Newsletter

July Newsletter

 

Welcome to our July monthly newsletter!

Happy new financial year! We cannot wait to complete your tax returns. We do however recommend waiting until the 15th of July to have your tax return completed if you are an individual taxpayer. This ensures the ATO have all the information required and reduces the likelihood of an amendment in the case of missed information. We recommend waiting until September if you are in business to ensure all activity statements for the year have been lodged and payroll has been finalised. Please contact us if you are unsure of what information you will need to complete your tax return.

 

 

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Monthly tax tip:

If you are an employer then you should know that there have been some recent changes to the superannuation guarantee for employees. The old rate of 10% has now been increased to 10.5% and will increase each year for the next 3 years. This added expense for employers could mean a slower rate of payment for this super liability if it has not been included in the budget for your business. It is important to note that superannuation paid late will result in NO tax deduction! It will also require an SGC statement to be lodged and penalties/charges would be payable. Superannuation should be paid for all adult employees at the minimum rate, 28 days after the end of the quarter. You could also start paying super monthly to spread out the liability throughout the year and to assist your cash-flow.

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.

 

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Important Dates!

14 July:

  • STP finalisation is due in payroll software on this date

21 July:

  • Lodge and pay June 2022 monthly business/instalment activity statement

28 July:

  • Lodge and pay quarter ending 30 June 2022 activity statement if lodging by paper
  • Make super guarantee contributions for quarter ending 30 June 2022 to funds by this date
  • Pay quarter ending 30 June 2022 instalment notice. Lodge the notice only if you vary the instalment amount

 

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Superannuation to increase on 1st July 2022

Superannuation to increase on 1st July 2022

 

 

Superannuation to increase 1st July 2022

On the 1st of July 2022 the superannuation guarantee (SG) will increase from 10% to 10.5%. It will continue to increase by 0.5% on the 1st of July each year until it reaches 12% on the 1st of July 2025.

Employers must increase the minimum superannuation contribution to eligible employee’s ordinary time earnings to 10.5% otherwise they can face significant charges and penalties imposed by the ATO for underpaid superannuation.

Employers will need to prepare and plan for the increasing employee costs for the next financial year & future financial years when reviewing their own budget. Some things to consider:

  • Review employee agreements to determine if remunerations are inclusive or exclusive of superannuation
  • Notify your employees of the superannuation increase – especially if the changes will impact their take home pay
  • Ensure payroll software is updated to incorporate the rate change

Depending on the terms of employment, it could result in an employee’s take home pay decreasing or the employer’s cost increasing:

  • An employee’s annualised salary is inclusive of superannuation – The employee’s wage includes superannuation which means their take home pay will decrease on the 1st of July 2022.
  • An employee’s annualised salary is exclusive of superannuation – The employee’s take home pay will remain unchanged & the employer will bear the costs of the increase.

Employees covered by a modern award are exclusive of superannuation, which means their take home pay will remain the same & the employer will incur the cost of the superannuation increase of 0.5%.

Some employees may already be receiving more than the minimum SG due to an agreed term under an employment agreement so the increase may not affect them, it depends on the wording of their contract. Employers need to review their employment agreements to determine if an employee’s superannuation rate must increase.

 

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June Newsletter

Welcome to our June monthly newsletter!

Labor has won the election, but what does this mean for you – the small business owner? Not much is changing directly for small business, however there will be significant increases to wages and superannuation payments. These changes will not only increase employee expenses, but we will also see price increases by suppliers. Business owners may find themselves tightening their budgets. However, with the increase in wages, business sales may too see an increase.

For individuals, the final stages of the tax cuts will continue, and no new taxes will be applied as well as the discontinuation of the low-and-middle-income tax offsets that will cease in 2023 as planned.

 

 

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Monthly tax tip:

The end of the financial year is just around the corner so now is the time to complete those trust resolutions for those entities operating under a discretionary or family trust. They will need to be completed by the 30th of June to distribute profits for the 2022 financial year.

A trust distribution allows a trust to distribute profits among its beneficiaries which can help to decrease a family’s overall tax liability. For example, a family with two adults and two children would be able to distribute $416 to each child, then the remaining profits split between the two parents to take advantage of individual tax rates and the tax-free thresholds for each adult. If a trust resolution is not prepared, then any profits made will be taxed at top tax rates which is 45% for the 2022 financial year.

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.

 

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Important Dates!

5 June:

  • Lodge 2021 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 2022 monthly business/instalment activity statement

30 June:

  • Superannuation contributions must be paid by this date to claim a tax deduction for the 2022 financial year
  • 2021 tax return must be lodged by this date to continue receiving childcare subsidy and family tax benefit payments
  • Trust distribution resolutions must be prepared and signed by this date to avoid paying top tax rates

 

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May Newsletter

 

Welcome to our May monthly newsletter!

