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DISABILITY AND AGED CARERS

TAX RETURNS

For the year ended 30 June 2018

$30,000 Salary Packaging Exempt Fringe Benefits

Your employer must be a Not for Profit - Public Benevolent Institution e.g. Endeavour or Centrecare

The maximum Grossed Up Exempt Fringe Benefits per employee is $30,000.

The maximum Un-grossed Up Exempt Fringe Benefits per employee is $30,000 x .535 = $16,050.50

This is the equivalent of a tax deduction as it paid in pre-tax dollars.

For most clients this means at tax refund of $16,050.50 x 34.5c (tax rate > $37,000) = $5,537.42

Or $5,537.42 / 26 fortnight pays = $212.98 per fortnight tax refund.

 

How are these payments made?

Many clients have these amounts paid into their home loans, car loans, credit cards, rent or other private payments.

 

Who makes these payments?

Usually your payroll.

You will need to contact payroll to see if you satisfy their conditions.

 

OVERNIGHT TRAVEL EXPENSES

 

Draft Taxation Ruling TR 2017/D6 Paragraph 63.

"In this draft Ruling, 'sleep away from home' does not describe the activities of employees who are on duty while sleeping at a workplace near their home - for example, a hostel worker, care worker or overnight supervisor at a boarding school,' or choose to sleep near their workplace, rather than returning home between their work shifts."

Please read TR 2017/D6 Example 5 below for the definition of near, that refers to 50 kms.

There may be exceptions to this general rule but I would recommend that you leave out any claims then object within 60 days so as to avoid penalties.

If successful you must keep actual records for your meals and incidentals.

These will usually be Coles and Woolworth's receipts.

You must keep all your receipts and apportion for overnights.

 

 

MOTOR VEHICLE EXPENSES

 

30 June 2016 & 2017

 

Travel to and from work is usually not a tax deduction.

Some exceptions are:


1. Carrying bulky equipment with no secure lockup at work.

 

(Bulkiness of equipment is determined by size & weight.  For tradesmen it could mean a minimum of a 40 kg tool box plus other items e.g. nail guns, drills, drop saws, materials, etc. Bulkiness is also determined by size e.g. Ladders, bench horses, large oil drums, spare tyres, etc.) If in doubt ask for a private ruling.


2. Travel between two places of work.


3. Travel to attend meetings and then to home or work.


4. Travel from home or work to see clients and then back to home or work.

 

5. Some travel to a place of education.

 

6. When you travel overnight for work.

This only applies to motor vehicles whose carrying capacities are 1 ton or less or fewer than 9 passengers.


One vs Multiple Work Locations

Most of my clients seem to have one of two types of travel situations.

1. Where they only visit one house then take clients on excursions.

In these situations travel to and from the client's house would not be business travel but travel with the client on excursions would be allowable.

or

2. Where they travel to multiple houses to assist various clients then take them on excursions.

In these situations business travel starts from when you leave home and ends when you arrive home including all excursion travel.

 

Most of my clients use the ‘log book method’ or the ‘set rate per kilometre method’.
 

Method 1

LOG BOOK METHOD

You must keep a log book for 12 weeks for each car once very 5 years.

You must start a new log book when you change cars or the business % changes by more than 10%.

You must have written evidence for registration, insurance, services, repairs, depreciation, interest, lease payments, RACQ, car washes etc.

PLEASE SUMMARIZE THE FOLLOWING:

Motor vehicle - 30 June 2016 and 30 June 2017 odometer readings

Motor vehicle - Log book % and business kilometres travelled

Motor vehicle - Fuel

Motor vehicle - Registration

Motor vehicle - Insurance

Motor vehicle - Interest or leasing expenses (Please provide hire purchase or loan agreement)

Motor vehicle - Repairs

Motor vehicle - Depreciation (Please provide date of purchase) 25% diminishing value method

If purcased between 12th May 2015 and 30 June 2017 and < $20,000 then depreciation is 100%.

Motor vehicle - Breakdown service e.g. RACQ

Motor vehicle - Car washes

Motor vehicle - An extended warranty is deductible spread over the period that the warranty applies. e.g. If you

have a factory warranty for 3 years then you buy an extended warranty for 3 years. You may claim an apportioned

tax deduction over years 4, 5 and 6.

