2015 Tax Tips

 

Claim work-related deductions

Claiming all your work-related deduction entitlements may save you considerable tax. To do so, make sure that you have all the necessary receipts or credit card statements. Typical work-related expenses include employment-related landlines, mobile phone and internet usage, computer repairs, union fees and professional subscriptions.

Claim home office expenses

When part of your home has been set aside primarily or exclusively for work, a home office deduction may be allowed. Typical home office costs include heating, cooling, lighting and even depreciation of your office equipment.

To claim the deduction, you must have kept a diary for a representative four-week period of the hours you worked at home.

Claim self-education expenses

Self-education expenses can be claimed provided the study is directly related to either maintaining or improving your current occupational skills or it is likely to increase your income from your current employment. However, if you obtain new qualifications in a different field through study, the expenses incurred are not allowable.

Typical self-education expenses include, amongst others, course fees, textbooks, stationery, student union fees and the depreciation of assets such as computers and printers.

However, any Higher Education Loan Program (HELP) repayments are not deductible. You must also disallow $250 of self-education expenses, which can include non-deductible amounts such as child-care costs.

Claim depreciation deductions

Immediate deductions can be claimed for depreciating assets that cost under $300 to the extent the asset is used for an income-producing purpose such as earning salary and wages or rental income. Such assets include tools, calculators, briefcases, computer equipment and technical books purchased by an employee or minor plant items purchased by a landlord.

Claim and maximise motor vehicle deductions

If you use your motor vehicle for work-related travel, and your annual claim for kilometres travelled does not exceed 5,000 kilometres, you can claim a deduction for your vehicle expenses on a cents per kilometre basis. The allowable rate for such claims changes annually so you need to obtain this year’s rate from the ATO. Such claims must be based on reasonable estimates.

If your business travel exceeds 5,000 kilometres, it may be possible to claim one-third of your actual car expenses or 12 per cent of the original value of the vehicle without a log book.

Alternatively, you may be able to claim a deduction for your total car-running expenses for that travel. However, such claims are only available if you have kept a log book, odometer readings and receipts..

Claim rental property deductions

Landlords can claim immediate deductions for a range of expenses such as:

  • interest on investment loans
  • land tax
  • council and water rates
  • body corporate charges
  • insurance
  • repairs and maintenance
  • agent’s commission
  • gardening
  • pest control
  • leases (preparation, registration and stamp duty)
  • advertising for tenants
  • reasonable travel to inspect properties.

Landlords may be entitled to claim annual deductions for the declining value of depreciable assets (such as stoves, carpets and hot-water systems), and capital-works deductions spread over a number of years (for structural improvements, like remodelling a bathroom).

Maximise tax offsets

Tax offsets directly reduce your tax payable and can add up to a sizeable amount. Eligibility for tax offsets generally depends on your income, family circumstances and conditions of particular offsets.

For 2014/2015, taxpayers should check their eligibility for tax offsets, which can include the low-income tax offset, senior Australians and pensioners offset and the offset for superannuation contributions on behalf of a low-income spouse .

Maximise your super contributions

Gone are the days when you could wait until the kids left home and the house was paid off to top up your super with additional contributions. With the introduction of the contribution caps in 2007, you should consider contributing as much as you can each year, up to the cap, to maximise your super.

The concessional contributions cap for 2014/2015 is $30,000 if you are under 49, and $35,000 if you are aged 49 or over. Concessional contributions include any contributions made by your employer, salary-sacrificed amounts and personal contributions claimed as a tax deduction by self-employed or substantially self-employed persons.

If you’re making extra contributions to your super and breach the concessional cap, those contributions will be taxed at your marginal tax rate. However, you can have the excess contributions refunded from your super fund.

Importantly, don’t wait until 30 June to make your contributions as your super fund may not receive them in time.

The contributions tax on concessional contributions for high-income earners is effectively doubled to 30 per cent if their combined income plus concessional contributions exceed $300,000.

