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Checklist – What to bring to your Tax Return Appointment

If you’re coming in soon to discuss your tax return for yourself or your business, come prepared with some records or access to them to help us with the preparation. Being prepared is not only wise, but saves a lot of time and effort for both yourself and us.

If you are a new client it is always smart to arm yourself with last year’s tax return. Also bring your latest bank account details in the event you are entitled to a refund.

If you use an online accounting solution, all or most or your data should be available online for us to access. Most packages capture business transactions, and allow you to record data in real-time and in a format that we understand (as well as giving us access to it 24/7 so we can work on your return after the appointment is over).

Here is a brief general checklist of things to prepare for your tax return appointment. Not all of the following will be relevant for everyone, and will depend on your circumstances, but as a checklist it should help you tick off what you do or don’t have in preparation for your return.

We will work through every allowable tax deduction available for you and /or your business. Don’t forget to ask us what tax incentives are available to you which may work to increase your tax deductions.

Income:
• PAYG Summaries from employers
• Bank statements for any interest received during the financial year
• Distributions from trusts, partnership, managed super funds
• Allowances (car, travel, entertainment, meals etc.)
• Government pensions and allowances
• Capital gains – e.g. sale of shares or property
• Foreign income
• Dividends
• Personal services income
• Net income/loss from business
• Rental income – e.g. from investment property
• Lump sum termination payments
• Superannuation lump sum payments
• Any shares / options received under an employee share plan

Expenses for tax deductions:
• Motor Vehicle expenses based on business use percentage and kilometres travelled (include your log book if applicable)
• Travel and accommodation information – domestic and overseas
• Work uniforms and other clothing expenses
• Courses, education and seminars
• Home office expenses
• Computer, software and repairs
• Tools and equipment
• Employee costs
• Superannuation contributions
• Rent/Lease payments
• Interest paid – on investment property
• Dividend deductions
• Bank Fees
• Low value pool deductions / depreciation
• Telephone and internet costs
• Freight and transport coasts
• Utilities – electricity, gas, water
• Legal and accounting fees
• Donations
• Income protection insurance
• Details of any asset purchases
• Childcare expenses

If you’re a business:
• Bank and credit card statements
• Lease, hire purchase, chattel mortgage or other loan agreements to your business
• Business Activity Statements and Instalment Activity Statements and working papers
• Post – June stocktake valuation figure

Note:
Keep receipts for all expenses and tax deductions you are claiming for your business. Scan and file them electronically so they’re accessible should you need them for audit purposes. Also bring your health insurance statement.

Top Last Minute Tax Planning Tips – 2017 Tax Year End

First, for all of you with a Discretionary Trust … as you know your annual Trust Income Distribution must be implemented before midnight on 30 June. And remember, once 30 June has passed it is too late to make a change!

Make an appointment now to prepare for year end to ensure you have minimised your tax – Call 07 3245 1466 or email info@tbctax.com.au today or simply click here.

Year End Tax Planning for Business Owners –

The Company Tax Rate continues to fall (for some)

This year, for Companies that qualify as Small Businesses, the tax rate is 27.5% (down from 28.5% last year and down from 30% prior to that). And the number of Companies that qualify as Small Businesses has substantially increased. Last year turnover had to be under $2 million. This year the threshold has increased to $10 million.

Next year, the threshold increases all the way to $25 million! So even more companies will qualify for the lower rate of 27.5%.

If your Company’s business turnover is expected to be close to the $25 million threshold next year, there could be an argument for bringing forward some revenue into this year, to ensure qualification for the lower rate next year.

Non-Companies also continue to get a Tax Saving

The still relatively new Tax Discount for Non-Company Small Businesses continues this year and next both at 8% (with a cap of $1,000). Your turnover needs to be under $5 million to qualify, so if you are close, consider deferring income to ensure qualification.

Company Tax Changes Could However Catch You Out

With the reduction in the company tax rate changes have also been made to the way dividends are franked. In short, there are less tax credits attached to your dividends then there used to be if you qualify for the lower tax rates. So keep this in mind if you have been budgeting on receiving credits at the old rate.

$20,000 Instant Asset Write-Off

In this year’s Federal Budget it was announced that the instant deduction for eligible assets costing less than $20,000 would be extended to 30 June 2018, but as things stand this isn’t yet law. So there is a chance 30 June this year could be the last opportunity to take advantage of this very valuable opportunity.

