November 2018: Three-quarter FBT year compliance check up

It¹s nowhere near the end of the FBT year, but a third quarter check-up can give you the opportunity to clear up any compliance issues. And it¹s a perennial question ‹ how much do you need to retire? We look at the latest estimates.

Santa¹s probably dusting of the sleigh, so why not plan ahead for the Christmas party. We have some pointers to help keep the FBT Grinch away. There¹s also information on tax when renting out part of your home, and we take a look at running a business out of your SMSF.

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Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

October 2018: Crowdfunding and Tax

Crowdfunding is a relatively modern phenomenon, helped in no small part by the growth of the online world. But with revenue, of any sort, tax is generally something that has to be considered.

If you have already lodged your income tax return but then realise you left something out, don’t panic. We can help you make an amendment with the ATO to make things right. In this issue we also look at the place private rulings can have in managing more complex tax affairs. We also examine the ins and outs of personal services income.

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Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

September 2018: Self Employed? You could claim a deduction for saving for your retirement

There’s a new option in place for self employed Australians to be better able to save for retirement, but another change to the superannuation rules (in the SMSF arena) could lessen the appeal of borrowing to invest.

We look at a GST apportioning option to cover private use, and also the compliance steps that may need to be taken should the “use” of an asset change. And we take a broad overview of tax and the stockmarket.

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Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

August 2018: Lodgement Rates & Thresholds Guide 2018/19

To save you having to laboriously search for the right tax rate or relevant threshold, the essential information is right here in one place.

This guide includes tax rates, offset limits and benchmarks, rebate levels, allowances, and essential super as well as FBT rates and thresholds (including current gross-up factors) and student loan repayment rates.

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Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

August 2018: Claiming Self-Education Expenses

They say that education comes with a cost, but that ignorance can cost you more. Self education is certainly worthwhile considering, especially as there can be tax breaks for the right sort of training.

SMSF trustees are generally family or friends, but that doesn¹t mean there won¹t be arguments along the way to greater wealth, so we take a look at how to best settle disputes. Another prompt for dispute is between deceased estate beneficiaries if a will doesn¹t satisfy expectations, so we examine how this can (sometimes) be rectified.

We also touch upon catching up on GST credits that have slipped through the cracks, and the exclusion clause the ATO has up its sleeve to deny a claim for a business loss.

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Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

July 2018: Retired and asset rich but cash poor? The pension loans scheme may help

Not every retiree has heard of the government’s Pension Loan Scheme, but it’s about time more people did. And with Tax Time now upon us, we run over some tips for your tax return.

 An integrity measure that businesses need to keep a close eye on, called Division 7A, is given the once over, as are the possible deductions available for insurance premiums, and we also provide a brush-up on partnerships in the form of a quick quiz.

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Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

June 2018: Managing tax disputes can be like wrestling with a superhero

It’s not uncommon for taxpayers to be in dispute with the ATO from time to time, and although the Tax Commissioner may seem invincible, this is not always the case. We look at the best approach to better your outcome.

At some stage, SMSF trustees will need to get their heads around the proportioning rule, so we run over the way this works. Also covered are the building and construction Taxable payments annual report, which is soon to be expanded to more industries, and a brush-up on statute barred debts.

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Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

May 2018: Federal Budget 2018

Undoubtedly the headline item from tonight is tax relief for individuals by lifting the 32.5% tax bracket to $90,000 from 1 July 2018 and the Government’s announcement of its intention abolish the 37% tax bracket in 2024-25. In the 2022-23 financial year we will also see the Low Income Tax Offset increased to $645 and the 19% tax rate from $37,000 to $41,000.

Health & aged care was a key focus for this announcement. In the build up to the budget, we heard that there will be no increase to the Medicare levy, as the National Disability Insurance Scheme (NDIS) has been funded from other sources of revenue. Whilst we do not know the exact details of where this extra money has been found, the abandonment of this proposed increase is certainly welcomed. The Medicare rebate is increasing by 55¢ for a visit to the GP after a four year freeze and the Royal Flying Doctors Service given an additional $84 million to expand its services.