Your super can also be boosted by non-concessional, or after-tax, contributions. While not as tax effective, you are still getting more money into the concessional-taxed super environment. The non-concessional contribution cap is $180,000 for 2014/2015, but you could also take advantage of the ‘bring forward’ provision if you are under 65 and utilise the cap for the next three years to contribute up to $540,000.

If you breach the non-concessional cap, the excess contributions will be taxed at the top marginal tax rate. However, you can now have any excess non-concessional contributions made since 1 July 2013 refunded from your super fund.

Importantly, don’t wait until 30 June to make your contributions as your super fund may not receive them in time. As a result, those contributions will count towards next year’s contribution caps, which could result in excess contributions and an unexpected tax bill next year.

Self-employed? Consider tax effective superannuation contributions

A self-employed person will be able to claim their contributions to a complying superannuation fund as fully tax deductible up to the age of 75 in 2014/2015. However, such contributions will only be deductible if less than 10 per cent of the total of a person’s assessable income, reportable fringe benefits or reportable employer superannuation contributions is attributable to their employment. Such a deduction cannot increase or create a tax loss to be carried forward. Employers can also claim deductions for superannuation contributions made on behalf of their employees.

Consider the superannuation co-contribution

An individual likely to earn less than $49,488 in 2014/2015 should consider making after-tax contributions to their superannuation to qualify for the superannuation co-contribution. The government will match after-tax contributions – fifty cents for each dollar contributed – up to a maximum of $500 for a person earning up to $34,488. The maximum then gradually reduces for every dollar of total income over $34,488 to nil at $49,488.

Consolidate your super

It makes a lot of sense to have your super in one place. You’ll reduce your fees, only receive one lot of paperwork, and you only have to keep track of one fund. You can also use the same fund in any job you may have.

Compare your funds’ fees and charges, investment options and life insurance cover to work out which best suits you before consolidating them into one fund. You can look at past investment performance as well but remember it is no guarantee of how the fund will perform in the future.

Once you’ve chosen the fund you want to keep, contact them and they can help transfer the money from your other super funds.

If you’ve moved around or changed jobs occasionally, your old super fund may have lost track of you and you may miss out on some of your super when you need it. To find your lost super, use the SuperSeeker System on the ATO website.

 

Contact us  for assistance to reduce your tax!

Email: info@jagaccountants.com.au  or call  Julian on 0408033696.

This information is general nature and does not take into account your individual needs and objectives.Please do not act on any information before seeking advice from a qualified Accountant and a licensed Financial Planner.

Small business Budget announcements become law

Instant asset write off – the Act temporarily increases the threshold below which small businesses can claim an immediate deduction for the cost of assets from $1000 to $20,000. The increased threshold of $20,000 applies from 7.30pm (AEST), on 12 May 2015 until Friday 30 June 2017.

The new Act also reduces the company tax rate from 30 per cent to 28.5 per cent for companies that are small business entities with an aggregated turnover of less than $2 million from the 2015-16 income year. The corporate tax rate for companies that have an aggregated turnover of $2 million or more remains at 30 per cent.

Contact Julian from JAG Accountants for all your business and tax questions on 0408 033 696 or email info@jagaccountants.com.au to make an appointment at our Williamstown or Flemington Offices.

Ways to reduce your tax before 30 June 2015! – Strategy 9: Government Co-Contribution

The end of the 2014/15 financial year is fast approaching, so now’s the time to review what strategies you can use to minimise your tax.

  • Qualify for a Government Co-Contribution

If your total income is less than $49,488 you may be eligible for a super co-contribution from the Federal Government. For each dollar in personal after-tax super contributions, the Government will contribute from 50 cents up to a maximum co-contribution of $500 for those earning less than $34,488. For the purposes of this test, total income is assessable income plus reportable fringe benefits plus reportable employer superannuation contributions, less allowable business deductions. Please contact us to verify that you can meet all the eligibility criteria for the Government Co-Contribution.

Contact us before the 30 June 2015 deadline for assistance to reduce your tax!

