2017 Tax Planning Checklist: Personal Planning

Zone Offset

Record the number of days that you spend in Zone A or B, especially if you live in Zone B but spend some time in Zone A during the year.

Sickness and Accident Insurance Payments

Premiums for Sickness and Accident Cover are tax deductible. Payments can be made by the employer without incurring Fringe Benefits Tax.  (This is because of the operation of the “Otherwise Deductible” Rule).

Home-Office Expenses

If you use an area in your home, you can claim the expenses of a home-office. You need to be able to support the claim being made. You should only make a claim for the portion of time the area was used for work related
activities. You should calculate how much space the home-office takes up in the home and the amount of time spent conducting work related activities from it.

Expenses that can be included are:
  • electricity (proportionate);
  • rent (proportionate);
  • cleaning (proportionate);
  • depreciation of fixtures and fittings;
  • insurance (proportionate);
  • plant and equipment for the home office;
  • rates (proportionate);
  • repairs and maintenance for the office;
  • telephone usage for business purposes.
Alternatively, the ATO allows you to claim $0.45 per hour without the onerous requirements of substantiation and the capital gains tax implications of maintaining a home office.

Utilising Tax Free Threshold

Every adult taxpayer has a tax-free threshold of $18,200.

If a taxpayer is verging on losses, consideration should be given to the decisions being made in relation to the valuation of stock, bringing forward or delay of sales etc.,  to utilise the tax-free threshold otherwise it will be lost forever.

Tax Offsets Net Medical Expenses

For 2016/17, the only medical tax offsets are for:
  • disability aids
  • attendant care
  • aged care expenses

Work Related Expenses

If you are lodging a claim for work related expenses which would normally include employee claims for expenditure on items such as travel, uniforms, laundry of work clothes, subscriptions, union fees and self- education, you should check that you claim the correct amount of expenditure. The ATO is closely monitoring claims for work related expenses.

Dividends, Interest, Managed Funds Distributions

The ATO matches information provided in tax returns with information it receives from external sources, such as public companies, banks, managed funds etc. You should ensure that you have returned the correct amount of interest, dividends and distributions that you have received. You should also include imputation credits. Records should be maintained including documents received from banks, managed funds and company dividend statements.

End of Year Tax Schemes

Product rulings are issued by the ATO on various investment products that are marketed particularly around 30 June each year. If you wish to avoid confrontation with the Australian Taxation Office, then it is best to consider investing in products that have obtained ATO product rulings. However, you should be aware that the ATO product ruling are not a guarantee or any sort of government endorsement on the likely success or profitability of the investment.

Salary Packaging

Salary packaging can also assist in the minimisation of income tax, particularly in the areas of voluntary superannuation contributions, acquisition of assets that are subject to "beneficial" fringe benefit tax treatment such as supply of a motor vehicle. You should be aware that your employer is required to report the value of fringe benefits on your payment summary and that may effect on some other government payments to you.

Superannuation Contributions

Special concessions are available to low income or non-working spouses relative to superannuation contributions.

Splitting of Superannuation Contributions

Legislation enables taxpayers to split superannuation contributions for married and de facto couples to spread the total contributions over two account names.

Australian Taxation Office Monitoring

The Australian Taxation Office receives significant information from banks, companies, managed funds, state government departments etc., including interest, dividends, distributions from managed funds, details of land and property sales and purchases, motor vehicles, boat purchases etc., all of which the ATO uses to check that proper disclosure has been made in income tax returns.

Motor Vehicle Expenses

If work related use of motor vehicle is less than 5,000 kilometers, then the cents per kilometer method can be used to claim work related motor vehicle expenses being:
  • 66 cents per kilometre