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Negative gearing is a heavily debated topic throughout the property industry and is often in the headlines at election time. As one of the major drawcards to investing in property, investors must factor it into their ongoing strategy.

Before exploring the negative gearing and depreciation relationship, let’s cover the essentials first.

What is negative gearing?
An investment property is negatively geared when the return, or rental income, is less than the property’s expenses. This essentially means that the investment property is making a loss.

Just like any other property expense such as interest repayments and insurance, the loss from a negatively geared property is deducted from the investor’s income.

What is depreciation?

Property depreciation is the natural wear and tear of a building’s structure and assets. Property investors can claim this as a tax deduction each financial year. A bonus of depreciation is that it’s a non-cash deduction, so investors don’t need to spend any money to claim it.

Depreciation can be claimed under two categories. The first being capital works deductions on the structural component such as walls, windows and sinks. The second category is plant and equipment deductions on the easily removable assets like carpet, ceiling fans and hot water systems.

The two broad categories mean that investors can claim depreciation on almost anything.

Benefits of negatively geared property

Many investors hold on to their negatively geared investment properties. Some even enter the market with the aim of having a negatively geared property.

But we know negative gearing means they are making a loss, so why would they want to do this?

The answer can be complex and there are many factors to be considered as everyone’s financial situation is different. However, there are two key benefits of negative gearing.

The first is long-term capital gain. Many investors hold onto their properties as part of a long-term wealth creation strategy. Their aim is to sell it in later years at a profit as the property market fluctuates, or to use the property to fund their retirement.

The second benefit is the reduction to taxable income. Property is a tangible asset and if it’s making a loss, it reduces the investor’s taxable income and they pay less tax. This can prove to be beneficial in the short-term and early stages of growing a portfolio.

Depreciation and negative gearing

Given that depreciation is a non-cash deduction, it can turn a positively geared property into a negatively geared one, without making a further cash loss. Let’s see how this works.

In practice: Depreciation and negative gearing

Kim earns $80,000 a year and pays approximately $17,500 in tax.

Kim receives $25,000 in rental income. Her property’s tax deductible expenses include interest repayments, maintenance costs, insurance, council rates and property management fees that come to $22,000 for the financial year. Her property is positively geared with a $3,000 return.

By including depreciation, Kim can claim capital works and plant and equipment deductions totalling $6,000 for the financial year. This changes the previously positively geared property to be negatively geared, with a $3,000 loss.

Kim’s tax liability decreases to approximately $16,500 rather than increasing to approximately $18,500 when positively geared.

To learn more about depreciation, contact BMT on 1300 728 726 or Request a Quote.

 


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This tax advice blog will show you how to be your tax accountant’s best client and why this will always work in your favour.

Does your tax accountant love you or do you suspect they are reluctant to answer the phone when you call?

If you’re leaning towards the latter, you could be missing out on money and opportunities.

Take a look at this tax advice on how to make life easier for your accountant and why this will pay off for you.

Learn the lingo

In Australia, anybody can start a business, even if they have very little financial literacy.

While this tax advice blog isn’t telling you to rush out and get an accounting degree, it really doesn’t hurt to familiarise yourself with the ‘language’ of accounting and some of the terms you accountant uses.

This includes:

  • – Profit & Loss
  • – Balance Sheet
  • – Cash Flow
  • – Arrears
  • – BAS
  • – Equity
  • – Accounts receivable/accounts payable

When you understand what the common terms mean, your tax accountant will be able to explain what’s going on ‘under the hood’ of your business and you will find it easier to have clarity about where you stand financially.

From there, you can start working together to figure out ways to maximise revenue, minimise your tax bill and increase your profit margins.

Keep beautiful books

Nothing makes a tax accountant happier than an organised, fully reconciled cloud-based accounting system which has an itemised record of every dollar that has entered and left your business and what the purpose of it was.

