FAQs About Claiming Tax Returns in Australia: Part 2

For the first part of this two-part series, head over here!

As we mentioned before, in our first part, the average Australian business owner is guaranteed to encounter questions about claiming tax returns.

At this point, you’ve probably spent quite some time trying to figure out what specific expenses you can start claiming for or what you can do to ensure your prep efforts don’t go to waste. While some assistance from the experts at The E-Commerce Accountant will help ensure that your online business is ready for more savings, it also pays to know the right answers to any questions you have!

Three common questions regarding tax return claims

If you want to ensure that your influencer marketing or online business efforts are as profitable as possible, let’s get back to answering three important questions you might have about claiming your tax return:

Question #1: “Is it possible to claim the cost of my Private Health Insurance premium?” Although it may seem logical to claim the cost of a private health insurance premium since it is a required expense by law, the truth is that you can’t claim its value.

If you want to reduce the total cost of operating your business and ensuring that all your employees are safe and sound, you can use your private health insurance as an advantage. Through a private provider, you can save on the extra tax caused by the Medicare Levy Surcharge in specific circumstances! Question #2: “Will it be possible to claim a tax deduction for conventional, daily clothing?” Generally, the ATO doesn’t allow employees or employers to claim tax deductions for everyday attire unless they meet specific requirements. While a regular t-shirt, jeans, and sneakers aren’t eligible for a tax claim, here are a few exceptions that the ATO will accommodate:

  • The clothing or attire in question must be protective

  • It must be a piece of clothing classified as a compulsory uniform according to the set definition of the tax law. It should also meet the requirements of Taxation Ruling IT 2641

  • It must be listed on the Register of Approved Occupational Clothing (if it classified as “non-compulsory”)

  • The piece of clothing must be conventional and satisfy the deductibility tests listed in this Tax Ruling

Question #3: “Can I claim tax on gifts for employees, team members, and clients?” For employees who only earn a fixed income or are under a limited payroll and don’t earn commissions on sales or work, it is not possible to claim taxes on the gifts you purchase for other staff and clients. Conversely, those who earn commissions in specific occupations and professions (such as real estate) are allowed to claim tax deductions on specific gifts in certain instances. However, it is worth noting that the primary requirement the ATO sticks by is that the gift must not be one of entertainment, and it must have a definite connection between the expense and earned commission. For instance, a free phone, vacuum cleaner, or three months of free Internet for a sold condominium unit (as “freebies”) will classify as deductible expenses! Conclusion Although claiming taxes may seem like a reasonably complicated effort because of all the different details and intricacies involved, asking the right questions and having the correct answers can make a world of difference. By taking this two-part guide into account and considering all the details we’ve expounded on, you won’t have to worry about unnecessary confusion! When it comes to tax and Shopify accounting work, we have the solution for any Australian company that seeks an accountant for their e-commerce business. Get in touch with us today to see how we can help minimise your tax and increase your profit!

5 views0 comments