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5 tax-minimising tips for small businesses

Date posted: Monday, November 10, 2014

How can a small business save on their tax? Well, returns for companies may not be due until February next year, but in our experience working with SBEs, there’s no such thing as getting on top of things too early or having too much help.

It’s no big secret that tax is one of the biggest worries for small business owners, so we’ve outlined our 5 top tips keep in mind when preparing your return.

• Pay your super early

Any superannuation you pay to your employees before June 30 can be deducted in that financial year – this is one of the best and easiest ways to reduce your tax bill. And don’t forget to contribute to your own super! Not only is it important to build up your own next egg, but super contributions are only taxed 15%, rather than the 45% income tax they would otherwise be slugged on.

• Delay your income

Another really simple way to help you at tax time is to defer income until the next financial year, so you don’t have to pay the tax on it this year. This means reviewing term deposit maturity dates or just delay sending out invoices until July.

• Get onto those tax concessions

As a small business (the legal definition by the way is an annual turnover of less than $2 million), there are a heap of special laws and exemptions that make life a bit easier for you, so it’s important you’re not missing out. They include GST and Capital Gains Tax concessions, deductions on interest payments and simplified depreciation rules – for example, did you know if you buy a business asset for less than $6,500 you can get it immediately written off on your tax? The more you know!

• Bulk buy your expenses

It’s a good idea to deck out the office with all your every day stationery, subscriptions and business expenses so you can claim their tax deductions this financial year, not next. It may not seem enough to be worth it, but have you seen the price of ink lately? All those little expenses add up and can make a huge difference on your tax bill.

• Bad debts? Write them off

If your cash flow’s been a bit under the weather, you might have a bad case of bad debts – i.e. clients that are behind on payments, or that may never even to be able to pay you. Such is life – but not all is lost. If you write these debts off now, they’ll become tax deductible and also reduce your taxable income.

So if you’re a small business who’s still wrangling with their 2013-14 return, stop stressing and give us a call – we’re here to make your tax time a regular walk in the park.

3 things you didn’t know about GST

Date posted: Tuesday, October 7, 2014

After nearly 15 years since its implementation, you probably think you’re a pro at navigating the complex world of our Goods and Services Tax, but we’re here to remind you that there’s almost always something new to learn. We know this because all the changes and adjustments over the years means we’re still learning it ourselves!

We put together a few key facts about the GST we find many people don’t even know about, to give you a head start and ensure you don’t get caught out.

GST is actually optional for businesses with an annual turnover less than $75,000.

Great news! Well, not quite – as always in tax, it’s not always that black and white. On one hand, having 10% lower prices can really put you at a competitive advantage, but not being GST registered keeps you from claiming input credits and some people don’t deal with business that are un-registered.

Basic goods are always GST-free, but only sometimes.

We all know that goods and services seen as essentials are exempt from the GST for example raw foods, various education courses etc.

When these same goods are put into a commercial setting however, this can change. For example, water is GST free, but when served at a restaurant or café, it’s not. It pays to be careful of these ‘hybrid’ products, especially if you’re in the food or beverage industry.

It can be better to split expenses annually.

If you’re a small business, dividing expenses between personal and professional for tax purposes is a constant headache. Most people do this split when they lodge their Business Activity Statement monthly or quarterly, but did you know you can do it annually? Year-end adjustments can prove to be more accurate, not to mention the savings in time and stress!

For more information, don’t hesitate to contact Pakenham Tax, your local Accounting specialists. We can arm you with a myriad of tricks and tips that could help you better navigate GST for you or your business.

How to teach your kids money skills in 5 easy steps

Date posted: Thursday, September 4, 2014

Teaching your children financial skills early makes good sense. Or should we say cents (insert, dad joke).

Just as it’s important to teach them good manners, to ride a bike or swim; equipping them with basic financial skills is important too.

Sometimes parents can find it overwhelming when it comes to teaching their kids good money management skills – especially if they’re not so great themselves. But we’re here to make your tax, accounting and financial lives easier, and this includes helping you, help your children.

So here are our five easy steps on how to teach your children good financial skills.

Begin Early
It’s never too early to start teaching your kids money awareness. Let them pay. Show them utility bills. Introduce the concept of saving money i.e. encourage them to turn off lights to save money, or not waste their food. Go through receipts with them. Explain why you need to go to work. Talk about bargains.

Start Saving
Help your child to become a saver by incentivising. Help them set little goals for their money. Encourage them to save for a particular toy. When they reach their goal, they’ll feel a real sense of achievement.

