Budget 2019-2020 - Tax Relief Estimator

With the tax relief now passing both Houses of  the Australian Parliament, 10 million workers will have immediate relief and 4-5 million tax payers will receive the full 1,080.00 tax relief.

By the time  this plan is fully implemented, 94% of taxpayers will pay a top marginal rate of no more than 30 cents in the dollar. 

Click Here For Your Tax Relief Estimator

Make Sure Your ATO Returns Are Clean - news.com.au

‘We’ll see far more audits and more letters’: ATO to ramp up crackdown on dodgy returns

Hundreds of thousands of Aussies are expected to receive a nasty letter from the ATO this year. Here’s who is being targeted.

Hundreds of thousands of Aussies are expected to receive “please explain” letters this year amid a dramatic escalation in the ATO’s crackdown on the $8.7 billion “tax gap”.

Dodgy, work-related claims like dry cleaning and car expenses will once again be the most closely scrutinised, along with investment property deductions and earnings from cryptocurrencies and sharing economy platforms like Uber.

“I think just the intensity of the focus is probably different this year,” said H&R Block director of tax communications Mark Chapman.

“The ATO has been given additional resourcing by the Government to back up the work they’re doing in relation to noncompliance. I think we’ll see far more audits and more letters in relation to incorrect claims around work-related expenses and property, and we’ll see far more data-matching around cryptocurrency and the sharing economy.”

Mr Chapman said “hundreds of thousands of people” had received letters last tax time after their claims were flagged as unusual or the ATO discovered undeclared income by cross-checking data provided from third parties.

“An audit is really just one component,” he said. “They do a lot of investigation in this space through technology — they data-match, they have benchmarks, if expenses are outside the norm people will get a letter which is not a full audit, it invites them to think again.”

Mr Chapman said the most important thing to remember was that if you “can’t substantiate it, you can’t claim it”. “Make sure you’ve got the receipt or invoice or bank statement that proves you incurred the expense,” he said.

The expense must also be legitimately related to your job. “If you’re not sure whether you can make a claim or not, go and get some help or advice, speak to a tax agent who’ll be able to tell you what you can claim and what you can’t,” he said.

More than 2.2 million Australians claimed over $47 billion in deductions in the 2017-18 financial year, led by work-related expenses and rental claims.

The ATO last month warned it planned to double the number of audits of dodgy rental deductions. “A random sample of returns with rental deductions found that nine out of 10 contained an error,” assistant commissioner Gavin Siebert said.

“We are concerned about the extent of noncompliance in this area and will be looking very closely at claims this year.”

Deliberate attempts to over-claim can attract penalties of up to 75 per cent of the claim. The ATO audited more than 1500 taxpayers last year over rental claims and handed out penalties totalling $1.3 million.

According to the ATO, one taxpayer was fined more than $12,000 for over-claiming deductions for their holiday home when it was not made genuinely available for rent, including being blocked out over seasonal holiday periods.

Another taxpayer had to pay back $5500 because they had not apportioned their rental interest deduction to account for redraws on their investment loan to pay for living expenses.

“We expect to more than double the number of in-depth audits we conduct this year to 4500, with a specific focus on over-claimed interest, capital works claimed as repairs, incorrect apportionment of expenses for holiday homes let out to others and omitted income from accommodation sharing,” Mr Siebert said.

“Once our auditors begin, they may search through even more data, including utilities, tolls, social media and other online content to determine whether the taxpayer was entitled to claims they’ve made.”

WORK EXPENSES TO WATCH*

• Claims for work-related clothing, dry cleaning and laundry expenses. The ATO has flagged it will be checking taxpayers who take advantage of the exemption from keeping receipts for people who spend less than $150 on laundry expenses. The ATO believes too many people are claiming this without actually incurring the expense.

• Deductions for home office use, including claiming for “occupation” costs like rent, rates and mortgage interest, which are not allowable unless you’re actually running a business from home.

• Overtime meal claims

• Union fees and subscriptions

• Mobile phone and internet costs, with a particular focus on people who are claiming the whole (or a substantial part) of the bill for their personal mobile as work related.

• Motor vehicle claims where taxpayers take advantage of the 68-cent-per-kilometre flat rate available for journeys up to 5000km. The ATO is concerned too many taxpayers are automatically claiming the 5000km limit regardless of the actual amount of travel.

• Incorrectly claiming deductions under the rule that allows taxpayers who have incurred work-related expenses of $300 or less in total to make a claim without receipts. The ATO believes some taxpayers are claiming this — or an amount just under $300 — without actually incurring the expenses at all.

DODGY PROPERTY DEDUCTIONS*

• The ATO has announced it will be paying close attention to excessive interest expense claims, such as where property owners have tried to claim borrowing costs on the family home as well as their rental property.

• It will also be looking at the incorrect apportionment of rental income and expenses between owners, such as where deductions on a jointly owned property are claimed by the owner with the higher taxable income rather than jointly.

• It will be looking at holiday homes that are not genuinely available for rent. Rental property owners should only claim for the periods the property is rented out or is genuinely available for rent. Periods of personal use can’t be claimed. This is particularly important for holiday homes where the ATO regularly finds evidence of homeowners claiming deductions for their holiday pad on the grounds it is being rented out when in reality the only people using it are the owners, their family and friends, often rent-free.

• It will be keeping a close eye on incorrect claims for newly purchased rental properties. The costs to repair damage and defects existing at the time of purchase or the costs of renovation cannot be claimed immediately. These costs are deductible instead over a number of years. Expect to see the ATO checking such claims and pushing back against claims that don’t stack up.

