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Paul Carrazzo CPA is a Registered Tax Agent, Fellow of the Taxation Institute of Australia
("FTIA") and, as noted in the Corporate Profile, is a respected tax commentator and writer.
Paul's taxation expertise and interest is sourced primarily from the three years he spent
working for the international accounting firm, "Arthur Young" (now "Ernst & Young"), where
the majority of his time was spent consulting in their specialist taxation division.
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The specialist services available within this area are:
- Tax Return preparation for all types of entities, including:
- Companies
- Family Discretionary Trusts
- Unit Trusts
- Partnerships
- Superannuation Funds
- Special Projects
- Sole Traders
- High net wealth salaried employees
- Financial particulars
- Fringe Benefits Tax Returns;
- Review of prior tax returns lodged to ensure compliance with taxation laws and ATO requirements; and
- Assisting business people and individuals subject to ATO audits
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Q.
I want to claim a deduction for using my car in my business or for employee
duties. What is business travel? |
A.
Business travel is travel which is undertaken in gaining or producing your assessable income or carrying on a business for that purpose. Travel between home and a person's regular place of employment or business is ordinarily private travel. While travel to work is a necessary prerequisite to earning income, it is not undertaken in the course of earning that income. Put at its simplest, travel to work is private; travel on work is business.
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Q.
Does a car log book have to be kept for every year? |
A.
A log book does not have to be kept every year. The business percentage is valid for five years. That is, the year that the log book is kept and the subsequent four years. Once you have established the business use percentage, you are not required to complete a new log book unless required to do so by the legislation, or otherwise directed in writing by the ATO. This business percentage is used as a basis for you to arrive at your reasonable estimate of the business use percentage in each income year as noted above.
Note: You must keep odometer records every income year.
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Q.
In what circumstances can I claim Home Office Expenses? |
A.
The ATO will generally not allow a taxpayer to claim for expenses associated with their home office unless their employer considers it necessary for them to work from home and the following criteria can be established:
- It is normal practice in the employee's industry to perform some work duties from home;
- It is a part of their current job specification; and
- It is a condition of their employment, although not necessarily evidenced/documented in writing.
Generally speaking, "running expenses" are able to be claimed by salary and wage earners who satisfy the above criteria, "Occupancy expenses" may be claimed by people running a business from home. For discussion as to what the ATO considers to be a "place of business", refer to Paul Carrazzo's feature article on this issue, published in the June 1999 issue of The Australian Bloodhorse Review.
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Q.
I want to invest in a rental property. What are the common deductions available?
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A.
The common rental property deductions available include:
- Travel to inspect the property
- Agents's commission and costs for rental collection
- Repairs (but not structural alterations or improvements)
Click the links below to see the ATO definitions of:
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Repairs
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Structural Alterations & Improvements
- Rates and Taxes
- Insurance Premiums
- Interest on Borrowings
- Legal expenses in recovering arrears of rent or evicting
a tenant for non -payment
Includes lease preparation, registration and stamping.
- Advertising
- Depreciation on plant (not fixtures) - click
here to see which items may be included
- Special building write-off
Applies to construction costs, not purchase price, of the dwelling.
4% write-off if construction commenced in the period 18-7-85 to 15-9-87,
2.5% write-off if construction commenced on 16-9-87 and onwards.
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