Frequently Asked Questions

ABNs are Australian Business Numbers. They are issued to businesses operating in Australia and to self-employed people. ABNs are required on invoices for work performed. For example, if you are a carpenter, fundraiser, or personal trainer, you will need an ABN.A TFN is a Tax File Number which is required by anybody who wants to work in Australia. This number is given to all employers when you start working and your employer will then deduct tax from your income under the PAYG (Pay As You Go) system. People usually don’t have to worry about having to pay taxes at the end of the year because their employers take taxes out of their paycheck. In the case of an ABN, tax is not taken at source, the person raising the invoice and receiving the payment is receiving full payment for products or services so a portion of that income should be retained to meet the tax liability at the end of the financial year.People understand what their obligations are when they work on either the TFN or ABN model. The confusion usually only happens when people have two jobs in one year and one is TFN and the other is ABN, or if they have a full-time job that is TFN but also have a small business that generates ABN income

If you are an Australian resident for tax purposes and hold a temporary visa in Australia, you are only required to declare your Australian-source income in your tax return.

If you are an Australian resident for tax purposes and are a permanent resident or Australian Citizen, you are required to declare your worldwide  income in your tax return.

There is often confusion about what expenses can be claimed for both business and personal use. For example, if you purchase a lawnmower for your landscaping business, but you also use it to mow your own lawn, you should divide the cost of the lawnmower between the two uses based on how often you use it for each.

For any tool under $300, you can claim the full cost on this year’s tax return. For any tool over $300, you need to claim the cost of the tool progressively over the course of its lifespan. This type of claim is known as depreciation, and it is in place to ensure that the amount you claim is relative to the actual value of the tool.

The accelerated depreciation rules apply to sole traders and businesses where the annual income is below $5 Billion. In these cases any equipment costing less than $150,000 can be written off in total in the year it was purchased. This is a great incentive for businesses to refresh their equipment before 30 June each year.

You can claim the cost of any tools or equipment that you purchase for work. This could include power tools, computers, printers, safety gear, sunglasses, office equipment and any other piece of equipment that is helpful for your income-earning activities.

Records are written evidence of your income or expenses that can be in paper or electronic form. You will receive documents that are important for doing your tax during the income year.You need to keep records for 5 years (in most cases) from the date you lodge your tax return. Records may include income statements, payment summaries and receipts.