowable tax deduction available for you and/or your business. Don’t forget to ask us what tax incentives are available to you which may work to increase your tax deductions.
If you have sold the family home in the last income year, although it is CGT-free we must still note in your individual tax return that this property has been sold. Rest assured that capital gains will not be calculated for this asset sale, although we will of course explain this to you before lodging on your behalf.
ACCELERATED DEPRECIATION FOR SMALL BUSINESS HAS BEEN EXTENDED
In the 2015-16 federal budget, the government increased the small business immediate deductibility threshold from $1,000 to $20,000, which was originally due to end at June 30, 2017. But a law amendment bill has recently been passed by Parliament that extends that measure by 12 months until June 30, 2018, after which the deductibility threshold will revert to $1,000.
At the time of the original announcement, small businesses were defined as having an aggregate annual turnover of less than $2 million. Announcements from the most recent federal budget however, and the new legislation, make
it clear that the depreciation measure will not only be extended for a year but also extend to businesses with an aggregated annual turnover of less than $10 million.
Small businesses can therefore continue to immediately deduct purchases of eligible assets costing less than $20,000 first used or installed ready for use by June 30, 2018. Only a few assets are not eligible (such as horticultural plants and in-house software).
Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to be placed into a small business simplified depreciation pool and depreciated at 15% in the first income year and 30% each income year thereafter. The pool can also be immediately deducted if the balance is less than $20,000 over this period (including existing pools).
The current “lock out” laws for the simplified depreciation rules (preventing small businesses from re-entering the simplified depreciation regime for five years if they opt out) will continue to be suspended until June 30, 2018.
Welcome to the InterActive Tax Consultants’ news – part of our personal and easy to understand approach to taxation. We are committed to working with you to achieve the best results for your business. If you have any question or would like more information on any of the articles please contact us.