Having said that, PLEASE, don’t just buy assets you don’t really need in order to obtain the tax saving! For every dollar spent at best you will save 49 cents in tax, so you are still out of pocket and accordingly the item you acquire best be needed.

This particularly applies to motor vehicles. Don’t just buy one you don’t need to save tax, you will still lose!

Having said that, if you know you will need to purchase assets in coming months anyway, including motor vehicles, that will cost less than $20,000 then there is a strong argument to bringing the purchase forward (there are exceptions to what assets qualify, so if in doubt please get in touch).

And remember …

If your business is registered for GST, the $20,000 test applies to the GST exclusive price. So generally that will mean the purchase can cost as much as $21,999 including GST (so long as the GST is a full 1/11th, just remember to check, especially in the case of motor vehicles).

Super Contributions – Watch those Contribution Caps

You all know we feel super is the most tax effective place to accumulate long term passive wealth, and this remains the case despite all the negative press over the past year related to law changes. So if you pass the 10% Employment Income Test, or you operate via a business structure, give serious consideration to topping up your contributions for this year before 30 June.

Just ensure …

Your fund MUST receive (so not just you must have paid) the contribution before 30 June (this is a strict deadline, though if you don’t have a Self-Managed Super Fund be weary of your corporate funds business rules and earlier cut off dates).

And …

You do not want to go over your Contribution Caps. $30,000 for individuals under 49, $35,000 for those 49 and over!

Employee Superannuation Contributions

Remember superannuation contributions made on behalf of your employees are only tax deductible when paid (UNLESS they are paid late, which means they are not tax deductible at all so don’t be late)! Your June quarter contributions are due 28 July, so why not bring them forward 28 days and get them paid before 30 June, providing that extra tax deduction this year?

Loans from your Company

Have you borrowed money from your Company (ie. that hasn’t been paid to you as a Salary, Wage or Dividend)? Then you need to make sure you have a Division 7A Loan Agreement in place! Similarly, if you had a loan from your Company last year it will need to be (at least partly) repaid this year which will almost certainly add to your tax bill, so let’s plan for this now.

Dividends from your Company

If Dividends are to be paid from your Company this year (ie. perhaps in relation to your Division 7A Loan above) you need to ensure your Company has enough Franking Credits before 30 June so that your Dividends can be Fully Franked. This may entail prepaying your June Pay As You Go Instalment.

Personal Services Income

If you derive Personal Services Income and you have not yet meet the 80/20 test, is there a way to do so before 30 June?

Utilise Your Tax Losses

If you have entities in your group that have current or prior year losses, you need a strategy in order to get income into them to soak up those losses and reduce tax to be paid elsewhere. Don’t get caught with a tax bill when you have unused losses going to waste.

Planning on Salary Sacrificing Next Year?

You must have a formal salary sacrifice agreement in place with your business BEFORE the sacrifice can take place, so get it done ready for 1 July. Note: this includes for those who intend to make extra super contributions for themselves from their business.

Trust (Income) Distribution Minutes

Mentioned above, but a reminder, you have to decide how your Trust income will be distributed BEFORE 30 June, and you can’t change your mind later. So make sure you know how much the Trust has earned and how much it’s Beneficiaries have earned, so you can get your income splitting strategy right now.

Is It Time to Consider Restructuring Your Business

Some substantial tax benefits can potentially be accessed via a restructure. In particular significantly reducing the capital gains tax you will pay in the future in the event of the sale of your business and/or related assets. If you are serious about wanting to pay the absolute minimum amount of tax possible, talk to us about investigating the benefits of a reorganisation of your affairs.

Avoid a Hit to your Credit Rating

Less a tax planning matter, more a warning regarding maintaining your Business’ good credit rating. As of 1 July, the ATO will commence reporting poor tax compliance to credit reporting agencies. Owing tax has always been stressful, now it could seriously impact your business’ ability to receive loans and other funding in the future as it will now impact your credit rating.

