Tax Tips

byArthur Kassos, CPA

If you're eligible for the education tax refund but you don't have to lodge a tax return you can complete either of the following options:

  • Item T6 and other compulsory labels on the 2009 Individual Tax Return (similar to what you do for a franking credit refund)
  • Education tax refund for individuals 2009 and lodge by paper or phone.
    If you are unsure please seek assistance from your accountant, tax agent or contact the Australian Taxation Office.

Business Tips (Fringe Benefits Tax)

If you own cars in your company or other business structure make sure you lodge a Fringe Benefits Tax (FBT) return. The ATO is constantly conducting FBT audits and the penalties could be severe. The average liability per FBT case is $77,000 with associated general interest charges of about $19,000.

As an example, if a car is garaged at or near an employee's home, FBT law says it is available for the employee's private use, regardless of whether the employee has permission to use the car privately and so an FBT return has to be filled out. Accurate and up to date log books are essential to minimise your FBT exposure.

The ATO is also focusing on tax payers lifestyles that seem to differ from their taxable income declared. If you're showing an income of $50,000 and drive a Ferrari and are spending $100,000 a year then you can probably expect a visit from the ATO.

Investor Warning

As mentioned in previous newsletters the ATO is also focusing on investors who incorrectly claim capital losses as taxable losses, especially with share trading. The ATO has a webpage Claiming losses from the disposal of investments available on its website, www.ato.gov.au and search QC00198607. The site explains the differences between capital and taxable losses as well as explaining if you are a share trader and the records you should be keeping.