car

When you can claim car expenses – Individual

When you can claim car expenses

 

You can claim a deduction for work-related car expenses if you use your own car in the course of performing your job as an employee, for example, to:

 

  • carry bulky tools or equipment
  • attend conferences or meetings
  • deliver items or collect supplies
  • travel between two separate places of employment (for example, when you have a second job)
  • travel from your normal workplace to an alternative workplace and back to your normal workplace or directly home
  • travel from your home to an alternative workplace and then to your normal workplace or directly home (for example, if you travel to a client’s premises).

If the travel was partly private, you can claim only the work-related part.

 

If you receive an allowance from your employer for car expenses, it is assessable income and the allowance must be included on your tax return.

Most people can’t claim the cost of travel between their home and their workplace because this travel is private. However, people doing itinerant work or who need to carry bulky tools or equipment that is used for work and can’t be left at the workplace can claim for driving between work and home.

start up 1

Five tips to start up a business in 2014

By Jocelyn Hunter

So you’ve ditched the job you hate or put your hand up for redundancy and you’ve decided you’re going to be your own boss in 2014. Congratulations. It’s a big step and not one to be taken lightly. The bad news is that the percentage of small businesses collapsing is on the rise, according to ASIC figures.

How can you ensure you’re not one of the 44 businesses closing their doors in Australia every day? Below are five tips to ensure you focus on the right things in the early days.

 1. Don’t sweat the small stuff

It’s easy to spend too much time thinking about a name and logo for your business. Similarly, money can be poured into cool looking websites and fancy business cards. This is a waste of your precious time and money when setting up a business.

Even if you’re in an ‘image conscious’ industry like ours (PR), it really doesn’t matter as much as you think it does. Of course if you’re going to be selling products online you need to invest in your website, but otherwise, get a basic one set up so people can find you online. This is very important – choose functionality over how it looks.

A website isn’t something you can set up and forget, we’ve had four different websites in five years as we’ve grown out of each one, but in the set-up phase choose a basic one and concentrate on getting money through the door.

 2. Spread your risk

Many businesses start with a customer the founder may have worked with before. It’s important to use your contacts and industry knowledge as much as possible. That first customer is very important as they provide you with a potential reference for future work.

However, be careful not to rely on one customer – this is a very risky strategy. If you only work for one customer, you haven’t really established a business; you’ve bought yourself a job. Of course you have a little more control than you would if you were employed by someone else, but ultimately this is all you’ve got. So you need to find time to do some business development and quickly.

 3. Start selling

You can spend so much time developing business plans, marketing strategies, attending various events and reading all of the excellent online resources that are available to small businesses today, but ultimately you need to start selling.

Your family and friends may have told you your product is great and they will have every faith in your skills and business idea, but you need to start making money.

This could involve contacting prospective companies, launching a google ad campaign or attending relevant events. You need to be able to explain what you do concisely and sell your business and the services you offer. The more practice you get at this the better.

 4. Know your numbers

Maths might not have been your favourite subject at school, but you’re going to have to understand what revenue is coming in, what costs are going out and how to read a profit and loss statement. Cash flow (along with bad management) is still the main reason why so many businesses fail in Australia. On average it takes a small business 55 days to get paid in Australia.

Don’t wait until the end of the year, or even the end of the quarter for your accountant to tell you how your business is performing financially. There are some excellent cloud based accounting packages which can tell you in real time just how financially healthy your business is. You can also send and reconcile invoices from your mobile phone and send customers online payment options, making it easier for you to invoice and easier for customers to pay.

 5. Do what you do best, outsource the rest

In the first 12 months it’s important for you to understand every facet of your business. This will make it easier to outsource and delegate tasks in future, but you can’t do everything. Business owners can struggle with this, they do have ‘control freak’ tendencies, believe me I know, but you have to do it to grow your business. The early days of setting up a business are the hardest, but they can also be the most rewarding.

relocate home

How to get your low offer accepted

By Jennifer Duke

There are some simple ways to get your offer accepted and to negotiate effectively, however many investors are not aware of them, explains a real estate author and buyer’s agent.

EPS Property Search’s director, Patrick Bright, said that  investors trying to secure the property they currently have their mind set on should consider attached a 10% deposit cheque to a signed contract.

The powerful incentive of the signed check should leave a reluctant vendor with a powerful incentive to accept, even if the offer is below the asking price.

“It’s a very persuasive strategy,” said Bright.

“The vendor’s looking at the cheque filled in for the 10% deposit and it can be extremely hard to give back,” he said.

There are also a number of negotiating tips that will assist you to push that offer across the line.

Bright provided his top four tips:

1)  Never disclose your budget to the selling agent

Once they know your budget, the selling agent will do everything they can to extract every cent out of you, especially if they haven’t reached the reserve or the vendor’s bottom line yet.