Year End Tax Planning for All –

For both business owners and employees alike, the basics still apply –

This year will see the last of the Budget Deficit Repair Levy being the extra 2% tax those earning more than $180,000 pay. So next year those individuals will have a tax cut of 2% creating even more incentive to get this year’s income down at the expense of an increase to next year’s income. So as usual …Look to defer income till next year, look to bring forward expenses. If you lodge on a Cash Basis (rather than Accruals) or are an employee, you must have physically paid the bill before 30 June for it to be deductible (that includes Accounting Fees by the way). Further, if you are an employee or currently a Small Business (under this year’s $10 million turnover threshold) you can claim prepaid expenses so long as the prepayment is for a period of not more than 12 months of services.

Planning on buying new plant & equipment related to business or work soon? Consider making the purchases before 30 June (even if you don’t qualify for the $20,000 Instant Asset Write-Off above).

Planning on doing some repairs & maintenance soon? Again consider bringing it forward to before 30 June (even if you just pay for it in advance),

If you have a Motor Vehicle make sure you have a log book capturing all your business/work related travel,

Own an investment property? Make sure you have a Property Depreciation Report. Also …Consider prepaying interest on your related investment loan,

Looking to sell, while the strategy could come with risks, if you will be selling at a profit consider holding off on accepting any offers until after 30 June.

On that note, consider delaying the sale of any assets that would have a capital gain until after year end, while considering bringing forward the sale of assets that will have a capital loss. Particularly if you already have a capital gain, selling under-performing assets at a loss could help offset the tax payable on your gains (though be careful of wash sales).

Considering making an investment in a Start-Up Company? Without rushing your decision, it could be well worthwhile doing so before 30 June. Investments in Early Stage Investment Companies (ESIC) can provide a 20% tax offset (capped at $200,000). Non-sophisticated investors may also benefit but they may only invest a maximum of $50,000. (Note: Capital Gains may also be disregarded if the shares are disposed after 12 months but before 10 years though this won’t help with this year’s tax.) Various criteria apply to ensure the company is an ESIC so do get in touch if you are thinking of going down this wealth building path.

Do you have Private Health Insurance? If you are over the threshold but don’t have the cover in place before 30 June, next year you could be hit with the Medicare Levy Surcharge the cost of which is often similar to the cost of the cover itself. Also, make sure you review your entitlement to the Private Health Insurance Rebate, if you continue to pay your premiums on the basis of qualifying, but then when you lodge your tax it turns out you don’t, you will get a nasty surprise bill requiring you to repay it!

Consider your Pay As You Go Instalments. Your last one for 2017 will be due in July. If you can estimate your tax position for this year now, perhaps you can vary your July Instalment down to ensure you haven’t over paid.

Make an appointment now to prepare for year end to ensure you have minimised your tax – Call 07 3245 1466 or email info@tbctax.com.au today or simply click here.

Top Tips for Effective Tax Structures

Grab a coffee and your notebook and settle in for some expert advice on effective tax structures – especially if you are a sole trader looking to expand…

For established and growing small business you are likely to outgrow a sole proprietor business/tax structure and be looking at a more sophisticated structure that can be established for both asset protection and taxation purposes.

We will discuss the advantages and disadvantages of the following three business/tax structures:

• a partnership of family trusts
• a unit trust, and
• a private company

Partnership of Family Trusts

For more than one partner a Partnership of Family Trusts is a sophisticated and well balanced structure. In this structure two family trusts, for the two practicing partners, are empowered to operate by two trustee companies respectively. It’s important to have brand new trusts and companies for this structure for asset protection purposes. This is a Partnership so it will be administered under Partnership Law meaning there is joint liability for the trusts running the business. If the business fails, for whatever reason, and interested parties start chasing monies or claims outstanding to them, they are allowed to look at the assets in each trust to recover their claim. As a result we recommend these trusts deal with the business only and no private investment assets should be bought in these trusts.

For operational simplicity a Company Manager will often run the business on behalf of the Partnership of trusts. So there is a fair bit of setup cost and complexity for who identify that complicating your business life with trusts means being better protected and minimising your tax.

A Partnership of Trusts has one major advantage over it’s competitor structures, and that is it will likely yield the easiest and least cost route to eventually selling your business potentially tax free.

Unit Trust

A Unit Trust is also a popular structure vehicle. It is easier to understand and has fewer adjustments required, in comparison to a partnership of family trusts, when partners exit or new partners are added to the business. With a Unit Trust, the business partners hold fixed units and so they receive a fixed proportion of income per year and this is set out in the trust deed. Once again the Unit trust should have a Trustee Company to operate it for asset protection purposes and usually the units are held by a family trust of each business partner.

