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Individual Tax Return Checklist

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					                                                                  Your Checklist
                    2010/11                                        Claims for deductions
                                                                   Receipts for deductions
                                                                                                     
                                                                                                     
    Individual Tax Return                                          Car claims and log books         
                                                                   Car record keeping               
          Checklist                                               Please review the information below
                                                                  and contact our office if you need
                                                                  assistance.


               Tax saving strategies prior to 1 July 2011
WARNING: Accelerating tax claims
A good strategy to reduce tax payable is normally to accelerate any income tax deductions into the current
income year. However, clients should remember that tax rates are effectively being increased for the next
income year due to the imposition of the flood levy on individuals earning more than $50,000.
The tax rates for resident individual taxpayers for the 2010/2011 income year are as follows:
            Income threshold                                                      Tax payable
            0 – $6,000                                                                      Nil
            $6,001 – $37,000                                   Nil + 15% of excess over $6,000
            $37,001 – $80,000                              $4,650 + 30% of excess over $37,000
            $80,001 – $180,000                           $17,550 + 37% of excess over $80,000
            $180,001 and over                          $54,550 + 45% of excess over $180,000
                          Note: The Medicare levy is in addition to these rates.

In the 2011/12 income year, the Flood levy will impose an additional 0.5% levy on taxable incomes from
$50,001 to $100,000 and 1% above $100,000.
     Common work-related claims                         	books and trade journals;
        made by individuals                             	briefcases/luggage or suitcases;
The following outlines common types of                  	calculators, electronic organisers;
deductible expenses claimed by individual
                                                        	software;
taxpayers, such as employees and rental
property owners, plus some strategies that              	stationery;
can be adopted to increase deductions for the           	tools of trade.
2010/2011 income year.
                                                        2. Clothing expenses
1. Depreciable plant, etc, costing $300 or less
                                                        Purchase or pay for work-related clothing expenses
Salary and wage earners and rental property
                                                        prior to the end of the income year, such as:
owners will generally be entitled to an immediate
deduction if plant costing $300 or less is purchased    q	compulsory (or non-compulsory and
before 1 July 2011.                                       registered) uniforms, and occupation
Some purchases you may consider include:                  specific and protective clothing;

	fax machines;                                         q	other expenses associated with such
                                                          work-related clothing such as dry cleaning,
	beepers and pagers;                                     laundry and repair expenses.
2011 Individual Tax Return Checklist

3. Self education expenses                           Deductions (in addition to those mentioned
                                                     above):
Consider pre-paying the following self education
items before the end of the income year:             u	award transport allowance claims;
                                                     u	bank and government charges on deposits
u	course fees (but not HECS-HELP fees),
                                                       of income, and deductible expenditure;
  student union fees, and tutorial fees;
                                                     u	bridge/road tolls (travelling on business);
u	interest on borrowings used to pay for any
                                                     u	 parking (when travelling on business);
                                                       car
  deductible self education expenses.
                                                     u	conventions, conferences and seminars;
Also bring forward purchases of stationery and
text books (i.e., those which are not required to    u	depreciation of library, tools, business
be depreciated).                                       equipment, incl. portion of home computer;
                                                     u	gifts or donations;
4. Other work-related expenses
                                                     u	home office running expenses:
Employees can prepay any of the following                   cleaning
expenses prior to 1 July 2011:
                                                            cooling and heating
	union fees;                                               depreciation of office furniture
	subscriptions to trade, professional or                	 lighting
  business associations;                                    telephone;
	magazine and newspaper subscriptions;              u	interest and dividend deductions:
                                                            account keeping fees
	seminars and conferences;
                                                            ongoing management fees
	income protection insurance (excluding
                                                            interest on borrowings to acquire shares
  death and total/permanent disability).
                                                            advice relating to changing investments
Note: When prepaying any of the expenses above               (but not setting them up);
before 1 July 2011, ensure that any services are
to be provided within a 12 month period that ends    u	interest on loans to purchase equipment or
before 1 July 2012. Otherwise, the deductions must     income earning investments;
be claimed over the period of the prepayment.        u	motor vehicle expenses (business/work
                                                       related);

          Information Required                       u	overtime meal allowances;

We will need you to bring information to assist us   u	rental property expenses – including:
in preparing your income tax return.                        advertising expenses

Please check the following and bring along payment          council/water rates
summaries, statements, accounts, receipts, etc.,            insurance
to help us prepare the return:
                                                            interest
Income/Receipts                                             land tax

q payment summaries for salary and wages;                   legal expenses/management fees
                                                            genuine repairs and maintenance
q lump sum and termination payments;
                                                            telephone expenses
q government pensions and allowances;
                                                            travelling to inspect property;
q other pensions and/or annuities;
                                                     u	superannuation contributions by sole traders
q allowances (e.g., entertainment, car, tools);        or substantially unsupported taxpayers;
q interest, rent and dividends;                      u	sun protection items;
q distributions from partnerships or trusts;         u	 agent fees;
                                                       tax
q details of any assets sold that were either        u	telephone expenses (business);
  used for income earning purposes or which
  may be caught by capital gains tax.                u	tools of trade.
       2010/2011 Year-end Checklist
               for Business
Many of our business clients like to review their tax position at the end of the financial year and evaluate
any year-end strategies that may be available to legitimately reduce their tax. Traditionally, year-end tax
planning for small businesses is based around two simple concepts – i.e., accelerating business deductions
and deferring income.
However, Small Business Entities (SBEs) have greater access to year-end tax planning due to particular
concessions that only apply to them. The SBE system replaced the previous Simplified Tax System ("STS")
on 1 July 2007. Taxpayers that qualify as an SBE can pick and choose which of the concessions they
wish to use each year (although restrictions still remain in relation to the SBE depreciation rules). The
basic requirement to be eligible for the SBE concessions is that the business taxpayer's annual turnover
(including that of some related entities) is less than $2 million.
The following are a number of areas that may be considered for all business taxpayers.