The Government is also tackling the sin taxes in this year’s budget. After crackdowns in recent times on the black economy, the Government’s next project to recoup lost revenue is to establish a tobacco taskforce – expected to raise an additional $3.6 billion in additional revenue – to crack down on the “chop-chop” tobacco trade. With regards to alcohol, the excise charged on craft beer kegs over eight litres will be equalised. This is intended to level the competition between small craft breweries and large multinational beer producers.

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Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

May 2018: Franchise businesses and tax

Interest expenses on money borrowed to buy business assets can be deductible. However there are also circumstances, allowed under tax law, where deductions are still available after the relevant asset is disposed of. We run over the details.

We also look at the “work test” required for super contributions to be made for those over the age of 65. In this issue of your newsletter we also deal with tax and franchising, the basics of testamentary trusts, and have a quick quiz (with answers) on business deductions.

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Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

April 2018: New Child Care Package: What every parent needs to know

From 2 July 2018 the new Child Care Subsidy (CCS) is replacing the two current child care payments of Child Care Rebate (CCR) and Child Care Benefit (CCB).

The Australian Government is investing an additional $2.5 billion over four years to support the 1.2 million families who use approved child care.  The changes are to provide more support for more families and be targeted to those who need it the most.

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Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

April 2018: Bitcoin: Its place in your wallet or SMSF portfolio

There’s been a lot of buzz about bitcoin lately, so we thought it timely to run over the ins and outs of cryptocurrencies. Another phenomenon of the modern marketplace is the sharing economy, but care needs to be taken when dealing with businesses carried on via sharing platforms to ensure there are no hidden tax traps. We use Airbnb as an example.

Back on more familiar territory, we also run over the many rules and requirements when making commutation requests for your retirement income. And as buying online from overseas is so prevalent these days, we also take a quick look at related costs such as customs duties.

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Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

March 2018: Beware of who you share your benefits with

There’s a hidden danger lurking within the FBT rules that business owners should keep an eye on. Where a third party supplier is generous enough to include your employees, there’s a very real possibility that this could trigger a tax liability for that business. We run over this and other quirks of the FBT regime.
 
We also look at the need for valuations for SMSF assets, the looming Single Touch Payroll requirements, as well as when or if a business can use simplified trading stock rules. 

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Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

February 2018: Key Factors for Rescuing a Bad Debt Deduction

For a business owner, the issue of bad debts can be bittersweet — yes you’ve missed out on revenue, but at least there’s some tax relief. We look at the conditions necessary to access such consolation. On another financing matter, we touch on the particular considerations necessary when refinancing a partnership.

Property investors have recently lost eligibility to certain deductions, so we run over what’s changed. And also in the real estate arena, consideration is given to property development undertaken via an SMSF, as well as retention of the main residence CGT exemption where the land on which a primary residence sits expands through acquisition.

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Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

December 2017: The ins and outs of ''entertainment'' business deductions

Recent legislative changes mean that SMSF trustees need more than ever to stay aware of the value of assets, and makes the forced unwinding of an LRBA a more real possibility for many. We run over the practical aspects.

We also look at the top 10 tax mistakes that rental property owners can make, pick apart where car expenses stand in relation to novated leases, and clarify when (and where) the concept of “entertainment” sits with regard to the deductibility of certain events to a business.

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Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

November 2017: Tax and Christmas party planning

As it’s getting ever closer to the festive end of the year, we thought it prudent to run over the rules regarding Christmas parties and FBT. And borrowing money from a private company, even if it is your own business, can have serious pitfalls if not carried out correctly, so we look at the dangers of “Division 7A”.

There’s also an important distinction you may need to know between a travel allowance and the living-away-from-home allowance. We also look at how Australians are taxed on income that comes in from overseas.

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Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

October 2017: Look before you leap: the small business CGT concessions

The small business CGT concessions can be extremely valuable, but sometimes the complexity of the details can be confusing. We clear up some of the more obscure factors.

The rules around LRBAs for SMSF trustees have been fiddled with again, and necessitate (again) a look at the fine print. There is also a new statistical report on SMSFs that trustees should be glad to read.

Also dealt with are the differences between investment returns being on revenue or capital account, and what to do if you need to lodge your next tax return early.

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Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

October 2017: What the proposed housing-based super contribution initiatives offer

There were a couple of housing-based superannuation contribution proposals contained in this year’s Federal Budget, for which draft legislation has finally been tabled. We run over the finer details that have been revealed. 