Unlike a Partnership of family trusts, the most advantageous structure to sell a business from, partners trading under a unit trust structure will be best served by selling the units in the unit trust to incoming owners. The difficulty with this is that buyers will usually want to buy your business but not your business structure.

If the buyer has their way and they buy the business then you the sellers will pay more capital gains tax than selling their business under a Partnership of family trust structure. This is a simpler structure, less costly to setup, but not as flexible and not as tax effective from a capital gains tax viewpoint.

Private Company

A Private Company is another structure that physios may choose to run their practice from. This is the simplest business structure of the three possibilities here because the entity is taxed for its yearly income before there are distributions to the Partners. This is easily understood but the major problem with the private company structure is that if you cannot sell the shares in your company when you are selling your business you will pay substantially more capital gains tax than the Partnership of Family Trust structures.

There are a number of factors that will affect your decision on the appropriate business/tax structure so you will need to contact your accountant to consult on which one is best for your circumstances. In particular there have been a number of changes to trusts recently that will require this specialist advice for your business.

Want more information? Make an appointment today with your friendly local accountant at Taxation and Business Consultants, 3245 1466 or info@tbctax.com.au or simply click here – we’re here to help!

How Is My Super Taxed?

For specific advice that suits your specific circumstances talk to our friendly expert Accountants – simply click here to inquire, ask a question or make an appointment.

Tax on contributions
The amount of tax you pay on contributions into your super depends on how much you contribute and when you contribute it.

Your Tax File Number – the key to paying less tax

If you haven’t given us your Tax File Number (TFN), you’ll pay more tax – up to 49%* on your before-tax and your employer’s SG contributions.

Super funds can’t accept any after-tax contributions from you if you haven’t provided your TFN.

If you’re an AustralianSuper member, you can check whether you’ve provided your TFN and provide it securely online:

Type of contribution Tax (2015/16) Details
Before-tax, aged under 49 years on 30 June 2015

These are mainly employer contributions, salary sacrifice contributions and deductible contributions made by self-employed people. 15% or 30% depending on your income Before-tax contributions are taxed at 15% unless you are a high-income earner, where the tax rate is 30%. See the Tax for high-income earners section below for details.

You can add up to $30,000 to your super from your before tax income. If you exceed your limit you can choose to release up to 85% of your excess contributions from your super account. Excess contributions released from your account will not be counted towards your after tax contributions cap and will be taxed at your personal tax rate, less a 15% tax offset, plus an interest charge.

Before tax, aged 49 years or more on 30 June 2015
These are mainly employer contributions, salary sacrifice contributions and contributions made by self-employed people. 15% or 30% depending on your income Before-tax contributions are taxed at 15% unless you are a high-income earner, where the tax rate is 30%. See the Tax for high-income earners section below for details.

You can add up to $35,000 to your super from your before tax income. If you exceed your limit you can choose to release up to 85% of your excess contributions from your super account. Excess contributions released from your account will not be counted towards your after tax contributions cap and will be taxed at your personal tax rate, less a 15% tax offset, plus an interest charge.

After-tax
These are typically extra, voluntary contributions you make from after-tax money. Spouse contributions fall into this category too. You must give us your Tax File Number before we can accept after-tax contributions. No tax payable up to allowable limits You can contribute up to $180,000 each year. If under age 65, you can contribute up to $540,000 tax-free in a three-year period. The three-year period automatically starts from the first year that you add more than $180,000 after-tax to your super.

If you exceed your after tax contributions cap you may choose to withdraw your excess contributions plus 85% of any associated earnings. The associated earnings withdrawn are taxed at your personal rate of tax, less a 15% tax offset. If you choose not to withdraw your excess after tax contributions they will remain in your super account and taxed at 49%*.

Government co-contribution
No tax payable To be eligible for a Government co-contribution, you need to add to your super after tax and earn less than $50,454. The co-contribution itself is not taxable either when it goes into your super, or when you withdraw your super. For more information on the Government co-contribution arrangements visit our website at australiansuper.com/cocontributions.

Tax for high income earners
Members who earn over $300,000 a year may pay 30% tax on some or all of their before-tax contributions.
If your income# is less than $300,000 a year, but is more than $300,000 when you include your before-tax contributions, the 30% tax rate will apply to the part of your before-tax contributions that take you over the $300,000 threshold.

