Maximum refunds with minimum effort and cost

Colin Paull and Associates and his team have been offering help and advice to his clients by always working with integrity.

The team of Tax Consultants takes the sting out of taxation time by offering friendly help and advice to his clients.

To maximize your refund, follow these simple steps:

Make sure you keep accurate records.
This is vitally important.Keep all your receipts. If in doubt, keep it.
Maintain accurate logbooks for your car.
Keep all bank statements.
If in doubt, ask.

The key to minimizing your tax is - ask first.

Before you take the plunge and make important decisions, run it past our team to make sure that the decision you are making is the right one for your situation.

Other important factors are:

Invest astutely
Consider the best way to structure your business.

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TAX OFFICE HOT SPOTS
 For 2003 Tax Returns
Each year the Australian Tax Offics (ATO) targets sepecific areas of tax returns. Below is a list of what they will be looking at this year.

1 Rental property claims : Over claiming rental expenses

In 2001, 1.3 million taxpayers declared rental income of $12.6 billion and claimed rental deductions of $13.3 billion. While rental income is up 7% on the previous year, deductions claimed have increased by 15%.

ATO Audit Activity
The ATO's action for the 2003 tax year is to write to taxpayers in June with rental properties indicating the focus the ATO have on this area and that taxpayers need to be careful when making claims. The letter also details some of the common errors and for some taxpayers they will be required to complete and lodge an additional rental schedule, which provides more details on claims made, which will be reviewed by the ATO audit staff. Taxpayers who use Tax Agents and those who do their own returns will be targeted.
Rental deductions--- Common Errors
Initial capital improvements being claimed as repairs.
Expenses being claimed where a property is not available for rent.
Deductions not being apportioned when non-commercial rates of rent are being charged to relatives or friends.
Estimating the construction costs of buildings rather than relying on cost estimates provided by independent qualified persons.
Including land value as part of the construction cost.
Interest being claimed on loans that are partly or wholly for private use.
Assets being incorrectly classified as depreciating assets for uniform capital allowance (UCA) purposes.
Incorrect asset values being used for calculating uniform capital allowances (UCA).
Travel expenses not being reasonably apportioned when the purpose of the trip is partly or predominantly private.
Borrowing expenses not being correctly apportioned.

2 Work related Expense audits

Work expenses, such as car, travel, uniform, laundry and self-education, amount to 57% of total claims by individuals. Some 6.7 million taxpayers claimed $8.8 billion in 2001, an increase of nearly 11% on 2000. While some of this is related to goods and services tax (GST), we are working with tax agents and industry representatives to better understand this increase. We have also selected 135,000 taxpayers from different occupations and asked them to confirm these deductions.

ATO Audit Activity
The ATO's action for the 2003 tax year is to write to selected taxpayers in June indicating the focus the ATO have on this area and that taxpayers will need to be careful when making claims. The letter also details some of the common errors and for some taxpayers they will be required to complete and lodge an additional rental schedule, which provides more details on claims made, which will be reviewed by the ATO audit staff. Taxpayers who use Tax Agents and those who do their own returns will be targeted.
This activity will be across various occupation categories and the case selection Is from 2002 tax returns particularly where a large increase in claims is evident.
Work related expenses-Common Errors
Motor vehicle claims made using logbook method when there is no logbook.
Clothing being claimed when qualifying conditions are not met.
Self education claims made when there is no work connection at the time the expense is incurred.
Students receiving AUSTUDY or ABSTUDY payments incorrectly claiming self education expenses against those payments.
Taxpayers incorrectly calculating depreciation and not apportioning deduction claims between business and private use. This applied particularly to home computer and mobile phone claims.
Claims made for meal expenses when no overtime meal allowance received.
Claims when there is no connection to current employment income.
Ongoing FID claims. FID was abolished with effect from 1 July 2001.

3 Income matching

Over claiming interest and dividend deductions or not including interest and dividends

Over 100 million transactions from banks, financial institutions, Centrelink, and private health insurance companies are matched to information lodged in around 12 million tax returns. This year, some 230,000 discrepancies worth $120 million will be followed up with taxpayers. The Tax Office also shares information with Centrelink, which last year recouped over $300 million in overpaid benefits.

ATO Audit Activity
Profiling reveals excessively large refunds and interest and dividend deductions.

The Tax Office each year conducts an electronic review of the income declared by taxpayers in their tax returns, matching that to the reporting information they have received from banks other financial institutions and corporate share registers, Centrelink and other sources. From this they generate letters advising taxpayers of the discrepancy asking for an explanation. If no response is received or no reason why the information is incorrect the Tax Office automatically amends the tax returns, charges the General interest charge on the tax outstanding at 11.8% and in some occasion penalties up to 45% of the tax avoided.

4 Capital Gains

Not reporting income from capital gains on sale of shares and properties
About 1.4 million taxpayers earn about $6 billion in net capital gains. This year we will compare 1,100 tax returns with share trading and rental property sales data.

ATO Audit Activity
The Tax Office is increasingly gathering information in regard to asset disposals with a view to ensuring any capital gain is declared.

5 Foreign Income received by Australian Tax residents

Many Australian Citizens receive income from overseas in the way of pensions, interest dividends and rental income.

ATO Audit Activity
The ATO is active in ensuring this income is declared as it is assessable in Australia. All Australian residents for tax purposes are required to declare their worldwide income in their Australian tax return.