If this is done, all your tax accountant needs to do is cross-reference with your bank statements and ask a few follow-up questions about anything that has fallen through the cracks. You won’t both need to spend hours figuring out where money has gone or come from.

Too busy to keep beautiful books? A bookkeeper can do this for you full-time or for a few hours per month. You can even outsource to someone offshore who will reconcile your accounts daily (just make sure you work with a reputable organisation and sign a contract to protect you from things going wrong).

If you want to do your own books, you will make it easier on yourself by learning to use a cloud-based accounting system. Most are reasonably priced and very user-friendly.

Read more: Tax time countdown: are you ready??

Separate your accounts

Another thing your accountant will thank you for is keeping your business and personal bank accounts separate.

Trawling through one account to do an annual tax return can be a nightmare. It’s stressful for you because you have to account for every single expense for the last 365 days. Some may not be marked in a way that makes it easy to remember whether they were for work or for yourself.

The best thing you can do is have separate accounts and a card for each. If you don’t want to add a credit card, attach a VISA debit or something similar to your business account. This will let you make credit-style payments without going into debt.

Tax accountants see business-only accounts and feel very happy! It makes them look forward to working with you and more likely to make your jobs a priority.

Be a friendly, helpful client

Everybody prefers to work with people they like. If you are responsive, organised and have a decent understanding of the ins and outs of taxes and accounting (tip: read a few tax advice blogs), you will start to become one of your accountant’s preferred clients.

What’s more, people like to do nice things for the people they like. Treat your accountant well and they will be motivated to give you tips, show you clever ways to minimise your tax bill, and offer advice to help you improve your business.

Even if your accounts are in a mess right now, if you can demonstrate that you’re willing to learn and improve, and you have a smile on your face, your accountant is more likely to go the extra mile for you.

Mobbs & Company are tax accountants with offices on the Sunshine Coast, in Brisbane and Caboolture. Contact us for a free initial appointment.


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Tax time is coming up again; are you ready? Find out how to be prepared for tax time in 2021 and about the benefits of using a specialist tax account.

The financial new year seems to roll around faster every year.

And just as we do on January 1st, every July 1st sees us resolving to be more organised and do better when it comes to our business and personal finance management.

With a few months until tax time in 2021, now is your chance to start organising so you can side-step the late-June/early July panic surrounding your tax return.

The best things about being organised are that you will be less stressed and have the clarity to claim every possible dollar. Here are some tips to get you started from a specialist tax accountant:

Talk to a tax specialist

Unless you are a trained accountant yourself (and have the time and effort to devote to dealing with the details of Australia’s ever-changing tax regulations), speaking to a professional is the way to go.

This year, change things up by calling them early.

Your tax accounting specialist will be able to give you a heads up ahead of time about what you should spend ahead of the end of the financial year so you can maximise your claim. For example, if you have been thinking for months about purchasing some new equipment, you may as well do it before EOFY so you can write it off as a business expense sooner. A specialist tax accountant can explain if this strategy will work for you.

Read more: How the government decides who to audit

Keep records

A shoebox of disorganised receipts will make you and your specialist tax accountant feel very stressed at tax time.

If you want to be really prepared for July 1st, spend some time each month, or even each week ensuring you have a record of your purchases. A receipt-keeping app is a great place to start, or you can connect your bank account to a cloud-based accounting system and have every purchase tracked automatically.

It may not feel like a big deal to spend $10 here and $200 there on business expenses on your personal card or without keeping a record, however, if you make this a habit it will all add up. And every $100 you don’t have evidence of will lead to a higher tax bill.

Put money aside all year

They say there’s nothing certain in life except death and taxes.

If you earn a living, unless it is less than around $19,000, you will have to give a percentage of your income to the Government.

The amount of tax you pay will change based on what you earn but as a rule of thumb, you should remember that $30 of every $100 you make doesn’t technically belong to you. Because of this, the best thing you can do is put this money aside as soon as you receive it.

