Tax question for an accountant

I had to buy a new laptop last year to replace my old PC - which is now just a crippled back up. Can I only claim the proportion of the cost relative to how much I use it for property investment income or the whole amount.

I would assume only the relative portion however I was surprised to find out a few years ago that I could claim the full cost of tools I bought to use on the IP regardless of what they were used for afterwards (as advised by ATO).
 
Ok, found the answer easier than I thought and there were some relevant examples. Low value pool, proportioned, 18.75% first year added to pool, 37.5% each future year if I interpret correctly. :cool:
 
Ok, found the answer easier than I thought and there were some relevant examples. Low value pool, proportioned, 18.75% first year added to pool, 37.5% each future year if I interpret correctly. :cool:

You pool the taxable use proportion of the cost. Not the entire cost if there is mixed private use.

I assume that it qualifies as a low cost asset in the first place.

Cheers,

Rob
 
I thought it was only meant to be the portion used - same as mobile phone bills, rent, utility bills etc. etc. You work out the percentage of how much it is used for work.

HOWEVER, just claim the whole thing because the risk factor on this type of thing is almost not worth mentioning. The chances of you being audited are too slim to worry. And if something did happen, you can just say it's just a work computer. And then on the rarest of chances they actually look at your computer, just delete your personal files beforehand.

They are depreciable over 3 years as others have mentioned. But also worth remembering you can claim up to $6500 of capital purchases in one hit and not need to depreciate any of it.
 
I thought it was only meant to be the portion used - same as mobile phone bills, rent, utility bills etc. etc. You work out the percentage of how much it is used for work.

HOWEVER, just claim the whole thing because the risk factor on this type of thing is almost not worth mentioning. The chances of you being audited are too slim to worry. And if something did happen, you can just say it's just a work computer. And then on the rarest of chances they actually look at your computer, just delete your personal files beforehand.

They are depreciable over 3 years as others have mentioned. But also worth remembering you can claim up to $6500 of capital purchases in one hit and not need to depreciate any of it.

Just when I thought I had it worked out :eek:

Yes, it is a PIA claiming some things. I can spend just as much time calculating a claim on a $2000 deduction as on $20.

There were examples of computers and printers used partly for taxable income in examples on ATO site which fits with my situation, and as over $300 and under $1000 they go into the low value pool as a low cost item. But all the examples are based on depreciating @ 37.5% per year with 18.75% in the year added to the pool ...including computers and printers etc. I was surprised that such items were not depreciated fully over a short period of 3-5 years tops.

I am not running a business, just use of computer, internet, etc etc for IP and some share trading related stuff ...so proportion related to taxable income. (I assume capital purchases is not relevant if not running a business) Where does depreciation over 3 years come into it? The examples show that 37.5% is diminishing, (37.5% deducted from value of pool carried over from last year will go on for ever, could not find any reference to a nominal remaining $$ value that can be claimed in total in that year to bring to an end.)

Approx details are $600 laptop, $120 extended warranty, $80 back up HDD, laptop bag $25. I was going to claim all in full (at appropriate proportion) except laptop this year.

???????
 
I thought it was only meant to be the portion used - same as mobile phone bills, rent, utility bills etc. etc. You work out the percentage of how much it is used for work.

YES

HOWEVER, just claim the whole thing because the risk factor on this type of thing is almost not worth mentioning. The chances of you being audited are too slim to worry. And if something did happen, you can just say it's just a work computer. And then on the rarest of chances they actually look at your computer, just delete your personal files beforehand.

Penalties and interest often far exceed the shortfall.

Fraud is also a criminal offence. On the up side, the ATO may choose to remit penalties and interest if you are prosecuted in the criminal courts.

Thanks for sharing your tax tip with the internet.


They are depreciable over 3 years as others have mentioned. But also worth remembering you can claim up to $6500 of capital purchases in one hit and not need to depreciate any of it.

$6500 for small business entities. A few IPs is not a business.

If you already have a low value pool then you must put all new low cost assets into it.

Cheers,

Rob
 
Is it any wonder that people don't make the effort to do their tax properly ...it just isn't worth the hassle.

I do attempt to get it right, and I do my own because of incompetence of a couple of tax agents previously. I'm sure a lot take a guess rather than find out the correct way, so why pay them to take the same guess I can. But you can't blame them when the ATO does not know how to apply their own rules!!!!!

I sometimes have to call them to have something clarified which can waste hours and hours. And some of the people they have in the dept must be anal nerds! In situations which could be explained as simple as a+b+c/d=e, they will
use a 20 step process to achieve the same answer. Admittedly there will be times when the 20 step process is probably necessary, but when they have the specific details and it is not ...why confuse the issue unnecessarily?

Last year I wrote to them to put my query in writing with details, a copy of their worksheet which did not seem to make sense and asked to explain how to apply my situation. It took months to get the reply which resulted in having to ask for an extension ........and when I aske for the extension I was asked how much time I needed. IT WAS THEIR HOLD UP :rolleyes: When I got the reply it did not answer my question, so reluctantly I wrote a complaint. The reply to my complaint did not answer my question either, so phoned the writer of the letter (I actually had a direct number and a full name :eek:!!) He apologised, understood what I was after and said he would have someone experienced in that area to call me. A couple of week later I did get a call which answered my query and acknowledged that the calculating steps explanation could be improved. I initially put my query in writing in September, and by their own std of service I would have had a reply by 30 October. I finally had my query answered in mid January the next year :mad:

Yesterday I phoned ATO re the laptop issue and another related to depreciation. I was transferred twice to more experienced staff and after 1hour 20 minutes I was told that further referral was necessary and I would be phoned back. All they were doing was reading the guidelines like I had done, and finding various sections which went close to covering the situation but falling short for one reason or another. No one seemed to have any expertise. How bloody hard is it to answer what must be a very common question about a laptop used for taxable income. UNBELIEVABLE.

I have a lot of references and names I can use to justify my frustration with ATO over the last few years if they ever want to get picky with me. A friend received a naughty girl letter last year because she forgot to include a small amount of interest from one of her 4 bank accounts. She was told she would be fined if she did it again. YOU HAVE TO BE KIDDING, THEY OUGHT TO GET THEIR OWN SYSTEM IN ORDER FIRST.
 
Last edited:
If dealing with the ATO then log the call and who you talked to.

If dealing with a tax agent who stuffs up then suggest they pay your GIC etc. or else invoke the statutory safe harbour provision. The ATO will remit penalties & interest and probably report the agent to the Tax Practitioner's Board.

Cheers,

Rob
 
lets assume I have two possible loans,

loan 1) Interest plus principle $1500 = cash flow neutral

loan 2) interest only $1000 PM and after expenses I have $500 Pm left over

all my costs and rents are the same etc.

how would the tax man treat the $500 left over if I put it towards my principle making loan 2 effectively the same position as loan 1 - obviously more flexibility though


any takers on how this works???
 
Back
Top