For example if your income is $280,000 and your before-tax contributions are $25,000, you only pay the 30% tax rate on $5,000.

Tax on withdrawals
Withdrawals from AustralianSuper are tax-free if you are aged 60 or over. Tax rates on lump-sum withdrawals for members under 60 are outlined below:

Super benefit component^ Tax

Tax-free No tax payable

Taxable If you’re under your preservation age, taxed at 22%*.

If you’re between your preservation age and 59 years, the first $195,000 is tax free and the balance is taxed at up to 17%*.

Tax on withdrawals is deducted before you receive your payment.

Tax on investment earnings
Investment earnings in super are taxed up to 15%. This tax, along with investment management fees, is deducted before your investment earnings are applied to your account. Earnings are applied to your account every 12 months or when you transfer out of the Fund or switch investment options.

What does this mean for you? For specific advice that suits your specific circumstances talk to our friendly expert Accountants – simply click here to inquire, ask a question or make an appointment.

Government announces superannuation reforms

In early September the Turnbull government released the first tranche of Exposure Draft legislation for superannuation reforms announced in the 2016-17 Budget. There has been a federal election in between, but the Turnbull government has finally released draft legislation of five superannuation reforms that were first mooted in the May budget.

What do the Superannuation Reforms mean for you? 

For specific advice that suits your specific circumstances inquire or make an appointment with our friendly expert Accountants – simply click here.

These five reforms relate to measures to:

Enshrine the objective of superannuation
Reform tax deductions for personal superannuation contributions;
Improve superannuation balances of low income spouses;
Introduce a Low Income Superannuation Tax Offset (LISTO); and
Harmonise contribution rules for those aged 6574.

In more detail, the legislation aims to:

1. Enshrine the objective of superannuation in legislation

The “objective” of superannuation has been the subject of much debate since March 2016 and the objective has been decided as to provide income in retirement that substitutes or supplements the age pension. This objective has guided the development of the Government’s reforms.

2. Reform tax deductions for personal super contributions

The government aims to improve access to concessional contributions by allowing people (under age 75) to claim a tax deduction for personal superannuation contributions, irrespective of their employment arrangements. According to the government this will assist around 800,000 people.

3. More superannuation contribution flexibility

Provide more flexibility and choice for older Australians, including by removing the restrictions that currently prevent some people aged between 65 and 74 from making voluntary contributions to their superannuation. Around 40,000 older Australians should benefit from this measure. The government also aims to encourage more people to make contributions to the superannuation fund of a low income spouse.

4. Introduce the Low Income Superannuation Tax Offset (LISTO).

Around 3.1 million low income earners will have their superannuation savings boosted by the LISTO, including 1.9 million women. This change will ensure individuals do not pay more tax on their superannuation contributions than on their take-home pay.

5. Industry response to superannuation reform

The announced reforms were widely welcomed by a number of industry groups, including:

a) Industry Super Australia

Industry Super Australia particularly welcomed fairer tax breaks for women and lower income earners.

“This measure is critical to restoring the fairness and integrity of superannuation tax concessions. It starts the process of closing the superannuation gender gap, and making the super tax system more contemporary and in keeping with modern society,” said David Whiteley, Chief Executive of Industry Super Australia (ISA). “It is welcome that the Government has prioritised tax breaks for the Australians who need them and not just the top end of town.”

b) Financial Services Council (FSC)

The FSC also welcomed the release of the first five superannuation measures announced in the 2016-17 Budget, stating that the set of measures will result in more equitable outcomes for Australians contributing to superannuation, improve flexibility in administration of the system and assist in strengthening retirement outcomes.

“Industry is pleased that the Government has adopted an administratively efficient approach to implementing the Low Income Superannuation Tax Offset (LISTO),” said FSC CEO, Sally Loane.

“The FSC supports the allowance of tax deductions for superannuation contributions. This will mean that people who don’t work for an employer with a salary sacrificing arrangements will get the same treatment on personal contributions to superannuation from their income as those who do.”

The FSC did note, however that it felt the objective of superannuation could be improved by including a focus on adequacy of retirement income.

c) Australian Institute of Superannuation Trustees (AIST)

The Australian Institute of Superannuation Trustees (AIST) said the first tranche of draft legislation of the Government’s super policy package –which importantly maintained support measures for low income earners – was a welcome step towards a fairer and more flexible super system.

