Posted , June 30, 2015.

Personal Tax Guide End of Financial Year 2015From a personal perspective, other than charity donation receipts there could be plenty more to think of to maximise any tax returns

Take a look at each of the key tax time areas for what might help reduce tax in your case.

Superannuation

Making extra contributions to your super could help you come out on top. Salary sacrificing contributions (asking your employer to do it on your behalf) to your super account could reduce your overall taxable income, as these contributions are taxed at 15% rather than your PAYG rate. This is particularly relevant for those approaching or over 55 and thinking about retirement. There is discussion that these rules may change in the future, so if you can take any action now before the benefits disappear you won’t be kicking yourself later on.

Investors

Particularly geared towards those with investments in property, just a few things to think about are: prepaying interest on your loan to claim further deductions; if you’re thinking of refinancing your mortgage do so by June 30 as the costs are tax deductible; and bringing forward any needed maintenance expenditure before June 30.

Medical

Don’t forget to give your Accountant a copy of your Medicare Annual Summary information and Private Health Fund summary, if applicable.

Log Books

If you need to claim more than 5000 kilometres per year for using your personal car for work you will need to supply a log book detailing your usage. Details of each trip must include dates, odometer readings (start and end), total kilometres travelled and the purpose of the trip (eg visited client A at location X). If you haven’t kept a log book this year you can only claim 5000 as the maximum, so if you think you may have travelled further for work it is worthwhile starting a log book on 1 July.

Term Deposits

If you have a term deposit maturing before June 30, you can arrange to have it delayed until afterwards so your taxable income is lower.

Get Your Paperwork Together

Fees, losses, bank statements, property management statements, receipts, dividend statements, etc. – get all this in order sooner so that you’re ready to pass this on to your Accountant as soon as possible. The sooner your tax can be lodged the sooner any returns can be given back to you. But don’t just look at this as a time to lodge paperwork – be proactive and ask your accountant the ways that you can minimise tax for next year.

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Business End of Financial Year Guide 2015If you’re a business owner, the end of financial year should be geared towards putting your business in the best position tax-wise. Paying less tax on the profits earned, as well as other housekeeping issues, is the name of the game each and every year.

We have outlined the issues that we believe will be the most relevant to our business clients this year.

$20K asset write off

If you are a small business (with turnover under $2M) earning a profit and therefore paying tax, you may want to look into taking advantage of the new $20K asset write off announced in the recent budget in order to offset some of your obligations. However if you are breaking even or running at a loss, spending up to $20K on any new assets will not help your business in any way and will only result in more losses, as it is not a $20K cash in the hand deal and only applies as a deduction after considering your overall taxation position. So first decide if your cash flow can actually bear spending $20K before splashing the cash. In addition, bear in mind there are a few things that do not qualify for the write off (building and construction works, horticultural plants) and there does need to be a direct relationship between the purchase and your business (does a wholesale business need a grand piano, for example).

Other Deductions to Think About

Bringing forward any deductible expenses like repairs and maintenance or prepaying rent, utilities, wages or superannuation may help offset profits. Be sure to record odometer readings from business cars on June 30.

Bad Debts

If you’ve got some outstanding invoices sitting with clients, try to recover any bad debts before the end of June. If they are not recovered they can be written off and are a tax deduction. You do however need to prove to the ATO that you have taken reasonable steps to recover the debt, so document your process for each case.

Bonuses

Sign off any employee bonuses in writing, they do not need to be paid by June 30 but they do need to be recorded.

Depreciation

Review depreciable assets by following the ATO’s guide to the effective life of assets to help you calculate the depreciation rates of your assets.

The ATO Watch List

Review your expenses but be mindful that the ATO will be paying close attention this year to those who are accessing business assets for private use, such as high wealth individuals and SMEs. Some things they will be looking out for is overnight travel, motor vehicle expenses, and the use of phones, computer and electronic devices for work purposes. Make sure you can adequately prove with documentation (such as diary entries/logs) the breakdown of personal and work usage for each item and only claim the deduction on the work related portion.

Stocktake

Retailers and wholesalers with turnover of more than $2 million and a difference in value of more than $5000 between opening and closing stock need to undertake stock take at the end of each financial year. You are exempt if these conditions do not apply.

Unearned Income

If you have received income but not earned it, such as receiving a progress payment for work that will not start until after 1 July, you should defer this income.

