Have you missed out on the $100,000 super stategy? There is still time to benefit if you act before 30 June 2009.
In order to save money the maximum concessional contributions were reduced from $100,000 to $50,000. Now a $50,000 tax deduction is still a benefit but not as good as $100,000.
You may now be paying as much as $30,000 dollars a year too much in tax by not using the super strategy.
Depending on your circumstances you may also be able to get the super money back without it being locked up in super or if you have your own self managed superannuation fund be proactively using the money to grow your wealth.
Its a great tax strategy, which is why the Government wanted to save money in the budge by making it half as attractive after 30 June 2009, but there is still time to get the maximum benefit, save the most amount of tax and there is stll benefits after 30 June.
I think its pretty short sighted by the government however as the idea was to save for retirement rather than relying on the government for the age pension. A bit like giving money away before the budget and then taking it back after the budget.
Shortly I will be announcing some information seminars to what you should be doing before 30 June 2009 to legally keep the biggest amount of your money. If you would like to be notified put your name and email address in the free resources and updates boxes on the top left.
Regards,
Regards,
Glenn Wallace
Business Adviser
Chartered Accountant
CPA
Australian Registered Tax Agent
Superannuation
The government is looking to boost business investment, bolster economic activity and support Australian jobs.
The Investment Allowance forms part of the government’s $42 billion stimulus package.
At the time of writing this the investment allowance legislation has not been passed yet so the following may change.
If you are a business with turnover of less than $2 million dollars and you spend $1,000 or more (or enter into a contract for $1,000 or more) on some new eligible equipment between 13/12/08 and 30/06/09 and it is reasonable to conclude that the asset will be used principally in Australia for the principal purpose (not apportioned for private use) of carrying on a business you can claim an additional 30% tax deduction in the business income tax return for the year ended 30 June 2009.
This is a 30% tax deduction not a tax rebate. For example, in a company, the tax you get back from spending $3,000 on new equipment is $270 ($3,000 x 30% x 30%) not $900 ($3,000 x 30%). This is a common misunderstanding.
The equipment must be new and you should normally be able to claim depreciation on the equipment. Land, intangibles and trading stock are specifically excluded. Cars that you claim the 12% method are included. More examples of ineligible equipment: intangibles such as computer software and intellectual property rights, cars using the cents per kilometer method, capital works such as building construction expenditure and earthworks also special deductions such as water facilities.
The expenditure can also be capital expenditure on existing assets.
If you acquire the asset between 1/7/2009 and 31/12/2009 and its installed and ready for use by 31/12/2010 you can claim an additional 10% tax deduction instead of the additional 30% tax deduction if you buy on or before 30/6/2009.
If the annual business turnover is greater than $2 million dollars then you must spend more than $10,000 on equipment to be eligible for the investment allowance.
In addition to what may change as a result of the current debate in parliament one line in Tuersday’s Treasury Press Release should be highlighted.
It indicates that not every “Working Australian” under $100,000 is going to get something.
“The bonus will be available to Australian resident taxpayers who paid tax in the 2007-08 financial year after taking into account available tax offsets and credits.”
So this seems to be saying that, for example, if you gave a large donation and claimed it as a tax deduction and as a result you didn’t have tax to pay you may miss out on the bonus.
Anyway, all will be revealed when the legislation is finalised and published.
Any questions please feel free to contact me on 02 9585 9585 or make comments below.
Regards,
Glenn Wallace
Business Adviser
Chartered Accountant
CPA
Australian Registered Tax Agent
Superannuation
Working Australians who have a taxable income in their 2007/2008 income tax return and paid tax after taking into account tax offsets and credits.
Up to $80,000 – $950 tax bonus
above $80,000 to $90,000 – $650 tax bonus
above $90,000 to $100,000 – $300 tax bonus
What You Need To Do
- Lodge your 2007/2008 income tax reurn by 30 June 2009.
- Check that the bank account you provided last year (or postal address if no bank account given) is still current or if you have already lodged your incone tax return for 2007/2008 ensure that the bank details given (if any) or postal address are still current. This is the account the money is to be paid into or teh postal address the cheque wil be sent to.
- The payments are planned to start in April 2008. If you want the tax bonus to go to a different bank account or postal address so that you actually receive the tax bonus you need to call the ATO on 1300 686 636. If you have already lodged your tax return you need to change the details by mid March.
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Single Income Family Bonus
Families who are eligible for Family Tax Payment Part B on 3 February 2009 will receive the Single Income Family Bonus.
Payments made automatically by Centrelink on March 11 2009.
If you claim the Family Tax Benefit part B a s a lump sum payment you should receive it after your 2009 income tax return is processed.
