Tax season tips

[BellaR]

Anyone got tax season tips for us? In Aus on a 457, first tax season approaching....

[Jordy]

Tip number 1: Employ a tax consultant! Cost about $140 to do a return but that is 100% deductable the following year. For your first time there are too many differences to do it alone.

Tip number 2: Declare foreign income.

[Mara]

I absolutely back everything that Jordy has said above!

[Guest May]

Looking for a tax consultant in Brisbane please

[patrice]

TOTALLY aGrEE !

Get in professional help - they will save you more than they cost.

For example, on a 457, and if you still have your house in South Africa, and if you are currently renting - then - you can claim your rent costs off your taxable income. This equates to the ATO 'paying' almost half your rent for you ! (only know this because my son is a CA and knows the tax stuff here and back in SA)

There are many other deductables that us 'normal' people don't know about, hence the significant possible savings when one uses an expert.

[AndreaL]

My tax situation is uncomplicated so I do it myself ( I must admit I quite enjoy it and love to know what I will get back!) but seeing as you can claim the cost of the tax consultant you may as well get one. Just make sure they are well versed in 457 visas.

[Gerhardk]

I agree with Jordy and Andrea. 457 are temporary tax residents and not taxable on worldwide income such as permanent residents. You will only be taxable on Austrialian sourced income such as local interest and of course your local employment.

With respect to Patrice comment about claiming your rent, I have not heard about this before and in my mind this will be a private expense which is not deductible. There is an exception if required to live away from home for relative short periods of time see ATO ID 2002/427. I would think the reference to 'home' is not limited to ownership but where you live.

http://law.ato.gov.au/atolaw/view.htm?docid=AID/AID2002427/00001

[Deon]

Gerhardk

Well said relating the 457 visa. Totally agree with you.

Patrice

You confuse this with the Living Away From Home Allowance (LAFHA) that was applicable till a couple of years ago and was widely abused by employers and their employees on 457 visas. This loophole was closed and you can now only claim LAFHA when living away from your main residence in Australia.

I think that people must be careful in posting information relating to tax if they don't have the facts to support that information. This can be very costly if readers of this forum rely upon that information.

[Emille]

i say dont declare foreign income - none of their business

[Jordy]

Of course Emille that would be illegal. The ATO has its tendrals everywhere and has vays and means. Most often foreign income is property rental. When you sell the property you will bring the money over and they will find out eventually. I honestly wouldnt screw up my visa because of a tac criminal record.

[Gerhardk]

ATO and SARS have exchange of information officers and they do share information. One of the exceptions of secrecy of both Governments. The world is getting smaller and neither SARS nor ATO take kindly to not providing all the information. The wrong attitde would be that there is a low probability of being detected.

Believe it or not but I have found that there are many dishonest people in Australia and if the tax agent's income is dependant on your successful refund then I would think twice about using them.

[AndreaL]

I did my friends tax last year ( previously done by a professional) and there were some inconsistencies in some of the deductions claimed, I advised my friend not to continue to claim unless she had receipts to prove it.

Also, every year the ATO takes a profession or industry to examine a little more closely, this year it is accountants and lawyers

Is the Tax Office widening its crackdown on lawyers and accountants?

[Deon]

Emille

With information exchange agreements in place with a substantial number of countries, it take the ATO ±2 years to pick up on undeclared income. I have seen numerous revised tax returns on undeclared foreign income. The first offense you will get with a friendly warning and the second time there is no excuse and you will pay the penalty. This penalty can be a serious whack on the hand or even jail time. I'm not so sure that any people on this forum will be willing to spend time in jail just to save a few dollars in tax... and that will be a criminal record that you won't hide to a future employer...

You can get away for 2, 3 or more years but need to slip ONLY ONCE to get all the previous returns revised with serious consequences...

Next time, think carefully before you make such an irresponsible comment.

[Mitchel]

Get a medicare exemption certificate and get what you paid for medicare back, win win

[Heather]

Looking for a tax consultant in Brisbane please

You can use Patricia Bakker from Taxpresso ( she is on the Gold Coast) but I can highly recommend her - she has saved us lots of money

[Jacques Voogt]

I can only imagine that in AUS, similar to RSA, tax practitioners need to be registered. In addition they put their name and registration number on that return.

So if you paid for their service and they "lied" on your return in some way. You may end up having to pay the correct amount of tax back to ATO but you are most likely not going to get introduced to the legal system.

Tax law is very complicated. Using a professional is not to claim money back but rather to ensure that you pay the correct amount of income based on your income and expenses.

