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Claiming mobile phone expenses

Posted on June 22, 2016 by admin

With tax time fast approaching, now is a good time to review those tax deductions that are often easily forgotten such as mobile phone expenses.

Mobile phone expenses can generally be claimed as a tax deduction provided they are used for work purposes, such as receiving or making work calls. When claiming expenses you will need to work out the percentage that reasonably relates to your work related use, not your entire phone bill.

The ATO requires you to substantiate these claims by keeping records for a 4-week representation period in each income year to claim a deduction of more than $50. Records may include diary entries, including electronic records and bills. The Tax Office also suggests including evidence that your employer expects you to work at home or make some work-related calls to demonstrate your entitlement to the deduction.

When apportioning the work use of your phone, you will need to use one of the following methods:

Incidental use
If you are not claiming a deduction of more than $50 in total and your work use is incidental, you may make a claim based on the following:

Usage is itemised on your bills
For phone plans with an itemised bill, you need to determine your percentage of work use over a 4-week representative period which then can be applied to the full year. You can work out the percentage by the number of work calls made as a percentage of total calls, or the amount of time spent on work calls as a percentage of total calls, or the amount of data downloaded for work purposes as a percentage of your total downloads.

Usage is not itemised on your bills
If your plan is not itemised, you can determine your work use by keeping a record of all your calls over a 4-week representative period and then calculate your claim using a reasonable basis.

Bundled phone plans
Phone services are often bundled and can be used by other members in your household. If other members use the services, you need to take into account their use in your calculation. You will need to identify work use over a 4-week representative period which can be applied to the full year. A reasonable basis must be used to work out the work-related use such as:

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Avoiding mortgage default

Posted on August 26, 2020 by admin

As individuals struggle with cash flow through the coronavirus, the Australian Bankers Association records that repayments on almost 500,000 mortgages have been deferred for six months. While repayments can be delayed, they cannot be avoided altogether.

Lenders can send you a default notice the day your repayment is overdue. However, they could also wait until your repayment is overdue by 90 or more days. When you receive a default notice, you are given 30 days to repay the amounts you have missed in addition to the regular repayment on your loan. Individuals who are struggling with their home loan repayments can avoid mortgage default by considering the following.

Contact your lender
Lenders are generally willing to work with you through financial hardship. Don’t be afraid to contact your lender to discuss your situation and find out what options are available for you. Lenders are often willing to negotiate short-term variations to repayment schedules that both parties can agree to. However, make sure that you do not agree to unrealistic repayment conditions that cannot be met.

Many Australian banks are offering a six-month deferral on mortgage repayments (including interest) for customers who are experiencing financial hardship as a result of COVID-19. If this is you, contact your bank to see if this is an option.

Apply for a hardship variation
Mortgage holders may be able to change the terms of their loan or temporarily pause or reduce their repayments under a hardship variation. A hardship variation can still be requested after you receive a mortgage default. To apply for one, contact your lender’s “hardship officer” and tell them that you wish to change your loan repayments due to financial hardship. This will usually require you to explain why you are struggling to make payments and to estimate how long your financial problems will continue to determine how much you can afford to repay.

After submitting a hardship variation request, your lender must contact you within 21 days with the outcome of your request. They may ask you for more details regarding your request; in this case, they must contact you again within 21 days from when you provide the additional information.

Consider selling your home
Selling your home is a tough decision, but in some cases this may be the better option if your circumstances are unlikely to improve. If you get to the point where your lender takes possession of your home and sells it, it’s likely that you won’t make as much as if you sold it yourself. When you sell your house on your own terms, chances are you will get a better price and avoid having to pay the legal fees passed on by your lender. Inform your lender if you decide to sell your home; they may ask for proof, such as a copy of the contract with your real estate agent or property advertisements.

Renting out your home until you can afford to make repayments again may also be an option if you are able to live somewhere else during this period.

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