Keep it in a separate account and don’t be tempted to dip into it. This way, come tax time, you won’t feel stressed about your tax bill. You may even be pleasantly surprised to find you have some cash leftover to either invest in your business or spend on yourself.

If you want to be really on top of your tax payments, ask your accountant to arrange quarterly tax payments. This will be based on your previous year’s income. Make a lump-sum payment every three months and you won’t be in as much danger of falling behind on your tax bill.

Get help

A specialist tax accountant shouldn’t be the only professional in your financial arsenal.

If you have been doing your own bookkeeping, i.e. paying your staff, paying supplies, sending invoices, and reconciling accounts, consider how much time this takes you and whether you could spend that time in a more productive way.

Nowadays there are plenty of independent bookkeepers who can bill you for just a few hours a week, depending on your needs. For a small price, you are free from the stress of sending invoice reminders, figuring out how much holiday pay your staff owe, and ensuring you aren’t behind on your own bills.

When you have a good bookkeeper, you will be far more organised and ready for tax time. They can work with your specialist tax accountant to make this EOFY your easiest ever.

Start early this year and you’ll thank yourself when your specialist tax accountant files your taxes without needing to ask you hours worth of questions.

Mobbs & Company are tax accountants with offices on the Sunshine Coast, in Brisbane and Caboolture. Contact us for a free initial appointment.


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Tax accountant services in Brisbane are there for you should you get audited. But how does the ATO decide who to audit? Read on to learn more.

If you find yourself or your business slapped with an audit you will probably be in dire need of tax accountant services. Every Brisbane business and individual is susceptible to being audited but there are ways to avoid being targeted by the ATO.

To be audited means an outside organisation such as the ATO will come in and review all your accounting ‘books’. They will be looking for detailed evidence of income and expenses. Often an audit will take place because the ATO suspects you are doing something wrong.

As shared by the ATO: “Our audit program ranges from relatively quick examinations of source documents to more intensive analysis of complex arrangements and transactions. Whatever the issue, we will be transparent about our concerns.”

The ATO provides much more detailed information on the website that is well worth perusing for.

If you have everything organised and above board, an audit should not have any negative outcomes but it will still be stressful and time-consuming. If you haven’t been above board, you may find yourself and your business in hot water.

Read more: Tax time isn’t final

How to avoid an audit: Do the right thing

If you want to avoid being audited, any tax accountant service in Brisbane or elsewhere will tell you the first thing to do is avoiding trying to cheat the system.

These days, the ATO has automated checks and balances. Anything which registers as out of balance increases your chances of being audited exponentially.

Things like claiming excessive laundry expenses or and declaring an income that is tens of thousands of dollars below the average for your industry fall into this category. These figures will set alarms off at the ATO and have the auditors heading to your door.

As it happens, avoiding an audit isn’t even the only reason you should be honest in declaring your income. If you want income protection (and these days you really do) your insurer will cater your policy to your tax declaration. This means you won’t be able to insure for what your company is actually worth. For the sake of trying to play the system, you may find yourself considerably out of pocket if the dark times come.

The same hens will come home to roost if you need to apply for a loan. The lender will value your company and assets by your tax declaration. This is shooting yourself in the foot when you need a loan and have to borrow far less than you should be able to.

The bottom line

At the end of the day, you may be audited no matter what you do but it is far more likely the auditor will knock on your door if you have glaring discrepancies.

Even the most honest business owner can make mistakes and find themselves in hot water. The best way to avoid this altogether is to use top-notch tax accountant services. Your accountant will make sure your tax return is accurate and lodged in a way that doesn’t raise alarm bells at the ATO. This includes not exceeding the limits of what you can declare as expenses and ensuring the income you declare matches what your bank accounts say.

Use a good tax accountant service to keep your ducks in a row and an audit should never be a problem. If you do get audited, you may like to check out some in-depth tips at knowthelaw.com.au and make sure to get in touch with the friendly staff at Mobbs & Company to help you showcase your financial records correctly.