And if you or anyone you know has considered driving an Uber car to earn some extra income, we have some essential information that you need to understand. However if you are already a higher income earner, note that a certain income threshold has recently dropped (by $50,000!) that may catch a lot of taxpayers unexpectedly.

We also look at immediate deductions for start-up businesses, and go over the car parking FBT exemptions for small business. 

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Please contact this office for clarification, or further advice, regarding this newsletter.

September 2017: Look before you leap: the small business CGT concessions

The small business CGT concessions can be extremely valuable, but sometimes the complexity of the details can be confusing. We clear up some of the more obscure factors. 

The rules around LRBAs for SMSF trustees have been fiddled with again, and necessitate (again) a look at the fine print. There is also a new statistical report on SMSFs that trustees should be glad to read.

Also dealt with are the differences between investment returns being on revenue or capital account, and what to do if you need to lodge your next tax return early. 

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Please contact this office for clarification, or further advice, regarding this newsletter.

August 2017: Travel allowances and the proper use of the exception to substantiate claims

Making claims for travel allowances is a handy deduction for many employees, especially as the ATO has seen fit to make an exception to substantiate these claims in many circumstances. However this consideration comes with a warning — get it right, or lose that exception. We run over the particulars.

Did you know that there are deductions that are specific to SMSFs? As usual however, there are conditions. We also look at deductions available for financing rental properties, the interaction between the new super transfer balance cap and child recipients of death benefits, and a tax break available for life policy bonuses held for a certain time. 

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Please contact this office for clarification, or further advice, regarding this newsletter.

July 2017: ATO waves a red flag on deductions for holiday rentals

The ATO is on the warpath over incorrect deductions that many taxpayers try to claim for holiday rental properties, so we take a look at the issues that have been grinding the taxman’s gears.

And if you’re going to soon make an appointment to complete your tax return, we’ve made a general checklist of things to prepare. By the way, you might also be able to claim the travel costs for travelling to see us — we share the particulars for eligibility.

Mobile, home phone and internet costs may be claimed under some circumstances, so we run over the substantiation that the ATO will accept to successfully make these deductions. We also present an overview of streaming trust capital gains and franked distributions. 

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June 2017: End-of-year tax planning tips for business

The end of the financial year is in sight, but businesses shouldn’t assume their 2016-17 tax outcome is set in concrete just yet — there are still some legitimate tax planning strategies that can help us help you not pay a cent more tax than you have to.

We also look at how to make good use of a tax loss, and discuss interest income and who is deemed to be assessable. Importantly for SMSF trustees, we also run over the newly minted transitional CGT relief measure that can apply when trustees comply to the new balance cap.  

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Please contact this office for clarification, or further advice, regarding this newsletter.

Federal Budget 2017-18

The budget announcements contain a suite of tax and superannuation measures aimed at increasing housing stock and improving housing affordability. While the government has not gone close to clamping down on the political and social hot potato of negative gearing, it has taken some steps to restrict the travel expense and depreciation tax breaks enjoyed by investors.

Last year, many individual taxpayers received small “cake and coffee” tax cuts (so called because they averaged around $6) which were touted as an important first step to addressing bracket creep; but one year later, the government announces that the Medicare Levy will increase by 0.5% to 2.5%, which will surely eat into those tax cuts (for those lucky enough to have received them).

Last year’s budget was one for small businesses. This year, the small gift is a one year extension of the $20,000 instant asset write-off for 2017-18. Unfortunately, the government will tighten access to the small business CGT concessions. 

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Be SUPER ready for 1 July 2017

On 1 July 2017 the biggest changes to superannuation in the last decade come into effect.

This guide outlines those changes.

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May 2017: The CGT implications of subdividing and building on the family property

There can be capital gains conundrums when sub-dividing the family property, so we run through the typical scenarios to dissect the likely tax outcomes. And another perennial head-scratcher is the deductibility of the interest payable on borrowed funds.

A GST exemption is available when a “going concern” business is involved, so we look at the conditions that must be met. And while the recent tax cut for some companies is welcome, thought needs to be given to the change in tax rates when dealing with dividend credits. 

