Tips on tax when WFH or small businesses #GetChatty with TaxAssist Collingwood, part 1

Transcript (00:10)
Badi: My name is Badi Ceren, I am an accountant. I work for my own practice. I am located in Collingwood on Smith Street right across from the Woolworths is my practice.
Chatty: So Badi I have actually had a few questions myself. Now I’m not fishing for free advice, but then I think it would be all you need to do is give me some general ideas and bibs and bobs there. And yeah so, now I do actually, I don’t drive a lot but I do have a car and I, you know, sometimes that you just Taking the car to see a client or something like that. What’s your advice on that one?
Badi: Yeah, so you, if you are running a business and you use your car to travel from client to client you are able to claim the deductions for the kilometres travel that’s the easiest way where you are keeping track of how many Kilometres you travel.
But the best way that I usually advise my clients is to keep your logbook because if you keep a logbook of the trips that you do for the actual business, you will be able to claim a percentage of all the car running expenses like the fuel, the depreciation if it’s a brand new car, the insurance…
Chatty: registration?
Badi: And registration. All the expenses that you could claim. Different to the set rate that you would be giving your number of kilometres. Usually, you are better off by doing a little bit of more homework and keeping a logbook for a 6 week period and that 6, that will be pro rata for the whole year. So it’s a little bit of work, some clients prefer I advise them to do it because it give them a better return when it comes to claiming the deductions. So what you have to do at the end of the year is keeping track of all the expenses to run the car.

Badi can be contacted via:
☎️ (03) 8594 1811
? [email protected]
? 256 Smith St, Collingwood VIC 3066
LinkedIn: www.linkedin.com/company/taxassist-accountants-collingwood
Instagram: @TaxAssist_Collingwood
Facebook: @TaxAssistCollingwood

Chatty: I see, wow that actually, actually I didn’t know about that before so thank you. Ok, so now the second question I have is, because until the foreseeable future that I think I would spend quite a bit of time working from home and so with, so are all of my neighbours, funny enough that the entire building is actually working from home, which is why internet’s horrible but anyway let’s not go into that, but how about like you know, I’m sure that there are some things that about, some expenses at home that we might be able to look into, what’s your advice for that one?
Badi: Yeah so most of the, my clients or everyone has been forced to work from home during covid19. However, claiming home office expenses has been in accounting and as a claim for a long time. So my advice to my clients always tells me how many hours, produce a diary, how many hours you work from home. Before covid19 and during covid19, because we are able to, sometimes the 80c per hour doesn’t provide a good return, a good claim because when it comes to use the other set rate per hour you are able to add the mobile phone percentage that you use, the internet percentage that you use and the computer depreciation or anything that you actually brought for your home office. You’re able to broader so sometimes doing, getting an accountant to do the calculations for you, gives you a better return instead of just multiplying the 20 hours that I worked during covid19 times 80c. It’s just not going to be worth it really efficient for your tax return
Keep a diary that’s the most important thing for your hours work from home. Even if it’s before COVID where you work from home doing additional, during the weekend working, preparing reports for the week, contacting clients, contacting your suppliers all that work you can do from home and you’re not reimbursed by your employer because it’s overtime or is considered to be outside your working hours. Although if you don’t get it done you’re obviously not gonna get paid so therefore you can claim a deduction for the hours that you work from home and the usage of your electricity, internet, mobile phone and computer.

Chatty: Badi, sometimes I have like some of the, some of the little things that I spend like for example, donation or different type of insurance and such as, but how do i like, how what, what defines as claimable and what are not?
Badi: Yeah, when it comes to donations you gotta make sure that you are not counting the donations to you give to the homeless people on the street outside the Woolworths or outside the Coles. Those do not, they are not deductible gift recipients so you need to make sure that the person you are donating, pretty much you are not first of all don’t get anything in return like if you donating to a charity that is offering you dinner in a gala that’s not going to be considered a donation because you are getting something in return. But most like a bushfire or the Cancer Council, things like that you don’t get anything it’s just out of your own good heart. Those are charities that are registered and they can claim a deduction, you can claim a deduction for those amounts and they are more than happy to provide a receipt that says that you have donated for the purpose of your tax. So those are the donations that you can claim.
When it comes to insurance, income protection insurance is, some people pay for it and they don’t realise that they can claim it as a deduction. Usually has to be paid out of your own pocket and not through your superannuation, when is it, so it can be deductible. But you know in case you lose your job you might be paying for this income protection insurance so therefore it’s deductible.
Chatty: I see, why that’s interesting…
Badi: Oh, I’m sorry that one more things about insurance when it comes to Medicare levy, so most of my clients, so when they go over a certain threshold which is $90,000, I usually recommend to get private hospital cover which is the insurance for their, in case they get injured, having that private hospital cover as an insurance avoids them from paying the Medicare Levy Surcharge which could usually turns out to be more than what you would pay to a private hospital provider like Bupa or Medibank, one of those big firms. Sometimes less than what you would pay to the government so that’s something that I recommend them.

Chatty: Badi, do you have any other tips that you might want to share on this video?
Badi: Yeah, well when it comes to, perhaps the uniforms if there’s people out there wearing uniform and they wash it. Make sure that you include that or if you purchase a specific clothing or protected clothing is called, in order to get your job done efficiently and also being safe. make sure to keep your invoices intact and receipts and for some clients they’re on the, they’re nurses, they’re working hospitality they require to special shoes, non-slip shoes or tradies who purchase their boots or their heavy-duty pants. Those things are tax deductible so make sure to keep your receipts and invoices and when you come and meet your accountants let them know that you are the ones who wash those uniforms because you are able to claim a deduction for the number of times you wash your uniform over the year. Also make sure that you wash your uniform by itself, because that provides you a higher claim than wash washing along with all your clothing and all your personal items.
Chatty: Well look at me, that that’s why you should not mix your colour and your, and your light colours clothes! Well I mean for me I do that I mean I don’t have a uniform but then I used, I separate my wash just to make sure that I could keep my clothes for longer! So and yeah so thank you so much for all these advise and please check out Tax Assist Collingwood on Linkedin, Facebook and Instagram and please Get Chatty about your local businesses like Badi’s and like and share this content because like I said before someone connected to you might be connected to someone who’s looking for something like that and we do need to get out there and support our local businesses and yeah, so thank you so much and now can I get you to read out how people can find your like your website and your social medial handle?
Badi: Yes so I’m Badi Ceren from Tax Assist Accountants Collingwood located on Smith Street right across from the Woolworths and the website www.taxassistau.com.au/collingwood and our phone number is 03 8594 1811.
Chatty: Wonderful! So once again thank you so much and best of luck and have a really nice evening.
Badi: Thank you, Arthur.