The team at Boutique Accounting House are excited about a new tax year about to roll around! The last twelve months have flown by so we want to reach out and make sure you are ready for this financial year.
5 quick tax tips for 2017!
1. Maximise motor vehicle deductions
If you use your motor vehicle for work-related travel, there are only two choices for how you can claim. If the annual travel claim does not exceed 5000 kilometres, you can claim a deduction for your vehicle expenses on the cents-per-kilometre basis. The allowable rate for the 2017 financial year is 66c per kilometre. Such claims must be based on reasonable estimates. If your business travel exceeds 5000 kilometres, however, the log book method is required to claim a deduction for total car-running expenses. Please contact us so we can provide further information regarding work-related travel and which of the two allowable methods can be applied to optimise your tax position.
2. Claim depreciation
Immediate deductions can be claimed for assets that cost under $300 to the extent the asset is used to generate income. Such assets may include tools for tradespeople, calculators, briefcases, computer equipment and technical books purchased by an employee, or minor items of plant purchased by a landlord. Assets costing $300 or more that are used for an income producing purpose can be written off over a period of time as a tax deduction. The amount of the deduction is generally determined by the asset’s value, its effective life and the extent to which you use it for income-producing purposes. Please note the depreciation rules for Small Business Entities are different to this so please touch base for further information regarding business depreciation.
3. Claim self-education expenses
Self-education expenses can be claimed provided the study is directly related to either maintaining or improving current occupational skills or is likely to increase income from your current employment. If you obtain new qualifications in a different field through study, the expenses incurred are not tax deductible. Typical self-education expenses include course fees, textbooks, stationery, student union fees and the depreciation of assets such as computers, tablets and printers. Higher Education Loan Program (HELP) repayments are not deductible. We must also disallow $250 of self-education expenses, which can include non-deductible amounts such as childcare costs.
4. Rental property deductions
Owners of rental properties and Air BnB homes that are rented or are ready and available for rent can claim immediate deductions for a range of expenses, such as:
interest on investment loans
council and water rates
body corporate charges
repairs and maintenance
leases (preparation, registration and stamp duty)
advertising for tenants
reasonable travel to inspect properties.
Landlords may also be entitled to annual deductions for the declining value of depreciable assets (such as stoves, carpets and hot water systems), and capital works deductions spread over a number of years for structural improvements like remodelling a bathroom.
It’s worth noting that the government has proposed that it will change the law to no longer allow travel deductions relating to inspecting, maintaining, or collecting rent for a rental property from 1 July 2017. This is an integrity measure to address concerns that such deductions are being abused.
Further, the government announced that from 1 July 2017 plant and equipment depreciation deductions will be limited to outlays actually incurred by investors in residential real estate properties.
Plant and equipment forming part of residential investment properties as of 9 May 2017 will continue to give rise to deductions for depreciation until either the investor no longer owns the asset, or the asset reaches the end of its effective life.
Please contact us to clarify if expenditure relates to repairs and maintenance that can be claimed immediately, or improvements which need be claimed over time.
5. Claim work-related deductions
Claiming all work-related deduction entitlements may save considerable tax. Typical work-related expenses include employment-related telephone, mobile phone, internet usage, computer repairs, union fees and professional subscriptions.
Note that the Australian Taxation Office (ATO) will again check claims made in real time. We will ensure you claim only what you are legally entitled to, please ensure you have all necessary receipts or credit card statements to support them.
We are here to help and answer any questions you may have. Please feel free to give us a call on (07) 5661 2697, alternatively you can email us at firstname.lastname@example.org.
We hope to chat to you soon!