Latest news with #HripsimeDemirdjian
Yahoo
19-05-2025
- Business
- Yahoo
Common $358 a day expense the ATO lets you claim on tax without receipts
An Australian accountant has revealed the 'easiest way' taxpayers can claim travel expenses for work. The Australian Taxation Office (ATO) usually requires you to keep a receipt to claim a tax deduction, but there are some exceptions to this rule. Hive Wise founder Hripsime Demirdjian told Yahoo Finance that a little-known exception applied to taxpayers who receive a travel allowance. These taxpayers don't have to keep receipts to claim a tax deduction for their travel costs, provided they are claiming "reasonable amounts". 'It is common for employees to receive a travel allowance, especially if their job regularly requires them to travel away from their home overnight to perform work duties,' she explained. RELATED Simple way to get an extra $1,322 in your ATO tax return in 2025: 'Act now' Daunting retirement 'squeeze' about to hit generation of Aussies: 'Hidden cost' Money crisis sparks capital city exodus as Australians embrace 'new frontier' 'The travel allowance will typically cover expenses for accommodation, food, and drink. The allowance can also cover incidental travel costs, which are smaller costs you incur as a result of travelling, such as parking and public transport.' The ATO sets out 'reasonable amounts' that taxpayers can claim for travel allowance expenses per day without receipts. Demirdjian noted that the cost varied depending on where you are travelling because some cities would be more expensive. It also varies depending on your annual the 2025 financial year, for example, employees earning up to $143,650 per year can claim $358.90 per day for travel to Sydney. That includes $198 for accommodation, $33.90 for breakfast, $38.10 for lunch and $64.95 for dinner, and $23.95 for incidentals like parking or public transport. 'The ATO also provides reasonable amounts that you can claim when you are travelling internationally, so it doesn't just apply to domestic travel,' Demirdjian said. 'The amounts that you can claim do vary, though, so you'll need to go back and check the Taxation Determination or ask your accountant.' The ATO gave the example of an accountant earning $150,000 a year who is required to travel to Sale in regional Victoria for work four days and three nights each month. Her employer pays for her accommodation directly and gives her a meal and incidental allowance of $140 per day for the four days of travel. She spends $25 on breakfast, $30 on lunch and $50 on dinner. Because she spent less than the 'reasonable amount' on meals and incidentals, she can claim a deduction for the $105 per day she spends on meals and doesn't have to keep receipts. She can't claim accommodation because her employer paid for it. If she spent more than the 'reasonable amount' and wanted to claim that, she would need to keep receipts in that situation. 'As long as the deduction you are claiming is below the 'reasonable amount', then you don't need to keep a receipt to substantiate the expenditure,' Demirdjian told Yahoo Finance. 'If you incur any types of costs which the travel allowance doesn't cover, then you'll need to substantiate those with a receipt as well." It is common for employers to receive a travel allowance if their job requires them to regularly travel for work. 'A good way to determine whether you're entitled to receive a travel allowance is to refer to your employment contract or any applicable industry awards,' Demirdjian said. 'If you are receiving a travel allowance, your payslip will include this allowance as part of your gross earnings.' You can see more about the ATO's rules around travel allowances here and the 'reasonable amounts' while retrieving data Sign in to access your portfolio Error while retrieving data
Yahoo
28-03-2025
- Business
- Yahoo
Major ATO tax debt change for all Aussies: 'Devastating impact'
Aussies will be hit with bigger penalties from the Australian Taxation Office (ATO) if they fail to pay their tax debts on time. The interest applied on overdue tax debts will no longer be tax deductible from July 1, 2025, after laws passed parliament this week. Legislation to remove tax deductibility for both the General Interest Charge (GIC) and Shortfall Interest Charge (SIC) was passed by the Senate on Thursday. The change is expected to boost tax revenue by $500 million in 2026 and 2027. Hive Wise founder Hripsime Demirdjian told Yahoo Finance the change would not be tax-beneficial for individuals and small businesses. RELATED ATO warning for small businesses as $20,000 tax break scrapped in federal budget Centrelink blow for millions on JobSeeker, Age Pension as federal budget denies cash boost Aussie couple on $330,000 reveal 'trap' that saw them in $151,000 debt: 'Isn't talked about' 'The reason why this measure was introduced is because the ATO has more than $50 billion in collectable tax debt,' she said. 'This change is being enacted in an effort to encourage the payment of tax debt on time, as the cost of debt will increase.' The ATO applies the GIC when a tax debt hasn't been paid by the due date, this includes where a tax return has been lodged late. The SIC applies when an incorrect self-assessment leads to a shortfall in tax paid. The ATO applies the SIC is applied to the shortfall amount. The GIC rate is currently 11.17 per cent per annum, while the SIC is lower at 7.17 per cent per annum. Both charges apply on a daily compounding basis and were tax-deductible. The government first announced the change in December 2023 and said it would encourage tax compliance and benefit taxpayers who were already doing the right thing. "Removing these deductions will enhance incentives for all entities to correctly self-assess their tax liabilities and pay on time, and level the playing field for individuals and businesses who already do so,' the government said in the 2023-24 Mid-Year Economic and Fiscal Outlook (MYEFO). The Council of Small Business Organisations Australia (COSBOA) has criticised the move and said it would impact small businesses the most. 'The overwhelming majority of small businesses are doing the right thing and seek to pay their tax on time and pay it correctly,' COSBOA CEO Luke Achterstraat said. 'Targeted measures to deal with high-debt accounts would be more appropriate and equitable to encourage voluntary compliance across the tax system.' CPA Australia also argued against the change, noting it could have a 'devastating impact' on small businesses already dealing with high interest rates and inflation. 'For tax-paying small companies, the non-deductibility of GIC effectively raises the penalty rate by 25 per cent,' CPA Australia tax lead Jenny Wong said. 'For sole traders, it potentially increases the penalty rate by up to 47 per cent depending on their marginal tax rate.'