       Maximising deductions for                         Accelerating expenditure – non-SBE
          non-SBE taxpayers                              This is where a business taxpayer brings forward
Non-SBE business taxpayers should endeavour              the expenditure on regular, on-going deductible
to maximise deductions by adopting one or more           items. Business taxpayers are generally entitled
of the following strategies:                             to deductions on an "incurred basis".
	Prepayment strategies;                                 Therefore, there is no requirement for the expense
                                                         to be paid by 30 June 2011. As long as the expense
	Accelerating expenditure; and                          has genuinely been incurred, it will generally be
	Accrued expenditure.                                   deductible.
                                                         Checklist
    Prepayment strategies – non-SBE                      The following may act as a checklist of possible
Any part of the prepayment relating to the period        accelerated expenditure:
up to 30 June is deductible in full.                     q	Depreciating assets costing $100 or less can
In addition, non-SBE taxpayers may generally claim         be written off in the year of purchase.
the following prepayments in full:                         Depreciating assets costing less than $1,000
                                                           can be allocated to a low value pool and de-
–    expenditure under $1,000;                             preciated at 18.75% (which is half of the full
–    salary and wages; or                                  rate of 37.5%) in their first year regardless of
                                                           the date of purchase.
–    expenditure required to be incurred under
     law.                                                q	Repairs – repairs to office premises, equip-
                                                           ment, cars or other business items.
Editor: Prepayments can be a little confusing, so
                                                         q	Consumables/spare parts.
before you commit to making a payment please
feel free to call us with any queries or assistance      q	Client gifts.
if required.                                             q	Donations.
2011 Year-end Checklist for Business

q	Advertising.                                          Accelerating expenditure – SBE
q	Fringe benefits – any benefits to be provided,     Former STS taxpayers who have continued to use
  such as property benefits, could be purchased      the STS cash method since before 1 July 2005 and
  and provided prior to 30 June 2011.                who qualify as an SBE are generally only entitled
q	Superannuation – contributions to a                to deductions if they have paid the amount by 30
  complying superannuation fund, to the extent       June. This includes general deductions, tax-related
  contributions are actually made (i.e., they        expenses, and repairs.
  cannot be accrued).
                                                     All SBE taxpayers can choose to write-off
    Note that, since 1 July 2007, no limit applies   depreciable assets costing less than $1,000 in the
    to the amount of tax-deductible contributions    year of purchase. Also, assets costing $1,000 or
    an employer can make for an employee.            more with an effective life of less than 25 years can
    However, an employee who receives                be depreciated at 15% (which is half the full rate
    employer contributions in excess of their own    of 30%) in their first year (note that, if such assets
    concessional contributions cap may have to       were acquired between 13 December 2008 and
    pay more tax.                                    31 December 2009 and then installed ready for
                                                     use between 1 July 2010 and 31 December 2010,
   Accrued expenditure – non-SBE                     the SBE may also be entitled to an additional 50%
Non-SBE taxpayers (and some SBE taxpayers)           deduction in the 2010/11 income year).
are entitled to a deduction for expenses incurred    Therefore, where appropriate, SBE business
as at 30 June 2011, even if they have not yet been   taxpayers should consider purchasing/installing
paid.                                                these items by 30 June 2011.
The following expenses may be accrued:               Note: SBE taxpayers choosing to use the SBE
u	Salary or wages and bonuses – the accrued          depreciation rules are effectively 'locked in' to using
  expense for the days that employees have           those rules for all of their depreciable assets.
  worked but have not been paid as at 30 June
                                                          Prepayment strategies – SBE
  2011.
                                                     SBE taxpayers making prepayments before 1 July
u	Interest – any accrued interest outstanding        2011 can choose to claim a full deduction in the
  on a business loan that has not been paid as       year of payment where they cover a period of no
  at 30 June 2011.                                   more than 12 months (ending before 1 July 2012).
u	Commercial bills – the discount applicable         Otherwise, the prepayment rules are the same as
  to the period up to 30 June, where the term        for non-SBE taxpayers.
  of the bill extends past 30 June 2011.             The kinds of expenses that may be prepaid
                                                     include:
u	Commissions – where employees or other
  external parties are owed commission               q Rent on business premises or equipment.
  payments.                                          q	Lease payments on business items such as
                                                       cars and office equipment.
u	Fringe benefits tax – if an FBT instalment is
    due for the June 2011 quarter for example, but   q	Interest – check with your financier to
    not payable until July, it can be accrued and      determine if it’s possible to prepay up to 12
    claimed as a tax deduction in the 2011 income      months interest in advance.
    year.                                            q Business trips.
u	Directors’ fees – where a company is               q Training courses that run on or after 1 July
  definitively committed to the payment of a           2011.
  director’s fee as at 30 June 2011, it can be       q Business subscriptions.
  claimed as a tax deduction.
                                                     q Cleaning.
      Maximising deductions for
                                                                Information Required
           SBE taxpayers
                                                     We will need you to bring the following information
Deductions can be maximised for SBE business
                                                     to help us prepare your income tax return:
taxpayers by accelerating expenditure and
prepaying deductible business expenses. Former       q Stocktake details as at 30 June.
STS taxpayers who have continued to use the          q Debtors listing (including a list of bad debts
STS cash method since before 1 July 2005 cannot        written off) as at 30 June. Note: In order to
accrue expenses, but other SBE taxpayers on an         claim a deduction, the debt must be written
accruals basis can accrue expenses (see above          off on or before 30 June.
for accruing expenditure).                           q Creditors listing as at 30 June.

				
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