15 August 2017

In the 2015-16 federal budget, the government increased the small business immediate deductibility threshold from $1,000 to $20,000, which was originally due to end at June 30, 2017. But a law amendment bill has recently been passed by Parliament that extends that measure by 12 months until June 30, 2018, after which the deductibility threshold will revert to $1,000.

Continue reading “Accelerated Depreciation for Small Business” →

15 August 2017

he concept of a “sharing economy” has been around for long enough now to have had a very real impact on how we transact. Think Uber, think Airbnb.

By now, most people will have realised that the “sharing” part of the concept does not refer to an absence of any monetary exchange, but rather to the use and access of shared physical or human resources or assets. The means of these transactions is usually conducted online, and there are many who therefore argue that rather than “sharing economy” a more accurate term that could or should have been adopted would be “access economy”.

Continue reading “Tax and the Sharing Economy” →

15 August 2017

If you’re coming in soon to discuss your tax return for yourself or your business, try not to turn up completely empty handed, or at least to turn up prepared with some records or electronic access to them.

To “be prepared” is not just a great scouting motto, but a wise approach for everyone, especially at Tax Time. It will also save a lot of time and effort for both yourself and for us.

If you are a new client, it is always smart to arm yourself with last year’s tax return or access to it if online. This should have your personal details, tax file number, income streams, tax offsets, deductions, and other relevant information previously claimed. Also have your bank account details in the event that you’re entitled to a refund.

Continue reading “Be Prepared: What You Need to Bring to Your Tax Return Appointment” →

5 August 2017

The ATO recently issued what it calls a “tax determination” which more clearly spells out the circumstances of what may be an allowable claim (under the general heading of “managing tax affairs”). The fact that you can deduct the fee that we charge you is the most widely known of these allowable deductions, but not everyone is aware that you can also make a claim for the costs of travel you incur where the purpose of the journey is to have your tax return prepared.

The Taxation Commissioner’s view, as stated in the tax determination, is that such costs should be deductible. But, as with deducting the fee charged for such professional services, a non-negotiable stipulation is that the task must be carried out by a “recognised tax adviser”.

The costs included in allowable claims (that are involved with managing tax affairs) include accommodation, meals, public transport fares and even travel insurance. Continue reading “Claiming the cost of travelling to our office to manage your tax affairs” →

24 June 2017

The ATO allows certain taxpayers to claim a deduction for the cost of buying and cleaning occupation-specific clothing, items of protective wear and for certain unique, and usually distinctive, uniforms.

To claim a deduction it is generally expected that you will be able to provide evidence that you purchased the clothing concerned, and will have diary records or other evidence of your cleaning costs.

If you receive an allowance from your employer for clothing, uniforms, laundry or dry-cleaning, it will be necessary for us to show the amount of this allowance on your tax return.

Continue reading “Getting deductions for clothing and laundry expenses right” →

2 June 2017

The general rule is that you can claim deductions for expenses your business incurs in its task of generating assessable income. Many of these deductions are obvious – rent, materials, supplies and so on — but there are also some less obvious options left available just before the end of the income year, should your circumstances suit, to further reduce your enterprise’s tax burden for the year.

Continue reading “End-of-year tax planning tips for business” →

8 March 2017

The provision of cars by employers to employees remains an issue that continues to create confusion for some business taxpayers. A not-uncommon situation is where the employer fails to identify that a car fringe benefit has been provided.

This is typically found in family companies or trusts where a car bought by the business is provided to one of the owners who is also an employee (or that person’s “associate” – say a spouse or child).  Remember, a director is still considered an employee.

The ATO in the past has undertaken data matching activities with state base road registration authorities to identify newly registered vehicles under a company or trustee’s name and issue amended assessments where the car has been provided to an employee (or an associate of the employee).

Continue reading “FBT and Cars Explained” →

8 March 2017

There are certain behaviours, characteristics and tax issues that the ATO admits will attract its attention. But as it is more interested to see taxpayers get things right rather than the bother, and expense, of chasing down every misdemeanour, the ATO has spelled out the areas that most concern it — that is, the incidents or details that are more likely to raise a red flag.

Broadly, the following behaviours and characteristics may attract the ATO’s attention:

Continue reading “What Attracts the ATO’s Attention?” →

8 March 2017

Salary sacrifice can be a great way to get a part of your remuneration in a form other than cash – and not personally pay tax on it.

Salary sacrifice (or salary packaging) is where you agree to take part of your wage as a benefit of some kind, equal in value to the salary it is exchanged for. The upside in you doing this is that your income tax is then based only on the reduced amount of salary that results.

If your employer agrees to go into a salary sacrificing arrangement with you, the benefit you get should of course be equal to the GST-exclusive value to the portion of salary that you give up, plus any FBT that is payable by your employer. Options that may be allowed by your employer include a car, shares or payments for your expenses, such as school fees, child care or home internet connection costs for example.

Continue reading “Can Salary Sacrifice Work for You?” →

8 March 2017

From January 1, 2017, the assets test free area and taper rate for pensions increased. The assets test works by reducing a person’s age pension payment for every dollar of assets owned over a certain value. The test takes into account most assets, including any property (except your primary home) or possessions owned, or partly owned, in or outside Australia.

The assets test is one of two means tests used by the Department of Human Services (Centrelink) to determine your age pension eligibility, the second being an income test. The results of these tests that produces the lowest pension payment (or zero) is then applied.

The asset test free area is the amount of assets you can have without affecting your pension. Centrelink will reduce your pension by $3 each fortnight for every $1,000 of assets you own over the assets test free area. This is the taper rate. Before January 1, this rate was set at $1.50 (so it has therefore doubled).

Continue reading “Recent Changes to the Assets Test for Pensioners” →