Yahoo
18-03-2025
- Business
- Yahoo
Accountant's ATO warning after $20,000 tax refund is refused: 'Getting stricter'
An Australian accountant has been left shocked after the Australian Taxation Office (ATO) refused to refund a $20,000 double payment made by her client. She said the experience served as an important lesson for other taxpayers. Hive Wise founder Hripsime Demirdjian told Yahoo Finance her client, who is a business owner, mistakenly double-paid a $20,000 tax debt to the ATO. The accountant and registered tax agent said she requested a refund of the extra amount through the ATO. But when the refund hadn't come through after the standard 14-day period, she enquired with the ATO again and was advised the refund couldn't be processed. RELATED ATO reveals hit list for 2.5 million Aussie small businesses: 'Getting it wrong' Older Aussie with $40 million fortune offers controversial coffee advice to young people: 'Out of touch' Tiny Aussie town offers $680,000 salary to attract one worker: 'More than just money' 'They had an upcoming amount that was going to be due to the ATO but that was in several weeks time,' Demirdjian said. 'But in this case, the ATO advised us that because of the upcoming debt, they would not be able to refund the money, which was quite unexpected because the payment was not overdue as of yet.' Demirdjian said the client was on top of all their lodgements and had all their payments up to date. However, their upcoming tax debt was for a 'significant amount' of around $150,000. 'It was very unusual because we've had a lot of success in the past requesting refunds from the ATO,' she said. 'So it was a bit shocking that we were experiencing some difficulties with this one, particularly because this client does have a good lodging history with the ATO.'An ATO spokesperson told Yahoo Finance it was unable to comment on the individual client's tax affairs for confidentiality and privacy reasons. 'If a taxpayer has a debt with the ATO, we are required by law to use any payments made, available credits, or refunds they become entitled to, to pay off the debt, except in very limited circumstances,' the spokesperson said. 'Where a taxpayer pays the ATO more than what they currently owe, they can contact the ATO to request a refund of the excess amount that has been paid.' Demirdjian noted the ATO's decision came as it took a firmer approach to lodgements and payments. 'We know generally speaking, the ATO is taking a stricter stance towards even things like lodgement extensions and allowing people to set up payment plans,' she said. Demirdjian said her client wasn't negatively impacted by not getting the refund. But she said it served as a warning others about prepaying their debts to the ATO. 'A lot of small businesses out there are struggling with cash flow in the current economic environment,' she said. 'So had this been another client, potentially, it could have been a make or break situation for them if they were really depending on that $20,000.' Demirdjian recommended not prepaying tax to the ATO. She said she did have some clients who preferred to pay PAYG upfront each time they processed payroll for their staff or prepay amounts on their ATO account, but this wasn't her preference. 'From my perspective, based on this experience that we've now had, if you go down that path and then you do need that money that is sitting in your ATO account for whatever reason, it will firstly take time for the ATO to process that refund,' she said. 'And that's assuming you don't experience any difficulties that we experienced trying to request that refund.' Demirdjian recommended companies set up a separate bank account where they can set aside cash for upcoming obligations. 'You can earn interest on that bank account and make use of your money there. But the purpose is the money is set aside knowing it is going to be used to extinguish your ATO debt when it falls due in the future,' she said. "That's the approach I prefer, purely because it gives you more control over the cash."Sign in to access your portfolio
