2017-18 Federal Budget: Personal Taxes and Medicare

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Personal taxes

The option of claiming a standard tax deduction for work expenses has long been talked about, in the hope of simplifying personal tax returns. It was speculated to be delivered in this year’s Federal Budget, however was not to be.

The 2017-18 Budget also contained no changes to the personal income tax rates and thresholds. This means that the Temporary Budget Repair Levy (2% on incomes over $180,000) will still expire at the end of the 2016-17 financial year.

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Tax and the sharing economy

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There are more and more sharing economy, or collaborative consumption, websites and apps hitting the market in Australia and they are making their way from the big cities into the Tasmanian market. With the holiday season upon us, short-term vacation rentals through apps like Airbnb and Stayz will be in full swing. And now that Uber has arrived in Hobart – just in time for the silly season – Tasmanians and our tourists are embracing the ride-sourcing phenomenon.

But before you decide to rent your house out for summer with Airbnb or earn some extra money driving for Uber, you need to consider the tax implications – you may need to pay GST and income tax on your earnings and you may be liable for CGT down the track.

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Work-related travel expenses: Why are they on the ATO’s radar?

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Many people, as employees, get their tax returns wrong in relation to claiming work-related travel expenses.

The absence of hard and fast rules can makes claiming travel expenses difficult. Often the deductibility of such costs can depend on the nature of employment, the amount of time spent away from home, and whether an allowance has been received to cover the costs.

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Rental properties: claiming for “repairs” or “improvements”

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The ATO is focusing on claims that investment property owners make for repairs to rental residences that it deems to in fact be “improvements”.

The scenario where investment properties have work done on them often happens shortly after the property is purchased, and has led to the term “initial repair” being commonly used when discussing the tax implications of such property works.

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No more zone tax offset for FIFOs

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In the 2015-16 federal budget, the government announced that it will exclude “fly-in-fly-out” and “drive-in-drive-out” workers from claiming the zone tax offset (ZTO) where their normal residence is not within a “zone” (access the Australian zone list here).

The measure was not passed by Parliament until late in 2015, but it is now law, effective from July 1, 2015. Anyone who may have looked at making a claim under the ZTO next tax time may need to review their eligibility. Contact us if you would like assistance.

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