As each year goes by, the Australian Taxation Office (ATO) increase their audit activity with the intention of ensuring taxpayers satisfy the requirement of claiming a tax deduction by having  valid documentation.

If you don’t have a receipt or valid documentation, you risk having your tax deduction disallowed…and of course the ATO may impose a penalty on you for making a “false” claim.

Speaking from experience…most accountants would prefer to not receive a bundle of receipts at the end of the year (remember the old “shoebox”?)…but rather a simple summary of your expenses would suffice.

Having said that, it is your responsibility as a taxpayer to ensure that while you might provide your accountant with a summary, you must still maintain the original records to support your claim (this is the basis of self-assessment under the Australian taxation system).

In the absence of a more sophisticated accounting system, I recommend getting in the habit of summarising your expenses throughout the year, either in an excel spread sheet or even just a note book, and keep the actual receipts in a separate envelope or file (tip: avoid plastic pockets as they can “erase” the thermal print found on many receipts these days)…

In general, if your total work related expenses are less than $300 you do not need to keep receipts, but if your claim is greater than $300…you need to be able to substantiate the whole amount, not just the amount exceeding $300…so when in doubt – keep the receipt!

Does anyone have any special tips record keeping they are willing to share?

Regards

When I think of comfort, I think of a plush couch, cushions, a warm blanket and my drink of choice…but that’s not the type of comfort I want to discuss today.

I’ve always felt it is important to feel comfortable with your advisor and to be able to trust that they will do the right thing by you.

Just like you look to a health professional, personal trainer and a hairdresser who are on the same page as you…your financial and legal advisors should be no different.

Throughout my career I’ve developed some wonderfully trusting relationships with my clients, and I want to look after them like they are my family and friends…of course all while maintaining a professional position.

I had a discussion this week with a new business owner who was feeling a little anxious about some advice she had received…like she felt the need to “double check” the information she was given.

This is not how it should be – I am in no way suggesting that you take all advice on face value, I believe a trusted adviser will:

Walk – Solve – Implement – Check

Walk with you through your queries and ensure they are answering the questions you want answered

Help you solve your problems and provide meaningful explanations to go with the solution

While your advisor cannot make decisions for you, they can assist in implementing the decisions you’ve made following the “walk” and “solve” processes

Take the time to review the implementation with you to check if the desired outcome is achieved

I hope that everyone reading this is in a comfortable and trusted relationship with their advisor, if not, perhaps it’s time for a review!

Regards

PS This is not me in the picture…but I love the look of the blanket!

Each year in May, the Federal Government of Australia release their budget for the upcoming financial year.

For the 2014-15 financial year, the Federal budget will be released by the Treasurer on Tuesday, 13th May, 2014 at 7.30pm AEST.

The budget covers many areas, but of particular interest to most taxpayers are the impact on tax rates and entitlements.

In recent days there has been much speculation about what will be contained in the upcoming budget…this speculation was the result of the release of the Commission of Audit report which outlined a series of proposals which would affect all corners of our community…being health, education, age pension and aged care, unemployment and the minimum wage, family payments, welfare and disability, defence, paid parental leave and childcare, foreign aid, public broadcasting, transport and infrastructure, indigenous affairs, government agencies and privatisations

Those holding the purse strings have been careful to point out that the Commission of Audit report is not the budget, but that it is recommending sweeping spending cuts…others have hinted that the timing of the report could be considered scare tactics, on the basis that the actual budget, when delivered, will not be as “bad” as expected…

While I have no doubt that this budget is going to be a tough one for our country, at this point all we can do is wait for it’s delivery…The Tax Chic will be sure to look at some of the areas that are likely to affect you…stay tuned!

Regards