Latest news with #BelindaRaso
Yahoo
18-07-2025
- Business
- Yahoo
Reason Aussies are being hit with shock ATO tax bills: ‘Same problem'
Many Australians have been left blindsided after lodging their tax returns and finding that, rather than getting a refund, they actually owe money to the Australian Taxation Office (ATO). An Australian tax accountant said many workers were running into the 'same problem' due to the way the payroll system works. Australians have flooded social media to share the outcome of their 2025 tax returns since the start of the new financial year. While some have been 'boasting' about their hefty tax refunds, others have shared their shock at being hit with a tax bill. Tax Invest Accounting director Belinda Raso told Yahoo Finance she was seeing more people getting tax bills because they worked multiple jobs and no longer had the 'buffer' of the $1,500 low and middle income tax offset, which ended on June 30, 2022. RELATED ATO tax return warning for 2 million Aussies over dangerous act Coles and Costco grocery price comparison 'shocks' Aussie mum Compensation sought for millions of Qantas customers hit in major cyber data breach 'The way our payroll system works is even if you do the right thing and you tick not to claim the tax-free threshold on your second job, that [job] is not withheld at enough,' she said. If you earned more than $45,000 in your first job, for example, you would already be in the 32 per cent tax bracket, including the 2 per cent Medicare Levy. 'When you tell your [second] employer not to claim the tax-free threshold, you're actually going straight onto that first tax bracket, which is 16 per cent plus 2 per cent Medicare levy,' Raso said. 'But if your first job is already $45,000, you need to be paying it at 30 per cent plus 2 per cent, so you are down 14 per cent and this is where people are getting tax bills.' Raso said Aussies in this position should either ask their employer to withhold the additional tax, put it away themselves during the year, or not claim the tax-free threshold on their main job. Otherwise, it's likely to happen again this year. There were 963,100 multiple job-holders in March this year, the latest ABS data found, representing 6.5 per cent of all employed people. Raso said she thinks changes to the payroll system would mean "less disgruntled Aussies" who end up with a tax debt, despite thinking they are doing the right debts can be a factor If you have a HECS-HELP debt, Raso said you'll need to let your employer know about it, or you could end up with a tax debt. If you have reportable fringe benefits or salary sacrifice, this could also be a reason you get a tax debt. That's because HECS repayments are calculated with salary sacrifice added back in and reportable fringe benefits are 'grossed up'. If you work multiple jobs, your combined income may also be enough to push you over the HECS repayment threshold and mean you get a tax debt. The threshold for the 2025 financial year was $54,435. 'If you have two employers, and if you don't reach that HELP debt limit, even though they know you've got a HELP debt, it won't come out of your pay,' Raso said. 'But then, added together, both of them will get you over that threshold and you will end up with the tax debt.' Other reasons you could get a tax debt Raso said the Medicare Levy Surcharge can be another reason you receive a tax debt. Your employer withholds the Medicare Levy, but not the surcharge. For the 2025 financial year, the surcharge applies to singles earning $101,001 or more and families earning $202,001 or more who don't have hospital health insurance cover. You can also get a tax bill if you earned other income during the year. That could include from side hustles, bank interest, investments, rentals and capital gains tax. What do I do if I have a tax bill? If you receive a tax bill, you need to pay it by the due date on your Notice of Assessment. If you can't pay on time, you can ask the ATO to set up a payment plan and break your bill down into smaller amounts. If you have an outstanding amount owing to the ATO after the due date, you will be charged a general interest charge. It is currently 10.78 per cent annually and compounds daily, even if you are on a payment plan.
