Uniforms Tax Deductions

Don’t get taken to the cleaners with laundry deductions

A timely warning at tax time for people wanting to claim laundry expenses.

The Australian Tax Office is concerned about the increasing levels of claims by tax payers for clothing and laundry expenses and will be “increasing attention, scrutiny and education” this tax season.

Assistant Commissioner Kath Anderson said that last year over 6.3 million people made a work-related expense claim for clothing and laundry expenses, totalling almost $1.8 billion.
“We have seen claims for clothing and laundry expenses increase around 20 per cent over the last five years. While this increase isn’t a sign that all of these taxpayers are doing the wrong thing, it is giving us a reason to pay extra attention,” she said.

Ms Anderson said common mistakes the ATO has seen include people claiming ineligible clothing, claiming for something without having spent the money, and not being able to explain the basis for how the claim was calculated.
“For your clothing to be eligible for a deduction, it needs to be occupation-specific clothing, protective clothing or a uniform that is unique to the organisation you work for,” she said.

Ms Anderson said it is a myth that you can claim a standard deduction of $150 without spending money on appropriate clothing or laundry. She said that while record keeping requirements for laundry expenses are relaxed for claims up to this threshold, taxpayers do need to be able to show how they calculated their deduction.

Ms Anderson said there are three golden rules to follow which will help taxpayers to get their deductions right.
“One – you have to have spent the money yourself and can’t have been reimbursed, two – the claim must be directly related to earning your income, and three – you need a record to prove it,” she said.

It is a myth that taxpayers can claim a standard deduction of $150 without spending money on appropriate clothing or laundry. While record-keeping requirements for laundry expenses are “relaxed” for claims up to the $150 threshold, taxpayers do need to be able to show how they calculated their deduction.

If you are unsure of what you can claim, contact your Tax Agent for advice and sleep easy this tax season.

Emma Baxter
Accountant
YOUtax

Tax time tax returns tax agent

Have you lodged your tax yet?

Yes, it’s that time of year again. Tax time! Are you ready for it?

According to the Australian Tax Office, as at 17 July 2017, more than 1.4 million people have already lodged their individual current year tax returns! With an average refund of $3084, these early birds have been rewarded for their promptness.

If you haven’t lodged your return yet, no need to worry, the ATO has given us until the 31 October 2017 to process and lodge your income tax returns. However, if you are registered with a Tax Agent and have a good lodgement history your lodgement day may be able to be extended.

Now is a great time to get organised as you should have received your payment summaries or annual statements from various agencies. Hopefully you have kept accurate records throughout the year the year and remember that now the ATO has its data matching program to capture not only your employment income confirmed by your boss or interest amounts sent by your bank but it includes payments made to contractors in the building and constructions industry, capital gains tax from the sale of your shares, foreign income paid to Australian employees overseas and contractor payments made by government agencies. This is rapidly closing any gaps on omitted or forgotten declared income.

In the last year the ATO cross checked more than 650 million transactions from third parties such as employers and banks to ensure all income was declared and the correct offsets and exemptions are claimed.This year, they contacted about 200,000 taxpayers who had apparent discrepancies in the information they reported in their tax returns. Nine out of ten returns were adjusted as a result the ATO enquiries.

It is important to note the majority of these returns were lodged before the ATO prefill were made available to individuals or tax agents to cross reference and check their clients’ details.

So if you are still itching for that tax refund as early as possible and do not want to wait until late August for the ATO prefill to become available, it might be best to contact a tax agent who can advise correctly of all the required income. Here are some tips that may help you…..

  • Remember all income from multiple jobs
  • Include your bank interest which is easier today to access with online banking
  • Include any foreign income you may have earned, making note that the tax year of the foreign country will most likely differ to the Australia financial year. Your tax agent can assist with calculating this correctly.
  • Wait for those important end of year managed fund statements
  • Check your share registry using your SRN or HIN numbers to not miss any dividends paid.
  • Start collating all your rental property information, ensuring you have all the statements for the required periods e.g. four statements for quarterly water rates or two statements for 6 monthly rates.

If you are worried about where to start with collating your 2017 financial year tax information contact your tax agent they will be more than happy to help.

Emma Baxter
Accountant
YOUtax

ATO warning on claiming of expenses

Source: THE NORTHERN STAR

THE ATO will be focusing on unusually high work-related expense claims across all industries and occupations this year, taking a wider approach than in previous years.

