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Re:     2014 Income Tax Returns

                                                        

 This is a general letter we forward and email to our clients each year to assist them with gathering their tax information for the year ahead.


To our Valued Client

Re:    2014 Income Tax Returns

The end of the 2014 financial year is fast approaching. In order to assist you with your information gathering, we have put together a list of common information needed in order to more efficiently prepare your income tax return. Please read through this list at your convenience. This information relates to the period 1 July 2013 to 30 June 2014. There may be instances where you do not need to lodge an income tax return, however, as a general rule, if you have paid tax, or received a payment summary, then you will.

Income

·         PAYG payment summaries and any ETP/termination statements for year ended 30 June 2014, from employers, employment agencies, labour hire arrangements, superannuation funds (together with UPP rebate information) etc. Details of Employee Share Schemes.

·         Copies of PAYG installments paid on annual or quarterly Instalment Activity Statements/Business Activity Statements (if not prepared through us, a copy of these statements is required for matching purposes).

·         Centrelink Pensions, unemployment benefits, social security, Taxable Parenting Payments, Paid Parental Leave Payments, Austudy or HECS statements and Financial Supplement Loan statements (Note that Centrelink does not provide these until after July if at all – If you are unsure please contact Centrelink).

·         Allowances, benefits, earnings, tips, directors fees etc.

·         Interest and dividend income, including imputation credits and TFN withholding tax (Provide dividend payment slips, and bank statements). Please note that even if these are not physically received and are reinvested back into more shares, the dividend is still assessable in the hands of the recipient.

·         Trust distributions received (2014 annual tax statements from Managed Funds etc. to be provided – sometimes these will not be available from the Managed Fund until September / October 2014).

·         Where shares or units are sold/redeemed during the year, details of the purchase dates and amounts (including copies of dividend reinvestment statements) and sale dates and amounts, for capital gains tax (CGT) calculation purposes (Copies of buy and sell contracts are needed).

·         Other business income and expenses (as per cash book kept, backup of MYOB or Quickbooks file, and invoices issued and receipts), plus closing stock / inventory at cost, debtors (accounts receivable)  and creditors (accounts payable) as at 30 June 2014, loan and bank statements, and prepaid expenses if the relevant service is to be provided over more than a year. Copies of BAS statements (if issued) are also required to be provided for matching purposes.

·         Rental income and expenses for all commercial, and residential rental properties (Agent Statements/Tax Invoices/Loan Statements, Quantity Surveyors Report, Rates, Insurances, Repairs, Capital Improvements etc.)

·         Income from foreign investments, overseas salary or overseas pensions. Note all overseas income earned is required to be declared in your return for the year ended 30 June 2014.

Deductions      (Note: receipts and tax invoices are required to be cited for all claims)

Due to the increase in audit activity this year, and to ensure your maximum claims are being made accurately and correctly, please include your receipts and logs for claims

·         Work-related expenses such as union fees, subscriptions, work related travel expenses, self-education costs, uniform costs and protective clothing and footwear etc.  Note: These costs should be GST-inclusive. (Even if you are unsure of the tax deduction, please include the invoice, and we can determine its deductibility)

·         Motor vehicle expenses (total costs for the financial year for fuel, registration, insurances, repairs, etc from 1/7/13 – 30/6/14 – per receipts), business kilometres travelled, logbook details (Note: Logbooks must be renewed every five years or if a new car is purchased, and reviewed annually to ensure the business percentage use is accurate). If a new vehicle is purchased, the dealers purchase contract together with the finance documents if applicable.

·         Other deductions such as interest on investment loans, bank charges, postage, telephone and computer related claims incurred in earning income from activities as described above, together with the logs kept to substantiate those claims.

·         Tax-deductible donations, and tax agent fees. Income Protection Insurance statements.

Rebates

·         Annual statements from Medicare, private health funds and other receipts for pharmaceutical, dental, hospital, optical expenses etc., where the total of such expenses exceeds $2,120 after reimbursement from Medicare/private health funds.

·         However, on 14 May 2013, the Labour government announced in the 2013–14 Budget that it will phase out the net medical expenses tax offset. From 1 July 2013, those taxpayers who received the offset in their 2012–13 income tax assessment will continue to be eligible for the offset for the 2013–14 income year if they have eligible out-of-pocket medical expenses above the relevant claim threshold. Similarly, those who receive the tax offset in their 2013–14 income tax assessment will continue to be eligible for the offset in 2014–15.

