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Frequently Asked Questions
1. How much do you charge?
A: The basic fee for an individual income tax return starts at $99.00. Please call us to confirm the cost as sometimes it does depend on the complexity of the return and what is involved. If you have investments, or operate a business, or any other entity, please call us for an estimate of cost for preparation.
2. Can you take my fee from my refund?
A: No, we do not provide this service.
3. Can you deposit my refund into my bank account?
A: Yes. When you pay for the preparation of the return up front, we can arrange to have your ATO refund deposited into a nominated bank account for you.
4. Do I have to lodge a return?
A: Each person's situation is different due to the age of the person, and the income and type of income earned. If you are unsure, please call us to determine your obligation.
5. How long does it take for my refund to come back?
A: The ATO advises all tax agents and taxpayers refunds should expect to issue in normal circumstances in around 14 working days. There could be some circumstances which could hold up your refund, such as the ATO data matching information with Centrelink. We do ask that clients not call us before at least 14 working days has lapsed.
6. How much refund will I get back?
A: The amount of the refund you will receive will depend on the amount of income earned, the allowable deductions against this income, any rebates you will be entitled to, and the amount of tax you have had taken out/paid to the ATO. Once we have prepared your tax return, we will be able to let you know what your estimated refund will be. Sometimes this estimated refund will change for unkown factors, such as child support debts.
7. I am behind in my tax returns. Can you prepare more than one year's return?
A: Yes we can. As long as we have all the necessary information, all prior year returns can be prepared together with the current year's one. Please be aware that their may be slight delays in the ATO processing past year returns, with refunds from the current year being issued first, and prior years being issued later.
8. Will I be penalised for lodging my returns late?
A: You may receive a late lodgement penalty, or if there is tax owing to the ATO, interest on outstanding amounts. The interest is tax deductible in later years. However, if you are receiving refunds, the ATO will more than likely owe you interest on outstanding refund amounts, and any penalties should be minimal. This interest will be required to be included in the next income tax return as income.
9. Do I get all my tax back if I only worked for a few months in the year?
A: No. The amount of tax calculated is based on your income earned for the full financial year, regardless of whether or not that income was earned in 12 days or 12 months.
10. I am new to Australia and have to lodge a tax return. I have been told I will get all my tax back. Is that right?
A: No. As an Australian resident for tax purposes, you are entitled to a tax free threshold of $18,200. When you enter Australia, your tax free threshold is apportioned for the number of days from when you arrived in Australia to 30 June, thereby reducing your tax free component, and also the low income rebate if it applies.
11. I have lost my Payment Summary. What do I do?
A: Your first port of call is to go back to, or contact, the employer who issued the Payment Summary, and ask for another copy. Employers are required to keep records for 5 years. If it is a past year Payment Summary, please be patient as this may take time for the employer to retrieve. If you have no success, contact us, and we can correspond directly with the employer. You can also complete a Statutory Declaration detailing your income situation for the year in question.
12. I think my Payment Summary is wrong. What do I do?
A: If you believe that your Payment Summary is incorrect, contact the employer in question and request a detailed summary of the gross income earned and the tax paid for that year. If the employer has made a mistake, a new amended Payment Summary will be required to be issued to you, and to the Tax Office detailing the amendment.
13. I didn't keep any receipts. Can I still claim any tax deductions?
A: Under some minimal circumstances, receipts are not required to make a deduction. However you must always be able to substantiate your claims being made. In order to maximise your tax deductions, and ultimately your tax refund, we strongly recommend that all receipts for tax deductions be kept, and brought with you at the time of preparing your tax return. (Please come in and pick up your free tax envelope, to assist in keeping your tax records secure.)
14. I received money from the Government last year. Do I have to include this as income?
A: Some Government payments are assessable income and are therefore required to be included in your income tax returns. Some payments received are exempt and therefore not required to be included in your returns. It is important that all assessable income be declared. If you are unsure of whether or not your Government payment is assessable, please contact us.
15. My wife/partner doesn't work and I have children. Can I claim them on my return?
A: In years past the ATO gave a spouse rebate for a non-working partner/spouse. This has now been replaced with Family Tax Benefits, which is issued by the Family Assistance Office. They base your Family Tax Benefits on the income earned during that year. These claims are not made via your income tax return. Contact FAO for your claim via our link page.
If you do not have children and have a non-working spouse/partner you may be able to claim a spouse rebate in your income tax return. However, a dependent spouse rebate will no longer be available if your spouse is born prior to 1 July 1952. Certain exceptions will apply if your spouse is an invalid or permanently disabled. The maximum offset is currently $2,423 p.a.
