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Private Rulings – if you lodge your own tax online then this is your new best friend

November 2nd, 2013

Private Rulings

Private Rulings – if you lodge your own tax online then this is your new best friend.

A private ruling sets out the Commissioner of Taxation’s opinion about the way a tax law applies, or would apply, to your particular circumstances.

If you rely on a private ruling given to you by the tax office, and you lodge your tax return based on the answer given in that ruling, then the tax office is bound by that yes or no answer, and can’t come back and challenge you later.

For example, Sam drives his car between work sites every day carrying a large tool box.  He is unsure if the tool box would be considered bulky or heavy enough by the Tax Office to claim a tax deduction for motor vehicle travel in his tax return.  He submits a private ruling asking for the opinion of the Tax Office.  He sets out the size of the tool box and how heavy it is in the private ruling, and he also provides details of his occupation and why he is required to carry his tool box between work sites. A few weeks later the tax office provides Sam with an answer to his question, including details on why they came up with that answer, and the applicable tax law it relates to.

A private ruling is simple to do, won’t take long at all, and the best bit is its FREE!

If you prefer, your accountant can lodge a private ruling for you.  However, just be warned that this can cost a considerable amount of money, so best to try lodging it yourself.

Note that sole traders, partnerships, trusts and companies can also lodge private rulings if they are unsure of how to apply tax and GST law to their business.

ATO Private Rulings Database

Details of every private ruling ever submitted is kept on the Tax Office website.  Personal details have been withheld to protect people’s identities, but everything else remains the same.  Unfortunately you can’t apply the tax law based on other people’s private rulings.  This will not stand up if the tax office decides to challenge you.  You can, however, get a very good idea of what the tax office might come back and say to someone with similar circumstances.  

Maybe it’s just an accountant thing, but I have a lot of fun going through old private rulings.  You can learn an incredible amount about what you can and can’t claim for your occupation type.  There is certainly a lot of juicy information in these private rulings compared to the very general information that is available on the new tax office website.  

When searching the private rulings I suggest typing your occupation in the search and ticking deep content search.  

 You can go straight to the register of private rulings by clicking here.

ATO Private Rulings Application Form

If you’re interested in reading more on private rulings, or you wish to lodge one, then you can find the application form here at the Australian Taxation Office.

 

Did you like this article? Why not download our free book!

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Online Tax Returns

This tax book includes information on:

                • the top mistakes taxpayers make when lodging their own tax online through e-tax and other online return providers
                • get tips on avoiding an audit
                • get tips on how to maximise your tax refund

Online Tax 2

 

 

This information, facts, insights and ideas (“Content”) are for general informational purposes only and nothing contained in it is or is intended to be, construed as advice. It does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon or treated as a substitute for specific or professional advice. You should, before you act or use any of this Content, consider the appropriateness of this information having regard to your own personal objectives, financial situation and needs. It should not be your only source of information but should be treated as a guide only. You should obtain your own independent professional advice before making any decision based on this information.

 In no event will we be liable for any loss or damage including and without limitation, indirect or consequential loss or damage, or any loss or damage howsoever arising from, out of, or in connection with the use of this Content.

Tax Deductions for Nurses

October 26th, 2013

Tax Deductions Nurses

TAX DEDUCTIONS FOR NURSES

 

As nurses are forced to do more professional development hours to keep up their nursing qualifications, the list of tax deductions for nurses is getting longer.  If you’re a nurse in Australia, then I suggest you check over the following list of most common missed tax deductions to make sure you’re getting it right.

 

Tax Deduction for Internet

Nurses can claim home internet for studying, working and maintaining professional development hours at home.  For further details on the records you need to keep to make this claim refer to my article on Claiming Home Internet as a Tax Deduction.

 Tax Deduction for Home Office at 34c per Hour

If you study, work or maintain professional development hours at home then you can claim 34c per hour to cover your gas, electricity and furniture depreciation.  To make this claim you don’t need to have a separate home office.  You just need to be working in a room in the house at a time when other family members are not present.  

For substantiation purposes, you will need to keep a diary for 4 weeks recording all the hours you were doing work related tasks.  The number of hours you come up with over that 4 week period can be used as a basis for the rest of the year.  The ATO has a great calculator for working out this claim.  You can find it here at the Australian Taxation Office website

 Tax Deduction for iPads and Laptops

If you study, work or maintain professional development hours for your job, then you can claim an iPad and laptop.  This claim is increasing in popularity as Nurses look for ways that they can do their PD hours without being stuck in the house.  An iPad can go away with the family for weekends allowing Nurses to catch up on their PD hours while still enjoying family time.  It is certainly not unusual for a nurse to have both an iPad and a laptop for this very reason.  For information on the records you need to keep to substantiate this claim see my article on Claiming Home Internet as a Tax Deduction

 Tax Deduction for Stationery

If you study, work or maintain professional development hours then you can also claim any stationery that you purchase.  This includes things like printer cartridges, paper, books, pens, USB and any other stationery purchased in relation to your work.

 If you didn’t keep receipts for many of these things you may still be able to claim them.  Check out my article Do you Know you Don’t Need a Receipt for every Tax Deduction you Want to Claim.