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Please contact this office for clarification, or further advice, regarding this newsletter.

April 2017: Small business entity turnover thresholds to be increased to $10 million

On 3 April 2017, the Government changed the definition of small business from an annual turnover of $2 million to $10 million with retrospective effect from 1 July 2016.

Will this affect you and how?

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April 2017: Gumtree sourced assets, and the realities of making a claim

There’s nothing wrong with sourcing certain business assets through peer-to-peer websites like Gumtree or even a Facebook group. It’s when it comes to substantiating a tax claim that these sorts of transactions can end up being difficult. 

The ATO’s rules regarding deductions claimed for work clothing, or for laundering clothes, are fairly straight-forward, but there are a few grey areas that crop up now and then. 

We cast an eye over how simplified depreciation works for small business pools, and also look at the new “total superannuation balance” and what it means for your fund. 

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Please contact this office for clarification, or further advice, regarding any of the topics covered in this newsletter.

*Page 8 of this newsletter refers to a small business as defined for tax purposes as an entity with an aggregated annual turnover of $2 million.  The Government has just announced that this is to be increased to $10 million, with retrospective effect from 1 July 2016.

March 2017: Tax and the sharing economy

FBT and the provision of cars to employees continues to cause potholes in the road to smooth tax compliance for businesses. We run over the usual FBT return problem areas. Also, as the "sharing economy" is becoming more prevalent, the ATO has found it necessary to issue some guidance. 

A not-uncommon conundrum for many SMSF trustees is what to do when the fund is found to have breached the in-house asset rules. There are also some common misconceptions about these regulations that keep resurfacing. 

We also look at tax and dividend income, and run over the options for salary sacrifice arrangements. 

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter. 

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Please contact this office for clarification, or further advice, regarding any of the topics covered in this newsletter.

February 2017: Active vs passive assets and the small business CGT concession

There is a particular speed hump to negotiate when chasing one of the valuable small business CGT concessions, and that is if the asset involved is “active” as opposed to “passive”. We explain the difference. 

There are certain steps to take when tying up the loose ends when looking after a deceased estate, so we provide a 7 point checklist to help. We look at the pros and cons of electing to be a family trust, and also run over important changes regarding the assets test for pensioners. 

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter. 

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Please contact this office for clarification, or further advice, regarding any of the topics covered in this newsletter.

December 2016: Extend the festive cheer (but in a tax efficient way)

With the festive season close at hand, we look at the ways in which the spirit of giving can be extended in a tax effective way. 

We also look at the details we know so far about the new transfer balance account requirement for SMSFs, and the cap imposed on these accounts. And as the rules around the valuation of assets held under an SMSF have seen a lot of changes, we run over the more important points. 

Also dealt with is the luxury car tax, and the level of substantiation the ATO generally requires in regard to home office claims. Lastly we provide a brief run-down of FBT and a business's Christmas party, with a handy "decision tree" flow chart. 

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Please contact this office for clarification, or further advice, regarding any of the topics covered in this newsletter.

November 2016: Don't let a tax debt put you in a spin

If you have the unfortunate consequence of having a tax debt, there are certain steps that can be taken to help ease the pain. We look at the relief available.

Sometimes a valuation is necessary for tax purposes, but there are various ways to go about getting one. There are similarities also in getting deductions right — especially if these deductions are in relation to home office claims.

The ATO has spelled out the areas of SMSF compliance it will be focusing on for the 2016-17 income year. We run over the hot spots.

Please contact this office for clarification, or further advice, regarding any of the topics covered in this newsletter. 

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Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

October 2016: Travel to a workplace: what's in, what's out

A recurrent topic of inquiry when it comes to possible tax deductions is when taxpayers travel to a work location, and the eligibility or otherwise of certain claims for that travel. We unravel the complexities.

A start-up business is going to have to make a decision about the type of structure most suitable for their enterprise. But we also look at when a business ends, and the delicate topic of liquidation and what needs to be done when winding up a business.

The latest government announcements regarding superannuation are also dissected to see where SMSF trustees may be able to prepare for the future.

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Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

September 2016: $20,000 write off is only available for small business, unless ...