Yahoo
16-07-2025
- Automotive
- Yahoo
$4,400 tax deduction update sparks warning for millions of Aussies: 'Kick in the teeth'
The Australian Taxation Office (ATO) has confirmed it will not be increasing the motor vehicle cents per kilometre deduction rate for the new 2025-26 financial year. Taxpayers can claim 88 cents per kilometre under the method, up to 5,000 kilometres per year, which works out to a maximum deduction of $4,400. An ATO spokesperson told Yahoo Finance the cents per kilometre rate would not be increasing this financial year. The rate is updated to reflect recent average operating costs for cars and the annual movement of the private motoring subgroup of the Consumer Price Index. 'The cents per km rate will not increase and the Income Tax Assessment (Cents per Kilometre Deduction Rate for Car Expenses) Determination 2024 will remain effective at 88 cents per kilometre for the 2025/26 year,' the spokesperson said. RELATED ATO tax refund warning as Aussies boast about big $4,000 cash boosts Aussie tradie loses $110,000 house deposit due to small detail $105,000 superannuation warning over growing 'mini-retirement' trend Tax Invest Accounting director Belinda Raso said the decision not to increase the rate was a 'kick in the teeth' for taxpayers and she had expected an increase to at least 92 cents. 'With fuel skyrocketing, it doesn't even allow people to cover their costs. It's going to force people to actually keep a logbook because the cents per kilometre method is just not going to be worth it for anyone,' she told Yahoo Finance. 'Even if you're travelling less than 5,000 kilometres, my advice is to keep a logbook because you may find that it's actually going to be better for you, just purely with the cost of fuel, let alone repairs and everything else.' The ATO increased the set rate to 78 cents per kilometre in the 2023 financial year, 85 cents per kilometre in 2024, and 88 cents per kilometre in 2025. Car-related travel claims made up the bulk of work-related claims in the 2023-24 financial year. Some 3.6 million people claimed about $10.3 billion in car expenses. There are two methods that you can use to claim motor vehicle expenses for work-related use of your car — the 'cents per kilometre method' and the 'logbook method'. The cents per kilometre method lets you claim up to 5,000 kilometres at a set rate of 88 cents per kilometre. It covers all car expenses, including registration, insurance, maintenance, repairs and fuel costs. While you don't need to keep a logbook, you need to keep track of where you've gone, why and how often. The cost of driving to your workplace cannot be claimed. The logbook method lets you claim more than 5,000, but you need to keep a logbook for 12 weeks straight of the income year. You need to track all kilometre use, both personal and work use. You also need to keep all your running costs for the year, including registration, insurance, services, repairs and fuel (which can be estimated over a four-week period). Raso said Aussies should start their logbooks now, as this method would likely give them a better tax deduction than the cents per kilometre method. 'Unless we're talking under 1,000 kilometres, you should really get a logbook going now,' she told Yahoo Finance. 'It goes for 12 weeks straight [so] right now is the best time to actually get that going.' Raso said you needed to have a starting and ending odometer reading. The logbook will be valid for five years as long as you don't change cars, jobs, the usage of the car or your home or workplace address. If you use an app for your logbook, such as Driversnote, or if you use a book you can also claim this cost on your tax return. 'Any costs associated with managing that logbook will be deductible,' Raso in retrieving data Sign in to access your portfolio Error in retrieving data
News.com.au
15-07-2025
- Business
- News.com.au
‘Never that high': Why so many Aussies have a tax debt this year
If you are one of the Aussies who has copped a bill after lodging their tax return this year, then you are not alone, with an accountant revealing she has witnessed a significant rise in the number of debts being issued. We are now half way through July and the number of people taking to social media after being told they owe money to the Australian Taxation Office (ATO) has been steadily rising. The tone of their posts range from disappointed to outright furious, but it is clear a significant number of Australians are really unhappy this tax time. Tax Invest Accounting director and tax agent Belinda Raso told she has seen an explosion in people being hit with tax debts, with numbers rising since the end of the low and middle income offset in 2022. Previously, Ms Raso said, people who received a tax bill predominantly knew they were going to be getting one. For example, people who forgot to tell their employer about their HECS-HELP loan, claimed the tax free threshold twice, people with side hustles or those with a positively geared investment property, would be unsurprised by the arrival of a tax bill. But now plenty of unsuspecting Aussies are being hit with unexpected debt. 