This tax time, the ATO, as usual, has nominated some tax claim hot spots that it will be paying attention to — and which you should approach with caution when claiming these deductions.

For example, the ATO has already flagged that it will be checking returns for taxpayers who take advantage of the exemption from keeping receipts when spending less than $150 on laundry expenses. The ATO believes that too many people are claiming this without actually incurring the expense.

In an announcement issued 4 June, the ATO said that for last financial year around six million taxpayers claimed work-related clothing and laundry expenses that totalled about $1.5 billion. It said that 25% of all laundry and clothing claims were exactly at the record-keeping limit. […]

New labels in the 2019 SMSF annual return

The SMSF annual return for 2019 has a number of new questions and labels that SMSF practitioners and trustees need to be aware of.

In previous years, the ATO advised trustees that the question in the annual return regarding whether Part B of the audit report was qualified could be answered with a “no” if the only reason the auditor qualified Part B was because they could not confirm the information provided to them (for example, opening account balances).

The ATO advice for this year is that this is no longer the case, and that trustees’ answers must correctly convey the auditor’s written opinion. […]

Main residence CGT exemption when there is no “residence”

There is a concession in the CGT rules that can allow a taxpayer to treat a property as their “main residence” even though it does not yet have a habitable dwelling.

It is a widely recognised fact that an exemption to capital gains tax (CGT) applies to a taxpayer’s principal or main residential property. What is less well known is that the period when this main residence CGT exemption applies can be extended to cover the time it takes to finish construction (or complete repairs to) of the physical residence on the property.

So even if there is no actual dwelling on a block, the vacant land can start to be treated as a taxpayer’s “main residence”. This is commonly referred to as the “building concession” or sometimes the “four year rule” for reasons that are outlined below. […]

EOFY last-minute tax planning tactics for individuals
This financial year is almost over, but there are still tactics you may be able to employ to make sure you pay the right amount of tax for the 2018-19 year. While the best strategies are adopted in July (that is, as early as possible in a financial year and not at the end), it’s worth remembering proper tax planning is more than just sourcing bigger and better deductions. The best tips involve assessing your current circumstances and planning your associated income and deductions.

Not all of the following tips will suit your specific situation, but should provide a list of possibilities that may get you thinking along the right track. […]

When are digital products ‘connected with Australia’ for GST purposes?
With the purchase of digital products such as the streaming or downloading of movies, apps, and e-books and so on becoming exponentially more popular, it is timely to examine the recently-introduced law that applies GST to digital products and services imported by Australian consumers.

Effective 1 July 2017, GST now applies to digital products and other services imported by Australian consumers. Affected supplies that are caught by the new law include not only the streaming or downloading of movies, music, apps, games, e-books, online supplies of software, digital trade journal/magazine subscriptions and other digital products, but also offshore services such as website design, publishing services, consultancy and professional services (such as legal advice, architectural services and so on). […]

Remember that a fuel tax credit increase has just gone through

Fuel tax credit rates are indexed twice a year, in February and August, in line with the consumer price index (CPI). Also these rates change regularly, so it’s important to check when you are preparing for us to complete an activity statement for you.

See this ATO webpage for the rates that apply from 4 February to 30 June 2019. (Past rates are also displayed there, just scroll down.)

If you claim less than $10,000 in fuel tax credits each year, you can use any of the following simplified methods that best suits your needs. […]

From 1 July this year employers with 20 or more employees will report to the ATO in real time from their payroll software. The changeover to Single touch payroll (STP) is a gradual change, and some employers may start reporting later.

Employers will be able to see STP information they report through the ATO’s business portal, and this is expected to give them a better picture of their tax position. The ATO will be able to offer help and support earlier to those businesses that may be struggling to meet their tax obligations, such as offering payment plans. […]

SG on leave loading? Yes, and no — so it pays to check
An issue has surfaced in recent times that in some cases may require a change in the approach taken by some employers with regard to them being fully compliant with superannuation guarantee obligations. The problem for some may not be so much ducking the rules, but rather being in sore need of clarification on how the existing rules apply.

The accepted convention with regard to superannuation guarantee payments is that it is an amount calculated as a percentage of an employee’s salary or wages (9.5% at this stage, but increasing over coming years). […]