The small business community welcomed the government’s $20,000 instant asset write-off initiative from the last federal budget, but there is an added bonus hidden in the legislation that could open up the valuable deduction to a wider tax-paying cohort than just small business entities. We explain.

We also look at legal expenses that are allowable deductions, where interest on a loan taken out to pay a tax debt may be able to be claimed, and in a similar vein when refinancing a partnership can open up a deduction opportunity.

And if you are considering setting up your own self-managed superannuation fund, we run over the considerations you really need to pay attention to. 

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Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter. 

August 2016: Gumboots? check. Akubra? check. Tax Status?......    

It takes more than gumboots and a kelpie to qualify for some of the tax concessions available to primary producers, so we look at where hobby farms stand with regard to tax. And if you rent a portion of your home, there are certain things you will need to remember for your tax records.

Are you an SMSF trustee and heading offshore for an extended period? There are certain steps you will need to be aware of to keep your fund compliant. We also run over the tax and deduction consequences of volunteering, and even list some favourable ideas to keep in mind for when your tax refund is credited to your account.

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Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter. 

July 2016: Maximise your claim: Overlooked property deductions for investors

Property investors may be missing out on some valuable depreciation items (and did you know sometimes even the humble garden gnome can qualify), so we run over the sorts of assets you may be able to include.

We also look at what is on the taxman’s radar relating to work deductions this Tax Time, and also run over what you might need to bring in to your appointment if we’re completing your 2015-16 tax return.

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June 2016: Last-minute tax planning for individuals

Even though the current financial year is winding up, don’t assume that your 2015-16 tax outcome is set in concrete just yet — there are still some legitimate tax planning strategies that can help us help you not pay a cent more tax than you have to. In the same vein, we also list the top 7 tax tips for investors. 

SMSF trustees come in two flavours — corporate or individual. Deciding which is best for your retirement savings outcome requires careful consideration, so we have run a ruler over each. We also look at trust essentials, and explain the government’s Restart wage subsidy program that’s available for businesses. 

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May 2016: FBT exemptions under the radar

While a lot of the benefits a business can provide to employees will bring an FBT liability with them, this is not the case for every benefit. We look at what you can consider that are also FBT-free. And if staff are looking to salary package, we also run over the possibilities.

Have you already lodged a BAS but forgot to include an item? Don’t panic. There are ways around it, and we can help. We also consider the tax implications that can arise through making claims on a holiday house, and raise the delicate topic of cognitive decline among older SMSF trustees. 

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May 2016: Federal Budget 2016 wrap up

This year’s federal budget has a few sweeteners, but not so much that will turn anyone hyperactive. The welcome news is that the turnover threshold for classifying a “small business entity” will increase from $2 million to $10 million. The devil however is in the detail.

Disappointingly, the current $2 million turnover threshold will be retained for access to the highly valuable small business CGT concessions, while access to the small business discount for unincorporated businesses will be limited to a $5 million turnover threshold. This will undoubtedly create an administrative headache, but be assured that we are here to help you manage this. 

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April 2016: Business assets, personal use?

While your business might own some tempting assets, be careful when making use of these for your personal enjoyment, as this could trigger a tax liability. And if you are considering changing the structure of your small business, a new measure means you might in certain instances no longer trigger CGT.

SMSF trustees note; it is essential that you know the difference between a binding and a non-binding death benefit nomination, so we run over what these mean. And speaking of legacies, every successful business owner should ideally have a succession plan in mind.

We also look at travel expense claims, how these differ from the living away from home allowance, and also how the ATO is getting help from insurance companies to uncover undisclosed wealth. 

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March 2016: Employers: Beware "left-field" FBT liabilities

With the fringe benefits tax (FBT) season looming, it will pay to be reminded that FBT liabilities can also arise due to third party involvement. We underline the factors to keep watch over.

And with the ATO being ever vigilant on the characterisation of income, we also spell out where care needs to be taken regarding income you receive for providing “personal services”.

Thinking of transitioning your enterprise from operating as a sole trader to join the ranks of incorporated businesses? There’s more involved than just opening another bank account, and there are important taxation differences to keep in mind.

We also look at the difference between “repairs” and “maintenance” when it comes to claiming deductions on your rental property, and take a look at the conditions of release that must be satisfied if you’re ready to access your super savings.

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