Individual Tax Return Myths

Below are some of the myths I am encountering when preparing my clients' 2012 tax returns:

1. The first year a person does the tax return, they get all tax paid back. Not true. Your tax refund depends on your income and tax paid not whether it's your first year tax return or not.
2. I use my car to travel to work so I can claim for that. False. You can claim only if you use it for work and not travel to work. So if you use your car to see your customer or travel from one office to another, etc then you can claim for the use of your car.
3. I can claim all my university fees in my tax return. Half true. You can claim for courses you do but they have to be related to your current job.
4. I can claim for my children's education in my tax return. Nopes you can't. Schoolkids Bonus (formerly known as Education Tax Refund) is not part of your tax return any more, its managed by Centrelink.
5. I am on call and need my phone to get shifts so I can claim the phone in my tax return.  Totally untrue. You can only claim for phone if you use it for actual work, say to call your clients, etc.
6. I work in an office environment and need to wear a suit so I can claim it in my tax return. Sorry but you can't. Unless it is part of uniform with a logo, you cannot claim it.
7. I flew interstate for a job interview and I want to claim it in my tax return. Unfortunately you can't claim that. Any expenses incurred in getting a job are not claimable in your tax return.
8. I was fined for not lodging a tax return on time last year and I want to claim it in this year's tax return. You can't claim fines and penalties in your tax return.

There may be other myths going around but the above are what I have encountered so far this year. Also note that the dependent spouse tax offset has been further restricted this year.

BY SURESH RAJANI

Suresh Rajani is the Business Leader at Tax First - an accounting and business advisory firm located in Wayville, South Australia.

 

 www.taxfirst.com.au

 

 

Stop blaming the banks and start taking some responsibility.

Let me start by clarifying a couple of things right at the start:

1. I have not been paid by any of the banks to write this article and have no investments in any of the banks.
2. I do have a substantial mortgage to pay so I do know how it feels when that monthly repayment goes out of the savings account.

Barely a week goes by without me reading, listening or watching someone who goes on and on about how horrible the banks are. How they should reduce their interest rates when the reserve bank does. How they charge unreasonable bank fees. How they make millions of dollars and should reduce their charges or interest rates to help the customers.

I call this "bank bashing". Is this justified? ABSOLUTELY NOT. And I will tell you why.

Buying a house (and having a mortgage) might be our dream but it is not a necessity of life (we can rent a house for the rest of our lives) and when we bought a house of say $500,000 we knew that we would have to pay the mortgage for a certain number of years and that interest rates keep changing. We knew there are a number of lenders out there and we decided to sign a mortgage contract with a particular lender. So now if we cant earn enough to repay the mortgage, whose fault is it? The banks? Obviously not! Its our fault that we bought something we couldn't afford. The banks never told us to buy a house of a certain value, they just helped us and its about time we all took full responsibility for our actions.

Now to the question of the banks charging all these "unfair" bank fees and making millions of dollars. The banks are a business at the end of the day and they are there to make money. Again having a bank account with a particular bank was your decision, you knew or now know what fees they charge, etc. So if you don't like the fees being charged then move to another bank that has lower fees or if you cant find a bank that offers what you want then keep the money under your mattress, but do take responsibility of the decision you make.

Do not take this article out of context and interpret my meaning of the message that all the people who are struggling out there to repay their loans deserve it and should not be helped. I am NOT saying that, all I am saying is that we all need to take responsibility for our financial situation and stop blaming others for it!

BY SURESH RAJANI

Suresh Rajani is the Business Leader at Tax First - an accounting and business advisory firm located in Wayville, South Australia.

 

 www.taxfirst.com.au