Tax time: deductions in the ATO’s sights

Work related deductions for you

Last financial year, over 8.8 million taxpayers claimed $21.98 billion in deductions for work related expenses. 

accountingIt's an area under intense review by the ATO. If you claim work-related deductions, it's important to ensure that you are able to substantiate any claim you make.

To claim a deduction, you need to have incurred the expense yourself and not been reimbursed by your employer or business, in most cases you need a record proving you incurred the expense, and the expense has to be directly related to how you earn your income – that is, the expense is directly (not sort of) related to your work. 

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2019 Tax Planning

Feel like you're paying too much tax?

Get on the front foot with Collins Hume this tax time and plan proactively to minimise your tax before 30 June.

tax timeHave you thought about your tax planning for this financial year?

Would it help to know your tax position before 30 June and how to minimise your tax and protect your assets?

Don't leave tax planning to chance
Smart business operators plan for their tax throughout the year, not at the last minute. As tax can be a major cost to your business, we work with you to minimise your tax and help you achieve your key business and lifestyle objectives.

Collins Hume provide the one stop shop for all your financial and tax affairs including tax returns, management accounting, activity statement preparation, payroll advice, GST, fringe benefits and FBT, tax minimisation and management of ATO audits.

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Effective ways to donate to charity

You don't have to be Bill Gates to be a philanthropist
When you think about philanthropy, it might be something like the Bill and Melinda Gates Foundation that comes to mind. But philanthropy isn't just for retired billionaires. 

Amanda at ElstonIn fact, anyone can set up their own perpetual charitable fund with as little as $50,000 and enjoy the satisfaction that comes from making a real difference.

We recently sat down with Amanda Sartor, Manager of Elston Philanthropic Services, to see how she is helping people connect with causes that are close their heart. It's clear that it's a job that she loves. "For me, it's wonderful seeing someone find a way to not only give, but also get so much in return," said Amanda.

Here's a short excerpt from our interview with Amanda.

Is Philanthropy related to fundraising and volunteering?
Absolutely. If you're giving your time, skills or money to support causes in your community, then philanthropy is already a natural part of your life. You might be sitting on the board of a Not-For-Profit or volunteering at the local surf club. That's philanthropy too.  Read more…

Rental deduction audits

ATO doubles rental deduction audits
In the 2017-18 financial year, more than 2.2 million Australians claimed over $47 billon in deductions and the Australian Taxation Office (ATO) thinks that is too much - one in ten is estimated to contain errors.

rental property audits4,500 audits of rental property deductions will be undertaken this year with the 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. 

Deliberate cases of over-claiming are treated harshly with penalties of up to 75% of the claim.  

In one case exposed by the ATO, a taxpayer had to pay back $12,000 in claims for deductions against a holiday home that was not genuinely available for rent and was blocked out during the holiday season. 

In another, a taxpayer paid back $5,500 because they had not apportioned their rental interest deduction to account for redraws on their investment loan to pay for living expenses.

Call us on 02 6686 3000 for clarification on allowable deductions so you stay in the clear.

Let Collins Hume partner with you to achieve greater business and lifestyle success as your trusted advisers. Call us in Ballina or Byron Bay on 02 6686 3000.

Discretionary trust distributions

A Labor Government on Tax & Super
Minimum 30% tax on discretionary trust distributions

trustThere are around more than 690,500 discretionary trusts, also known as family trusts, in Australia. Discretionary trusts are popular as the trustee has the discretion on how to pay the income or capital of the trust to the beneficiaries – beneficiaries do not have an interest in the trust. 

Income can be apportioned by the trust to the beneficiaries on a discretionary basis, for example, to beneficiaries on a lower income tax bracket. As a result, discretionary trusts are often used to protect assets within family groups, manage succession, and to distribute income tax effectively within that group.

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