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Frequently Asked Questions


Taxation
What do I need to bring in for my tax return?
Do I need receipts to claim deductions on my tax return?

If your claims exceed $300 then you need receipts to justify your deductions. There are certain expenses which may not need specific receipts, such as kilometre claims on a car, but they will need their own justification. Our accountants can talk you through the requirements of all deductions at the time of completing your tax return.


Will owning a rental property help me reduce tax?

In a lot of cases negatively geared investment properties can help to reduce tax by allowing a tax deduction for the net cost of the property. This is highly dependent on the property, amount mortgaged and specific expenses relating to the property, so we would suggest specific advice in relation to your specific situation. Negative Gearing plans rely on Capital growth of properties, so should not be entered lightly as the cost of entry and exit with property can be costly (Stamp Duty & Realestate Agent Fees).


What are the common items the ATO scrutinize?

Excessive amounts outside benchmark deduction for the item for your occupation, Data matching bank interest & group certificates, Private Health claims.


How much does it cost to get my tax return done?

A small price to pay to ensure your tax return maximizes your potential claims and to ensure completeness and correctness of your return.


Can I claim driving to and from work?

For the most part, travel between home and work is considered private travel, however there are circumstances where a claim can be made, such as carrying bulky tools or equipment, or travel to alternate workplaces. Please ask our accountants at the time of your appointment to consider your individual circumstances.


Can I claim parking for work?

If your workplace is set and the travel between home and work is classed as private in nature, then the parking costs are also private in nature. If there is provision to claim the travel to and from home, then the parking may be deductible. Please ask our accountants at the time of your appointment to consider your individual circumstances.


When can I rely on the substantiation exemption for Travel costs?

If you are paid a bone fide travel allowance, you are able to claim costs up to the substantiation exemption amount for only the amount you incur in earning your income while travelling. In a lot of cases a convenience travel allowance is paid which is not bone fide and as such, claims are not allowable, but please ask our accountants at the time of your appointment to consider your individual circumstances.


Can I buy a laptop for work?

So long as you use your laptop for work purposes, the cost of a laptop is claimable (usually depreciated) on your tax return.


How long before I get my tax return from the ATO?

The ATO have a service standard of 28 days for refund processing, however we typically see the money returned to our clients within 10 business days. Given these timeframes are out of our control once sent over to the ATO, there are no guarantees given on these timeframes.


How long does it take to have my tax return done?

A typical standard tax return appointment will take half an hour to complete once we have covered off on all questions and possible deduction items on the return. Rental properties or complex investment tax returns take a little longer depending on the complexity, but usually will take no longer than one hour to complete. For postal or email tax returns, we aim to have tax returns completed and returned to you within two weeks, however most are done the same week – depending on workload at the time.


Can I pay your fees from my tax return?

We cannot accept payment from your tax refund. Most tax returns require payment on the day, however in some cases we can send you away with an account to pay prior to lodgement of your return.


Why do I have to prepay tax to the ATO? (PAYG Instalments)

The ATO require prepayment of tax on investment or business earnings to ensure that you are not lumped with a large tax bill come the end of the year. These prepayment amounts are based on the last lodged tax return and can sometimes not truly reflect your current investment or business income. For this reason, should you receive a tax instalment that you feel is too high, or not enough, please contact one of our accountants to discuss the options available to you.


Can I claim meals for working overtime?

You can claim overtime meals when you are paid an allowance under an industrial instrument (award) and actually incur expenses for food and drinks. You can claim up to a reasonable amount without substantiation, but only up to the amount you have actually spent.


How can I reduce my tax?

There are a few ways to minimise your tax, the two main ways are paying more money into Superannuation and Negative Geared investments. Our trained accountants are able to advise you on these tax minimization strategies once they have taken into account your individual circumstances.


Can I claim working from home?

If you work does not provide you an office space at work and you are contracted to work from home, then there are certain abilities to make a claim for home office expenses, however we would strongly suggest you ask our accountants at the time of your appointment to consider your individual circumstances.


What are the common errors people make on a tax return?

The biggest error people make on their tax return is that they miss critical deductions which they are entitled to claim for. Our trained accountants cover all potential claim aspects of your tax return to ensure we maximise your tax return legally. Other common errors are Medicare issues and missing income, such as interest earnings from the return.




Salary and Employment
Should I salary package a car?