Talk About Money
Talk about money and keep things positive. Kids absorb your attitude to money and so best to leave the negative Nancy for after hours. Instead of saying ‘we can’t afford it, ‘ or that’s too expensive’, try saying ‘ we could save up for that’. Past generations kept children in the dark about money, it was a no go zone. Thankfully things have changed though and the more open you can be about money the better kids have a chance to get a handle on it.

Get An Account
Around the age of 12 to 13 is a really good time to set up a bank account. It’s a great responsibly they’ll feel proud to have.

Plan Ahead
Visiting a tax agent or financial planner with your teen is a great way to give your child insight into basic finance in the real world before they’re out there living it on their own.

To find out more about what you can and can’t claim this financial year give us a call, send us an email or book in for a visit. We specialise in servicing individuals and businesses in the South Eastern Suburbs including Pakenham, Lakeside, Berwick, Nar Nar Goon, Garfield, Tynong and Koo Wee Rup.

Cons to doing your own tax

Date posted: Friday, August 15, 2014

We encounter quite a few go-getters who take on doing their own tax and then wind up on a tax rebate mis-adventure. And by this time, often it’s too late to avoid incorrect deduction fines.

Sure, you can save money by not paying for an accountant and sometimes it might be a faster way to process your refund, however here are some cons to doing your own tax you should probably know about;

• You might overlook or not be aware of expenses you can deduct

• Tax returns can take a considerable amount of time if you don’t know what you’re doing (who has spare time to crunch numbers!)

• You might deduct costs of doing this year’s tax in next year’s tax return

• You might experience fines if you don’t lodge your return in time and in the right way

• You may get randomly audited, which could unearth incorrect claims and result in hefty fines

Go easy on yourself and let us get your tax records organised. We can help you understand what you can and can’t claim and do all the hard-work for you.

It’s Tax Time in Pakenham

Date posted: Tuesday, July 1, 2014

That’s right people, it’s tax time.

Did we just hear you yawning?! Ok, we know that the topic of tax draws a universal yawn, but it’s a topic that requires so much of your attention.

No need to stress though, in fact – tax time should be seen as a window of opportunity. You might get to cash in on all of those receipts that you’ve meticulously collected. Or you might get some rejuvenated direction on how to manage things better next financial year to make things easier for you in the long term.

C’mon then, get your tax records organised and make an appointment with the Pakenham Taxation + Accounting team now. We’re looking forward to helping you organise your work life, business accounting, personal tax, bookkeeping, superannuation and company set-ups. See you soon!

Individual tax brackets 2014

Date posted: Friday, June 20, 2014

Every year there’s confusion surrounding just how individual income is taxed. The below figures from the ATO website, allow you to see the current tax brackets and exactly how each bracket is taxed.

The following rates for 2013-14 apply from 1 July 2013 and are applicable to individuals who are Australian residents for tax purposes

Taxable income	Tax on this income
0 – $18,200	Nil
$18,201 – $37,000	19c for each $1 over $18,200
$37,001 – $80,000	$3,572 plus 32.5c for each $1 over $37,000
$80,001 – $180,000	$17,547 plus 37c for each $1 over $80,000
$180,001 and over	$54,547 plus 45c for each $1 over $180,000

The above rates do not include the Medicare Levy of 1.5%

To find out how the tax brackets can affect your taxable income; give us a call, send us an email or book in for a visit.

We specialise in servicing individuals and businesses in the South Eastern Suburbs including Pakenham, Lakeside, Berwick, Nar Nar Goon, Garfield, Tynong and Koo Wee Rup.

Can I claim tax back on my work clothes?

Date posted: Monday, June 9, 2014

So you’ve been giving your credit card a work out and you bought an awesome designer bag, the latest adidas high-tops, and a few tops that you’ll most definitely wear at work eh?! And now you’re not sure what clothing you can claim as an expense on for your upcoming tax return – right?

Read on to see if your clothing falls into one of the categories you are entitled to make a claim on.

Work Uniforms
If you’re required to wear a uniform that is unique and distinctive to the organisation or brand that you work for, then you are able to claim for the purchase of the uniform.

Occupation-Specific Clothing
This relates to clothing that is specific to your occupation and is not every day in nature, such as the overalls a mechanic might wear. We’re afraid however that this does not include garments you bought specifically for work but are actually every-day clothes as well. Likewise this does not include that gorgeous dress you bought for a work event.