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Back To School Bonus
Families who are eleigible for Family Tax Payment Part A on 3 February 2009 may receive $950 tax bonus for for each eligible child of school age (aged 4 to 18 on 3 February 2009).
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If you have any questions etc please feel free to call me on 02 9585 9585
A tax appeal last November resulted in a self managed super fund become non complying. The trustee decided that to appoint an auditor was too expensive and the few transactions didnt warrant keeping of accounting records. The ATO issued a notice deemingt the fund to be a non-complying superannuation fund. A possible consequence of ths is that the assets of the fund can be taxed at the maximum personal marginal tax rate.
No matter how small the fund or few transactions you still need to keep accurate accounting records and produce financial statements and have them audited.
Regards,
Glenn Wallace
Business Adviser
Chartered Accountant
CPA
Australian Registered Tax Agent
Superannuation
It doesnt matter what tax strategies you have implemented or how you have structured your business, if you don’t have an effective and efficient way of recording all your expenses you will end up paying more tax than you need.
Alot of small business owners hate, and I mean really detest, having to look after the financial side of their business whether they do it themselves or not. This could be you.
However in order to ensure you are claming the maximum amount of tax deductions and therefore paying the lowest amount of tax you need to record them. You also need to record them in a way that is acceptable for the Tax Office.
Regards,
Glenn Wallace
Business Adviser
Chartered Accountant
CPA
Australian Registered Tax Agent
Superannuation
I read Michael Campbell’s newsletter the other day and he talked about Business Secret #1. I thought I would share it with you.
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Business Secret #1
The first thing to do is separate your business and personal accounts. Evenif you’re not incorporated and don’t have a company account, use separate cards for each.
Use your Gold card for business and your Silver for personal. That way, if you ever get audited, you’ll have clean records for the tax man to look at.
That triggers or flags an audit? Sudden jumps in income, deductions, travel or complaints. If you trigger a flag, you’re 3-5 times more likely to get audited if you, or a “bookkeeper” did your taxes.
Look for and hire a professional. In Canada they’re called CGAs. In the US they’re CPAs. In the UK they’re CCAs. These professionals – and others like them – are held accountable for their accounting. They must abide by the rules of their associations and the government.
Get one and you won’t lose any sleep over your taxes.
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So Business Secret #1 is to get a Professional Tax Accountant.
Regards,
Glenn Wallace
Business Adviser
Chartered Accountant
CPA
Australian Registered Tax Agent
Superannuation
There has been talk about a 20% tax break for the December Quarter BAS. Could this be a Cbristmas New Year present? Its actually a deferral not a cut.
Its only in relation to the income tax paid in advance, known as Pay As You Go Instalment (PAYGI). This is paid as part of your BAS payment for December. Normally the income tax in advance is calculated by the Tax Office as a fixed amount or as a certain percentage of your income ex GST.
According to the Prime Minister the 20% reduction is available to small businesses with annual turnover of less than $2 million. This effects about 1.2 million businesses. It is not that significant in that you can reduce the instalment manually in some cases in any BAS statement.
Here are some extracts from the press release.
“While there is a tolerance in the existing provisions that allows taxpayers to vary instalments down of their own accord, many small businesses are reluctant to do so, especially those with unpredictable income streams. This action by the Government will reduce uncertainty for those small business taxpayers and relieve them of the cost of doing their own calculations.”
and another extract outlining how it will apply
“How will it apply?
The 20 per cent reduction applies to the instalment amount shown on the Business Activity Statement (BAS) dispatched by the Australian Taxation Office (ATO) in December 2008 for the quarter ending on 31 December 2008. This instalment amount is due on or before 28 February 2009 (which will be extended to 2 March 2009 as 28 February 2009 falls on a weekend) for most small business taxpayers. For some small business taxpayers (for example, small businesses which elect to report and pay the goods and services tax on a monthly basis), this due date is 21 January 2009. As such, for the quarter ending 31 December 2008, small business entities are only required to pay 80 per cent of the instalment amount shown on the BAS on 21 January 2009 or 2 March 2009.
Small businesses can further vary their instalments based on the reduced amount in accordance with the existing law.
This reduction does not apply to taxpayers who calculate their instalments based on the instalment rate notified by the ATO. Their payments will automatically adjust when they apply the given rate to their actual income for the quarter.”
If you have a cash flow issue this will be welcome, however you still have to pay the tax at the end of the year.
So not really a present but maybe a gift which has to be returned.
Regards,
Glenn Wallace
Business Adviser
Chartered Accountant
CPA
Australian Registered Tax Agent
Superannuation
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