Hi all,
My partner and I have just finished off our taxes and we are terribly shocked.
I own 3 properties (2 x negatively geared and 1 x positive geared) and he owns 1 property (very very negatively geared!). We both earn very similar amounts.
I put very similar figures into my tax return last year but am coming up with about half the return compared to last year.
I note that e-tax has changed somewhat…..what's the purpose of the new section called "income test" when it's automatically populated with the figures anyway. Also, do you think the "formulas" have changed? Does anyone know if Tax law has changed so much to have such a great affect on my properties?
Grateful for your comments. Would like to see whether you are in a similar boat.
Cheers
RissTax rates have dropped slightly. And you rents have probably risen a bit – but so too has interest rates.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
e-tax has changed slightly, There are 26 new items in the Individual form this year.. say hello to simplified income tax!
your spot on in that the income tests are probably the most relevant to you.. yes the “formulas” have changed. but not to any great extent.. the most likely change would be that your rental losses are now included in your “Income for medicare levy surcharge”.. meaning that if your combined taxable income, plus rental losses, is > $150k for yourself and your partner, then you’ll be liable for the MCLS (1% of your “income for medicare levy surcharge”) 1% certainly isn’t enough for you to feel “terribly shocked” .. but I’m just trying to explain the interaction of the income tests in your tax return.
As terry pointed out.. tax rates have dropped mildly, but once again, not enough for you to feel “terribly shocked”.
please please dont take this the wrong way.. but there’s any number of things you could input incorrectly in the tax form, which would drasticly effect the result, without throwing an error.
Of course, if you’ve submitted a PAYG variation then none of this applies.
The only way to find the problem.. is to compare this years tax form to last years.. I’d start with:
-compare the total expenditure (not the loss.. just the expenses) on each rental with the prior year
-then compare net rental loss from this year to last year
-compare your income from non-rental sources with the prior year (less income will mean less refund)
-then deductions against non-rental income sourcesIf that does not show up the difference then go through the entire form start to finish and list the items which have considerable differences to last year. The problem / difference is in there somewhere.
I hope this helps.. Let us know how you go..
Thank you so much for your insight. Am just about to start the whole process again to see whether we have entered something wrong. Understandably, emotions were running very high yesterday, so will try to do e-tax with a clearer head.
I did notice, on reflection, that we did receive a slight change in tax paid which brought our taxes down from about $25K to $20K last year based on a $90K income from employment.
The rental income is pretty similar and so too were the rental expenses.
Well, let's see if I can find anything else!
Thank you so much for your advice!
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