Assistant Commissioner Adam Kendrick said the ATO’s ability to identify and investigate claims that differ from the norm is improving each year, due to enhancements in technology and the use of data.

“These enhancements mean that every return is scrutinised and it is becoming a lot easier to identify claims that are significantly higher than those claimed by people with similar occupations and employment income,” Mr Kendrick said.

In addition to focusing on work-related expense claims that are higher than expected, the ATO will also be paying particular attention to claims that have already been reimbursed by employers, and for private expenses such as travel from home to work.

Get it right

IT’S important for people claiming to carefully review deductions before lodging their tax return to avoid a delay in getting a return.

Mr Kendrick said there were three key points for people to remember when claiming work-related expenses:

Firstly, you must have spent the money yourself; second, it must be related to your job, and third, you must have a record to prove it.

When claiming work-related travel, it’s important to remember you cannot claim for a normal trip between home and work, unless: you use your car to carry bulky tools or equipment which you use for work and can’t leave on the work premises; your home is a base for employment or you have shifting places of employment (you regularly work at more than one place each day).

The ATO website has a series of videos to help with getting deduction claims right.

For more information, visit ato.gov.au/deductions or phone 132861.

Don’t be a dummy with your deductions

The Australian Taxation Office (ATO) is warning taxpayers to avoid incorrect claims for work-related expenses at tax time this year.

Assistant Commissioner Kath Anderson said the ATO is using real-time data to compare taxpayers with others in similar occupations and income brackets, to identify higher-than-expected claims related to expenses including vehicle, travel, internet and mobile phone, and self-education.

“It is important to know what you’re eligible to claim before lodging your tax return and to make sure you don’t claim more than you’re entitled to,” Ms Anderson said.

“Many taxpayers don’t have a good understanding of what deductions they can claim, and believe they can claim for items which they in fact can’t. Some taxpayers even think that you can make a standard claim of $300 without having spent the money. You don’t need receipts for claims up to $300 but you must have actually spent the money, and be able to show us how you worked out your deduction if asked.”

Ms Anderson said that deductions for work uniforms are also a common trap for employees at tax time.

“It’s a myth that you can claim everyday clothes, for example, black pants and a plain white shirt, even if you only wear them to work, and your employer says you have to. To legitimately claim your uniform, it needs be unique and distinctive, such as a uniform with your employer’s logo, or be specific to your occupation and not for everyday use, like chef’s pants or coloured safety vests.”

“It sounds like a small thing, but we aren’t talking about small sums of money here. There are 13 million taxpayers, so if everyone over claims even $100 that adds up to a lot.”

Ms Anderson said the ATO’s focus is on helping taxpayers get it right in the first instance, but the ATO is also on the lookout for red flags to find people who are doing the wrong thing.

“The ATO scrutinises every return. We have the technology and experience to detect non-compliance and we are continuing to catch taxpayers who are deliberately doing the wrong thing.”

Ms Anderson says there are three golden rules for taxpayers to remember to get it right.

“One – you have to have spent the money yourself and can’t have been reimbursed, two – the claim must be directly related to earning your income, and three – you need a record to prove it.”

The myDeductions tool in the ATO app can help make keeping records easier, and at tax time you can send your deductions to your tax agent or upload them directly to myTax. This year myDeductions is available to sole traders as well as individuals.

The ATO also publishes a range of information on its website to help taxpayers figure out which of their expenses are deductible.

“If you are using an agent, you can also talk to them to make sure the work-related expenses that you claim are right,” said Ms Anderson.

For more information about work-related expenses, visit ato.gov.au/deductions and to find out about myDeductions, visit ato.gov.au/mydeductions

11 deductions you (probably) can’t claim

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Here’s a list of things you probably can’t claim on your tax return:

  1. Trips between home and work. Generally you can’t claim a deduction for these because they’re considered private travel.
  2. Car expenses for transporting bulky tools or equipment, unless:
    • you need to use your bulky tools to do your job
    • your employer requires you to transport this equipment
    • there is no secure area to store the equipment at work.
  1. Car expenses that have been salary sacrificed.
  2. Meal expenses for travel, unless you were required to work away from home overnight.
  3. Private travel, so if you take a work trip that includes personal travel you can only claim the work-related portion.
  4. Everyday clothes you bought to wear to work (eg, a suit or black pants), even if your employer requires you to wear them.
  5. A flat rate for cleaning eligible work clothes without being able to show how you calculated the cost.
  6. Higher education contributions charged through the HELP scheme.
  7. Self-education expenses when the study doesn’t have a direct connection to your current employment – your future or dream jobs don’t count.
  8. Private use of phone or internet expenses – only the work-related portion counts.
  9. Up-front deductions for tools and equipment that cost more than $300. However, you can spread your deduction claim over a number of years. That’s called depreciation.