Mobbs & Company are tax accountants with offices on the Sunshine Coast, in Brisbane and Caboolture. Contact us for a free initial appointment.


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Your tax return isn’t final. By amending previous tax returns and using a good business accounting service, you may be able to claim far more than you thought.

If you have done your own taxes in the past, you may have made a mistake and paid too much tax.

The good news is that with the help of a reliable business accounting service, you may be able to revise past tax returns and give your business a welcome cash boost.

Was your tax bill too high?

If you feel that you didn’t get the best rebate you might have last tax time either because you filed in a hurry or you failed to declare all your expenses, the good news is that business accounting services can help.

Just because you have submitted and claimed your tax return doesn’t mean it is final. It is actually very possible to amend your return to claim items and deductibles you may have missed.

People get their tax lodgement wrong for a number of reasons, including:

  • – Filing their taxes without the help of a business accounting professional
  • – Not realising what they could claim (see more on this topic here)
  • – Working with an accountant who did a rush job
  • – Failing to declare all their expenses correctly
  • – Having little separation between their business and personal bank accounts, making it difficult to estimate their actual income

Don’t miss the opportunity of a few thousand extra dollars for yourself and your family. Talk to a business accounting service to review your past tax returns.

How do you redo your taxes?

The ATO calls it ‘amending your tax return’ and you can generally do this within four years of submitting it.

This is great news if you feel that you can get more back than you did the first time around. It can also come in handy if you feel you got anything wrong. For example, you may have been unwittingly failing to declare income. A new business accounting service could pick this up but amend your tax return before the tax office notices and penalises you.

The ATO has plenty of information on how to request and submit an amendment and it is possible to do it on your own. However, as mentioned, it is much better to get a business accounting service on your side. The ATO allows you to amend your return in order to correct mistakes, include forgotten capital gains, and to claim deductions you may be entitled to. This is where a good business accounting service or tax accountant will prove to be invaluable.

Hand over the hard work

Accountants, especially tax accountants, know the Australian tax system inside out. It is their job to maximise your tax return. They will know all the ins and outs of what you can and can’t claim and exactly how much you can get back.

If you feel your tax bills have been too high or if you have realised that you didn’t claim for significant expenses such as paying yourself super, paying for insurance, paying for a new vehicle purchase, or even paying staff, work with an expert to review your past tax submissions.

It may take some time but the process could unearth thousands of dollars that the tax department owes you.

It’s also worth noting that the same may apply to your GST payments. If you have been automatically submitted your BAS through Xero, you could have missed some deductions. Again, the best thing to do is check with a reputable business accounting service. With their help, you could be thousands of dollars better off.

Mobbs & Company are small business tax accountants with offices on the Sunshine Coast, in Brisbane and Caboolture. Contact us for a free initial appointment.


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This financial year, there have been some changes to the tax deductions you can claim due to COVID. Read on to learn more from an experienced Sunshine Coast accountant.

The federal government made some changes to what you can claim during COVID so you may be able to look forward to a lower tax bill than you were expecting.

Our Sunshine Coast accountants are already busy preparing to help our clients minimise their tax payments for 2020-2021. Take a look at some of the things we will be highlighting, which you may or may not be aware of.

– Bad debts can be written off

COVID-19 has hit a lot of people and businesses hard. As such, it is expected that many debts will go unpaid.

Many business owners aren’t aware that bad debts can be written off. For example, if a client owes you $20,000 for work you have completed, this is $20,000 less money earned this year. Claiming it on your tax will help improve your cash flow so you don’t fall behind on your bills yourself.

Before you claim, you will need to show as much proof as possible that you have done everything in your power to recover the debt. Hold on to any written evidence that you have, including the invoice and any follow-up reminders or communication.