“The hardest thing to understand in the world is the income tax” – Albert Einstein

We are now nearing the end of the financial year with tax time approaching. Now is the time to assess 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.

 

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Monthly tax tip:

Depreciation is a tax deduction whereby an asset is depreciated over its effective life. This makes sense as the asset will be used in multiple financial years and so the claim for it should also be spread over multiple financial years. Small businesses can choose to use these general depreciation rules or the simplified depreciation rules. If the small business chooses the simplified rules, then they can usually claim a higher deduction in the year of purchase, claiming the asset over less financial years. This can be a great option for small businesses that wish to pay less tax after spending money on new assets. However, the con to using the simplified rules is they must be applied to all assets, even if that results in a taxable loss. A small business can choose to stop using the simplified rules but then must use the general rules only for five income years before using the simplified rules again.

Due to the stimulus measures brought out by the Government, there are more options and more benefits for small businesses. The temporary full expensing measures mean that there is no write-off limit so the cost of a new asset can be claimed in the year of purchase up until 30 June 2023. The “lock out” rules have also been suspended to 30 June 2023 which allows a small business that has opted out of the simplified rules to re-enter before the five year period. These options should be discussed with us during tax planning or tax time to calculate the best taxable outcome.

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.

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Important Dates!

15 May:

  •       Lodge 2021 tax returns for all entities that did not have to lodge earlier
  •       Pay 2021 income tax for companies and superannuation funds

21 May:

  •       Lodge and pay April 2022 monthly business/instalment activity statement

26 May:

  •       Lodge and pay quarter ending 31 March 2022 activity statement

28 May:

  •  Lodge and pay quarter ending 31 March 2022 superannuation guarantee charge statement if the contributions were not paid on time*

*Superannuation guarantee charge is not tax deductible

 

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The Federal Budget for the 2022/23 financial year

The Federal Budget for the 2022/23 financial year

 

 

The Federal budget for the 2022/23 financial year has recently been handed down in Parliament.
Below is the list of key tax measures and changes that are included in the budget.

Business:

  • Small businesses will be able to claim a 20% bonus on external training courses used for the upskilling of employees. The expenditure can be incurred between the 29 March 2022 to 30 June 2024, however the bonus’ cannot be claimed until 2023 onwards
  • Small businesses will also be able to claim an extra 20% deduction for the cost of technology purchases that support digital adoption such as cloud-based services, portable payment devices and cyber security expenses. The expenditure can be incurred between the 29 March 2022 to 30 June 2024, however the bonus’ cannot be claimed until 2023 onwards
  • COVID-19 Business support grants will be considered non-assessable non-exempt income, meaning that they are not assessed as taxable income and no tax is payable on them

Individuals:

  • Increase to the low- and middle-income tax offset (offset increased to reduce a taxpayers income tax liability from $1,080 to up to $1,500) for the 2022 income year based on their taxable income
  • The Medicare levy low-income thresholds will be increased for the 2022 income year (taxpayers will not be required to pay the levy until their income exceeds the threshold)
  • COVID-19 testing costs will be claimable when these have been taken to attend work
  • A one-off $250 cost of living payment will be available to eligible individuals who are currently receiving Government payments, allowances, or pensions, or are concession card holders

For more details, please visit the budget website at https://budget.gov.au/index.htm

April Newsletter

Welcome to our April monthly newsletter!

Taxpayers that have been affected by the recent floods in NSW and QLD states will have flood support available from the ATO. This support will include automatic lodgement deferrals for those in affected local government areas as well as payment plan options for any debts owing. The ATO emergency support line is 1800 806 218 and can be used to speak to a support officer regarding the support available for taxpayers.

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Monthly tax tip:

Australians are unfortunately affected by many natural disasters but grants and recovery support payments are usually available. If a taxpayer has been affected by drought, flood/fire, or other natural disaster then they may receive a payment from a local, state, or federal agency and each payment has a different tax consequence. Australian Government Disaster Recovery Payments (DRP’s) are treated as exempt income, meaning it is not taxable, but it does need to be included in the recipient’s tax return. Examples of non-taxable payments that aren’t included in the recipient’s tax return are assistance payments from a charity or community group as well as gifts from family and friends. It’s important to be aware of the tax implications of any support payments that you may receive so that income can be correctly reported and taxed, and extra tax is avoided. If a taxable support payment is received, then this will affect your total taxable income and the rate of income tax that is paid so adjustments may be required if paying tax instalments. Any payments received throughout the year should be discussed with your accountant for tax planning measures.

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.

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Important Dates!

21 April:

  •       Lodge and pay March 2022 monthly business/instalment activity statement
28 April:
  •       Lodge and pay quarter ending 31 March 2022 activity statement if lodging by paper
  •       Make super guarantee contributions for quarter ending 31 March 2022 to funds by this date
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