Email: info@jagaccountants.com.au or call  Julian on 0408033696

 

This information is general nature and does not take into account your individual needs and objectives.

Please do not act on any information before seeking advice from a qualified Accountant and a licensed Financial Planner.

Ways to reduce your tax before 30 June 2015! – Strategy 8: Defer Investment Income & Capital Gains

The end of the 2014/15 financial year is fast approaching, so now’s the time to review what strategies you can use to minimise your tax.

  • Defer Investment Income & Capital Gains

If practical, arrange for the receipt of Investment Income (e.g. interest on term deposits) and the Contract Date for the sale of Capital Gains assets, to occur AFTER 30 June 2015. The Contract Date is generally the key date for working out when a sale occurred, not the Settlement Date!

Contact us before the 30 June 2015 deadline for assistance to reduce your tax!

Email: info@jagaccountants.com.au or call  Julian on 0408033696

 

This information is general nature and does not take into account your individual needs and objectives.

Please do not act on any information before seeking advice from a qualified Accountant and a licensed Financial Planner.

Ways to reduce your tax before 30 June 2015! – Strategy 7: Realise Capital Losses

The end of the 2014/15 financial year is fast approaching, so now’s the time to review what strategies you can use to minimise your tax.

  • Realise Capital Losses

Tax is normally payable on any capital gains. You should consider selling any non-performing investments you hold before 30 June to crystallise a capital loss and reduce or even eliminate any potential capital gains tax liability. Unused capital losses can be carried forward to offset future capital gains.

Contact us before the 30 June 2015 deadline for assistance to reduce your tax!

Email: info@jagaccountants.com.au or call  Julian on 0408033696

 

This information is general nature and does not take into account your individual needs and objectives.

Please do not act on any information before seeking advice from a qualified Accountant and a licensed Financial Planner.

Ways to reduce your tax before 30 June 2015! – Strategy 6: Defer Investment Income & Capital Gains

The end of the 2014/15 financial year is fast approaching, so now’s the time to review what strategies you can use to minimise your tax.

  • Defer Investment Income & Capital Gains

If practical, arrange for the receipt of Investment Income (e.g. interest on term deposits) and the Contract Date for the sale of Capital Gains assets, to occur AFTER 30 June 2015. The Contract Date is generally the key date for working out when a sale occurred, not the Settlement Date!

Contact us before the 30 June 2015 deadline for assistance to reduce your tax!

Email: info@jagaccountants.com.au or call  Julian on 0408033696

 

This information is general nature and does not take into account your individual needs and objectives.

Please do not act on any information before seeking advice from a qualified Accountant and a licensed Financial Planner.

Ways to reduce your tax before 30 June 2015! – Strategy 5: Prepay Expenses

The end of the 2014/15 financial year is fast approaching, so now’s the time to review what strategies you can use to minimise your tax.

  • Prepay Expenses and Interest

Expenses relating to investment activities can be prepaid before 30 June 2015. You can prepay up to 12 months of interest before 30 June on a loan for a property or share investment and claim a tax deduction this financial year. Also, other expenses in relation to your investments can be prepaid before 30 June, including rental property repairs, memberships, subscriptions, and journals.

Contact us before the 30 June 2015 deadline for assistance to reduce your tax!

Email: info@jagaccountants.com.au or call  Julian on 0408033696

 

This information is general nature and does not take into account your individual needs and objectives.

Please do not act on any information before seeking advice from a qualified Accountant and a licensed Financial Planner.

Ways to reduce your tax before 30 June 2015! – Strategy 4: Depreciation

The end of the 2014/15 financial year is fast approaching, so now’s the time to review what strategies you can use to minimise your tax.

  • Property Depreciation Report

Are you achieving the full tax benefits of owning an investment property?  A Property Depreciation Report allows you to claim depreciation and capital works deductions on capital items within the property. The cost of this report is tax deductible and will provide great future tax savings.

 

Contact us before the 30 June 2015 deadline for assistance to reduce your tax!

Email: info@jagaccountants.com.au or call  Julian on 0408033696

 

This information is general nature and does not take into account your individual needs and objectives.

