tax tips

[mako]

Any tips on things you can claim as a deduction on your tax when self employed as a biulder. I know the usual stuff but i hear stories about people claiming for the dogs because they claim they look after his tools. Just after some differant things like that. My accountant is ok but not overly creative in the things he claims. Doesnt like to push the envelope so to speak.

[Sturdee]

My accountant is ok but not overly creative in the things he claims. Doesnt like to push the envelope so to speak.

Why should he.:(( If he helps you to cheat the Tax office will prosecute him as well as you.


Peter.

[journeyman Mick]

While I'm sure that most of us wouldn't want to cheat the ATO there are legitimate deductions that some accountants don't seem to know about. It is legal to claim a watch dog if its sole purpose is to guard your tools or business premises. I did for a number of years and anyone that ever came anywhere near him would attest to the fact that he was definitely not a pet. (He drew blood on a number of occasions:o)

Similarly I found out from my accountant not long after I enetered the trade that if one was required to carry tools of the trade that were not able to be transported by public transport then any travel from home to work was a legitimate deduction. Yet many tradesmen I mentioned this to reported that their accountants were unaware of this.

If you have a room set up at home that's soley devoted to a home office space then you can claim the % of floor space as a % of your rent. I wouldn't reccomend claiming a % off your mortgage as it will complicate things horribly if/when you sell. You can, however claim that same % of your electricity bill.

You can't claim a raincoat to protect you from the elements but you can claim one to protect you if you are washing down a job. You can't claim a portable fridge for your ute (unless you have employees and you need to keep their lunch cold) but you can claim one to keep your cartridges of sikaflex cool.

Mick

[Barry_White]

Why should he.:(( If he helps you to cheat the Tax office will prosecute him as well as you.


Peter.

I thought that when he gets you to sign the tax papers he is absolving himself because he is only doing what you have instructed him to do and he is just submitting every thing on your behalf.

[Abug]

I was watching a Home Hardware (I think) King Gee Tradie Competition on tv and they said you can claim a GPS navigator as it gets you to jobs quicker and not get lost finding the the place. Also best thing about the navigators is that you can put a memory card in them and it can record the Km's travelled which you can also claim.

[Calm]

Firstly are you an
employee - limited claim items or a
contractor - 80% or more of your income from the same person
- income from various sources.

If you are a contractor with 80% or more income from one person/company then you are basically on the same basis as an employee.

As a contractor there are many things to claim.



My accountant is ok but not overly creative in the things he claims. Doesnt like to push the envelope so to speak.

If you dont have confidence in your profesional/accountant then you should change and find one you have confidence in.


I thought that when he gets you to sign the tax papers he is absolving himself because he is only doing what you have instructed him to do and he is just submitting every thing on your behalf.

I think Bazza is on the money there. You sign to say that everything in your return is correct. - read the small print. Did "Strop"'s (John Farnham's manager) accountant go to jail for tax avoidance or was it just him?

[snowyskiesau]

The best tip seems to be - get a new accountant.

When I first went to my accountant I was amazed at some of the work expenses he claimed for me (IT industry). In 10 years, I've only been audited once and it didn't involve any penalties. I didn't even have to front the ATO, the accountant took care of it all. In fact I only found out about it when the accountant sent me a letter saying it had happened, no charge to me as his fee covers any dealing with the ATO.

[journeyman Mick]

Firstly are you an
employee - limited claim items................

Actually as an employee you can still claim travel to and from work if you are required to carry large or bulky tools. There was a test case many years ago. A Quantas engineeer had his tools knocked off at work so started taking them home. Wasn't able to catch the bus carrying all the bulky gear so drove and claimed the mileage. ATO dissallowed it and it went to court. Employees can claim travel to and from work if their work is of an itinerant nature or if they are required to carry large or bulky tools/materials as part of their work (ie saw horses, boxes full of tools, ladders). You can claim laundry costs of your uniforms as an employee also. Mako, if your're self employed it makes sense to have a business uniform. To qualify as a uniform it must have your full business name permanently marked on every piece of the uniform. Costs of acquiring and laundering said uniform items is 100% tax deductible.

Mick

[journeyman Mick]

I was watching a Home Hardware (I think) King Gee Tradie Competition on tv and they said you can claim a GPS navigator as it gets you to jobs quicker........


You can claim a GPS navigator and any street directories if your work entails driving to different jobs. Of course you can only claim the % used for work activities.