16. How does the Senior Australian's Tax Offset affect me?
A: This is a tax offset for Senior Australian's and used to reduce any tax liability and medicare levy payment. In some circumstances Senior Australian's may not have to lodge an income tax return.
17. What is the Medicare Levy Surcharge, and why do I have to pay it?
A: Medicare Levy is a tax based on 1.5% of your taxable income each year. Every Australian taxpayer is required to pay the tax. It is your income level that determines the amount of Medicare Levy charged, not the Health Fund you are in.
As from 1 July, 2013, and if you are single and your assessable income (including reportable fringe benefits) exceeds $84,000 , and you do not have Private Health Insurance with Hospital cover, you will be required to pay a 2.5% Medicare Levy (being1.5%Medicare Levy + 1% Surcharge), of your taxable income.
If you are a couple, and your assessable incomes (including reportable fringe benefits) exceeds $168,000, and you do not have Private Health Insurance with Hospital cover, you will both be required to pay a 2.5% Medicare Levy (being1.5%Medicare Levy + 1% Surcharge), of your taxable incomes.
In the 2014/2015 financial year the Surcharge increases again to 1.25% surcharge for Singles with incomes over $97,000 and couples with incomes over $194,000, and again to 1.5% surcharge for Singles with incomes over $130,000 and couples with incomes over $260,000
18. Is my Child Support that I pay tax deductible?
A: No. It is not a tax deduction.
19. I received a dividend statement. What do I do with it?
A: All dividends received, and any interest received, is to be included as assessable income in your income tax return. Dividends that you did not physically receive, but instead chose to reinvest them into more shares, are also to be included as assessable income in the year in which it is received.
20. I spent a lot of money this year on my business. Will I get it all back?
A: A refund may be issued to you only if you have actually paid tax during the year. If you have incurred expenses in running your business, and it is running at a loss for the year, the loss will be calculated and then carried forward to future years to be offset against any future profits you will make. The Government will not reimburse you for your expenses and no refund will issue if no tax has been paid.
21. I have just bought a car for my tax. Will I get it as a tax deduction?
A: No. The rules relating to the claim of a motor vehicle are many and varied depending on the type of vehicle you have, and the type of work you do. If you have purchased a car for tax purposes the cost of the vehicle is not 100% tax deductible. Instead the vehicle is depreciated over the life of the car (basically over 8yrs at 18.75%) from the date you purchased it to the 30 June. Therefore the depreciation of the car is apportioned based on the number of days you have owned it for the financial year. You also need to keep a log book for the mileage of the vehicle to be able to substantiate the actual business use of the car as compared to the private use. This log book must be kept for a minimum period of 13 consecutive weeks. It is this work related percentage, as calculated using your log book, that you can claim of the related vehicle running costs (fuel, registration, insurance, repairs).
22. My friends always talk about negative gearing. What is it?
A:Gearing refers to the process of borrowing money to invest. Negative gearing occurs when the expenses associated with an investment, including the interest on the money borrowed (on either shares or rental properties), are greater than the income generated from this investment. This means that you are making an income loss on the investment which is generally tax deductible. However this may create a cash flow problem if you do not have sufficient other income to meet the interest costs. The benefit is that the tax deduction reduces your overall tax liability and thus reduces the effect of the loss on your cash flow, by potentially increasing your tax refund. The objective of this strategy is to have the long term total return from the investment, including capital growth, be greater than the short term income losses. However, if there is little or no capital growth in the investment then you may be worse off than before you borrowed and invested the money. There are a number of asset types which you can gear into. Property is the mostpopular. Always remember that gearing requires a long term investment time frame.
23. So if I buy a rental property, will I get the cost of the stamp duty as a tax deduction?
A: No, it is not deductible. Whilst it is a lot of money to pay the state government for the privilege of owning a property, the stamp duty charged on a property is attached to the purchase of it, and is added onto the cost of purchasing a property. It is a state levied tax and not a federal one. When this property is sold down the track, then the cost of the stamp duty is taken into account when calculating the capital gains tax / loss of the property.
24. What is the difference between a refund and a rebate?
A: A refund is the excess of tax you have paid during the year being returned to you.
Rebates are tax incentives used in order to reduce your income in order to maximise your tax refund to be returned to you.
25. What is your fee policy?
A: We do have a strict payment policy. Payment is required upon completion of your return, and we are unable to lodge any returns until our account has been settled in full.
26. When are you opened?
A: From 1st July to 30th September Small Business and Taxation Specialists extends its opening hours during the peak tax period for your convenience. Please call us to check on our extended hours. No appointment is necessary to drop off information into the office.