·         The changes mentioned above will not apply to all taxpayers – the offset will continue to be available for taxpayers with out-of-pocket medical expenses relating to disability aids, attendant care or aged care expenses until 1 July 2019

·         Superannuation contributions made during the year on behalf of your spouse, together with your spouse’s income details.

·         If you do not normally lodge an income tax return but received franked dividends or trust distributions, you are now eligible to claim back from the Australian Taxation Office any excess imputation credits.

·          

·         If your spouse does not work and you are not receiving Centrelink Benefits  for your family you may be entitled to a spouse rebate. Your spouse must have been born before 1/7/52, and earn less than $9974.00. If your spouse was born on or after 1 July 1952, you can no longer claim a dependent spouse tax offset for them.

Record-keeping

Please note that the Australian Taxation Office is increasing its audit activity with the audits of ax returns of individuals on a regular basis. As your return will be assessed on the information contained therein, care should be taken to ensure that details of income and deductions supplied are correct. Substantial penalties may be imposed where errors or omissions occur. Note that it is the responsibility of the taxpayer to ensure the information in the return is correct. Where any errors or omissions are detected, please inform us immediately so that we can amend the return for you.

For the 2013/2014 financial year, the ATO has increased its auditing capacity, looking at all occupations and the benchmarks for these occupations, and looking at deductions claimed. If you are outside of the ATO benchmarks, you will be looked at. Please ensure all receipts are kept for all claims and that all claims are able to be substantiated.  The ATO is specifically looking at under declared / cash earned income for all taxpayers and also concentrating on claims made and the relevance to your employment and deductibility.

Deductions claimed for income tax returns are required to be substantiated by receipts or other records. Without such records, claims will be disallowed and penalties may also be imposed.

Similarly, appropriate records must also be maintained for capital gains tax (CGT) purposes, in respect of assets (shares, property etc) acquired after 19 September 1985. If such records are not currently available, we recommend that you contact us to discuss your options as, on the sale of an asset, it can be a time-consuming and costly process to obtain the required information. Please note that we are also able to provide an investment register service to help in eliminating any future problems.

To minimise the time involved (and cost to you), we ask that you review the information above that applies to your situation, and include all relevant details when you send your information in to us. Please include logs of your phone and internet usage (if applicable) and a summary of your work related expenses along with the receipts to substantiate the claims.

All information is required to be kept by the taxpayer for 5 years (business) and 3 years (individual).

From the 2014 year, we will be emailing a full copy of the return to you. There will be NO charge for this service. Accordingly. as we provide a full copy of the return and any related information to you, we do not hold physical copies of these on file.

Any additional paper copies of these returns required will incur a fee of $55.00 for retrieval and copying/faxing. Please ensure you keep copies of these returns in a safe place.

We have a tax information envelope this year to assist in the retention of this information for you. Please call into the office to collect your free tax envelope.

 

As an existing client -  that our fee for the preparation of a basic salary and wage income tax return (drop off – no appointment) will remain the same at $99.00 for an up front payment at drop off. This fee has remained the same for the past 7 years.

Normally, these returns are able to be prepared within a few days for your convenience.

We do ask that you fill out our client information form in order to provide your contact details (phone, address, and email). Please do not be offended if we ask for this information again. As we are going paperless, we do need to check all our contact details and email addresses to ensure we are able to get hold of you.

Payment for the processing and lodgment of your return is required immediately upon completion of the return and presentation of your invoice. Without full payment, lodgment cannot be assured. Once paid for in full, we can arrange for the ATO to deposit your refund directly into your bank account, so please provide us with your banking details.

If an appointment is required to prepare your salary and wage income tax return, a base fee of $385.00 will apply. Please call us for our schedule of fees for rental properties, businesses, and other entities. Whilst we do have a fee structure, these fees may vary depending on the amount of work involved and the time taken to prepare these.

Should your contact details change at all during the financial year, please ensure you contact us to provide us with these changes addresses and phone numbers. At times the ATO forwards information to us which we are required to forward to the taxpayer. However, without the correct contact details, we are unable to forward these to you.

Should you have any queries regarding these matters, please do not hesitate to contact us. We trust the enclosed information has assisted you in the gathering of your 2014 tax information. Looking forward to assisting you in 2014.

Yours faithfully

 

 

Nadia Linnane  CPA  FNTAA.

Small Business and Taxation Services



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