Your Money & You – August 2012

Donating and Crowd Funding

Making good decisions about your money doesn’t just involve budgeting and investing. You can help others by donating to a charity or supporting a crowd funding project. But make sure you check exactly where your money is going.

Donating to charity

With thousands of charities competing for your donation, do some research to make sure your money is being used for the cause you want to support. It’s important that you're comfortable with the charity's activities.

You may decide to make a regular, set donation or a one-off donation. You can also donate your time and skills.

Be careful who you donate to. Find out if a charity is legitimate by checking:

• where the charity is based, e.g. the business address
• that the person you are speaking to does represent the charity. Call the charity to check
• that donations are tax deductible. Donations to charities are only tax deductible if the charity has been endorsed by the Australian Taxation Office as a deductible gift recipient (DGR) organisation.
• the corporate registration number, such as an Australian Business Number.

Find out about the latest charity scams at the Government's SCAMwatch website, www.SCAMwatch.gov.au.

Crowd funding

Crowd funding is used by artists and entrepreneurs to fund their projects. Money is usually raised online, with people pooling their money towards a project.

There is no monetary reward for supporting a crowd funding project and sponsors are often enticed with a small gift such as a signed CD, free T-shirt or a discount on products in return for their support.

Most sites will have information on the project’s aims and objectives, how it will work and its budget. If you want to participate, you will need to nominate the amount you would like to pledge and the account the money will be deducted from.

Once the project has reached its target funding, your pledge will be deducted from your account. In most cases, only projects that raise enough money can go ahead. Most but not all sites return funds if the target amount is not reached. Check the refund policy on the crowd funding site before signing up.

If you’ve heard about a crowd funding project that you’d like to support, make sure you check its legitimacy first.

You should also try to find out as much as you can about the project and its owner before you sponsor them. For example:

• have they used crowd funding before?
• have they been involved in successful projects in the past?
• did they deliver the gift, if one was promised?

Donating to charity and contributing money to a crowd funding project can be a great way of showing your support. Just be careful someone isn’t taking advantage of your generosity.

For more information about donating and crowd funding go to ASIC's MoneySmart website , www.moneysmart.gov.au. Email topic suggestions to ADFcolumn@asic.gov.au

Greg Medcraft
Chairman 
Australian Securities and Investments Commission

Tips on Completing Your Tax Return

If you complete your own Tax Return then you must submit your 2012 financial year return to the Tax Office by 31 October 2012.

If you use a Tax Agent, such as a public practising accountant, then you have until 15 May 2013 to submit your 2012 Tax Return.

It’s important you get your return in on or before these dates because the ATO can impose fines and penalties if you’re late.

Don’t Be Greedy With Your Claims

The Tax Office has publicly revealed that it intends to look very closely at the Income Tax Returns submitted by ADF Members especially Non-Commissioned Officers.

Typical Errors Made By ADF Members

The ATO say some common mistakes made by non-commissioned officers include:

• Insufficient documentation available to support car expenses. If you use the ‘cents per kilometre’ method you must be able to show how you worked out your estimate for work kilometres by:
• keeping a diary of work-related travel
• basing your costs on a regular pattern of travel.
• Incorrectly claiming motor vehicle expenses on the basis that you are carrying bulky equipment. If your employer provides secure storage for your equipment or you transport your equipment to and from work as a matter of convenience, then the transport costs are private and a deduction is not allowed.
• Incorrectly claiming physical fitness expenses - claiming expenses for fitness courses, gymnasium memberships, other health-related items, such as protein shakes and supplements, when your required fitness level is not well above the general Australian Defence Force standard.
• Incorrectly claiming home office, mobile phone and internet expenses. Claims need to be supported by evidence and you can only claim the work-related portion. This is best achieved by maintaining an annual diary for a four week period that establishes the actual work percentage of the computer, phone or internet costs.

ATO document to help ADF members

Each year the ATO publishes a document to specifically help ADF Members understand their tax obligations.

That document contains an excellent summary of the typical expenses that ADF are permitted to claim. It also contains examples of expenses which can’t be claimed as a tax deduction.

If you complete your own Tax Return you should refer to this ATO document when completing your return so that you only claim tax deductions for expenses that you’re entitled. If you use a Tax Agent then you should give a copy of this ATO document so they know how to complete your tax return.

You can find the latest ATO document for ADF Members at http://www.ato.gov.au/content/00313578.htm

Bought A Dud Consumer Product? Your Consumer Rights

This article gives you a brief introduction to your rights if you buy goods that turn out to be defective. It is the first in a series of articles we will publish on your consumer rights aimed at arming you with the information you need to protect yourself in today’s complex consumer markets.

With effect from 1 January 2011, there is now a national consumer law, the Australian Consumer Law (ACL) which applies across Australia and should make it much easier for Defence personnel and their families to understand and enforce their consumer rights. The ACL is administered by the Australian Competition and Consumer Commissioner (ACCC), Australian Securities and Investment Commission (ASIC) and State and Territory consumer protection agencies.

What are consumer guarantees?

The ACL provides a set of rights and remedies that apply to consumer goods, known as consumer guarantees. These rights exist separately from and in addition to any ‘warranty’ or ‘guarantee’ offered to you by the seller or manufacturer of the goods. And importantly, because they are set down in legislation, it is illegal for businesses to try to contract out of the consumer guarantees. In summary the main consumer guarantees for goods are:

• that the business must have the right to sell the goods to the consumer - the ‘guarantee as to title’
• that the consumer will not be inconvenienced by others seeking to reclaim the goods, unless the consumer is told about the claims against the goods by third parties - the ‘guarantee as to undisturbed possession’
• that the goods are free from any security, charge or encumbrance that was not disclosed to the consumer or created with the consumer’s consent
• that the goods would be of acceptable quality, taking into consideration the nature and the price of the goods, as well as any statements and representations made in regards to the goods. ‘Acceptable quality’ is defined as what a reasonable consumer considers:
  • fit for all the purposes for which goods of that kind are commonly supplied;
  • acceptable in appearance and finish;
  • free from defects unless those defects were disclosed by the seller prior to the sale; safe; and
  • durable
• that the goods are fit for any purpose disclosed by the consumer to the business and that the goods be fit for any purpose, or any disclosed purpose, for which the business represents
• that the goods will match any description given by the business or any sample or demonstration model provided by the business
• that repairs and spare parts would be available for a reasonable period after the goods have been supplied, unless the consumer has been given written notice at the time, or before, they purchased the goods that the facilities or parts would not be available
• that the business will comply with the terms of any express (or manufacturer’s) warranty it gave or made in relation to the goods.

What rights do consumer guarantees give you?

So if you buy goods that don’t meet the consumer guarantees, you may have the right to claim a remedy from the business including a repair; or a replacement or refund in some cases.

In the next editions of Your Money and You we will explain more about the remedies available to you and some of the exceptions that may apply for example to goods bought at auctions or online.