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FAQs - Tax

What are the new small business depreciation write-offs from 2012/2013?

Beginning with the 2012-2013 tax year, businesses with a turnover of under $2 million can instantly write off any depreciating assets which cost $6500 or less. From a technology standpoint, that means that virtually any laptop you purchase can be written off immediately, rather than over a number of years. Many server systems would also fall under that threshold.

The limit applies to each individual item; if you purchased four $3000 notebooks for work, they would all be immediately written off, rather than being depreciated over a period of three or four years.

You still need to write off higher-priced assets over a number of years, but the rules are also simpler there; assets are added to a general pool and depreciated at 15 per cent for the first year and 30 per cent for each subsequent year.

From the 2012-2013 income year, a small business using the simplified depreciation rules can claim up to $5,000 as an immediate deduction for a motor vehicle costing $6,500 or more that it starts to use, or have installed ready for use, for taxable purpose.

Last Updated on Wednesday, 04 September 2013 22:19
 

I am about to go overseas on work, which records should I keep to substantiate my travel expenses?

If you received a bona fide travel allowance and the deduction exceeds the Commissioner's reasonable allowance amount, you must fully substantiate all travel claims by providing the following records:

  1. details and evidence to support the type and specific amounts of allowance received for travel expenses, such as accommodation, meals and incidentals
  2. details of specific overnight travel undertaken, including:
    1. dates or period travel was undertaken
    2. specific purpose of travel
    3. if the travel involves being away from home for six or more nights in a row, a travel record (diary) is required to be kept
  3. evidence that you actually undertook the travel and incurred the accommodation and meal expenses, such as receipts or other documents.

    If you did not receive a bona fide travel allowance or received a token travel allowance, you will be asked to keep the following records:

    details of specific overnight travel undertaken, including:
    1. dates or period travel was undertaken
    2. specific purpose of travel
    3. if the travel involves being away from home for six or more nights in a row, a travel record (diary) is required to be kept.
    4. sufficient information to ascertain how specific expenses were incurred in the course of earning assessable income
Last Updated on Wednesday, 04 September 2013 22:14
 

I want to claim a deduction for using my car in my business or for employee duties. What is business travel?

Business travel is travel which is undertaken in gaining or producing your assessable income or carrying on a business for that purpose. Travel between home and a person's regular place of employment or business is ordinarily private travel. While travel to work is a necessary prerequisite to earning income, it is not undertaken in the course of earning that income. Put at its simplest, travel to work is private; travel on work is business.

Last Updated on Thursday, 22 August 2013 05:11
 

Does a car log book have to be kept for every year?

A log book does not have to be kept every year. The business percentage is valid for five years. That is, the year that the log book is kept and the subsequent four years. Once you have established the business use percentage, you are not required to complete a new log book unless required to do so by the legislation, or otherwise directed in writing by the ATO. This business percentage is used as a basis for you to arrive at your reasonable estimate of the business use percentage in each income year as noted above.

Note: You must keep odometer records every income year.

Last Updated on Thursday, 22 August 2013 05:12
 

In what circumstances can I claim Home Office Expenses?

The ATO will generally not allow a taxpayer to claim for expenses associated with their home office unless their employer considers it necessary for them to work from home and the following criteria can be established:

It is normal practice in the employee's industry to perform some work duties from home;

It is a part of their current job specification; and

It is a condition of their employment, although not necessarily evidenced/documented in writing.
Generally speaking, "running expenses" are able to be claimed by salary and wage earners who satisfy the above criteria, "Occupancy expenses" may be claimed by people running a business from home. For discussion as to what the ATO considers to be a "place of business", refer to Paul Carrazzo's feature article on this issue, published in the June 1999 issue of The Australian Bloodhorse Review.

Last Updated on Thursday, 22 August 2013 05:12
 

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