Preparing Your Documentation for Your Accountant

Get your files in order so there is less back and forth and you don’t miss any important documents. This includes invoices, cash register tape, receipts, bank statements, loan statements, cash deposit records, list of creditors and debtors, list of depreciating assets, capital gains records, stocktake details, and anything that may be particular to your business. If you’re not sure, ask us.

Planning For Next Year

There are too many strategies to list here, and each case is individual, so talk to your accountant about how to best take advantage of your situation for tax purposes when you discuss your end of year return. Sometimes just a few small changes to the way you do things can make a big impact.

Posted , May 22, 2015.

Budget 2015 - BusinessesA ‘mixed bag’ is the only way we can describe this year’s Budget for individuals. Families, pensioners, workers and others will benefit from familiarising themselves with the changes so they can be best positioned when making their next move.

As with any Budget, these measures are subject to Senate approval before becoming law. We will update you as soon as each measure is enacted.

Those Using a Personal Car for Work

If you claim use of your car for work as a deduction, there is a shake up to these rules. No longer will you be able to claim up to 77 cents per kilometre, 12% of the original value of the vehicle or 1/3 of actual expenses. The new method will be a flat rate of 66 cents per kilometre regardless of the type of vehicle. If you use a larger vehicle you will likely lose out, however if you have a smaller ride you are likely to be better off.

Those Looking to Start a Business

If you’ve always wanted to venture out on your own, the professional costs involved with setting up a business, including legal and accounting, will become immediately deductible rather than written off over 5 years. Coupled with the small business tax cuts and $20K write off, there is perhaps no better time to start a business than now.

Job Seekers

Both older and younger workers will benefit from this Budget. For younger workers, the Budget includes an incentive to businesses to employ young people with up to $6,500 in wage subsidies over 12 months. Employers of job seekers over 50 will be able to access the wage subsidy payments of up to $10,000 over a 12 month period rather than 2 years as proposed in last year’s Budget.

Parents of Children in Childcare

New subsidies based on the percentage of the actual fee paid up to an hourly cap ($11.55 for day care) will replace the current system. This will help parents better afford childcare, as families earning up to $65,000 will receive a subsidy of 85% and families earning above $170,000 set to receive a 50% subsidy.

New Parents

Those taking Parental Leave pay from the Government and their employer will no longer be eligible to receive the Government payment from 1 July 2016. This may reduce the amount of time new parents are able to spend at home with newborns, meaning they need to go back to work earlier and will be accessing the improved childcare payments sooner rather than later.

Pensioners

Another ‘mixed bag’ is the change to pensions, with those on part pensions receiving an increase of $30 per fortnight whilst other pensioners face losing payments altogether. The number of individuals eligible for the pension is also likely to change, with the value of assets a pensioner can have (in addition to the family home) while still receiving the full pension rising from $202,000 to $250,000 for singles and $286,000 to $375,000 for couples.

However part pensioners who own more than $823,000 in assets as a couple (in addition to the family home) will no longer qualify for the pension. This level is down from $1.15M. For singles, the threshold will drop from $775,000 to $547,000. These changes will come into effect on 1 January 2017 should they pass through Parliament.

As a small win, those no longer eligible for the pension will still be entitled to a Commonwealth Seniors Card or Health Card.

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Budget 2015 - BusinessesThis year has delivered a surprisingly positive Budget for businesses compared to those of previous years. We welcome this news as a step in the right direction, after all with small businesses employing around 5 million Australians, the positive flow on effects and potential for employment growth are significant.

With many policies announced, including measures to encourage start-ups, the cutting of red tape for small business and FBT exemptions for electronic devices, we have decided to zero in on a couple of key announcements. Read on for everything you need to know about the two most exciting and relevant policies – the tax cuts and write off concessions.

Tax Rates Slashed for Small Businesses

If you’re a company with less than $2M in turnover, expect a 1.5% cut in the tax rate to 28.5% from 1 July 2015. This will benefit 780,000 incorporated small businesses across Australia. As an example of how you could benefit, if your business earns $1.9M per year with a taxable income of $300,000, the tax would fall from $90,000 to $85,500, saving $4,500.

If your business is set up as a sole trader, trust or partnership, you will not be eligible for this 1.5% tax cut. Instead, you will receive a 5% discount (capped at $1,000) on income tax payable on the business income received from an unincorporated small business entity, provided the annual turnover is less than $2M.