“Importantly, this first tranche of legislation includes the Low Income Super Tax Offset (LISTO) which will boost the super contributions of about 3 million Australians,” said AIST CEO Tom Garcia.

“Without this targeted equity measure, these individuals face paying more tax on their super than their take home pay when the current low income super contribution system expires on July 1 next year.” Mr Garcia said other measures in the draft legislation would improve access to superannuation and provide more incentives for people to make voluntary contributions.

d) ASFA

ASFA interim CEO Jim Minto commended the government for listening to feedback about arrangements for the Low Income Super Tax Offset (LISTO) and simplifying administrative arrangements.

“It is important to get the details of all the measures right and we welcome the opportunity to work with the Government to ensure the superannuation tax legislation is fit for purpose,” Mr Minto said.

“The legislated objective for the superannuation system is enormously important and we need to ensure it will lead to adequate retirement outcomes for all Australians.”

What do the Superannuation Reforms mean for you? 

For specific advice that suits your specific circumstances inquire or make an appointment with our friendly expert Accountants – simply click here.

SMSFs and Property Valuations

The requirements for SMSF property valuations can be confusing. This is partly because there are no hard and fast rules. The ATO has produced guidelines but these are open to some interpretation. Factors to consider include the domain expertise of the Trustee, and the expectations of the ATO and Fund Auditor.

Why Assets Need to be Valued
SMSF Financial Accounts are in some ways unique in that they require the market valuation of assets to be done each year. Reasons for this are so that the SMSF financial reports and member statements are more meaningful to members and allow for decisions to be made. It is also useful for a SMSF to be able to compare its investment returns against the wider superannuation investment sector.

Other Events Requiring Valuation
Certain events may require a valuation at the time of that specific event, for example:
• Business Real Property is acquired from, or disposed to a related party to ensure the transaction is at arm’s length.
• Determining the value of assets that fund a member’s pension.

When to Have an Independent Valuation for Real Property
An external valuation of real property is not required each year, but the decision as to whether to seek an independent valuation should be at least reviewed every year. The valuation approach will be examined by the fund auditor each year. A general rule of thumb is that it would appear reasonable to have an independent external valuation at least every 3 years. In determining whether an external valuation is required, more often the things to consider are:
• the value of the property in proportion of the fund’s overall value;
• significant changes in market conditions;
• any event that may have affected the value of the property such as a natural disaster.

Who can provide a valuation?
The valuation may be undertaken by anyone as long as it is based on objective and supportable data. When valuing real property, relevant factors and considerations may include:
• comparison to similar properties;
• sales history for the property;
• independent appraisals;
• value of any improvements; and
• net income yields.

An independent valuation can be provided through a number of methods. According to the ATO publication ‘Valuation guidelines for self-managed superannuation funds’, “A valuation undertaken by a property valuation service provider, including online services or real estate agent would be acceptable.”

A Trustee can provide a valuation if they can demonstrate that they have a sufficient level of knowledge and can support their valuation with factual data that can be reasonably interpreted by a 3rd party. For most Trustees this method may suffice for years when an independent valuation hasn’t been sought. For example, the Trustee may be able to find statistical evidence that market conditions have not changed significantly as support for their decision to maintain a prior year external independent valuation. If a Trustee arranges an external independent valuation every 3 years, supplemented by an annual internal valuation with objective supporting data, then in general, the requirements will be met to the satisfaction of the Auditor and the ATO.

As a member of the National Tax and Accountants’ Association, we have access to independent online property valuations for residential properties that meet the ATO valuation guidelines. The online service produces a report that lists the property sales history and provides a valuation amount/range, rent estimate and yield estimate based on key market data and comparable properties. The property valuation can be requested in conjunction with fund audits or as an independent service.

Please contact us for details if as a Trustee, this is a service you are interested in

The 5 Smartest Things to do with your tax refund

Having a better financial destiny is an age-old fight with discipline, but a tax refund is a chance to take some steps in the right direction. Follow these 5 tips to build wealth fast.

1. Put it into super

Remember the 70 year old you gets better tax treatment. Unless you are already contributing the maximum to your super through a salary sacrifice arrangement, there will not be many other opportunities for tomorrow – proofing.