Please do not act on any information before seeking advice from a qualified Accountant and a licensed Financial Planner.

Ways to reduce your tax before 30 June 2015! – Strategy 3: Motor Vehicle Log Book

The end of the 2014/15 financial year is fast approaching, so now’s the time to review what strategies you can use to minimise your tax.

  • Motor Vehicle Log Book

Is your log book up to date and accurate? Motor Vehicle Log Books must be kept for at least a 12-week period. The start date for the 12-week period must be on or before 30 June 2015. Ensure you keep all receipts/invoices for your motor vehicle expenses.

Contact us before the 30 June 2015 deadline for assistance to reduce your tax!

Email: info@jagaccountants.com.au or call  Julian on 0408033696

 

This information is general nature and does not take into account your individual needs and objectives.

Please do not act on any information before seeking advice from a qualified Accountant and a licensed Financial Planner.

Ways to reduce your tax before 30 June 2015! – Strategy 2: Assets

The end of the 2014/15 financial year is fast approaching, so now’s the time to review what strategies you can use to minimise your tax.

  • Ownership of Assets

Its is important to review  the ownership of your investments. Any change of ownership needs to be carefully planned in relation to any capital gains tax and stamp duty implications. Investments may be owned by a Family Trust, which has the key advantages protecting assets and providing flexibility in distributing income on an annual basis in a tax effective way.  Please seek  our advice before making any changes.

Contact us before the 30 June 2015 deadline for assistance to reduce your tax!

Email: info@jagaccountants.com.au or call  Julian on 0408033696

 

This information is general nature and does not take into account your individual needs and objectives.

Please do not act on any information before seeking advice from a qualified Accountant and a licensed Financial Planner.

2015 Business Tax Planning Strategies

2015 Business Tax Planning Strategies

The end of the 2014/15 financial year is fast approaching, so now’s the time to review what strategies you can use to minimise your tax.

  • Small Business Asset Depreciation

If your business is a Small Business Entity (turnover less than $2 million), then the following tax concessions apply:

  • Instant asset write off – the Act temporarily increases the threshold below which small businesses can claim an immediate deduction for the cost of assets from $1000 to $20,000. The increased threshold of $20,000 applies from 7.30pm (AEST), on 12 May 2015 until Friday 30 June 2017.
  • Depreciating assets valued at more than $20,000 will be depreciated in one pool at a rate of 15% in the first year and 30% in future years

 

  • Concessional Superannuation Caps

The concessional superannuation cap for 2015 is $30,000 per year for persons under 50, and $35,000 for persons over age 50. Do not go over this limit or you will pay more tax! Note that employer super guarantee contributions are included in these caps. Where a contribution is made that exceeds these limits, the excess is taxed to the fund member’s account at an effective rate of 46.5%. In order to claim a tax deduction in the 2015 financial year, the super fund must receive the contribution by 30 June 2015.

 

  • Employee Superannuation Payments

To claim a tax deduction in the 2015 financial year, you need to ensure that your employee superannuation payments have CLEARED your business bank account by 30 June 2015.      For any last minute superannuation payments, we recommend that you arrange for a BANK CHEQUE made payable to your employee super fund prior to 30 June 2015. Also, check that your payroll system is now paying the required 9.5% rate (up from 9.25%) from 1 July 2014.

 

  • Defer Income

Where practical, defer issuing further invoices and/or receiving cash/debtor payments until after 30 June 2015.

 

  • Bring Forward Expenses

Purchase consumable items BEFORE 30 June 2015. These include stationery, printing, office and computer supplies.

  • Repairs & Maintenance

Make payments for repairs and maintenance (business, rental property, employment) BEFORE 30 June 2015.

 

  • Defer Investment Income & Capital Gains

If practical, arrange for the receipt of Investment Income (e.g. interest on Term Deposits) and the Contract Date for the sale of Capital Gains assets, to occur AFTER 30 June 2015. The Contract Date is generally the key date for working out when a sale occurred, not the Settlement Date!