Mako,
as a builder you will probably need a camera to document work, this is also tax deductible. Also very handy for quoting jobs, as the photos refresh your memory and show lots of details.

Mick

[mako]

Yeah thats what i mean. Things like my camera. I only use it for work. i didnt think of claiming it. I dont want to do any illegal stuff but find things i can claim that you wouldnt normally think of. We are so over taxed already i dont want to give them more than i have to.

[Calm]

As an employee or PSI contractor (Personal Services Income- contractor with >80% income from one source) You can claim anything that is used specifically to ern your income.

Protective clothing - as a builder you could claim 1 or 2 pairs per year rubber boots (used in the wet weather) Leather boots 2 or 3 pairs per year. Overalls 3 or 4 pairs per year. Wet weather coats, plastic pants. These are all protective clothing and dont need to have company names etc on them. In fact a good accountant would estimate there costs without receipts. Also as part of this you can claim (i think $85 per year) for sun protection - sunscreen, hat, sunglasses - without receipts but with receipts you can claim actual cost ($200 oakleys) but you acn only claim work %. If you wear them weekends deduct 2/7ths for personal use.

Travel from the first job to any other or if you go to a "starting point" each day any travel from there until you leave to go home. Up to 5000 km per year without a log book but you need to be able to substaniate it. With a log book (kept for a 13 week period every 3 years) you can claim the % of all costs - fuel and oil can be estimated once again.

Travel from home to the first job and from the last job to home can be claimed if you carry sustansial tools and the boss provides no "locked" enclosure for overnight storage.

There is many other things like meals, dog, parking, etc but a good accountant will do all that for you.

Accountants dont need to be iin your town anymore as you can post you recipts etc and they will post returns for signatures. They also can work off your bank statements if you are a contractor.

Hope that clears up some of the 1/2 facts that preceed this post.

Sorry but my day job is an accountant and i claim these and more everytime i do a return. My boss has quite a few investigations from the ATO and alwys they are cleared.

cheers david

[mako]

I drive a 1 tonne capacity ute. I beleive i can claim 100% costs?

[Calm]

I drive a 1 tonne capacity ute. I beleive i can claim 100% costs?

Are you a contractor with no more than 79% of your income from one source?

[mako]

yep

[Calm]

yep

You can claim all the ute as it is a business vehicle and i would do a log book for the family car and then the accountant can choose if the logbook method or the 5000km method is best for it. Of course you would use the family car to quote on jobs, pick up supplies etc so that should be claimed. 5000 km is a reasonable estimation. If you went to a Turnfest/forum get together that would be educational

Camera although some would be personable, home office - there is a ATO acceptable amount for that. you would have entertainment, keeping up to date with OH&S and work journals.

As i said at the start if your not satisfied with your accountant change as they will usually try harder the first year to impress.

good luck

david

[mako]

thanks david. thanks for the advise:2tsup:

[artme]

Now,now Sturdee!!:D:D:D

[manoftalent]

The ATO will answer any question put to them in regards to your tax .....they are not in the business of giving advise ......but they will answer your questions in full and provide an accurate account of how to go about filling in the correct forms, with the correct details required to ensure you get your entitled refund ...all you have to do is ....ring and make an appointment ...or ......talk to them over the phone and have any paperwork/forms sent out to you .......points to remember before ringing ...have your tax file number handy, and a list of questions your going to ask ....pen and paper ready to write down the answers .....simple as that .....and if I am not mistaken, you can go to the website ... www.ato.gov.com.au (http://www.ato.gov.com.au) and send them an email with your query/s ...

The ATO is not going to "do your taxes" for you, but they will help YOU do them properly...its all part of the service, our taxes pay for it, so you might as well use it.....

[Chesand]

When I first went into business 30 years ago the best advice given to me was
"Declare all that you earn, but claim everything that you are entitled to and you won't have a problem". The ATO expects just that.

[Sturdee]

I thought that when he gets you to sign the tax papers he is absolving himself because he is only doing what you have instructed him to do and he is just submitting every thing on your behalf.

Actually it isn't.

Amongst the ATO arsenal of weapons to combat tax evasion is a small piece of separate legislation, introduced (and to my knowledge not yet repealed) to combat the original bottom of the harbour schemes.

This legislation makes the professional advisors, be it accountants or lawyers, liable for any tax evaded on their advice if the taxpayer is unable to pay their debt to the ATO.

It critically affected the profitability of the accountancy practice I was working for at the time. :(( Cost me my expected and regular bonus. :((


Peter.