 

Did you like this article? Why not download our free book!

Onlinetax

Online Tax Returns

This tax book includes information on:

                • the top mistakes taxpayers make when lodging their own tax online through e-tax and other online return providers
                • get tips on avoiding an audit
                • get tips on how to maximise your tax refund

Online Tax 2

 

 

This information, facts, insights and ideas (“Content”) are for general informational purposes only and nothing contained in it is or is intended to be, construed as advice. It does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon or treated as a substitute for specific or professional advice. You should, before you act or use any of this Content, consider the appropriateness of this information having regard to your own personal objectives, financial situation and needs. It should not be your only source of information but should be treated as a guide only. You should obtain your own independent professional advice before making any decision based on this information.

 In no event will we be liable for any loss or damage including and without limitation, indirect or consequential loss or damage, or any loss or damage howsoever arising from, out of, or in connection with the use of this Content.

Donation receipt – do I need one?

October 25th, 2013

 fire

 

Donation receipt – do I need one?

It’s been a tragic week with the NSW bushfires.  Therefore, I thought it was a rather appropriate week to talk about donations, and the do’s and don’ts when it comes to claiming them in your tax return and whether you need a donation receipt.

Firstly for a donation to be tax deductible it must:

1.  Really be a gift.  The main thing to remember here, is that you can’t receive something for your money.  Raffle tickets, pens, chocolates, the cost of attending fund-raising dinners and membership fees are all examples of situations where the ATO would class you as receiving something for your money, and therefore the donation would not be tax deductible.  The only thing you can receive for your money is a sticker or a badge.

2.  Be either a gift of money of more than $2, or an eligible gift of shares or property.  The nuts and bolts of this point are – if you’re going to throw change in the donation tin, make sure it’s not less than $2 or you won’t be able to claim a tax deduction.

3.  Comply with any relevant gift conditions.  For example, some organisations only have Deductible Gift Recipient status for a certain time period.  If your donation is not made in this time then it is not tax deductible.  Disaster relief appeals are normally subject to these type of time restrictions.

4.  Be a deductible gift recipient (DGR)

A deductible gift recipient (DGR) is an organisation that is entitled to receive tax deductible gifts. DGR’s are:

  • Listed by name in the tax law, or
  • Endorsed by the Tax Office.

To check whether an organisation is a deductible gift recipient (DGR) visit the Australian Taxation Office here:

“Do I need to keep a receipt?” 

Times are tough at the moment, people are doing it hard, and not-for-profit organisations are not getting the funds they need to help others.  Throw natural disasters in the mix, and it is no wonder we are seeing not-for-profit organisations everywhere taking to the streets with the donation tins desperately trying to raise money.

In response to this, the tax office now has special rules when it comes to keeping receipts for donations made to natural disaster appeals.  They allow the following:

“If you have made one or more donations of $2 or more to bucket collections conducted by an approved organisation for an approved bucket appeal, you can claim a tax deduction equal to your donation without a receipt if your donation is $10 or less.”

The ATO has a list of approved organisations on their website.

As for any other types of donations, unfortunately you will need a receipt.

Some people seem to believe that they can claim up to a certain limit of small donations without receipts.  Trust me, this is a fairy tale or story that someone has made up, and it’s not true!  You must have a receipt.

If you were unable to obtain a receipt then I suggest you do the following:

– Record the entry in a diary with the date, the place that you gave the donation, the amount, and who you gave the donation to.

– If you made the donation via EFT or Visa then keep any relevant bank statements or visa statements that have details of the donation.  In most cases, if you made the donation directly from your bank account, bank statements should be sufficient evidence if you write on the bank statements what the donation was for.

– Keep any other information that you were given at the time of making the donation such as a sticker or badge that will help prove you made the donation.

– Document clearly why you were unable to obtain a receipt.

If you were unable to obtain a receipt, I suggest you read Australian Taxation Office Practice Statement – Substantiation of Deductions.  This will give you guidance on what type of argument you will need in case of an audit where you’re missing receipts.

Lastly, you will often hear me say that the decisions we make in life should not always guided by the monetary benefit we will receive in return.  Nothing rings truer than donations for sudden disasters such as fire and flood.  Who cares if you don’t get a tax deduction for a $20 donation.  If it helps give one family who has lost everything a bed to sleep in or food on the table, then in my eyes it is absolutely worth it!

Did you like this article? Why not download our free book!

Onlinetax

Online Tax Returns

This tax book includes information on:

                • the top mistakes taxpayers make when lodging their own tax online through e-tax and other online return providers
                • get tips on avoiding an audit
                • get tips on how to maximise your tax refund

Online Tax 2

 

 

This information, facts, insights and ideas (“Content”) are for general informational purposes only and nothing contained in it is or is intended to be, construed as advice. It does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon or treated as a substitute for specific or professional advice. You should, before you act or use any of this Content, consider the appropriateness of this information having regard to your own personal objectives, financial situation and needs. It should not be your only source of information but should be treated as a guide only. You should obtain your own independent professional advice before making any decision based on this information.

 In no event will we be liable for any loss or damage including and without limitation, indirect or consequential loss or damage, or any loss or damage howsoever arising from, out of, or in connection with the use of this Content.