Deductions / Offsets
Claims for deductions need to be supported by receipts, which can be kept for easy reference in a monthly organiser file. A deduction is a subtraction from assessable income, from which the income tax is calculated. Rebates (now called offsets) are deducted from the tax already calculated.
Therefore, a one-dollar rebate is of more value than a one-dollar deduction.
Private Health Insurance
An additional Medicare levy surcharge is payable by individuals with taxable incomes in excess of $90 000 for couples / families with a taxable income of $180 000 who choose not to pay for private health insurance.
Salary packaging is a series of arrangements that allows an employee to use some of their income prior to tax to pay for benefits (e.g. health insurance, car repayments). This reduces the overall tax payable on the employee’s salary effectively increasing the net value taken home. It can be extremely effective where the employee is paying tax at the highest margin.
Motor Vehicle Travel
Vehicle travel to & from your place of employment is not allowable as a tax deduction unless carrying bulky tools & equipment.
If a taxpayer does not carry tools & equipment but must travel from location to location for work purposes, a deduction is allowed from the first port of call to the last. However, travel to & from the original workplace, however long, is not deductible.
If your business makes a loss you can generally carry forward that loss and claim a deduction for your business in a future year.
If you’re a sole trader or an individual partner in a partnership, you may be able to offset your business losses against other types of assemble income for the same income year.
NOTE: Investments in Rental Properties. Rental Property Deductions – If you have a rental property less than 10 years old. Please get a report from the quantity survey. It makes a huge difference to your negative gearing.