If you have a purely personal use vehicle then it can be advantageous to salary package a car with your employer rather than buy it outside your payroll. Given the variables with these sort of transactions, we suggest talking with the Novated Lease company your employer uses and if you have any further questions you can contact our office and we can assist with the transaction. There are cases where it can cost more to package a car, so the right advice is crucial.


Is Salary Sacrifice into Super a good option?

Superannuation contributions for most taxpayers are taxed at 15% going into Super. Given marginal tax rates are in the mid 30%’s for the average taxpayer, it can be an effective strategy to reduce tax. The downside to this tax strategy is that the money is locked in Super until you reach preservation age, which for a lot of us is age 60. There are a lot of factors to consider before making Super contributions, so we recommend talking with one of our experts about the options.


Can I be employed by my employer as a Contractor to enable me to reduce my tax and split income to my partner?

In a lot of cases if you are seen as an ‘employee’, then you are not able to be a Contractor and not able to split income to your spouse. These rules are covered by the Personal Services Income rules and are quite stringent when and how personal exertion income is treated. If you are being paid on a results basis, ie, paid to produce a result rather than an hourly rate and are responsible for the delivery of that result irrespective of the time or manpower, then it is possible that you can be a contractor. As this can be a very grey area, we strongly recommend an appointment with one of our trained professionals who will cover all aspects of your individual case and advise on the correct treatment of the income.




Personal Finance and Property
Should I lease a car or equipment finance it?

General rule of thumb is that if you are a business and GST registered, then Equipment Finance / Chattel Mortgages provide the ability to claim back the GST on the business use of the asset on the next Business Activity Statement. Leases only allow for the GST to be claimed over the term of the lease.


Should I set up a family trust for our investments?

Depending on your family situation and taxable income positions, family trusts can be an effective way to minimise tax on investment earnings. Our trained accountants are able to advise you on these structures and in most cases we would prefer to talk face to face about the costs and benefits of these structures.


Do I need a Depreciation schedule for my Rental Property?

In most cases a Depreciation Schedule will be advantageous if you have a rental property. There are some circumstances where they are not needed, such as a very old building with no recent renovations, but for most rental properties it is worthwhile. We work closely with Quantity Surveying companies and can recommend some good people to complete these reports.




General Business
Should I set up a Company?

The decision to set up a Company to run your business is a matter to discuss with us directly as every situation will have a specific set of circumstances. Companies are an effective way of reducing tax in the short term as well as protecting assets. Our accountants can assist with these queries in a face to face meeting.


What is the best structure for my small business?

As every small business is unique, it is strongly recommended that you seek one-on-one advice from one of our trained accountants who will take into account your individual circumstances.


How much turnover do I have to have before my hobby is classed as a business?

here is no set rule as to when your hobby becomes a business. There is a range of questions that need to be addressed before you can make a determination, such as how much am I turning over, where does the work come from (ie, are you advertising), how repetitive is the activity, are you doing it for the money or for the love of it? If you are unsure then please talk to one of our specialists and we will be able to provide you with some guidance in the matter.


How can I pay less tax?

Income tax is cheapest when paid through a Company, however decisions to retain profits in a Company have strict criteria. To answer this question we would have to know more specific details about your personal situation. It is recommended that you talk with one of our small business accountants about your own unique situation.


What accounting software do you recommend?

Cleave Accounting are partners with all the large software providers, including Xero, MYOB, Quickbooks and Saasu. We also support some of the smaller providers, however we suggest you talk with one of our experts about what package will best suit your needs.


Can you help me grow my business?

We can. Our approach to your accounting matters starts with helping you understand the financial health of your business. Ideally we like to meet with clients on a quarterly basis for a quick catch up and review of your figures. From there we discuss how your figures show you are going verses your cash position. We also assist with tax savings and tax planning during these meetings. Knowledge is wealth.


I feel like I am paying too much GST. Am I?

There are only two reasons you are paying a lot of GST. Bookeeping mistakes, or the fact you are making money. If the latter is the problem, then it is a very good problem to have. Our accountants are trained to spot and rectify GST problems and bring them to your attention and we will work with you to help understand or fix the GST problems that you have.




Important Notice


Whilst this FAQ is drafted with an information intention, it cannot be classed as advice. Any items referred to in this FAQ are general comment and does not constitute or convey advice. Your unique and personal circumstances as well as changes in legislation can change the outcome of the items addressed and we strongly suggest you seek our one on one advice should you wish to rely on any of the items covered in this FAQ.



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