2. Reduce or pay off HELP debt

The ATO keeps track of your HELP debt balance and allows you to pay it off as you go. If your salary is over the HELP repayment threshold (currently $54,868) repayments are levied from your before-tax income automatically, starting at 4% and rising as your pay increases. For now, if you pay your HELP debt upfront, the government reduces on the offer for repayment contributions that are extra to the compulsory amounts. But this is generosity runs out on January 1, 2017- so this is the last tax refund that you can use to get this “free money”.

3. Pre-pay recurring obligations

It’s a rare luxury to be able to pay any insurances, registrations and re-payment obligations before they roll around. Car registration payments commonly catch people off-guard, and paying extra off your mortgage will save interest on daily compound rates. The other big one could be your credit card bill, which can have high interest rates. These don’t have to be left until last. Bite the bullet – defer those non-essential purchases for now and buy them next quarter when your bills are fully taken care of.

4. Put in a term deposit

This could be your chance to put money away in a “just in case” account. Most Australian banks offer higher interest savings accounts for term deposits, with some requiring minimum monthly deposits. While interest rates are not great at the moment, you can’t go wrong letting your tax refund earn extra returns for a short stretch.

5. If you’ve got a small business or side venture, invest in it

Business tools and resources inevitable age. Why not use your tax refund to update old equipment or replace not-so-good assets with good ones? If you’re a small business, anything you buy for the business will likely be able to be written off. So you’ve got an extra incentive to use your tax refund this way.

 

Tax Return Appointment Essentials – The Checklist

We will work through every allowable tax deduction available for you and /or your business. Don’t forget to ask us what tax incentives are available to you which may work to increase your tax deductions.

Bringing the right documents to your appointment saves time for you and for us and lessens the chance of the need for phone or email follow ups.  If you’re ready to do overdue tax returns call us today for an appointment and let’s get your slate clean for 2018!  Call 07 3245 1466 or email info@tbctax.com.au today!

If you are a new client it is always smart to arm yourself with last year’s tax return. Also bring your latest bank account details in the event you are entitled to a refund.

If you use an online accounting solution, all or most or your data should be available online for us to access. Most packages capture business transactions, and allow you to record data in real-time and in a format that we understand (as well as giving us access to it 24/7 so we can work on your return after the appointment is over).

The Checklist – Tax Return Appointment Essentials

Our general checklist follows – not all of the following will be relevant for everyone, and will depend on your circumstances, but as a checklist it should help you tick off what you do or don’t have in preparation for your return.

We will work through every allowable tax deduction available for you and /or your business. Don’t forget to ask us what tax incentives are available to you which may work to increase your tax deductions.

Income:
• PAYG Summaries from employers
• Bank statements for any interest received during the financial year
• Distributions from trusts, partnership, managed super funds
• Allowances (car, travel, entertainment, meals etc.)
• Government pensions and allowances
• Capital gains – e.g. sale of shares or property
• Foreign income
• Dividends
• Personal services income
• Net income/loss from business
• Rental income – e.g. from investment property
• Lump sum termination payments
• Superannuation lump sum payments
• Any shares / options received under an employee share plan

Expenses for tax deductions:
• Motor Vehicle expenses based on business use percentage and kilometres travelled (include your log book if applicable)
• Travel and accommodation information – domestic and overseas
• Work uniforms and other clothing expenses
• Courses, education and seminars
• Home office expenses
• Computer, software and repairs
• Tools and equipment
• Employee costs
• Superannuation contributions
• Rent/Lease payments
• Interest paid – on investment property
• Dividend deductions
• Bank Fees
• Low value pool deductions / depreciation
• Telephone and internet costs
• Freight and transport coasts
• Utilities – electricity, gas, water
• Legal and accounting fees
• Donations
• Income protection insurance
• Details of any asset purchases
• Childcare expenses
If you’re a business:
• Bank and credit card statements
• Lease, hire purchase, chattel mortgage or other loan agreements to your business
• Business Activity Statements and Instalment Activity Statements and working papers
• Post – June stocktake valuation figure

Note:
Keep receipts for all expenses and tax deductions you are claiming for your business. Scan and file them electronically so they’re accessible should you need them for audit purposes. Also bring your health insurance statement.

Ready to do overdue tax returns? Call us today for an appointment and let’s get your slate clean for 2018! 07 3245 1466 or email info@tbctax.com.au today!