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10 Most Commonly Asked Questions During Tax Season

The most common 10 questions we get asked around tax time are below.

The vast majority of individual taxpayers in Australia complete and lodge their income tax returns each year between 1 July and 31 October.

In the world of tax and accounting, this four month period is often referred to as tax season.

While most taxpayers who lodge through registered tax agents have deadlines that stretch well beyond 31 October each year, tax season and the days leading up to 31 October are an intensely busy time for the Affinitas Accounting tax team.

We get to welcome new clients and catch up with many of our once-per-year regulars.

Whether it’s via email or face-to-face, we get to deal with clients’ tax situations and answer questions and queries related to their income and expenses.

A poll of the Affinitas tax team produced the following list of 10 most commonly asked questions during the 2018 tax season.

The most common 10 questions we get asked around tax time are below.

These questions and our responses are summarised below.

  1. Do I need to come into the office for my appointment?

 No. Many of our clients from all over Australia and the world make use of our email service to prepare, check and lodge their returns.

  1. I have had a phone call telling me I owe money to the ATO and I will be jailed if I don’t pay.

Every year unscrupulous people try to cash in on tax season by running these types of scams. If you are our client and you have a tax debt we will know about it. So just hang up the phone and call us to check what you are being told.

  1. Why do I need to pay PAYG instalments?

While it is always much more exciting to receive refunds, some people  lodge a tax return which results in a tax bill. This could be for a number of reasons – high bank interest, capital gains or other forms of untaxed income. If this happens, the ATO will assume you are going to continue to receive these tax bills and ask you to start prepaying towards next years bill. This is called a PAYG instalment. 

  1. Why do my PAYG instalments keep changing, I thought we had sorted this out?

Your PAYG instalment is calculated by the ATO based on the information in your most recently lodged tax return. Each time you lodge a new tax return, the ATO resets and re-calculates the amount. If you think it is excessive based on your current circumstances, then we can always amend this figure as long as we make a reasonable attempt to be accurate. 

  1. Can I pay my debt off with the ATO?

In most cases the answer is yes, provided you have a good record with your tax lodgements and no previous bad debts with the ATO. Normally, the ATO will allow you to pay off a debt over  periods of up to 12 months.

  1. What home office expenses can I claim?

It depends – that is the short answer. There are two broad categories of home office expenses . These are referred to as occupation expenses and running expenses. It depends on whether your are running a business from home or simply using your home to occasionally do some of your paid employment work. It is worth having a more detailed chat with us if you believe you may have a claim in this area.

  1. Do I have to declare and pay tax my overseas rental property?

Generally speaking yes, unless you hold a temporary resident visa. Holders of temporary resident visas who have overseas rental properties need to declare the income earned from these properties, but will not need to pay tax on them.

  1. Do I need to declare capital gains if they are under $10,000?

Yes, unless the capital gain is for what is classified as a personal use asset. There have been a lot of questions in this area related to cryptocurrency gains. In most cases, a gain on buying and selling a cryptocurrency is going to be considered a capital gain even if the amount is less than $10,000.

  1. How come I spent $1200, but don’t get a $1200 refund?

One of the most common misconceptions in relation to how tax deductions work in Australia. A refund reduces your taxable income, but ultimately the tax you get back (or save) is related to your tax bracket. For example, if you are in the 32.5% tax bracket, your $1200 deduction will provide a tax benefit of $390. This $390 will either be added to your refund or reduce any tax you have to pay.   

  1. Why can’t I claim that? My friend does?

Once again a very common question. Australia operates a self assessment tax system and under this system many self-preparers can misinterpret the rules relating to what is an allowable deduction.  It’s only if and when they are audited that the ATO will disallow the claims. Our job as qualified professionals and registered tax agents is to do our best to ensure your tax lodgement is correct each and every year according to the tax laws of Australia.

If you think self-preparing sounds more lucrative as far as refunds are concerned, ask anyone who has been subjected to an ATO audit. They are time consuming, stressful and often result in the taxpayer having to repay many thousands of dollars worth of refunds, plus fines and penalties. Using a registered tax agent does not guarantee you will not be audited, but it should mean that the process will not be as time consuming or expensive. Options like buying tax deductible audit insurance also can provide peace of mind that our fees will be covered if we need to help you through a tax audit process.

Has that helped?

We hope so!

If you have any more questions, don’t hesitate to contact the Affinitas team. You can also keep up to date with us on Facebook and LinkedIn for more tax and accounting tips.

Need friendly advice? Talk to our staff today about how we can help your business succeed.

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  • I’ve been dealing with Affinitas Accounting for about 3 years now and I have found them to be nothing but friendly and helpful. I’m a Bookkeeper and on occasions have been stuck with various accounting problems. Affinitas have not hesitated to spend time with me until the problem was solved. Any queries or questions have always been answered in a timely manner.

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    Paul Maclaine

    Affinitas has looked after all our financial needs for our business and personal tax returns. We have been with our accountant for 10+ years. I have no hesitation in recommending Affinitas to anyone looking for an accountant or any financial advise. We have always found and received friendly professional and practical advise.

  • For the past 6 years, Tammy has been lodging our tax. The team always spend the time to explain how things will affect us and always manage to maximise our returns. We highly recommend the team to anyone we speak to and have had friends move to do their future tax with the team at affinities accounting. Couldn’t recommend them highly enough.

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    Kirsty Whittaker

    I’ve been using Deb from Affinitas Accounting now for many years and have found her to be excellent in looking after my taxation needs. I’m in Tasmania, Affinitas Accounting is in Queensland and distance is no barrier. She understands my business needs, everything is done in a friendly and efficient manner and I happily recommend to anyone looking for ‘down to earth’ taxation advice.

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    David Williams

    We’ve been with Affinitas Accounting for over 5yrs when they were known as Online Accounting & Taxation Solutions. From our initial phone call with Brad looking for an accounting team that would meet our expectations as well as provide efficient service, we’ve been really impressed with the team’s professionalism, knowledge & expertise.

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    Debbie is our accountant and has been for seven years. She is thorough and always does what she can to honestly get us the best return but always adheres to the ATO guidelines. We recommend her to our friends and wouldn’t take our business to anyone else. Thanks Debbie.

  • We have only been with Affinitas Accounting for the past 12 months but in this time they have by far exceeded our expectations of an accountant and far surpassed previously used accountants.
    Affinitas are not just about annual returns, BAS statements etc, they take the time to get to know you enabling them to provide advise to help you work toward personal & business goals.

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    Mark D’Andrea

    Can’t fault Affinitas.

    Have been coming here for years (when it was then called online tax). Deb has been happy to always go the extra mile and doesn’t mind dispensing helpful advice throughout the year.

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    Deagon Fixing

    I have been a client of Affinitas Accounting (previously Online) for the past 8 years. It is like a one stop shopping experience, all my needs were addressed in the one office.

    Thanks Affinitas you for all your assistance and I would strongly recommend them to anyone to use

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