[AndreaL]

Actually, that is probably one of the man reasons to use someone. It is fairly easy to work out your tax PAYG, but knowing what off-sets and deductions you are entitled to or can claim is a little trickier.

The one time I did pay for tax services, the lady who did my tax claimed for education expenses, which I then had to pay back around 2 months later, and offsets change here all the time, i.e. there used to be a dependent spouse tax offset which is now only for people born before 1951 I think.

E-Tax is incredibly easy to use and effectively will not let you lodge until you have been through all the sections, plus it is aligned to Centrelink/Medicare, and once you have used it, pre-stores your information, it works for me, but still, seeing as you can claim the money back for using a tax professional, you may as well.

[Lynnie]

Looking for a tax consultant in Brisbane please

ITP are fantastic and they have offices all over Brisbane

[Sunnyskies]

As a 457 visa holder your tax is fairly simple. As a 457 visa holder you may be a tax resident but get no benefits, so very few deductions. You are also not liable to pay the Medicare levy as you have to have inpatriate cover.

As mentioned previously, remember that residency for tax is different to residency for visa purposes. If you plan on living in Aus permanently you are a tax resident. Remember that the way of determining residency is different for Aus to SA. If you are resident for tax purposes in both countries in any year you probably need an advisor to ensure you claim your respective tax payments properly.

I'm not a tax advisor. The below are my general rules of thumb that I use to make sure I have the right bits of paper and then I hand everything over to my tax guy.

As a permanent resident you are entitled to all benefits that you qualify for (as most of them are means tested). Over and above the social benefits which are well documented in the tax handbook from the ATO, make sure you keep evidence of:

- books required for your work (deductible in year purchased) and subscriptions for work.

- medical aid certificate (so that you can determine if you are liable for Medicare levy if you have private health care and if so how much). You may also be entitled to claim a portion of your medical aid costs (on a sliding scale as means tested)

- all technology purchased that you use for work (computers, phones, printers etc)

- all receipts for your vehicle if you use it for work (keep fuel, maintenance, parking etc) - but most people can't claim this

- electricity, phone, gas, rent, mortgage payments if you have a home office (remember that that portion of your house must be dedicated to your home office - so the dining room table doesn't count)

- superannuation payments over and above the deductions from work (but capped to $25k overall) but make sure you tell the superfund that you intend to claim a tax deduction

- get a tax certificate for all donations

- interest earned in your bank account (note you won't get an itb3 and have to calculate interest earned for yourself)

- if you own an investment house get specialist advice as you are entitled to negative gearing

- if you still have South African assets make sure you know their value and declare any income earned (converted at the prevailing exchange rate on 30 June) - they are apparently clamping down big time on 457 visa holders who don't declare their assets.

[WilsonClan]

Anybody know of a good tax consultant in Adelaide? This is our first tax year here after 6 years of NO tax (was lovely) in the UAE - so very rusty on it all

[Lynnie]

Looking for a tax consultant in Brisbane please

Have you found a consultant yet? As I said - ITP are very good.

Edited July 7, 2013 by Lynnie

[delboy2oz]

Can anyone recommend a tax consultant in Castle Hills area please?

Thanks

[Timmin]

Hi everyone,

I know this thread is a bit old – but my question fits the topic all too well, so here goes:

I am going on a temporary (18 month) visa (476) to check out the place. I will still be employed by my current South African employer (which will pay my salary) while I work for one of their clients (so it’s sort of like being a contractor).

1.) Can I be exempted from paying taxes in South Africa, since I will be out of the country for more than 183 days (of which at least 60 days will be consecutive)?

2.) Would I need to register and declare anything in Aus, and if not, can my South African employer directly pay my salary into my Australian bank account without making things difficult?

Thanks in advance - looking forward to your responses!

[AndreaL]

Good question!

And I haven't got a clue.I would imagine that if you are paid by a South African employer you will still be liable for South African taxation.

Have a look at this to see if it answers any questions http://www.ato.gov.au/General/International-tax/In-detail/Residency/Residency---the-resides-test/

There is also the domicile test and the 183 day test.

It may well be that you continue to pay tax in South Africa, which acts as a credit toward Australian tax if the ATO does indeed decide you are resident for tax purposes.

Here's hoping you get an answer from someone who knows rather than someone who is guessing

[Timmin]

Have a look at this to see if it answers any questions http://www.ato.gov.a...e-resides-test/

Thanks, it does sort of... but not necessarily what I wanted to hear ... looks like I'll have to pay tax