Chesterton Accounting

July Newsletter

Welcome to our July monthly newsletter!

Happy New Financial Year! We are ready for another crazy tax season so please contact our office to schedule in for a tax consultation. We do however recommend waiting until the 15th of July to have your tax return prepared as this allows time for the ATO (and yourself) to have the information required and to reduce the need for an amendment should any information be missed. Please contact us if you are unsure what information is required to complete your tax return.
Monthly tax tip:

A property owner has many deductions at their finger tips but one deduction that many owners don’t consider is depreciation. When a new asset is purchased for a rental or commercial property then it would usually need to be depreciated over a number of years, but what about the existing assets and buildings on the property? Existing assets can too be depreciated and claimed as a tax deduction, maximizing tax savings! However, the value of the existing assets and the depreciation rules that can be applied are often unclear. We suggest contacting a quantity surveyor to value the existing assets, including any buildings and provide a depreciation schedule to allow for higher tax deductions against your property. Please contact our office for more information if you are interested in this service.

Important Dates!

7 July:

  • The ATO will start processing tax returns for the 2021 financial year

14 July:

  • STP finalization is due in payroll software on this date

16 July:

  • The ATO will start paying refunds for tax returns lodged for the 2021 financial year

21 July:

  • Lodge and pay June 2021 monthly business/instalment activity statement

28 July:

  • Lodge and pay quarter ending 30 June 2021 activity statement if lodging by paper
  • Make super guarantee contributions for quarter ending 30 June 2021 to funds by this date
  • Pay quarter ending 30 June 2021 instalment notice. Lodge the notice only if you vary the instalment amount

June Newsletter

Welcome to our June monthly newsletter!

It is now June which means the financial year has almost ended! If you would like to book in early for your annual tax then please contact our office for an appointment. We are also more than happy to correspond electronically should you be unable to come into our office. We will be offering our discounted rates at tax time again so make sure you book in before October to save on your accounting fees.
Monthly tax tip:
The Federal Budget revealed a change in the way self-education expenses can be claimed. Previously, the first $250 of the expense was non-deductible, e.g. $1000 paid on course fees would result in a $750 tax deduction. This has now been scrapped, making all self-education expenses tax deductible. But of course we all know that tax law is not black and white and there are still hoops to jump through to make a legitimate claim. The study that you are undertaking must relate to your current employment to the extent that a nurse cannot claim self-education expenses to become a doctor – it really has to relate to only the current taxable income that you have made in the year of claiming.

The expenses that can be claimed include course and tuition fees, internet and computer costs, stationery and office expenses, textbooks and resources, student union fees and travel costs if travel is required for classes, exams, etc. You would also need to be able to show that the study that is being undertaken maintains or improves the specific skills or knowledge you require in your current employment activities or that it results in or is likely to result in, an increase in your income from your current employment activities.

If you are an employer and choose to pay for your employees to undertake study then that can be claimed as a business expense, however fringe benefits tax would apply if the employee wouldn’t usually be able to claim the costs as a deduction if they were to pay for it themselves. If you are unsure about this and what can be provided for your employees or what can be claimed as self-education expenses then please contact our office.

Important Dates!
5 June:

  • Lodge 2020 tax return by this date to avoid failure to lodge on time penalties when lodgement due date is 15 May

21 June:

  • Lodge and pay May 2021 monthly business/instalment activity statement

30 June:

  • Superannuation contributions must be paid by this date to claim a tax deduction for the 2021 financial year
  • 2020 tax return must be lodged by this date to continue receiving child care subsidy and family tax benefit payments

May Newsletter

Welcome to our May monthly newsletter!

“A person doesn’t know how much he has to be thankful for until he has to pay taxes on it” – Ann Landers

We are now nearing the end of the financial year with tax time approaching. Now is the time to make an assessment of your profits and apply any tax saving strategies that you can! We are now taking tax planning appointments and are happy to provide anything from a simple chat about your potential taxes to a full tax planning service which includes a detailed estimate of taxable income, income tax payable and a tax savings report which explains which strategies can be applied to reduce income tax this year and potentially in future years. If you are unsure if this service would be beneficial or would like to know more then please contact our office for more information.

Monthly tax tip:
The pandemic has certainly taken a financial toll on all of us with bills and debts being postponed or potentially written off for some. Small business owners may find their debtors quickly piling up faster than they are being paid. We often find that this is an area of a business that is ignored with very few small businesses following up with unpaid accounts let alone knowing how much is owed to them. Unpaid invoices can become what is considered “bad debts” and not many will claim this as a tax deduction. A debt is considered “bad” and can be claimed if the following conditions are met:
  • The debt was included as taxable income in a current or previous income year (e.g. a business using the accruals method of accounting for income tax purposes)
  • The debt must be considered non-recoverable (this means that it is extremely likely that it will not be paid not just currently but also at any time in the future)
We suggest reviewing your debtor accounts at the end of each financial year and discussing this with your accountant prior to tax return lodgement to ensure that you are not paying taxes on income that you will not be receiving.

Important Dates!
15 May:

  • Lodge 2020 income tax return for all entities
  • Pay 2020 income tax for companies and superannuation funds

21 May:

  • Lodge and pay April 2021 monthly business/instalment activity statement

26 May:

  • Lodge and pay quarter ending 31 March 2021 business/instalment activity statement

28 May:

  • Lodge and pay quarter ending 31 March 2021 superannuation guarantee charge statement if contributions were not paid on time*

*Super guarantee charge is not deductible.