 

You may claim $200 worth of items costing < $10 without receipts.

You do not need receipts for fuel based on a reasonable estimate of the cost per business kilometres travelled.

e.g. 500 kms per tank with an average fill up of 50 litres = 10 kms per litre.

Therefore 15,000 kms / 10 kms = 1,500 litres x $1.25 (average petrol cost per litre in QLD) = $1,875

 

Method 2

SET RATE PER KILOMETRE METHOD

Motor vehicle tax receipt exception: ‘set rate per kilometre method’ 66c per kilometre x up to 5,000 kms.

You must be able to work out your estimate by using a diary or regular pattern of travel.

This means that the maximum claim using this method will be 66c x 5,000 kms = $3,300.


 Example:

Jenny is a carer and travels to multiply clients homes every day. Jenny has kept a log book for 12 weeks which shows his work travel is 95%. Jenny purchased a Toyota Hilux which has a 2 litre engine on 01/07/2011 for $25,000 which he financed through a hire purchase chattel mortgage at an interest rate of 9%. His odometer reading on 30 June 2017 was 75,021 kms and his car travelled 25,000 kms in the year. Jenny's car does 500 kms on a 55 litre tank of petrol. The average cost for petrol in QLD was $1.25 per litre.

 

Method 1 - Log Book

Fuel 25,000 kms/(500kms/50 litre tank) x $1.25 per litre = $3,125

Registration $680

Insurance $650

Interest on loan  $25,000 x 6% = $1,500

Repairs, services & tyres $900

Depreciation $25,000 x 25% = $6,250

Breakdown service RACQ $96

Car washes $120

Total                                       $13,671  x 95% Log book = $12,654.95

E.g. Tax refund x 34.5c (tax rate $37,000 to $80,000) = $   4,365.96

 

Method 2 - Set rate per kilometer

Business kms 25,000 kms x 95% = 23,750 kms

Limited to 5,000 kms x 66c = $3,300

E.g. Tax refund x 34.5c (tax rate $37,000 to $80,000) = $   1,138.50

 

Jenny hooses Method 1 because he will receive the largest tax refund.

 

Google ATO work related car expenses
 

ATO Practice Statement LA 2005/7

In some circumstances BPAY and internet banking statements may include sufficient details to support the correctness of your claims. Suppliers may not issue a receipt containing all the information required by the substantiation legislation. However you may use a combination of other documents to support your claims.

e.g.,  K-Mart Auto Service, BWM Service & Repairs,  Ablion Auto Works, etc. plus a break up of expenses, etc.

In some cases if a credit card statement has the date of the transaction, the name of the supplier and the amount paid and you make a note on the credit card statement detailing the items purchased with their respective prices, the Tax Office may accept this as sufficient evidence.

The above does not apply for EFTPOS transactions because bank statements do not show cash withdrawals separately.

 

 

KEEPING RECORDS

 

Record keeping is hard. Try taking a photo of your receipts with your

mobile then emailing it to yourself then save as a file under tax.

 

Protective clothing

Protective clothing are generally tax deductible if it is designed to protect:

Steel capped boots, high visibility shirts, fluro trousers, fire proof clothing, non-slip safety shoes, aprons, etc.

Many carers claim non slip safety shoes for slippery and wet bathroom situations.

 

WORK EXPENSES

iPhone, mobiles & home phone

Computers - iPads, Macs, laptops & desktops

Computer supplies

Stationery - Cartridges, diaries, pens & office sundry

Internet

Self education, conferences and courses.

 

PRIVATE USE APPORTIONMENT

If there is private use (other than incidental use) a 28 day diary is required every year.

A diary can be a simple A4 pad with a line in the middle with work & private on opposite sides.

 

RECORDS

You may claim $200 worth of items costing < $10 without receipts.

 

SUN PROTECTION AND SUN GLASSES

Includes sun glasses (not perscription), sun screens and hats.

You do not need receipts for up to $200 of items that cost less than $10. The $200 is a total for the whole tax return.

 

TOLLS & PARKING

You do not need receipts for up to $200 of items that cost less than $10. The $200 is a total for the whole tax return.

 

COURSES

Courses include fees (but not HECS), books, laptops, internet, stationery, home office expenses, some travel to a place of education.