 

  • Motor Vehicle Log Book

Ensure that you have kept an accurate and complete Motor Vehicle Log Book for at least a 12-week period. The start date for the 12-week period must be on or before 30 June 2015. You should make a record of your odometer reading as at 30 June 2015, and keep all receipts/invoices for motor vehicle expenses.

 

  • Investment Property Depreciation

If you own a rental property and haven’t already done so, arrange for the preparation of a Property Depreciation Report to allow you to claim the maximum amount of depreciation and building write-off deductions on your rental property.

 

  • Private Company (“Division 7A”) Loans

Business owners who have borrowed funds from their company must ensure that the appropriate principal and interest repayments are made by 30 June 2015.

 

  • Year End Stock Take / Work in Progress

If applicable, you need to prepare a detailed Stock Take and/or Work in Progress listing as at 30 June 2015. Review your listing and write-off any obsolete or worthless stock items.

 

  • Write-off Bad Debts

Review your Trade Debtors listing and write off all Bad Debts BEFORE 30 June 2015. Prepare a minute of a Directors’ meeting, listing each Bad Debt, as evidence that these amounts were actually written off prior to year-end.

 

  • Small Business Concessions – Prepayments

“Small Business Concession” taxpayers can make prepayments (up to 12 months) on expenses (e.g. Loan Interest, Rent, subscriptions) BEFORE 30 June 2015 and obtain a full tax deduction in the 2015 financial year.

 

  • Trustee Resolutions

Ensure that the Trustee Resolutions are prepared and signed BEFORE 30 June 2015 for all Discretionary (“Family”) Trusts. Please see us for more information about these resolutions.

 

 

Contact us TODAY before the 30 June 2015 deadline for assistance to reduce your tax!

Email: info@jagaccountants.com.au or call  Julian on 0408033696

 

This information is of a general nature and does not take into account your individual needs and objectives.

 Please do not act on any information before seeking advice from a qualified Accountant and a licensed Financial Planner.

Ways to reduce your tax before 30 June 2015! – Strategy 1: Superannuation

The end of the 2014/15 financial year is fast approaching, so now’s the time to review what strategies you can use to minimise your tax.

 

  • Sacrifice Your Salary to Super

Salary sacrifice can be a great way to boost your superannuation and pay less income tax. By putting pre-tax salary into super rather than having it taxed as normal income at your marginal rate you may save tax. This can be especially beneficial for employees nearing their retirement age.

 

  • Superannuation Contributions

Certain individuals may be able to make tax-deductible personal contributions to superannuation. The advantage of this strategy is that superannuation contributions are taxed at 15% compared to typical personal income tax rates of between 34.5% and 49%. Superannuation contributions are limited to $30,000 per year for persons under 50, and $35,000 for persons over  50 years of age. Any contributions in excess of these limits can be taxed at the highest rate.  Be careful  not to go over these limits! Please contact us to determine if you are eligible for this deduction.

 

Contact us before the 30 June 2015 deadline for assistance to reduce your tax!

Email: info@jagaccountants.com.au or call  Julian on 0408033696

 

This information is general nature and does not take into account your individual needs and objectives.

Please do not act on any information before seeking advice from a qualified Accountant and a licensed Financial Planner.

Tax Update

Thinking about starting a business?
From July 1st 2015 the Government have committed to reducing the company tax rate to 28.5%
Hence establishing or restructuring your business as a company may be extremely tax effective.

The reduction to the company tax rate should benefit many corporate businesses across all sectors, but in particular those smaller companies who will benefit from a much needed cash flow boost to support business activity and growth.

Contact Julian from JAG Accountants for all your business and tax questions on 0408 033 696 or email info@jagaccountants.com.au to make an appointment at our Williamstown or Flemington Offices.

Our new office!

Photo of new office

JAG Accountants is proud to open our new office at 21 Shields Street Flemington.

Call us to arrange an appointment and receive a free half an hour consultation to discuss your tax and business needs!

Call 03 9397 4552 or 0408 033 696