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FREQUENTLY ASKED QUESTIONS
- How long should I be keeping receipts for?
- Do I need to keep a log book?
- What are rental property borrowing costs and how are they claimed?
- Do I need to be registered for GST?
- Should I be paying my staff super?
- Medical Expenses - What can I claim as part of the 20% Medical Expenses Tax Offset?
- What deductions can I claim?
- What is transition to retirement?
- What is negative gearing?
Q 1- How long should I be keeping receipts for?
Generally speaking all records, including receipts, should be kept for a minimum of 5 years.
For more information regarding receipts and record keeping click here.
Q 2 - Do I need to keep a log book?
There are many different ways to calculate kilometers travelled, e.g. cents per kilometer method, 12% of original value method or 1/3 of actually expenses method. Using a log book allows you to claim using the method which awards you the greatest deduction.
For more information regarding log books click here.
Q 3 - What are rental property borrowing costs and how are they claimed?
Borrowing costs can include:
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Stamp duty charged on the mortgage
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Loan establishment fees, fees for a valuation required for loan approval and lender’s mortgage insurance
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Title search fees charged by your lender, costs of preparing and filing mortgage documents and mortgage broker fees.
If these amounts are less than $100 in total they can be deducted immediately, otherwise they are generally deductible over five years or over the term of the loan, whichever is less.
For more information regarding borrowing costs and rental properties click here.
Q 4 - Do I need to be registered for GST?
If you are a business receiving a GST turnover of $75 000 or more, are not-for profit entity receiving a GST turnover of $150 000 or more, or a provider of taxi travel then you must be registered for GST. When we say GST turnover we mean your gross business income (not your profit), excluding any:
- GST included in sales to your customers
- Sales that are not for payment and are not taxable supplies (for example, some supplies to associates)
- Sales not connected with a business that you carry on
- Input taxed sales you make
- Sales not connected with Australia.
If you are not registered for GST, you must check each month to see whether you have reached the GST turnover threshold. If you reach the threshold, you must register for GST within 21 days.
For more information regarding registering for GST click here.
Q 5 - Should I be paying my staff super?
You should be paying super to your staff if they:
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Are between 18 and 69 years of age inclusive,
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Are paid $450 or more (before tax) in salary or wages in a calendar month, AND
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Work full-time, part-time or on a casual basis.
If you are self employed you do not need to contribute super on behalf of yourself, however, this is recommended as part of a retirement plan for yourself as no-one wishes to be working forever.
For more information regarding super click here.
Q 6 -
Medical Expenses – What can I claim as part of the 20% Medical Expense Tax Offset?
As part of the Net Medical Expense Tax Offset you may be eligible to can claim 20% of your total net medical expenses over $1500. When we say net medical expenses we mean all medical expenses paid less any refunds you received from Medicare or a Private Health Insurer. These types of expenses include all amounts paid to all qualified-
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Doctors, nurses, chemists and private or public hospitals.
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Dentists, orthodontists or registered dental mechanics.
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Opticians or optometrists, including for the cost of prescription spectacles or contact lenses.
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Carer who looks after a person who is blind or permanently confined to a bed or wheelchair.
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Therapeutic treatment under the direction of a doctor.
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Medical aids prescribed by a doctor.
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Artificial limbs or eyes and hearing aids.
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Maintaining a properly trained dog for guiding or assisting people with a disability (but not for social therapy).
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Laser eye surgery.
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Treatment under an in-vitro fertilisation program.
Expenses you cannot claim for include all cosmetic procedures such as teeth whitening or plastic surgery.
For more information regarding the 20% medical tax offset click here.
For a comprehensive checklist regarding Medical Expenses visit our Checklist section of the website.
Q 7 - What deductions can I claim?
Generally speaking you can claim work-related deductions when you incur an expense in the course of your job. These work-related expenses must;
For more information regarding deductions as per occupation click on the links below.
- Airline employee
- Australian Defense Force Members
- Building workers
- Cleaners
- Factory workers
- Hairdressers
- Hospitality industry employees
- Journalists
- Lawyers
- Nursers
- Performing artists
- Police officers
- Real estate employees
- Shop assistants
- Teachers
- Truck drivers
Q 8 -What is transition to retirement?
Transition to retirement allows people who have reached their preservation age to reduce their hours worked but not their income by ‘topping up’ their part-time income with a regular income stream from your super savings.
Note: your preservation age depends on your date of birth.
For more information regarding your preservation age and the transition to retirement scheme click here.
Q 9 - What is negative gearing?
A rental property is negatively geared if it is purchased with the assistance of borrowed funds and the net rental income, after deducting other expenses, is less than the interest on the borrowings. You can also borrow to purchase other investments such as shares or managed funds.
For more information regarding negative gearing click here.
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