Read more: How to catch up if you haven’t filed your taxes

– Equipment purchases

Not surprisingly, tax deductions have been extended to include the purchase of sanitising and protective equipment for some businesses and individuals. As long as you pay for it yourself and work in an industry that requires close contact with other people, such as the airline industry, hairdressing, or, naturally, the medical industry, you will most likely be eligible.

In 2020, the Government also extended the amount business can write off on equipment to $150,000. Talk to your accountant if you have made any big purchases. Provide evidence so you can claim part of the cost and minimise your tax bill.

– Superannuation

A deduction can be made for any personal contributions you make to your superannuation up to $25,000. Your contributions can be claimed from the money your employer pays into your super (if they pay super on your behalf).

You also have to make sure that you notify your super fund of your intentions. The ATO has extensive instructions on how to deal with such a deduction.

– Travel for work + your vehicle and its upkeep

There are a couple of ways things are different now in this area. To begin with, many travel expenses that were not previously deductible now may be considered so if you are required to quarantine. The ATO website outlines some examples of which travel expenses are now tax-deductible, such as having to quarantine in a hotel for two weeks when returning from interstate work.

COVID-19 has restricted public transport and many are choosing the safer option of using their private vehicle even when public transport might be available. This means there are reasonable claims that you can make in relation to your personal vehicle if you use it to travel to and from work-related events. Check out more info here and speak to your accountant for more information.

If you have your own business and need to purchase a vehicle to get around, the cost of this purchase may be partially claimable as a business expense. Claiming it as a tax write off will reduce your taxable income.

If you’re based on the area, talk to your Sunshine Coast accountant about which travel expenses can be written off.

– Home office expenses

In this current age of pandemic, however, more and more people are working from home and the ATO understands and supports this.

Possible deductions include the cost of electricity, cleaning, and phone and internet costs. Deductions don’t extend to coffee and tea though so don’t get carried away!

For an extensive look at all of the new issues which have surfaced thanks to COVID-19, check out the ATO’s COVID-19 FAQ information.

Seek out the best Sunshine Coast accountants to help you ensure you are claiming as many tax deductions as possible.

Mobbs & Company are specialist tax accountants based on the Sunshine Coast and in Brisbane. Contact us for help getting up to date with your small business or personal tax and we will make sure you get the best return possible.


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If you are late to file your tax return, the problem can be sorted out faster with the help of a tax professional. Find out more from a tax accountant in Brisbane.

Lots of small business owners and individuals either forget about or don’t get around to lodging their taxes for years. When things start to catch up with them, they respond by continuing to ignore the problem.

Unfortunately, this makes things worse. And the issue doesn’t go away.

Take a look at how to catch up if you haven’t filed your taxes, with the help of tips from a Brisbane tax accountant.

1. Stop ignoring the situation

When it comes to taxes, a problem ignored is not a problem solved.

The ATO keeps records and they will get around to you if you haven’t lodged your tax return. This has become much easier for them with the rise of digital record keeping. Artificial Intelligence can rapidly identify who has a tax file number but hasn’t filed their taxes and automatically take steps to follow up with you.

Fail to lodge and you can be fined up to $1,110 for individuals and considerably more for companies. In extreme cases, you may even find yourself in court.

Read more: What happens if I don’t lodge a tax return

Pre-empt a phone call or letter from the Government and there will be fewer repercussions so act now and get a tax accountant in Brisbane or one in your local area to help you figure out the best next step.

2. Get started

The most important thing is to stop putting it off looking at your tax return and get it done.

Here is some information that will help put your mind at ease:

  • – If you are only late by a few months you may even be able to apply for an extension
  • – If you have good reasons for filing late, natural disaster, or bereavement, the ATO is generally very forgiving
  • – If your return is overdue you may need to pay a penalty but the sooner you get it done the less the penalty will be.

To lodge your tax return, you will need evidence of your income and your work-related expenses. Head over to the ATO website to see what information you need to gather to get started.

It is possible to do everything yourself through the ATO online but that may feel quite intimidating and may not yield the best results. The better option is to seek professional help.