Write Off $20K

Small businesses with less than $2M in turnover will also be able to write off assets of less than $20,000, up from $1,000. These assets are defined by the government as ‘capital equipment’, so items like machinery and equipment will become a deduction in their first year rather than spreading these deductions out over the lifetime of the asset.

Once passed as legislation, this will apply to each asset under $20K purchased from 7.30pm on 12 May 2015 until 30 June 2017, so it is wise to start thinking about what will most benefit your business so you can act quickly once this measure is confirmed. Remember it is not restricted to only one purchase worth $20K, but can apply to all assets under $20K, so if you have multiple items in mind take this into consideration.

This measure is a huge boost to not only small businesses needing to invest in equipment, but suppliers who offer equipment from coffee machines to printers and even software. This sector has been stagnant in recent years so they can expect a much needed lift for the next 2 years.

Posted , February 17, 2015.

ASV Partners has grown – in all the right ways!

Merging with David Hindle & Associates, we now have an additional five accountants to service your needs.  With over 30 years’ experience, the David Hindle team brings skills and knowledge along with the same sense of high quality service that ASV Partners is renowned for.

As a practice, our combined expertise in self-managed superannuation, taxation, business advisory management, auditing and bookkeeping means your business and personal taxation requirements are all covered.

You may ask why we needed to add to our already dynamic and skilled team of accountants and administrators? The answer is growth – for both you and us. Our team is highly experienced but youthful enough to have great ambitions; merging with a like-minded accounting practice will help us deliver an even greater depth of experience and broader skillset to help you grow your business and personal wealth.

At ASV Partners we strive to deliver optimal customer service whilst producing the best results.  Our team is constantly looking to develop their professional capabilities and be recognised for its strong ethics and integrity.  The merger of ASV Partners and David Hindle & Associates will produce a technically sound team of client-oriented professionals who are keen to share their knowledge and learn from each other’s experiences. The recipients of this shared know-how are you – our valued clients.

Posted , October 26, 2013.

We’ve got some good news for your business. You may be eligible for a 150 % tax deduction from the Australian Government. 

Could your company be eligible for some cash back from the government?

As of 2012, the ATO’s research and development (R&D) tax concession has been replaced with the R&D tax incentive.

The R&D tax incentive offers refundable or non-refundable tax offsets to encourage R&D – which means more money for your innovation programs.

You may be eligible for a refundable tax offset of 45% off your R&D spending as part of your income tax return if you are:

  • A small to medium enterprise
  • Have an annual aggregate turnover of less than $20 million;
  • Are not controlled by income tax exempt entities.

That’s a deduction of 150%.

A 40% non-refundable tax offset will also be available to companies with an annual aggregate turnover of $20 million or more.

That’s a deduction of 133%.

Unused offsets may potentially be carried over for use in future income years.

What can ASV Partners do for you? 

We offer expert accountancy and taxation advice to a range of aspiring SMEs and individuals. We offer a no obligation quote to determine your eligibility.

And we won’t charge you if your entity does not meet the criteria. 

Call us today on (03) 9587 9747 to find out whether you are eligible.

Posted , July 28, 2013.

Taxpayer’s Duty

The ATO is putting increasing assurance upon self-assessment by taxpayers and expects auditing most taxpayers at some stage. Most claims lodged in your return are accepted on lodgment but are potentially subject to later review with increased penalties being applied should there be an underpayment of income tax, even if it is accidental. As a result, a greater responsibility is placed on taxpayers to ensure that Income Tax Returns are accurately prepared and contain no misleading statements or information.

We therefore advise that before signing, you carefully review each return to ensure that, to the best of your knowledge, the following have been addressed:

  • That all the claims for deductions and rebates that have been included, are based on your instructions
  • That all deductions claimed can be sustained by the required records and receipts
  • That all statements are correct, complete and not misleading

Furthermore, the Income Tax Assessment Act requires that where items are used for both business and private purposes, appropriate apportionment documents to verify business usage need to be kept and that written evidence must be kept for at least five years.

If an answer to a question or any statement made in an Income Tax Return, or an attached schedule, appears to be incorrect, incomplete or misleading, please advise us so the return can be amended before lodgment.

Please do not hesitate to contact our office on 9587 9747 should you wish to discuss the above.