Happy New Year
Welcome to the Personal Tax Specialists 2016 Tax Time Update.
Your 2016 tax return
It’s hard to believe another financial year is nearly over, but that means it’s time to start getting your records together again for this year’s tax return. We will be emailing your ‘2016 Quick Update Form’ to you in the month you indicated you would like to have it done. If you would like to have your tax done earlier this year, please just let us know and we will send the quick update form through straight away.
New team members
As you may know, Chris has now started her long planned for ‘around Australia’ travels with her husband. Unfortunately, with the unreliable phone and internet service in the more remote areas of the country, she has been having trouble keeping in touch as often as she would like.
So to make sure Personal Tax Specialists can continue to provide the level of service our clients expect, Kerry and Diane Lavering will be joining the practice from July. Kerry is a Chartered Accountant and Registered Tax Agent with approximately 40 years’ experience specialising in providing tax accounting services to individuals, investors, property owners and small businesses. Diane is an experienced tax return preparer and bookkeeper who has worked with and supported Kerry in his accounting practices over the years. Kerry, Diane and the team are committed to continuing to deliver the friendly and efficient service our clients expect and look forward to helping take the pain out of tax time for you again this year.
Major changes in 2016
This year there have been a few changes that will affect your tax return in the 2016 year and beyond. Some of the things that you might need to be aware of are:
1. Changes to the zone offset
From 1 July 2015 you will only be able to claim for the zone offset (for living in a remote area) if your main residence is within a zone. In the past you could claim for the zone offset based on the number of nights you were staying in a remote area for work. This will no longer be allowed.
Please check with us if you unsure whether you can claim for the zone offset this year.
2. HECS/HELP debt repayments
From 1 July 2017, if you have a HECS/HELP debt you will be required to make repayments on this debt even if you are living and working overseas.
If you are planning to go overseas from 1 January 2016 (for more than 6 months), you will need to register with the ATO before you leave. If you are already living and working overseas, you will have until the 1 July 2017 to register with the ATO.
You will then need to lodge a tax return each year in Australia, declaring your worldwide income so that your HECS/HELP debt repayment can be calculated.
The ATO have published information about this change on their website, but please contact us if you need help with the registration process.
3. Changes to car expense claims this year
From 1 July 2015, there will only be two options for claiming your car running costs. The rate per kilometre method and the log book method.
Under the rate per kilometre method, the rate will be changed to a flat 66c/km for ALL vehicles, regardless of the engine size. This may mean that your claim for car travel is reduced by up to $500 this year.
If you have travelled significantly more than 5,000km this year for work and have kept a log book and all of the receipts relating to running your car, it may be worth claiming for the actual costs this year. Ask us when we are preparing your return if you are not sure which option will work best for you.
4. Claiming for your mobile phone and internet costs
If you use your personal phone and internet for work then you can claim for a proportion of these costs, but beware that the Tax Office will be keeping a close eye on these types of expenses this year.
If you plan to claim for work related use of your mobile phone, landline phone and/or internet costs in your 2016 tax return you should read the information sheet published by the Tax Office on their website and make sure you have all of the records you need to substantiate your claims.
Basically this means that, unless you are only claiming a maximum of $50 for each of these expenses, you are required to keep a 4 week diary to prove the work and private use of each of these expenses every year! The diary entries can be either hand written or electronic (e.g. using an app or spreadsheet). You will still need to keep copies of receipts for payment of these expenses as well.
It is also helpful if you can provide evidence that your employer expects you to work at home and/or use your personal phone and internet for work (this evidence might be contained in your employment contract and workplace policies or in an email from your manager).
This year’s audit targets
The Tax Office hasn’t announced their audit targets for 2016 yet. But if you claim for a large amount of work expenses or for any unusual deductions for your occupation, you may be on the Tax Office’s radar this year. So no matter how much you plan to claim, make sure you have records to prove all of your expenses.
At the very minimum, the records you need to keep for your work expenses are:
- receipts for all work expenses costing $10 or more
- a diary record of any minor work expenses (costing $10 or less and up to a total of $200 for the year) where you haven’t kept the receipt
- a diary record of any work related trips you have made in your personal car
- a diary record of your internet use for work for one month during the year
- a diary record of your telephone use (mobile and home) for work for one month during the year.
If you are unsure about what expenses you can claim for in your occupation have a look at the updated ‘what deductions can you claim’ page on our website.
If you know of anyone who might find any of the information in this email useful, please feel free to forward it on to them.
Thanks for your support over the last year and as always, if you have any tax related questions, please just ask. We look forward to catching up with you over the next few months.
The Personal Tax Specialists team