3. Find an Accountant

Speaking of professionals, reach out to a tax accountant in Brisbane or wherever you live and let them know what’s going on.

A good tax accountant will know exactly what to do and how to handle your late return on your behalf.

It is often the case that people are worried that they no longer have the information that they need to file a return that might be a few years old. An accountant knows how to fill in these gaps, get you the best possible rebate, and minimise any penalties you may incur.

If you’re worried about penalties, your accountant will be able to negotiate with the ATO on your behalf. For instance, it is possible to get a payment plan to repay any taxes you may owe. Having a good accountant on your side is essential to get the best possible results and minimise the amount you have to pay.

Case Study

Here’s why it makes sense to get help with a late tax return.

‘Bill’ has a business as a sole trader and generates $150,000 in income per year. He hasn’t filed a tax return in three years. He incorrectly assumed that he would owe $45,000 for each year and is worried he could never pay that amount.

His accountant showed him that once he calculated his expenses, his actual taxable income was closer to $90,000 each year. This meant the yearly tax bill was closer to an average of $27,000.

Bill knew he would have to pay back the money. His accountant negotiated with the tax department on his behalf and it was agreed that Bill would pay in monthly installments. His tax accountant also arranged for him to pay a set amount of tax each quarter going forward so he won’t fall behind again.

Mobbs & Company are tax accountants with offices on the Sunshine Coast, in Brisbane and Caboolture. Contact us for a free initial appointment.


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Sunshine Coast Accountants

Want more money and less stress? A tax accountant can play a big role in helping you have both.

While it’s possible to manage your finances and lodge your tax online, there are some big reasons to hand the responsibility to someone else, especially if you’re a small business owner.

These are some of the benefits our clients experience after working with the experienced tax accountants at Mobbs & Co.

More time

Who has time to bury themselves in receipts, Profit & Loss statements and financial reports when they are running a business?

Time is the most precious asset most small business owners have. Don’t waste yours on finance-related tasks when you could be focused on growing your business.

Less stress

Unless you have an accounting qualification, balancing the books is tricky (it’s still tricky sometimes, even for your tax accountant).

That feeling of knowing you need to go over your accounts but being reluctant to get stuck into it isn’t a pleasant one. Walk away from the stress by handing the bulk of the responsibility to someone who can get it done in far less time than you.

Less confusion

The goalposts of paying tax change every year. One year you can claim for one thing, the next you can’t.

If you don’t have time to stay on top of ever-evolving legislation, you’ll benefit from working with an experienced tax accountant. It’s this professional’s job to know the rules and regulations inside out.

Less dealing with the ATO

The Australian Tax Office isn’t really a place you want to spend a lot of time on the phone with when you’re a business owner.

Let your tax accountant handle your relationship with the ATO by receiving and responding to correspondence on your behalf. They will reach out to you when you do need to get more personally involved.

Longer deadlines

Most Australians are expected to lodge their tax return by October 31 but if you have a good tax accountant they should be able to get extra time.

Having an extension until as late as May gives you more time to be prepared. Your accountant can give you a heads up as to what your bill will be so you can make sure the money is set aside and you don’t end up paying interest on an overdue tax bill.

Additional support

A large tax franchise may be able to support your basic tax needs but it makes sense to work with a boutique accountant who is focused on small businesses.

As well as dealing with your tax obligations, this professional can provide tips and ideas that will help you grow your business.

More money

This is the big one! Having an experienced, reliable and dedicated accountant will definitely help you pay less tax so you can keep more of the money you earn in your pocket or use it to grow your business.

For a small (tax-deductible) cost, your accountant has the potential to save you a significant amount of money. As mentioned, they can also identify opportunities for your business to generate more revenue so you have a more profitable and financially secure future.

See more: Five ways to pay less tax

Mobbs & Company are small business tax accountants with offices on the Sunshine Coast, in Brisbane and Caboolture. Contact us for a free initial appointment.