Tax FAQs

Do I need to declare my overseas pension?

In most cases overseas pensions are taxable and, if you are an Australian resident, you will need to include the amount in your tax return.  There are a few exceptions to this rule.  
I am required to undertake road travel, in the ordinary course of earning my income, using my own car.

What do I need to do so that I can claim a tax deduction for my car?

There are two different methods for claiming work related motor vehicle expenses and each have different record keeping requirements.  To use the method that ensures you the best claim it is advisable to keep a log book and all receipts for expenses (e.g. insurance, registration, repairs, services, tyres, etc).  You do not have to keep receipts for petrol as this amount can be calculated using a yearly average formula.  Your log book should be kept for a minimum of 12 consecutive weeks and generally it will be valid for five years unless there are significant changes in your circumstances.  You also need to keep the opening and closing odometer reading for each year.  

You cannot claim any car expenses if your car is salary packaged.

During the year I had an overseas holiday and while I was away attended a seminar that was relevant to my job. Can I claim the cost of the trip?

You cannot claim the cost of the trip because the main purpose was to have a holiday and attendance at the seminar was incidental to this.  You will only be able to claim the additional expenses that you incurred to attend the seminar.  These could include the registration fee, taxi fare to the seminar, etc.

I have a room set aside in my house as a home office and would like to claim some expenses.

If a taxpayer carries on all or part of their employment activities from home and has an office set aside to do the work, then some portion of the running expenses can be deducted.   A diary should be kept for a minimum of 4 weeks stating hours the office was used for work related purposes.  Where a home is a place of business (and is easily identified as such – for example a separate entrance, signage etc), deductions can be claimed on the following items of expenditure - house insurance, council rates, heating and lighting, depreciation, insurance, repairs, cleaning, pest control, maintenance and telephone.

My employer expects me to wear specific clothing for work? What would I be able to claim?

Compulsory uniforms are generally deductible provided they identify you as an employee of that organisation or in a specific occupation.  A requirement to simply wear particular colours is not enough to make the clothing deductible nor is a requirement to wear a store’s own brand of clothing (these are still conventional clothing and not tax deductible).  Corporate wardrobes are also deductible if certain conditions are met. The uniform design must be registered with AusIndustry.  Provided that the clothing is deductible then you may also claim maintenance costs (laundry, dry cleaning and repairs).

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 may need receipts to substantiate the expenditure.  Keeping incomplete, incorrect or no records at all may be limiting your ability to claim 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 notation on the document indicating the type of goods that were purchased.  Many taxpayers use the internet to purchase or pay for their work related expenses and as such the ATO will also accept Bpay or email receipts provided they contain the necessary information; date, supplier, nature of the goods and the amount.

How long do I need to keep my receipts?

Documentary evidence should be kept for five years from the date of lodgement of the tax return in which the claims are made.  If you are depreciating an asset the receipt should be kept until the item is fully depreciated, even if over 5 years.

I am over 60 years of age and retired. Will my superannuation pension be tax free in future?

People who have reached 60 no longer pay tax on superannuation income streams (pensions or annuities) that are paid from a taxed fund.  A taxed fund is one where contributions tax was paid on the contributions made by your employer into your super fund on your behalf.  Contributions tax would also have been paid for contributions made under a salary sacrifice arrangement.  Most funds are taxed funds.  However, for taxpayers who belonged to an untaxed super fund, they will still have to pay tax on their superannuation income stream, irrespective of their age.

Taxpayers who are over 60 years of age (for the full financial year) and receiving a superannuation income stream from a taxed fund no longer receive a PAYG Payment summary.

How do I apply for the government co-contribution?

If you are entitled to a co-contribution the payment will be made to your fund after you have completed the relevant details on your tax return and lodged it and your fund has reported your contributions to the government.The ATO will also provide you with a notice at the time the Super Co-contribution is paid and accepted by your superannuation fund or RSA.