The ATO website has lots of information about what you can and can’t claim as a tax deduction, visit ato.gov.au/deductions

Tradie Tax Deductions: Claim everything you’re entitled to

Tradies work long and hard to meet tight deadlines, which often leaves little time or energy to think about finances and taxes. As a result many tradespeople pay too much tax, miss changes in legislation or suddenly find their cash flow is not as healthy as they thought.

Does this sound like you?

Stay in control

Apart from making sure you claim all the tax deductions you are entitled to, as we’ll discuss in a moment, we suggest getting into the habit of checking with your tax agent annually to make sure you’re up to date with legislative changes. Sometimes a business switches gear or changes direction which can affect it’s status legally and financially so it’s also important to know when your business structure is no longer cost effective tax wise.

Being organised with your expenses is an essential habit to get into. Keep a clear, itemised record of ALL of your expenses and consider investing in some accounting software to help you stay on top of it. (Etax Local can assist with subscriptions and set up of various popular products so feel free to get in touch for a chat if you are unsure.)

TIP: Photograph each receipt when you get it as many have a tendency to fade. This means any hard to read receipts can still be claimed and you have an electronic back up on your computer. YOUtax provide all clients with secure access to our Client Portal so securely uploading and storing your receipts and other personal documents is simple.
Don’t miss out

There are a great many tradie tax deductions you may be entitled to claim on your tax return. Unfortunately, a good number of tradies miss out on hundreds of them every year. This leaves their hard earned cash in the pockets of the ATO and that’s never a good thing.

So why are so many deductions missed? Because tradies, like many other occupations, simply don’t know these expenses can be claimed. In addition, expenses are often simply forgotten about. And that’s exactly why good record keeping is essential.

Tradie tax deductions for work related expenses are broad and span across equipment, tools, training, travel, clothing and more.

Common tradie tax deductions include:

Clothing (must have business logo)
Tools and equipment – purchase, lease or repairs
Technical instruments.
Protective items (hard hats, steel cap boots, safety glasses etc.)
Laundry/cleaning of work clothes
Sunscreen and sunglasses (if you work outside)
Tablet, computer and mobile phone expenses (work related portion only)
Work related software and computer accessories
Home office running expenses (if applicable)
Filing cabinets and bookshelves
Desks, chairs and lamps
Internet expenses (apportioned)
Training courses, (if directly related to your current role)
Professional libraries
Journals/Manuals
Car/vehicle expenses including parking, tolls, running expenses, fuel, km driven etc.
Travel expenses (between sites, to pick up equipment, to training courses or meetings)
Accommodation expenses when working away from home
Union fees
Insurances
Licenses, permits and certifications

Please note: The content of this post is meant for general information purposes only. Not all items mentioned can be claimed by all tradies. Purchase limits and allowances can affect claims as can certain circumstances. Your tax agent will advise you on what you can and can’t claim, in keeping with your own particular circumstances.
Keep it real!

The ATO are very good at spotting fraudulent or inflated claims and they’re getting better all the time. Powerful tools can check up on you, even your “private” details such as bank transactions. The consequences of being caught out can put you and your finances in hot water – so keep it real. Only claim for items you paid for and that are directly related to your work.

TIP: Don’t think that cash jobs are untraceable. The ATO may question tradie tax deductions that aren’t ‘reasonable’ for your income.

Transporting bulky tools to work?

Generally you cannot claim the travel costs for the journey between your home and your place of work. However if you are required to transport heavy goods and tools, you can. There are some rules that apply though so watch this ATO video to make sure you get it right.

Need more advice on tradie tax deductions or simply need to get your tax return sorted?
No problem, simply CLICK HERE to book an appointment with one of our friendly accounting team . Alternatively upload your documentation through our secure client portal for processing.

YOUtax understands there are many things you would rather be doing than your tax return.

Whether you’ve got a basic tax return with a single group certificate, or you’re at the other end of the scale with rental properties and complex investments… we can help you get it sorted, fast!

