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Foreign income and foreign residents

Foreign Income

If you are resident in Australia for tax purposes, then you are taxed on your worldwide income.  The ATO is concerned that some Australian residents may not be correctly reporting their foreign income, often because they are unaware that their overseas income needs to be reported here.

Governments are sharing a lot more information now and digital communications makes it much faster and easier to do this.  The ATO states that the Common Reporting Standard now allows them to share data with over 65 foreign countries.  If you own property, shares or have a bank account overseas, then you need to declare any income on your Australian income tax return.

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ATO Focus 2019

Image by Harry Strauss from Pixabay

The ATO focus for this year is largely upon rental properties.  A random audit of rental property was conducted and the ATO found errors in 9 out 10 of the samples checked.  The main problems the ATO found were:

Over-claimed interest

It is important that when you take money out of your home loan account for something other than maintenance, repairs or improvements to the house itself that you account for this personal drawing when calculating interest.  For example, if you decide to buy a new car and extend the mortgage to do that, then the amount you borrowed for the car needs to be converted to a percentage of the overall loan and that percentage of the interest is no longer tax deductible.

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Help for Small Business

I recently had to find out some information on government assistance for small business for a discussion group I am a part of, and I thought it would be good to share the information I found here.

Queensland Government Assistance

The first place to go for state government assistance is the Business Queensland website.  From the home page you can access a range of information on starting and running a small business.  There is information about buying a business (including a franchise), the tourism industry, creating a website, legal obligations, and so much more.  You can sign up for the Small Business Connect newsletter for updates on new rounds of grant funding, awards and other initiatives for small business.

There are a number of grants available for small businesses to help them get started or expand.  Most of the grants work in rounds as funding is approved, so at any time applications for a particular grant may be closed, but it could open back up again at any time – subscribing to the newsletter above will keep you informed about which grants are currently open to applications.  There are also mentoring programs and business growth workshops either provided free or at a price subsidised by the State Government as well as a number of webinar recordings on YouTube. Continue reading “Help for Small Business”

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2018 ATO Focus

ATO focus on the “income tax gap” for individual tax payers

The ATO has been signalling for months now that it is going to target work related and rental property deductions for individual tax payers this year.  They have been conducting random audits of taxpayers, and recently published the results of the 2014-15 financial year audits.  The result of this is that they have estimated a net tax gap over around 9.6 million individual taxpayers of $8.7 billion for an average of $906 for each taxpayer.  The tax gap is defined as the difference between the tax actually paid by people and the amount that would be paid if everyone did the right thing. Continue reading “2018 ATO Focus”

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Introductions

Hello, my name is Mai Pauling and I am the founder of Pure Tax Accounting.

I have worked for various accounting firms in Brisbane and finally decided to branch out on my own.  I believe you, my clients, are better served when I am in charge of my own time and able to spend it making sure I have the right answer for you, not just the quick answer.

I hope you will give me a chance with your tax and accounting needs and that we can build an ongoing relationship.