[Afro Boy]

There is many other things like meals, dog, parking, etc but a good accountant will do all that for you.

Dog? Really? :o

[artme]

Yes Afro boy!! Really - guard dogs, farm dogs for stock work.

[johnc]

Actually it isn't.

Amongst the ATO arsenal of weapons to combat tax evasion is a small piece of separate legislation, introduced (and to my knowledge not yet repealed) to combat the original bottom of the harbour schemes.

This legislation makes the professional advisors, be it accountants or lawyers, liable for any tax evaded on their advice if the taxpayer is unable to pay their debt to the ATO.

It critically affected the profitability of the accountancy practice I was working for at the time. :(( Cost me my expected and regular bonus. :((


Peter.

It certainly was the case in the past where the client usually got the fine even if the Accountant had provided incorrect advice. Recent changes mean the Accountant may also be liable for fines or penalties especially if they have submitted claims that are false. Sturdee is right although the old legislation was limited in reach, the new changes are more general and aimed at those that submit claims without substance.

There are no rules on estimating claims for boots, gumboots etc, if the total work related claims are over $300 you need receipts.

As for guard dogs, the mut that sits on the ute and shares your lunch and plays with the kids at night is a pet and not a guard dog. Farm dogs are fine as are dogs that really do operate as guard dogs, and that means locked in yards, mean hungry mutts that would rather take your leg off than get an ear scratched. Mind you there are shades of grey, and the facts of each situation deterimine the validity of the claim.

[journeyman Mick]

.....................As for guard dogs, the mut that sits on the ute and shares your lunch and plays with the kids at night is a pet and not a guard dog..........................

My dog sat on the back of the ute and shared my lunch but he was most definitely a guard dog. He bit a number of people that were foolish enough to come too close to the back of the ute. I wouldn't have minded being audited when I had him, just so I could prove that he was indeed a guard dog that guarded my tools and my ute.:D I had visions of the tax inspector going home with shredded clothes. I had to muzzle him when he went to the vets as he managed to bite a hole in the front of his jacket when a rectal thermometer was inserted!:o

Mick

[johnc]

My dog sat on the back of the ute and shared my lunch but he was most definitely a guard dog. He bit a number of people that were foolish enough to come too close to the back of the ute. I wouldn't have minded being audited when I had him, just so I could prove that he was indeed a guard dog that guarded my tools and my ute.:D I had visions of the tax inspector going home with shredded clothes. I had to muzzle him when he went to the vets as he managed to bite a hole in the front of his jacket when a rectal thermometer was inserted!:o

Mick

In that case Mick you fitted the shades of grey requirement:2tsup:, it all comes down to being able to provide a reasonable basis for a claim against assessable income, there must be income, the claim must be relevent to earning that income, and the claim must not be specifically excluded. A speeding fine hurrying between jobs would not be a claim for example.

[Calm]

I once applied for a personal judgement on claiming a dog. I was driving a stock truck for a two days a week and was told that i could only claim 2/7ths of the dog expences.

After a short phone call from me the final verdict was i could claim the full costs for the dog because of the training and reliance on me to look after it. I argued that the boots, rubber boots & overalls were also only used 2 days a week but could claim the full amount.

They are dumb ba@#$%^&$s but usually if you can argue your point well you get on alright.

[Calm]

When doing tax returns one thing that i found out for truck drivers is to ensure your employer pays you a reasonable meal allowance.

If they dont at the end of the year you count the days up in your logbook you stayed away from home and get about $20 per day on your group certificate as a meal or away from home allowance.

It will not cost your employer as they just transfer this amount from your gross income into allowances

The ruling on the ATO website gives a per day meal allowance for this and you can claim about $70 per day with no receipts. you only need to be able to show you were away from home (interstate only)

Good one for the truckies.

[journeyman Mick]

In that case Mick you fitted the shades of grey requirement:2tsup:, it all comes down to being able to provide a reasonable basis for a claim against assessable income, there must be income, the claim must be relevent to earning that income, and the claim must not be specifically excluded. A speeding fine hurrying between jobs would not be a claim for example.

The ute was used 100% for income production and carried my tools of trade and materials. The dog specifically guarded the ute, he wouldn't go people at home or on the jobsite only if they got close to the ute. I can't see that it would be any different than an insurance policy covering the ute, tools and materials against theft. He was my insurance policy and proactive car alarm.:2tsup: I still wish I could've demonstrated his ute-specific guard dog abilities.:D

Mick