2) Never let the agent see you fall in love with the home

A few rules I tell my clients before we inspect a property is not to talk about the property until we leave. Don’t make comments or talk about the property while we’re there and don’t answer the sales agent’s questions. You could save yourself several thousand dollars by just keeping quiet.

3) Always put your offer in writing

By law, the agent must communicate all offers to the vendor but this doesn’t always happen especially if the agent considers the offer ‘too low’. If you put your offer in writing there’s much less chance of the agent putting it to one side. If there’s written evidence of an offer it’s easier for the agent to get caught out if they don’t pass the offer on to the vendor.

4) Never let the agent know if you are motivated to buy

When you’re going to open homes and talking to sales agents on the phone always play the indifferent buyer. Never let them know what your motivation is to buy. If they know you’re in a tight situation they’ll use that information to negotiate with you, just as you will use your knowledge of how motivated the vendor is to sell to your advantage. If you’re buying property with your partner, it’s a good idea to let one person do all of the talking with the agent.

 

chef 2

Tax deductions for chefs and hospitality workers

If you work in the hospitality industry or as a chef, some of the tax deductions you may be able to claim on your personal tax return are:

Meals and Travel

  • The cost of buying meals when you work overtime, provided you have been paid an allowance by your employer (you can claim for your meals without having to keep any receipts, provided you can show how you have calculated the amount you spent)
  • The cost of parking, tolls, taxis and public transport if you are required to travel to attend seminars, meetings and training courses (if you need to stay away overnight you can also claim for the cost of all meals and your accommodation)
  • The cost of using your own car for work, including travel to collect materials and supplies, travel between 2 or more places of work, to attend meetings and to attend training courses (to claim for car costs it is usually best to keep a diary record of the number of kilometres you travel during the year for work purposes and then we can calculate the amount of your tax deduction at the end of the year)

Work Clothing

  • The cost of buying compulsory uniforms (including shirts, pants, skirts, jackets, jumpers – your uniform should have the business or restaurant’s logo on it to ensure it is tax deductible)
  • The cost of buying occupation specific clothing (including checked chef’s pants, black or white chef’s jackets, chef’s hats)
  • The cost of laundry or dry cleaning of your uniforms or occupation specific clothing
  • The cost of buying other protective equipment, including gloves, steel-capped boots, hair nets and aprons

Training

  • The cost of work-related short training courses, for example first aid, OH&S, specialty cooking courses, management, staff supervision, RSA which are not run by a University or TAFE (you can also claim for the cost of travelling to and from the course and any accommodation and meal expenses if you are required to stay away overnight)
  • The cost of self-education courses run by a University (not including HECS/HELP) or TAFE, for example Cert IV in Commercial Cookery or Hospitality. If you are studying, you can also claim for the cost of books, stationery, equipment and travel required for your course

Work Tools & Equipment

  • The cost of buying and repairing equipment you use at work, including knives, steels, tools, electronic organisers, laptop computers and mobile phones
  • The cost of any materials or supplies that you buy for use at work, for example stationery, diary, work bag or briefcase
  • The cost of insuring your work equipment

Other Work Expenses

  • The cost of annual association membership fees or union fees
  • The cost of work-related magazines and journals
  • The cost of work-related books (these could include recipes, management, customer service, or hospitality books)
  • The cost of work-related mobile or home telephone calls and rental (you should keep a diary record of the number of phone calls you make for work for one month and then we can use that to estimate your usage for the whole year)
  • The cost of work-related internet connection fees (you can only claim the proportion of your monthly fees that relate to work use, which could include emailing, research relating to your job, for example gathering recipe ideas and investigating different types of produce and availability or comparing prices and menus at other restaurants)
  • The cost of reimbursing your employer for any cash or bar shortages
  • The cost of maintaining a home office if you are required to complete work at home (you should keep a diary to record how many hours per week you spend working from your home office)

General Expenses

There are some tax deductions that all employees can claim on their personal tax returns:

  • The amount of any donations to registered charities (as long as you haven’t received anything in return for your donation, such as raffle tickets or novelty items)
  • The cost of bank fees charged on any investment accounts
  • The cost of income protection or sickness and accident insurance premiums (this type of insurance covers you if you hurt yourself (including when you are not at work) or become sick and you are unable to work. It will pay you your normal wage until you are fit to return to work – if you don’t have this insurance you should see a financial adviser or ask us and we will refer you to someone who can organise it for you. It is definitely worthwhile)
  • Your tax agent fees (the amount you pay to your accountant to prepare your tax return each year)
  • The cost of travelling to see your tax agent (you can claim the cost of travelling to see your accountant to have your tax return prepared. You should keep a record of the number of kilometres you travel and any other incidental costs such as parking, meals, accommodation etc)

We suggest that you keep receipts for all purchases that are work related, even if they are not listed above. That way, when we prepare your tax return, we can decide whether you are allowed to claim a tax deduction for them or not.

If you would like any more information about the deductions listed or if you would like our team to prepare your tax return for you to ensure you maximise your claims this year, contact us at info@youraccountants.com.au