SHARING ECONOMY SHAKE-UP*

• The ATO will also be looking closely at those working in the shared economy to ensure income and expenses are correctly reported.

• Examples include transporting passengers for a fare (Uber), renting out parking spaces, providing skilled services such as web or trade services (Airtasker), supplying equipment or tools, completing odd jobs, errands or deliveries, or renting out equipment such as tools, musical instruments or sports equipment.

• Renting out a room or house for accommodation is a big one. Airbnb hosts are the obvious example. The ATO is believed to be particularly concerned about taxpayers claiming the full CGT main residence exemption when part of their main residence has been rented out through Airbnb — the law prevents a full CGT exemption where part of a main residence has been used to earn income.

* Source: H&R Block

End of Financial Year What It Means...

So, if you have worked part time, casually and/or full time, you would have been payining through your employer to the Australian Goverment's Australian Tax Office.

The ATO conducts audits on Australian tax payers and it is important to know that to complete an annual tax return each year, to your benefit. The perception of the ATO is they are the 'Bad Guys'.

They are only the 'Bad Guys" if you knowingly have done somehing wrong or dodgey. Everyone is afraid of the response of the ATO once a claim is lodged. The completion of  ATO form at the end of each financial year,  provides fairness of whether each individual has been charged correctly

In my younger years I was getting refunds as when I started any new employment, I was asked whether I want to pay tax as 'single man tax rate' or a 'married mans tax rate'. I did think that it was a silly question to ask as I thought when you are married you pay the 'married mans' tax rate.

I was married and was given the option of choosing  what tax rate I wanted to be charged. The simple explanation I was given is the single man tax rate is taxed at a higher rate than a married mans rate. So, I had decided to pay the 'single mans tax rate'. You may be asking me why I did have done that? The simple reason is it doesnt matter what rate uou use as when you complete your financial tax return, the Australian Tax Office will calculate if you have been overtaxed or undertaxed.

If you are overtaxed based on a 'single mans tax rate' there is more of a chance for a potential refund. If you are undertaxed based on the 'married mans tax rate', you may have to cough up extra tax to be back to the amount to pay back ATO.

Therefor the ATO is a Federal government department that checks this to see if throughout that financial year you have been charged tax, fairly. Which is a good thing. If this wasn't done at all, people would cheat the system.

Tax plays an important role in our lives as it provides our government choices in how to spend our money in improvements to all local communities , through State and Local Governments, providing essential services and infrastructure making our communities a great place to live in.and supporting infrastructure.

In actual fact our tax keeps the economy going -: we pay tax , money gets spent, jobs created and money is spent again.

Click here for Australian Tax Office Details

Be Careful And Check Any Bills From Centrelink -The Guardian

We have come to a day of age, where technology is supposed to be so precise and accurate that the ordinary person like myself and  yourself can be fooled and life changes.

So, it appears CentreLink is now sending bills for over-payments  paid to their customers  from 4- 5 years ago and trying to collect on them. Anywhere up to at least $24,000. To the innocent person, they might accept and staring a small amount for years on end. The discrepancies have been known to occur  from income details supplied to the Australian Tax Office compared to details supplied to the  Centrelink Office. One of the reasons is that her same Employer was recorde in 2 different ways to the different Agencies. It poicks up she she is work for two jobs when she is working for one job at one company, thus requesting for benefits paid to us, to be repaid.

The Opposition in Federal Government is requesting the Australian Government to call off sending these bills. I personally suggest that the 2 agencies should interact with  all customers information  between these agencies and all details would be  either match or cross-reference and then double checked. Then there is no reason for overdue debt letters being sent out. Undue financial stress, is not required to people that have honestly recorded the  their employment details and received any correct additional benefits.

 I ask that the Federal member of Chifley,  Mr Ed Husic, take a stand on this issue, when Parliament is next called into session. I also suggest that if anyone from our Mount Druitt and surrounding community, receives letters like this or knows someone who has,  please contact Centrelink to check their records with the Australian Tax Office. If any issues contact  your local  Australian Federal Member of Parliament.

Click here for The Guardian Story

Credit Card Defender Protecting Scammers Who Are Scanning Wallets/Purses! Protect your Money!

We spoke about ATO* Scammers and fraudsters before now there is a growing  rate of people  scanning devices that will scan your credit cards  through your wallet/purse out in the open streets. Next thing your money is gone!

Now available at handbag/ bag stores is a Credit Card Defender,  which will block people scanning your wallet/purse at a small cost of $10.00 under, when you place it in your wallet/purse. I must admit it also prevents Opal Cards being scanned at electronic ticketing machines. I suggest you get o protect your money!

Click here for previous post on ATO Scams

*Australian Tax Office

Here it is "Korjo" Credit Card Defender:
Click here for details on Korjo Credit Card Defender
 

Becareful Of MyGov Joining Up!

I have strong advice from an accountant that with the internet being used nationally and as it personally to open up accounts online, the secret of the internet is now be revealed.

What the government is trying to do is cut costs. Just think about it!

So the issue is that if you are opening an account with MyGov 
 




you do not receive any postal mail to yourself or even to your tax agents that is if you link the account to the following Australian Government Departments: Australian Tax Office, Centrelink and Medicare.

This has been due to the cost of printing, the Australian Government incurs in sending out mail to all Australian constituents, in relations to matters raised. On the positive side, once you have joined MyGov to all other departments you can check all your accounts online and so can your professional tax agent/accountant!