TAXPAYERS are gifting the Government
billions of dollars a year by failing to claim legitimate deductions -
it's enough to make Kerry Packer turn in his grave.
The billionaire once told a parliamentary committee that "if
anybody in this country doesn't minimise their tax, they want their
heads read, because as a government, I can tell you you're not spending
it that well that we should be donating extra".
But donating extra we are.
News
Limited analysis reveals workers offset 5.59 per cent of their income
in 2005-06 but only 4.76 per cent in 2010-11, the most recent financial
year for which ATO data is available.
Had we kept up that 2005-06 level we would have claimed $37 billion of deductions in 2010-11 instead of just $31.5 billion.
On
this basis the average taxpayer dudded themselves of $436 in deductions
and a potential refund of $131 for those on a 30 per cent marginal tax
rate.
Reasons for the decline include the increasing complexity of the
system, poorer record keeping by taxpayers - and more DIY returns.
ITP regional director Scott Bailey said people were getting worse at claiming deductions.
"I think they miss out on a lot,'' Mr Bailey said.
H&R
Block regional director Frank Brass said: "It comes down to a lack of
knowledge. People don't really know what they can claim. But they think
they do."
The Federal Government is banking on us doing an even poorer job into the future.
The
2013-14 Budget papers reveal that Treasury expects a $12.9 billion
increase in gross income tax this year - a rise of 8.6 per cent. In
stark contrast, it estimates refunds will increase by less than 0.2 per
cent, or just $50 million.
Yet more people are choosing to their
return themselves. ATO data shows the proportion submitted by tax agents
fell from 77 per cent in 1999-2000 to 72 per cent in 2010-11.
Ban
Tacs consulting accountant Julia Hartman said some new clients get
annoyed with all her questions. But they are always pleased when they
see the size of their refund.
"You have to ask all those questions," Ms Hartman said. "People are not good at asking those questions of themselves."
To help readers get their fair share when filing their 2012-13 return, today we reveal the most under-claimed deductions.
Atop the list is car expenses.
"People don't claim their motor vehicle enough," Ms Hartman said.
ITP's Mr Bailey said: "It doesn't take long to get a decent claim out of that but it is something that people often overlook."
Next is time spent in the home office. Every hour earns a 34c deduction - if a diary is kept for a month.
"It doesn't sound like a lot but it's usually a couple of hundred dollars for a schoolteacher," Mr Bailey said.
HLB
Mann Judd tax consulting partner Peter Bembrick said that
record-keeping was becoming more difficult because people were
increasingly time-poor: "Substantiation - that's the thing people really
struggle with."
H&R Block's Mr Brass said: "Because they don't keep the records they limit the claim."
Mr Bembrick has a solution: "Use technology to help you."
Log
books and diaries can be sourced from websites such as etax.com.au,
while smartphone apps such as Shoeboxed make it easier to keep records
of receipts.
The average taxpayer has dudded themselves out of $436 in deductions.
The most under-claimed - but legit - deductions
1.
Diarise it. You can't claim the commute between home and work but if
you go to other sites or functions outside work you can claim a minimum
63c/km up for up to 5000km. "It's not unusual to be able to get that
5000km," Ban Tacs' Julia Hartman says. Requires diary records
2.
Log it. If you're serious about getting the maximum deduction for
work-related car use it's possible to get more than twice as much back
from the tax man by using the "logbook method" instead, H&R Block's
Frank Brass says. It allows you to claim some of the decline in value of
the vehicle. You'll need to keep detailed logbook entries for 90 days
minimum
3. Lug it. Tradies who can't safely keep their tools on
site can claim their commute. "They need to be carrying equipment
weighing more than 20kg," Ms Hartman says
4. Home office. You can
deduct 34c for every hour spent working in a home office. It has to be a
dedicated room. "And you need to keep a diary for a month," ITP's Scott
Bailey says
5. Travelling to an investment property. More than
1.8m taxpayers have an interest in an investment property earning rental
income. You can claim meals and accommodation related to visiting it do
repairs or an inspection. "The only thing they've got to watch is where
they try to tee it on to a holiday," Mr Bailey says
6.
Technology. Work calls from your home phone and mobile. Depreciation
relating to your computer and tablet. Home internet usage. "About 10 per
cent internet usage would be reasonable, given all the gaming kids do
these days," Mr Bailey says,
7. Cleaning of uniforms. Receipts are
not required for laundry costs up to $150. But it's got to be a proper
uniform. Goggles, helmets and sun protection can also be claimed for
some professions and trades
8. Accountant's fee. In 2005-06
accountants forgot to claim on 3m returns the fees they'd charged the
year before. Don't let yours forget how much you're paying them
9. Union fees. Membership is a deduction, as is the cost of being part of a professional association
10.
Income protection insurance. "It's almost a bit of a no-brainer," HLB
Mann Judd's Peter Bembrick says, especially for those earning more than
$80,00
news.com.au 21 July 2013
What the corporate media is NOT telling you is that in Australia taxation is a voluntary contribution, as it is NOT law.
Taxation collection in Australia is unlawful.
