Individual tax returns from $99 - $120
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*These changes are proposed to apply from 7:30 pm (AEST) 12 May 2015.
The government will significantly expand accelerated depreciation for small businesses. It will do this by allowing small businesses with aggregate annual turnover of less than $2 million to immediately deduct assets they start to use or install ready for use, provided the asset costs less than $20,000 (currently, an immediate write-off is generally available for assets costing less than $1,000). This will apply for assets acquired and installed ready for use between 7.30pm (AEST) 12 May 2015 and 30 June 2017.
Note: $20,000 tax deduction does not mean $20,000 tax reduction.
Spending money in order to gain tax reduction is not a good business decision, if you spend money on something you don’t require, you might be saving 30% tax on it in a company structure, however if you decide not to spend, you will end up paying 30% tax but will still have 70% leftover.
Don’t spend on assets you don’t need.
Have you been running a home office and are not sure what deductions can you claim?
Read further, this article will help shed some light on home office expenses that are deductible on your tax return. In this post I’m going to be focusing on tax deductions that can be claimed in your tax return for the home office expenses.
Home office deductions, or working from home deductions, can be claimed if you produce your income at home, and incur expenses from using your home as your ‘office’. If you are an employee and are required to use your computer, phone or other electronic devices for work purposes, you are also eligible to claim a deduction for your costs.
You can claim a proportion of tax deduction as per the work usage for the expenses that fall into the following categories:
Running expenses include internet, electricity, water and gas. In order to claim for these though, you need to keep a record of the number of hours you use the home office. It is important to note that if you do claim a deduction on your utilities, you need to be able to demonstrate how you arrived at the amount you’re wanting to claim as deduction. Tax office has a set rate of $0.34 cents per hour of work usage for the home office to cover the running expenses.
For occupancy expenses such as mortgage, rates and home insurance, these are only deductible where the home is the place of business.
Depreciation on home office equipment includes, but is not limited to, furniture, carpet, computer and printer. The use of these must be recorded covering income-related and non-income related use, showing nature of the use of equipment and the period of time it was used for.
Deductions are generally only available for the decline in value of office furniture. You cannot claim a deduction in value on your curtains or lights or claims for the cost of owing or renting the house unless a specific area – usually a room – is set aside solely for business use.
Please note these are generic home office deductions, you might be eligible for more industry specific deductions.
If you have been working from home or running a home business and not sure what deductions are you entitled to claim on your tax return.
Call Tax Accountants Cranbourne at 1300 300 106 for further information.
Australian Taxation Office (ATO) have been getting tougher and taking stronger measures when a taxpayer repeatedly defaults on the ATO payment arrangement plans.
ATO stronger action may include
Garnishee notice is issued to make sure that the payment of any funds will directly come to ATO to offset your debt. This notice can be issued to your employer, financial institutions and your debtors.
Director penalty notice
Company director has a legal responsibility to meet with the company arrangement with pay as you go (PAYG) and superannuation guarantee charge (SGC). If the director fails to pay above listed liabilities on time then they can become personally liable for the penalty, which is equal to the unpaid amount.
This notice is issued to start legal proceeding from ATO.
ATO can take number of legal action to recover his debt. Listed below are the few legal actions that ATO may take.
If you don’t pay your debts on time, then ATO may file a claim/summon in relevant court. One court has decided debt is owed; court may look of number of option for recovery. One of the options is bankruptcy.
Bankruptcy notice obliges you to pay your debt or make payment agreement in 21 days after the notice. If you are unable to pay your debt then a bankruptcy will file. It is legal declaration that you would not be able to pay the debt. Once, a person is declared bankrupt, all his assets sold to pay the debts.
It is an application to declare someone a bankrupt.
ATO can issue a statutory demand-asking payer to pay the debt on next 21 days. If the debt remains unpaid then ATO has a right to file an application with federal court to wind up the company.
If the court approves the wind-up action then an official liquidator will be appointed to sell the company assets to pay off the owed debts.
Contact us today on 1300 300 106 if you need help sorting out your debt with the tax office or for further information about our Cranbourne Accountant and Cranbourne Tax Agent Services.
Fringe Benefits Tax (FBT)
FBT is a tax employers pay on certain benefits given to employees such as rights, privileges and services given to employees. Examples of some benefits are
• Work car given to employee for personal use.
• Paying employee personal bills such as health insurance cost, school fees for kids.
• Paying for the cleaning services for employee residential place.
• Charging less interest rate on the loan provided to employee by business.
• Covering the cost for food, drink and recreation for employee.
Fringe Benefits Tax is separate from income tax and is based on taxable value of the fridge benefit provided.
FBT year runs from 1st April to 31st March.
Below are some of the Fringe benefits Categories
• Car Fringe Benefits
• If the car is available for private use.
• Loan Fringe Benefits
• If you charge no or low interest on loan to employee.
• Debt Waiver Fringe Benefits
• If you sell goods or services to employee and tell them not to bother about paying.
• Expense payment Fringe Benefits
• Reimburse employee for expenses they incurred.
• Housing Fringe Benefits
• Accommodation provided to employee at no or low rent.
• Board Fridge Benefits
• Benefits arise when you provide accommodation to an employee and there is an entitlement to at least two meals a day.
• Airline Transport Fringe Benefits
• Travel agent providing free or discounted air travel.
• Living-away-from-home allowance Fringe Benefits
• Provide an allowance to cover additional expenses because they ate temporarily away from home.
• Providing Entertainment
• Way of providing food, drink or recreation to employee.
• Car parking fringe Benefits
• Car parking facility provided to employee. Car parking threshold applies.
Call Tax Accountants Cranbourne at 1300 300 106 for further information.
Luxury Car Tax (LCT) is applied @ 33% on luxury cars sold or imported provided that value of the car exceeds the luxury car threshold. LCT is required to be payable by the businesses who sells the cars and is GST registered. Businesses include retailers, manufacturers. LCT also implies on individuals who imports the luxury car. A business needs to be registered for GST before in order to be registered for LCT.
LCT is payable or refundable and can be calculated on cash or accrual basis and is required to be lodged in the activity statement.
If you sold the two years old luxury car and the car has already subject to LCT then you only pay LCT if the value of the car has been increased. LCT payable in this car is on the increased value of the car. You must have Tax invoice for the old taxable sale where the LCT is already paid.
Value of the car includes price of all accessories, modification and treatments done to the car or overall price paid by the customer before the car gets delivered.
LCT threshold applies to the relevant year the car was imported, acquired or sold. For the financial year 2013-14, threshold for fuel efficient vehicles and other vehicles is $75,375 and $60,316.