Take advantage of our national network of Members, for face-to-face appointments, or simply get in touch with our national head office. We’ll create your tax return in our system so you can login in to the secure client portal to securely upload your supporting documents and personal details. Once this is done, your accountant will get on with processing you return.

You can communicate with your accountant AND view and sign your tax return electronically at any time, wherever you are. Plus your documents are stored, safe and sound but accessible whenever you need them.

Choose YOUtax to prepare your individual tax returns this year and you’ll get:

Peace of mind in knowing your individual tax return was lodged by a CPA-qualified tax agent company with over years’ experience in taxation and accounting.

Double review on every return prior to lodgement to ensure you get the best possible refund and a compliant, trouble-free return.

Customer service – we can explain everything in detail and ensure you’re aware of your obligations and rights as a tax payer.

What are individual tax deductions?

If you’re an employee who is paid a salary or wages by your employer, you are classed as an individual by the ATO. Each year you are required to submit an individual tax return and the expenses you can claim on your return are called individual tax deductions.

As an employee you are eligible to claim expenses related to your particular profession. As an example, these may include exercise equipment if you’re a personal trainer, teaching aids if you’re a teacher and non-slip nursing shoes if you’re a nurse.

Aside from these occupation specific expenses, there are many other work related expenses that you may be able to claim as individual tax deductions.

Knowledge is everything
To ensure you’re getting the best possible refund and paying the least amount of tax, it’s important to know what individual tax deductions you might be entitled to claim and to keep good records each time you incur a work related expense.

Tax deductions can range from, motor vehicle expenses, work related mobile or internet costs, work related travel costs such as a flight to attend a seminar, the cost of uniforms and even charity donations.

So what individual tax deductions can you claim?
Below is a list of common individual tax deductions that you may be able to claim; some of them may be a surprise to you. But remember, you can only claim genuine expenses that you have a receipt or other evidence for. The ATO is very good at picking up on claims that don’t seem quite right and if you’re caught out you could be in for a very hefty fine.

PLEASE NOTE: Not everyone can claim all of the following expenses as individual tax deductions as some will be subject to you meeting specific criteria and in some cases being in receipt of allowances. Your tax agent will be able to advise what you personally can and can’t claim in keeping with your own particular circumstances.
Individual tax deductions you may be able to claim:
FEES
Accounting fees including tax return preparation
Professional membership fees
Union Fees
Income Protection
EDUCATION
Self-Education
Course fees including text books (note: HELP/HECS repayments are not tax deductible)
Professional libraries and work related magazines
EQUIPMENT
Calculators and electronic organisers
Computer related consumables
Computers and laptops
Internet usage (excluding connection fees)
Ipad & similar small electronic equipment
Phone – Home Office + Mobile + phone accessories
Software
Briefcases and carry-bags
Safety equipment – e.g. sunscreens, hard hats, harnesses, safety glasses
Sunglasses (if you work outside)
Technical instruments
Tools of trade
Decline in Value for depreciating assets (where cost exceeds $300)
TRAVEL
Tolls – where relevant to work related travel
Motor Vehicle Expenses-e.g. fuel
Parking Fees
Public transport fares
General travel expenses, including flights, taxis etc.
Accommodation and meals (if away from home overnight)
HOME OFFICE
Desks chairs and other office furnishings
Home Office running costs
Stationery
Postage
CLOTHING
Protective clothing
Uniforms (with logo)
Laundry of work uniform or protective clothing
MISCELLANEOUS
Gifts
Charity Donations
Individual tax deductions receipts

REMEMBER: You can’t claim an expense if you have no proof, so remember to keep a logbook (if required) and get a receipt for every expense. Even if you’re not sure you can claim it, keep the receipt safe and ask your tax agent.

Getting in the habit:
Being organised with your expenses is a good habit to get into. Keep a clear record of your expenses, such as an excel sheet or even a note pad if you prefer. Keep your receipts all in the same, safe place and split them into months so they are easier to provide at tax time. Separate envelopes or folders is the simplest way to separate them – just write the month on the outside and you’ll easily keep track.

TIP: Photograph each receipt when you get it as many have a tendency to fade. This means any hard to read receipts can still be claimed and you have an electronic back up on your computer. YOUtax provide all clients with secure access to our Client Portal so securely uploading and storing your receipts and other personal documents is simple.

Need more advice on individual tax deductions?
No problem, simply contact us today by calling 07 5321 9217 or click here to book an appointment directly with one of our friendly accountants. Alternatively, upload your documents securely through our Client Portal for processing.