'Since 2023, I'm not exaggerating, I'm looking at 20 to 30 per cent of clients that are ending up with the tax debt. It was never that high,' the tax agent said. Ms Raso shares a lot of content on social media around tax time and has this year been inundated with messages from people who have no idea why they have received a tax debt. On TikTok alone she says she can get about 20 messages a day from people who owe the ATO money. 'I could be speaking to 30 or 40 people daily that are not even clients, that are begging for help,' she said, adding that she always works to help these people as much as she can. 'It is so prevalent and it's just ordinary Aussies that are employees, and they're wondering, 'Why the hell? What's going on?'' Looking at the comments on some of Ms Raso's videos, you can see just how many people are struggling with tax bills this year. 'My estimate says a $1.9k debt. Can't work out for the life of me why, there's no way I can pay that,' one person said. Another commenter said they got a $1500 bill despite having the same job as previous years where they received refunds. 'Nothing has changed. I made a bit more money this year worked more. But how do I get $1000 returned last year, and now I owe $1500?' they asked. Another said: 'I have two jobs only claim tax free threshold on one and now I owe $1800!' A quick scroll on TikTok will also show dozens of videos of young people expressing lament after their dreams of a healthy tax refund were dashed. One user, Kenneth, said he spent 'five hours, 47 tabs, three breakdowns doing (my) tax return, just to find out I owe $4000 to the ATO'. In the caption of the video he added: 'The only return I got was emotional damage.' Another young worker shared an image showing she owed almost $5800 to the ATO, asking 'wtf is this' and 'no one speak to me'. A nurse made a video revealing his $3404 debt, while another TikToker, Elaya, was hit with a $1733 bill. Another user revealed they owed close to $9000, writing, 'Any accountants wanna help me?' Ms Raso said there are a few main reasons people are copping debts this year, with one of the key culprits being the rise in people taking on multiple jobs. Australian residents are entitled to the tax-free threshold, which means you pay no tax on the first $18,200 of your income. However, it can only be claimed for one job, and for any additional jobs Aussies must inform their employer they will not be claiming the threshold. But the accountant warned that for people with multiple jobs, this is often not enough to avoid being hit with a tax bill at the end of the financial year. 'If your main job is earning $45,000 or more per year, when you tell that employer at your second job that you don't want to claim the tax free threshold, you go to that first tax rate, which is sitting at 16 per cent plus Medicare levy, that automatically defaults to that,' Ms Raso explained. 'So the employee has done the right thing, the employer has done the right thing, but if you're earning $45,000 or above in that main job, you're already sitting at 30 per cent tax rate, plus 2 per cent Medicare levy, so straight up, you've got a 14 per cent difference.' Ms Raso said this hasn't been as significant an issue previously, because fewer people were working multiple jobs and there was the buffer of the low and middle income tax offset. The tax agent sees thousands of people a year and says she is having conversations on this subject almost every day. She said it is 'distressing' when people are having to get second or third jobs just to get by and they think they are doing the right thing in terms of their tax, only to be hit with a bill. 'No one's done anything wrong, but there is no option for them to actually get that extra tax withheld,' Ms Raso said. 'For most people, our tax system is complicated enough. If they have to go and manually work out another 14 or 15 per cent, that's unfair.' Another common issue has to do with HECS-HELP debt. The repayment income threshold is currently sitting at $56,156, meaning you'll only start seeing payments come out of your pay if your salary ticks over that amount. But, if you are earning under the threshold for both jobs, then neither employer will be withholding those repayments. However, the ATO looks at your total taxable income, so if your combined income is above the threshold and you haven't been making repayments, you are going to be hit with a debt. Another situation Ms Raso sees revolves around salary sacrifice, novated leasing and reportable fringe benefits. She said many people don't realise that those reportable fringe benefits get grossed up by 1.88 times, which is going to impact how your HECS-HELP repayments are calculated, with them being repaid at a higher rate. Ms Raso said those are the three main reasons for tax bills she sees every year, and warned people who cop a debt this year are likely to find themselves in the same situation next year, unless they figure out why. 'If it's not addressed, the same thing is going to happen next year. And if you're one of the people that go may not have had a tax debt this year, but have gotten a second job, you'll end up in that situation next year,' she said.