April Newsletter

Welcome to our April monthly newsletter!

The federal government will be continuing the country’s stimulus package by boosting the travel and tourism industries with a new support package of $1.2 billion. This package will allow travelers a 50% subsidy for domestic flights to select destinations throughout Australia. The destinations included in this package are the Gold Coast, Cairns, Whitsundays, Alice Springs, Broome, Kangaroo Island and Merimbula. This subsidy will be commencing on 1st of April 2021 so plan your holiday now!
Monthly tax tip:
Since we are on the topic of travel and holidays, why not also breakdown how you can make a holiday tax deductible. Business travel involves being away from home for at least one night for business purposes. Reasons for business trips include visiting customers or suppliers, meetings at other company locations, professional development, attending seminars, and networking, etc. Business travel days include days spent travelling, weekend days which are between two business days and days where more than 50% of the day was business activities. A travel diary will be required to keep data of the business activities and correctly apportion the expenses. The expenses that can be claimed whilst travelling are meals, accommodation, air and taxi fares and motor vehicles expenses. Please contact us if you would to maximise your tax deductions during your next trip.
Important Dates!
14 April:

  • Make the March monthly business declaration for the JobKeeper Scheme

21 April:

  • Lodge and pay March 2021 monthly business/instalment activity statement

28 April:

  • Lodge and pay quarter ending 31 March 2021 activity statement if lodging by paper
  • Make super guarantee contributions for quarter ending 31 March 2021 to funds by this date
  • Pay quarter ending 31 March 2021 instalment notice. Lodge the notice only if you vary the instalment amount

March Newsletter

Welcome to our March monthly newsletter!

The ATO have recently begun auditing businesses that have claimed JobKeeper payments which has resulted in over $200 million of overpayments. They have found around $155 million of the overpayments were made to businesses that were deliberately being dishonest in their application for the payment which will be required to be paid back. The other $50 million of overpayments have been due to honest mistakes and will not be required to be paid back. Businesses that have claimed this wage subsidy should ensure they are keeping proper payroll and accounting records to support their applications in case of audit.

Monthly tax tip:
The loss carry back tax offset is a recent offset which will be available this financial year. Eligible entities will be able to carry back tax losses made in 2020-2022 income years. The offset would be applied to any income year between 2019-2021 where profits were made and income tax became liable to the taxpayer. This offset is only available to eligible entities including companies, corporate limited partnerships and public trading trusts that carry on a business and have a turnover of less than $5 billion. This is a great tax saving for small corporate businesses so please ensure that you contact your accountant to carry-back your business losses to be refunded for previous income tax paid.
Important Dates!
14 March:

  • Make the February monthly business declaration for the JobKeeper Scheme

21 March:

  • Lodge and pay February 2021 monthly business/instalment activity statement

February Newsletter

Welcome to our February monthly newsletter!

JobKeeper has been a hot topic for small business employers and sole traders over the last year with many businesses receiving this assistance to enable them to continue to employ and trade as usual. The ATO are currently processing the last round of this payment scheme with March being the last month of the wage subsidy. Although JobKeeper has been extremely helpful and very much needed to many small business owners, the Government will have to cut this financial help eventually with the countries budget being exceeded. Businesses will have to adjust to the end of JobKeeper as well as other previous payments and subsidies being received after the affects of COVID-19 (cash-flow boosts, apprentice subsidies, etc.) and this may become a sore spot for businesses that have limited cash-flow and poor forecasting. Now is the time for small business owners to sit down and look at their financial position, adjust their budget and prepare for a decrease in cash-flow once all final subsidies and payments have been received. If you are unsure where to start with your budget or cash-flow forecast and require advice or assistance to keep your business on track and trading then please contact our office for an appointment (phone appointments are available).

Monthly tax tip:

We mentioned in our January newsletter that the shortcut method for home office expenses (80 cents per hour working from home between 1 March and 31 December 2020) had ended. Since then, the ATO have announced that this method of claiming home office expenses has been extended until 30 June 2021 since COVID-19 cases rose. This means that if you work from home during these dates at any point during your employment (or when carrying on a business) then you can claim this easy method. However, please ensure that you are keeping good records of the hours spent in your home office (e.g. timesheets, work diary entries). The ATO will most likely see a jump in home office expense claims this financial year with many taxpayers working from home. It is highly likely that these claims will become an ATO audit target over the next few years so we do recommend that you speak with your tax adviser to calculate the best claim for you and to ensure that you are claiming this expense correctly.

If you would like to schedule a consultation with us then please jump onto our website where you can see our availabilities and book a time that suits you.

Important Dates!

14 February:

  • Make the January monthly business declaration for the JobKeeper Scheme

21 February:

  • Lodge and pay January 2021 monthly business/instalment activity statement

28 February:

  • Lodge and pay SMSF (self-managed superannuation fund) annual return for new registrants for the 2020 financial year
  • Lodge and pay quarter ending 31 December 2020 activity statement
  • Lodge and pay annual GST return for the 2020 financial year
  • Lodge and pay quarter ending 30 September 2020 superannuation guarantee charge statement if contributions were not paid on time

*Superannuation guarantee charge is not tax-deductible

 

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