6 Missed Tax Deductions

Every year thousands of people miss out on tax deductions that they are eligible to claim?
Are you one of them?

Quite often these missed tax deductions are simply forgotten but in many cases people just aren’t aware that an expense can be claimed.Tax deduction

We asked our accountants what the most commonly missed tax deductions are and they came up with the following list.

Do any of these tax deductions apply to you? If so it’s time to make amends and make sure you claim every cent you’re entitled to.

1. Last year’s tax agent fees

If you used YOUtax or any other tax agent, to prepare and lodge your tax return last year, the fee you paid is eligible for a tax deduction. You can claim last year’s fees on this year’s tax return. The fees you pay to a tax agent are always tax deductible but it’s quite surprising how many of us forget this.

2. Licenses, certificates and membership fees
Are you a member of a union or a professional body directly related to your job? Do you need a license or a certificate to do what you do? Don’t forget, you can claim the cost of these fees every year.

3. Conferences, seminars and training courses

Do you attend conferences, seminars or training courses that maintain or increase your knowledge in your current field of work? The expenses related to these fees are usually tax deductible so it’s well worth giving your career a boost with some personal development each year.

4. Work related Car Expenses

With the exception of driving to and from work*, if you use your personal car for ANY work-related travel, you can usually claim fuel and maintenance expenses as a tax deduction for that use. So remember, when you drive between work locations, deliver merchandise pick up or deliver an order for your boss, or attend a meeting away from your usual place of work, make sure you record ALL your mileage.

It’s worth noting that as of 2016, the ‘12 per cent of original value’ and ‘one-third of actual expenses’ methods of claiming have been dropped.

To record your work related care usage you now use either:

The 12 week logbook method (which generates numbers you can re-use for 5 years!)
The cents per kilometre method.
The cent per kilometre method has changed in 2016. This used to increase with the engine size of your car, now it’s a flat rate of 66 cents per kilometre.
*You may be able to claim trips to and from work IF you carry heavy equipment for work, or transport heavy tools required to do your job. Check with your tax agent to see whether your load makes you eligible.

5. Working from home expenses

Do you work from home occasionally? Perhaps you need to finish reports or meet tight deadlines in the evenings. Maybe you work from home one or two days a week, or a few hours a day, to fit in with school hours or child care.

If so, the cost of using your personal computer may be claimed as a tax deduction. The ATO also allows employees who occasionally work from home to claim the running expenses for a part of the home used as a home office.

If you run a home based business or work at home full time as a home based employee you can also claim the apportioned ”occupancy costs” of your home office space as a tax deduction.
Are research, emailing, social media or other online tasks included in the work you do at home?

If your internet connection is in your name, then it’s likely you could claim a percentage of your Internet expenses as a deduction.

For example: Let’s say your internet bill is $60 a month. If 40% of your internet usage is work related you can claim 40% of your monthly bill.

40% of $60 = $24 per month
$24 x 12 = $288 per year
Please note: If your internet costs are shared with another person, you can only claim on the percentage that you are responsible for, as follows:

Total internet cost: $60
Shared with one other = $30 each
40% of $30 = $12 per month
$12 x 12 = $144 per year
6. Mobile Phone Expenses

Do you need to make work related phone calls on your personal mobile phone? If so you can generally claim the cost of these calls as a deduction on your tax return.

It’s important to remember, you are only allowed to claim the cost of your work related phone calls, not your entire phone bill. It’s recommended that you keep a record of all the work related calls you make so you are able to work out the average percentage of your calls that are work-related.

For example: If you pay $49 per month for your mobile phone plan and estimate that 50% of your monthly calls are work related:

50% of $49 = $24.50 per month
$24.50 x 12 = $294 per year
You could claim a $294 tax deduction on your annual tax return for your mobile phone expenses.

Be Prepared

Keep good records of mileage, phone calls or internet usage so you are able to provide these to your tax agent.
Our most important piece of advice is: If you’re not sure whether or not you can claim a deduction for a purchase – KEEP THE RECEIPT! Our accountants will be happy to let you know. Remember, it’s always better to have too many receipts than not enough.
Not everyone will be eligible for all the above mentioned tax deductions as these can be governed by certain circumstances and whether or not allowances are paid by employers. Your tax agent will be able to advise which tax deductions are relevant to you.

Book an appointment with a YOUtax Accountant today. Alternatively upload your documentation for processing through our secure Client Portal.

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