Yahoo
09-07-2025
- Automotive
- Yahoo
ATO issues warning to millions over $4,400 tax deduction 'mistake'
Millions of Aussies who use their car for work will be looking to claim a tax deduction for car expenses on this year's tax return. But the Australian Taxation Office (ATO) is warning people not to make this common mistake. If you use your car for work, you can claim a deduction using the 'cents per kilometre method' or the "logbook method'. The 'cents per kilometre method' is a more straightforward calculation and allows you to claim up to 5,000 kilometres per year at a rate of 88 cents per kilometre, meaning a maximum deduction of $4,400. An ATO spokesperson told Yahoo Finance a "mistake" car owners made was claiming expenses using this method without keeping all the necessary records. RELATED Common ATO tax return mistake revealed as Aussies claim $3,500 worth of deductions CBA, NAB, ANZ reveal $200,000 move borrowers making after RBA interest rate cuts Commonwealth Bank, Westpac reveal major payment change for millions of customers 'If you use the cents per kilometre method, you will need to be able to show that you own the car, used the car for business reasons and explain how you worked out your work-related kilometres,' the spokesperson said. 'For example, you could record your work-related trips using a diary or the myDeductions tool in the ATO app.' If you choose to use the logbook method instead, you'll also need to keep additional travel make up the bulk of work-related expense claims, with 3.6 million people claiming about $10.3 billion in car expenses in the 2023-24 income year. At $4,400, the 'cents per kilometre' tax deduction is one of the highest that you can claim without receipts and also one of the most heavily scrutinised ones. Tax Invest Accounting director Belinda Raso told Yahoo Finance a lot of people tended to think it was an automatic deduction and didn't understand when they could and couldn't claim. 'You've got, on one hand, a lot of people that just go and automatically claim the 5,000 kilometers. But also, on the other hand, you've got people that don't realise when they can actually claim it," she said. 'It is important that you do track where you've gone because it's such a good deduction, $4,400 worth, the ATO does look at it. 'Even though you don't need a logbook, if you are pulled up for an audit, you do need to substantiate where you've gone, how often you've gone, how far you've gone and why you've gone there.' To claim the tax deduction, you need to be travelling for work purposes. That means travel from your home to the office doesn't count, except in limited exceptions. Raso said you must be going to a different location from where you normally go. 'It could be somewhere for training, it could be somewhere for meetings, it could be going to a different site, a different location, a different branch. You could even be running errands for your employer,' she said. 'The important thing with this is it mustn't be on your way home or on your way to work, so it must be during your work day.' The ATO also specifies you can claim the cents per kilometre method per car per year. You can find more information on trips you can and can't claim in retrieving data Sign in to access your portfolio Error in retrieving data
Yahoo
30-06-2025
- Business
- Yahoo
ATO tax deductions worth $3,518 that millions of Aussies are claiming
The Australian Taxation Office (ATO) has revealed how Australians have claimed $3,518 worth of tax deductions on their returns. Tax time is officially here, and experts are urging people to be aware of everything they can and can't claim. Aussies claimed an average of $2,639 in work-related expenses in their 2022-23 tax returns, according to fresh data released by the tax office. This marked the highest average in at least a decade and was higher than the average amount claimed during the pandemic. More than 10.3 million Australians claimed a work-related deduction throughout the year, out of the 16.1 million individual tax returns that were analysed. This included claims related to working from home. RELATED Major $1,500 ATO warning for Aussies lodging tax returns on July 1 Mortgage warning over July RBA interest rate cut Centrelink age pension alert for Aussies travelling overseas Tax Invest Accounting director Belinda Raso said the data highlighted how vital it was to claim what you were entitled to. 'It is important that you start arming yourself with the information of what you can and can't claim this year,' she said. 'Make sure you are reaching that average of $3,500.'The second most common tax deduction was related to expenses incurred in managing tax affairs, such as engaging a tax accountant to help complete your tax return. More than six million taxpayers claimed an average deduction of $370 on this expense. Deductions for gifts and donations doubled, with more than 4.4 million people claiming an average of $2,032, up from $1,067 for the previous financial year. The biggest tax deduction was personal superannuation contributions, with 679,004 people claiming an average deduction of $17,380. More than 302,000 people claimed deductions for interest charged by the ATO, with an average deduction of $2,362. This is something Aussies can no longer claim. From July 1 this year, interest charged by the ATO for late payments or underpayments will no longer be tax deductible. The change has been brought in to ensure taxpayers who do the right thing and pay their tax in full and on time aren't disadvantaged compared to those who delay payment. ATO assistant commissioner Rob Thomson said work-related expenses would be a key focus of the tax office this year. 'Work-related expenses must have a close connection to your income-earning activities, and you should be prepared to back it up, with records like a receipt or invoice,' he said. 'If your deductions don't pass the 'pub test', it's highly unlikely your claim would meet the ATO's strict criteria.' The ATO will also be taking a close look at working from home deductions, with taxpayers able to use either the fixed rate method or actual cost method to claim. If you're not sure what you can and can't claim, Thomson recommended checking the ATO's website for detailed guidance or asking your registered tax professional. 'Don't just claim it and hope for the best, as penalties and interest may apply,' he said. The ATO has information on specific deductions for different jobs on its website.