You do not need receipts for up to $200 of items that cost less than $10. The $200 is a total for the whole tax return.

The course must relate to your current income producing activity, not income that will be made in the future. e.g. Medical School expenses are not a tax deduction for a doctors income in the future.

If your course is run by a university, TAFE or college you must reduce your expenses by the first $250.

Many of my clients do 1st Aid courses.

 

SECURITY/CRIMINAL CHECKS ATO TR 98/6 PARA 177

Security checks are usually not deductible as the expense happens at a point too soon before the income is earned.

Renewal of criminal checks may be deductible as you are currently earning income e. g school teacher's blue cards.

 

TR 2017/D6 Example 5

Working at new locations every few weeks and staying away from home

Special demands travel (deductible)

Work-related accommodation (deductible)

Mike is an employee foreman specialising in road construction, particularly intersection construction. He works for a road construction firm, which has an office near Mike's home in Melbourne. Mike does not have a set desk as he is rarely in the office, only attending meetings one or two times per month.

Mike is mainly based and required 'on-site', which can be anywhere throughout Victoria. He generally works Monday to Friday, and is paid separate weekend rates if required to work on weekends.

Work equipment required for the projects is carried on trucks driven by other employees.

Projects can be between 50 to 200 kilometres away from Mike's home or the firm's office, and can last for periods ranging from one to eight weeks. Where a project is more than 100 kilometres from home, Mike is paid a daily 'travel allowance' by his employer for the number of days of the project to help cover the cost of his accommodation and meals.

Apart from being paid for weekend work and receiving the daily 'travel allowance', Mike's salary package recognises all aspects of his position, including the requirement for him to travel between Melbourne and various project sites at the start and end of each project. His employer requires Mike to respond to any work calls received while in transit between Melbourne and the project sites.

It is up to Mike to decide if he stays away from home overnight when at project locations. If he does stay away, he arranges his own accommodation and meals. Typically, where the project is more than 100 kilometres from home, Mike usually chooses to stay in short term accommodation such as motels, bed and breakfasts, or a cabin or caravan at a caravan park, depending on what is available in the area in which his 'road construction team' is working.

Mike always stays in one accommodation location for each project and commutes between that accommodation and the project site.

Mike does not travel from one project to the next or from one work site to the next. Mike will usually travel from home to a particular project site and then return home upon completion of that project.

On occasions Mike chooses to travel back to Melbourne from a project location during the week or on weekends, rather than staying away from home overnight. On these occasions, he returns to the project location in time to recommence work at the required time. He undertakes this travel at his own cost.

Mike's transport expenses for trips between Melbourne and the project locations at the start and end of each project and are deductible. Mike undertakes this travel in the performance of his work activities, which reflect special demands associated with ongoing travel between various work locations.

Mike's accommodation, meals and incidentals for the periods he spends away from Melbourne on projects are deductible because the travel is required by his work and he is not living away from home.

The cost of travel between project locations and Melbourne during the week and on weekends is not deductible. It is not undertaken in performing Mike's duties, and occurs by choice for personal reasons.

Further, Mike cannot deduct accommodation and meal expenses for periods when he has returned home, including for periods when Mike receives a travel allowance to cover the costs of working away from home and he chooses to travel home. These are private expenses (Return to paragraph 40 or 58 of this draft Ruling).

 

 

 

DISCLAIMER

The information provided in the above documents are not intended to be, nor should it be construed as tax advice. Any specific recommendation for a client can only be done after their individual circumstances have been determined by David Douglas Accountants.

We have clients from the following locations:

Brisbane, Gold Coast, Sydney, Newcastle, Sunshine Coast, Cairns, Canberra, Melbourne, Adelaide, Perth, Darwin.

Other:

Brisbane, Albion, New Farm, Teneriffe, Newstead, Windsor, Wilston, Bowen Hills, Wooloowin, Herston, Lutwyche, Hamilton, Eagle Farm, Gordon Park, Fortitude Valley, Clayfield, Ascot, Hendra.

Morayfield, Burpengary, Caboolture, Bellmere, Wamuran, Narangba, North Lakes, Mango Hill, Kallangur, Dakabin, Deception Bay, Bribie Island, Elimbah, Kippa-Ring.

We do tax returns for individuals, trusts, companies, partnerships, contractors, ABNs and sole traders.

 

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