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Tax deductions misconceptions

Wrongly claiming tax deductions can result in heavy penalties from the tax office. Despite this, many Australian taxpayers continue to attempt claiming invalid tax deductions that are rejected by the tax office. While some are not quite so obvious, below are some common misconceptions about deductions that many taxpayers believe.

Driver’s licence: While claiming deductions for vehicle expenses such as repairs and servicing is allowed, claiming for the cost of a standard driving licence is not.

Vaccinations: Vaccinations against the diseases an employee may be in contact with due to work are not tax deductible

Childcare: Claiming deductions on the expenses paid to have someone care for your children during work hours is not viable, even when this is necessary for a person’s career advancement.

Commuting to work: Although certain circumstances, such as picking up or delivering heavy equipment, can allow a deduction, general travel between home and work does not.

Relocation expenses: The costs associated with changing employment, such as moving house or meeting an employment agreement are not deductible. This is because the expenses are often regarded as being incurred by gaining an assessable income.

Posted on 29 July '15 by , under Tax.

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What to consider when consolidating your super

The ATO reported that 45% of working Australians were not aware that they had multiple super accounts in 2016. Having multiple super accounts is particularly common for individuals who have had more than one job. If this is you, it is important to identify and manage your super accounts because having more than one can be costly as a result of account fees from multiple funds.To combat this, you may want to consolidate your super, which moves all your super into one account. Not only does this save on fees, but it also makes your super easier to manage and keep track of.

Before consolidating your super, it is important to do the following:

Research your funds' policy
Compare your active super accounts so you can make the right choice about which one you should close. Things to assess include:

  • Exit fees
  • Insurance policies
  • Investment options
  • Ongoing service fees
  • Performance of the funds

Check employer contributions
Changing funds may affect how much your employer contributes, as some employers contribute more to certain funds. Check your current accounts to see if changing funds will affect this. Once you have selected a super fund, regardless of whether you choose a new super fund or one of your existing ones, provide your employer with the details they need to pay super into your selected account.

Gather the relevant information
When consolidating your super, you will need to have the following details ready:

  • Your tax file number.
  • Proof of identity. This could include your driver's license, birth certificate or passport.
  • Your fund's superannuation product identification number (SPIN).
  • Your fund's unique superannuation identifier (USI).
  • Details of your previous fund.

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