Income Protection Deductions

Occasionally I see taxpayers who seek to claim a tax deduction for the premiums for income protection insurance in their superannaution account/s.

This isnt tax deductible to the taxpayer but is a deduction the super fund will claim that reduces member taxes. The taxpayer should not claim a deduction.

Only a personal policy that provides income protection cover is tax deductible. Life insurance etc is not tax deductible. Where a policy includes life and income cover the insurer will issue notice each year to confirm the deductible amount.

 

So does that mean can you claim income protection when it comes to tax time for the IP's?

 

If you are the owner of the policy.

 

Yes, Income protection insurance paid by a property investor is a deduction that will reduce overall tax.

 

Ah cool

 

@MoneyMan - Income protection only covers 75% of salary not rent & subject to waiting period.

 

Fingers crossed the rent coming in from the tenants will cover the mortgage on the IP anyway, right ?

 

The word on the streets of the Druitt is to build a buffer. Income protection insurance not absolutely necessary if modest buffer built.

 

Sorry, off topic but if I use @datto to run a protection racket for which he gets a 50% cut of the proceeds, can a tax deduction be claimed for his split?

 

@wombat777 - specific exclusions apply, like @datto's injuries incurred cutting the grass

 

well the income protection was more for the PPOR if one of us was incapacitated etc

 

LOL - No. It would be a share of partnership income and each partner assessed on their respective 50% share - after GST of course.

 

Sounds legit. The expenditure is linked to gaining assessable income. Don't forget the GST. The tax invoice is in the mail.. LOL.

Hmmm...injuries like... getting knifed?

 

Free spaying service - no anesthesia required

 

No deduction for expenses relating to committing an indictable offence, s.26-54.

Illegal proceeds are ordinary income, but deductions may be denied.

Double jeopardy, punished under criminal law and fiscally punished under tax law.

 

Therefore, no incentive for crims to declare ill gotten money. Govt misses out.

 

Commissioner does not need a crim to declare proceeds.

All the ATO needs to do is raise a default assessment based on unexplained wealth.

It is then up to the taxpayer to then show what the correct tax position is by explaining how they came by this wealth other than by earning it. The onus is on the taxpayer, none of this weak criminal law presumption of innocence.

 

A wealthy crim uses the best lawyers and accountants.

They are untouchable unless they stuff up in some way.

Have a look around. Bikie clubs still operate untouched in NSW. They aren't getting raided by the ATO. Neither are night club/strip joint operators. Or maybe s167 assessments have been raised and these taxpayers have paid them out or gone bankrupt without any assets.

Who knows, but I bet stooges are set up to take the default assessments which end up being written off and never see the light of day again.

 

and they/their families are well looked after by their associates for having taken the 'fall'.

There are several towns in the Mafia strongholds where the old man gets locked up, family/kids get 'looked after' but 'owe' a debt back to 'la famiglia', they never need to work a day in their lives as they are cared for in all ways.

The easiest way is money laundering through 'approved channels' like the TAB, you win some/lose some but all wins are clean.

 

The lawyer was arrested too. Love how the AFP recorded his meeting when the journo allegedly blackmailed the group for $5m and the lawyers drafted and executed a deed/ agreement for the bribe with a NDA !! Then when it was paid they froze the $5m.

The AFP had these guys in their sights for months. The introductions of funds into a TAB account is the point of AML (anti money laundering) concern. Same as a casino. If you walk into a casino and take chips of $10K or more its a reportable transaction. Even under $10k with frequency the face recognition technology used in casinos can pick up laundering.

These days with anti terrorism and funding or the likes of ISIS there is a huge process to monitor cash....I would think that how this one started.