April 4, 2017
Tax season is just around the corner. Get it right and you could see a very nice return. Get it wrong and you could end up out of pocket. Follow these basic tips to help get your tax in order:
1. Get organised
Goes without saying, right? But even in 2017 there is still a large proportion of Aussie tradies who limp in to tax time with a shoebox full of receipts from the hardware store and a glovebox stuffed with receipts from the servo.
As a tradesman you are entitled to claim a wide range of expenses including tools, motor vehicle and travel expenses, work-related phone bills, some education, uniforms and protective clothing as well as the cleaning expenses for this clothing.
Keeping records of each of these expenses over the year is key to maximising your return and minimising the hassle involved it lodging. And with the number of tools and apps available now to help simplify record-keeping, there really is no excuse for not staying on top of things.
The recently released enhancements to the myDeductions tool on the ATO app makes it easier and more convenient that ever to keep your tax deductions and income records all in one place.
Easily capture information including expenses, vehicle trips, income and photos of invoices and receipts, and then easily submit to your agent once tax time rolls around.
The ATO app is free to download from their website.
2. You can’t beat the system
The building and construction industry remains one of the main targets of the ATO’s attempts to retrieve revenue lost due to the illegal cash economy. Made up of around 406,000 businesses, building and construction has been identified as one of the riskiest industries for the cash economy.
The ATO now uses data and analytics to target the building and construction industry, combined with on-site visits and the use of social media to cross-check peoples claims.
With billions of dollars still being lost to the cash economy, the ATO will continue to step up its auditing of the building and construction industry. If you are making claims be sure it’s kept above board and you have the correct paperwork to back it up, otherwise it will only be a matter of time before the ATO comes knocking.
3. It’s last call for the instant asset write-off scheme
The 2015 Federal budget saw the introduction of the $20,000 instant asset write-off scheme, allowing any businesses turning over up to $2 million to immediately deduct the full value of every asset purchased, up to the value of $20,000.
Last year the offer was extended to businesses turning over up to $10 million. The instant write-off previously applied only to items valued at $1000 or less, with anything over that amount needing to be claimed each year, but only by the amount it had depreciated.
However with the scheme due to end June 30, time is running out to take advantage of an instant return on some big ticket items. The scheme also includes the purchase second-hand items, but please be aware the asset must be installed and ready to use but the June 30 cut-off.