Property Investors Save Tax With Depreciation

Property Investors Save Tax With Depreciation

As an owner of an investment property you’re entitled to claim depreciation on your building, it’s fixtures and fittings.  This can be a significant taxation benefit and one that is often overlooked by owners.  

Better still depreciation is a non-cash deduction – this means you do not spend any money to claim it on your tax return.  

So what is depreciation and how do you claim it?

Click here to find out. 

Can you claim your car expenses on your tax?

Can you claim your car expenses on your tax?

For the 2016 financial year (July 2015-June 2016) there is a new change to the way you can claim for motor vehicle related expenses in your tax returns.  The options have been reduced down to 2 methods: Cents Per Kilometre or Logbook.

The even rate of 66 Cents Per Kilometre is claimable regardless of the type of car you drive.  You can only use the Cents Per Kilometre claim for less than 5,000km annually.  Whilst you don’t need a Logbook, you do need to have diary records to justify your travel claims.  A diary is less rigid than a logbook and could be your work calendar or appointment notes.

If you do more than 5,000km of work related travel per year you have a logbook.  This method allows to claim for specific expenses such as petrol, maintenance, insurance, registration, etc.

Claiming for motor vehicle expenses is available for employees and businesses alike.  The key criteria is whether your car is used for work purposes. 

Our tips for claiming your motor vehicle:

  • Don’t claim for travel between your home & place of work (this is private use)
  • You can claim for travel home from a meeting held offsite your normal workplace (for example you travel to a customer site and then go home afterwards – you can claim the journey home)
  • Your logbook must have 12 concurrent weeks of records for every trip taken during this time – put the logbook on the passenger seat with a pen so you remember each time to fill it in
  • A logbook can remain valid for 5 years if the nature of your travel doesn’t change – so a little bit of pain in getting it done can last a long time
  • If you use a logbook, you must yearly record the opening/closing odometer of your vehicle on 30 June/1st July 
  • If you have an employer paid vehicle or salary sacrifice you cannot claim for work related motor vehicle expenses
  • There are great Apps available for smart phones that can be used to record your Logbook
  • By using one debit card or credit card you can keep all your motor vehicle related expenses on one set of bank statements making it easy to find all the claims at the end of the year
Preparing for your tax appointment

Preparing for your tax appointment

You can try filling out your tax return by yourself, and you may feel confident enough to do tax returns for yourself or your loved ones. But a qualified tax accountant will be up to date with the latest changes in tax law and will ensure that you get the very best return possible.

If you not sure what to bring with you for your appointment, stress less, the below checklist contains a list of information for you to prepare and ensure you have all the info we need to complete your tax return on the spot.

This will also ensure we have all your information as we cannot always be sure the ATO portal will have these details ready for when you make your tax appointment:

Income

  • Your PAYG summaries including any termination payments (if applicable)
  • Bank interest
  • Dividend statements
  • Superannuation income stream summaries
  • Information on any Allowances paid such as car, travel, entertainment, meals etc.
  • Annual tax statements from investments
  • Foreign income
  • Sale of property, shares, managed funds information that may attract Capital gains
  • Dividend statements
  • Business income and expenses                  
  • Rental income from the agent

Expenses for tax deductions

  • Motor vehicle expenses
  • Travel and accommodation information
  • Work uniforms
  • Self-education and training expenses
  • Tools and equipment
  • Personal Superannuation contributions
  • Interest on investments
  • Telephone and internet
  • Donations
  • Income protection insurance

You might not be able to claim all of these expenses, but your tax accountant will be able to advise you of what you can claim during your appointment. 

It is best to prepare all the information at least a week in advance of your appointment so that you have time to obtain any of the information that you don’t can’t easily locate. 

Please note – The ATO is no longer issuing refunds by cheque therefore please also ensure you bring along your current bank account details including the BSB, account number and name to ensure any refunds can find their way into your bank account.