Should I invest in shares or a managed fund?

Different investments have their own advantages and disadvantages and what is right for you depends upon your investment goals and risk profile. You need to discuss this question with your licensed financial adviser. If you don’t have a financial adviser or are looking for a second opinion, please contact the TickTax office.

Can I claim vehicle expenses if I have not kept a log book?

Yes, you can, however you may get a bigger deduction if you do keep a log book. The Tax Office will let you use a cents-per-kilometre method with the cents dependent upon the engine size but this is limited to 5,000 kms. Over 5,000 kms you can claim up to one-third of expenses without a log book or 12% of the original vale of the vehicle. (Note: you can generally claim most or all expenses for larger trucks, vans and specially modified business vehicles.)

What % of donations are tax deductible?

100% – provided that the gifts are made to a “deductible gift recipient”, namely an organisation that the Tax Office has pre-approved (See Locating an organisation for tax deductible gifts). To claim a tax deduction for a gift, the payment must be truly a gift of $2 or more (purchase of raffle or art union tickets are not a gift nor are membership fees, fundraising dinners etc).

Do I have to pay capital gains tax when I sell my shares or rental property?

Provided that you have made a gain, you will probably have to pay tax. If you have held the shares or property for less than 12 months, the whole of the capital gain is taxed as part of your foreseeable income. If you have held them for more than 12 months contract-to-contract date, you will pay capital gains tax but in general only half the gain is counted into your taxable income. If you have lived in your rental property for a period, there may be a further reduction – and if you happened to purchase the shares or rental property before 20 September 1985 you won’t pay at all!

When can I claim interest on money that I borrow?

Most borrowers are able to claim loan interest and other costs of investment as tax deductions – depending on individual circumstances. The investment must be one that is reasonably expected to produce income now or in the future. Examples might be a margin loan or an equity drawdown to purchase shares, a mortgage loan to buy a rental property or a bank loan to acquire or expand a business. You wouldn’t expect to be able to claim the interest on a holiday loan but you might be able to claim a portion of your car loan if you normally claim motor vehicle expenses.

I am expected to maintain a well groomed appearance. Can I claim these expenses?

Expenditure on personal grooming and haircuts are generally not deductible, however there are some exceptions for taxpayers involved in the performing arts field.

Is there a limit on how much I can claim as a tax deduction each year?

There is no limit on the amount claimed each year, provided the expenses are necessarily incurred in earning your income. The expenditure must be work related and you should keep receipts to substantiate the expense. We are happy to advise you on appropriate record keeping that will enable you to maximise your deductions.

Is a credit card slip acceptable as a receipt?

Provided it gives full details of the supplier and date of purchase the tax office would accept a credit card slip as proof of purchase. Taxpayers can make a note on the credit card slip indicating the expense. More and More taxpayers are using the internet to purchase or pay for their work related expenses and so the ATO will also accept Bpay or email receipts provided they contain the necessary information; date, supplier, nature of the goods and the amount.

I am paid an allowance for travel. Can I claim a deduction for that on my tax return?

A deduction will only be allowed if you have actually incurred a work related expense and have the necessary documentation. Travel to and from your job is generally not claimable unless, for example, you are carrying heavy equipment. Some awards allow for a payment of an allowance even though an expense is not necessarily incurred by the employee.