Protective Clothing
Clothing and footwear required to protect you from the risk of illness or injury while carrying out your duties, such as work boots or a specific type or brand of work gear, are deductible.

Clothing, Laundry and Dry-Cleaning Expenses
You can also claim a deduction for the cost of buying and cleaning occupation-specific clothing, protective clothing and unique, distinctive uniforms.

Just be sure that when you make a deduction you have some form of written evidence that you purchased the clothing and records or written evidence of your cleaning costs.

To find out more about what you can and can’t claim this financial year give us a call, send us an email or book in for a visit. We specialise in servicing individuals and businesses in the South Eastern Suburbs including Pakenham, Lakeside, Berwick, Nar Nar Goon, Garfield, Tynong and Koo Wee Rup.

Tax benefits of a novated car lease

Date posted: Monday, May 26, 2014

Are you looking at leasing a new car either for yourself or your business? While the finance options for leasing a new car can be a little confusing, the tax implications for you or your company should be considered before you get into your brand new ride.

Leasing a car involves providing regular pre-approved payments for the use of a car. At the conclusion of the lease period the car must either be returned, purchased so a new lease agreement for the vehicle can be established.

Car leases can also be wrapped into salary packages for both employees and employers to reap potential tax benefits. Novated car leases are a popular example of a leasing option, with benefits for both employees and employers. Put simply, a novated lease allows an employer to make lease payments for an employee’s car as part of a salary sacrifice arrangement.

The benefits of a novated lease for employees:

–       Vehicle costs are paid from pre-tax income which means a lower rate of income tax is payable

–       GST is removed from the financed amount

–       Employees can select the vehicle of their choice and it is theirs to drive all the time

The benefits of a novated lease for employers:

–       Lease payments are usually tax deductible on vehicles used for business requirements

–       There is little to no cost to the business

–       Lower employee costs, such as Payroll Tax

If you want to know more about leasing a car and how it can benefit you or your business, give us a call, send us an email or book in for a visit. We specialise in servicing individuals and businesses in the South Eastern Suburbs including Pakenham, Lakeside, Berwick, Nar Nar Goon, Garfield, Tynong and Koo Wee Rup.

The cents per kilometre method 2014

Date posted: Sunday, May 4, 2014

So, you want to know the ‘cents per kilometre method’  to work out how to claim a deduction for petrol for tax purposes right?

This is a common question and one we can answer for you easily.

The cents per kilometre method allows individuals to claim a deduction for work-related car expenses for travelling up to 5,000 km per car, per annum.

The claimable rates have been set for 2013/14 and for the first time since 2008/09 they have increased. This increase and the new rates can be seen below;

YEAR	SMALL CAR	MEDIUM CAR	LARGE CAR
2012/13	63c	74c	75c
2013/14	65c	76c	77c

Or in other words, for every kilometre you drive for work-related job tasks you can now claim 65c for every kilometre for a small car, 76c for a medium car and 77c for a large car.

If you’d like to know more about whether you’re entitled to claim petrol as a tax deduction then be sure to stay tuned for upcoming blog posts as we’ll cover that off soon.

You can find out more by giving us a call, sending us an email or booking in for a visit. We specialise in servicing individuals and businesses on all things tax related in the South Eastern Suburbs – including Pakenham, Lakeside, Berwick, Nar Nar Goon, Garfield, Tynong and Koo Wee Rup.

Superannuation concessional contributions cap 2014/2015

Date posted: Thursday, April 24, 2014

Some employers may be a bit confused by the recent changes made by the ATO to the superannuation rates and caps for 2014/15.

The amount contributed to super each financial year, is capped for tax purposes. Contributions above these caps are at risk of having to pay extra tax.

Factors impacting on the cap amount include:

• The superannuation holder’s age
• Whether the contributions are concessional or non-concessional contributions.

Concessional contributions are from before-tax income and are most commonly made up of employer contributions. Non-concessional contributions are from after-tax income and come from personal contributions.

To find out the current threshold on the superannuation concessional contributions cap then be sure to visit this link via the Australian Tax Office. This web page highlights the changes for the 2014/15 financial year.

Do you have more super questions? You can find out more by giving us a call, sending us an email or booking in for a visit. We specialise in servicing individuals and businesses in the South Eastern Suburbs including Pakenham, Lakeside, Berwick, Nar Nar Goon, Garfield, Tynong and Koo Wee Rup.