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September Newsletter

Welcome to our September monthly newsletter!

The Government has expanded the SME Recovery Loan Scheme to now include businesses that didn’t receive JobKeeper payments. Previously to be eligible to apply for the scheme, a business needed to receive JobKeeper payments but now any small or medium business with a turnover of less than $250 million can apply as long as they can show that they are facing sustained economic impact as a result of the pandemic. If eligible, a business could receive a loan of up to $5 million over a 10-year term.
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Monthly tax tip:

Laundry is an expense that most of us don’t even notice but it can be claimed as a clothing deduction. To be eligible, a tax-payer has to be laundering clothes that can be claimed as a deduction. Examples of this are protective clothing (e.g. hi-vis shirts), uniforms that have a logo/business name displayed or occupation specific clothing (e.g. medical scrubs). Unfortunately, plain clothing cannot be claimed and laundering of this clothing is also considered of a personal nature even if you have been asked to wear a certain type of clothing for work (e.g. black clothing only required, gym clothes). If you are eligible to claim the laundering of your work clothes then you can claim 50 cents per mixed load (mixed with personal clothing) or 1 dollar per full load of clothes up to a total limit of $150 without receipts. If you work in an industry that requires a large amount of laundry then it may be helpful to keep receipts for the laundry items you purchase specifically for your work clothing to claim more than $150.

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 September:

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

30 September:

  • Lodge Annual TFN withholding report if a trustee of a closely held trust has been required to withhold amounts from payments to beneficiaries

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.

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

 

January Newsletter!

Welcome to our January monthly newsletter!

Happy New Years and welcome to 2021, we hope you had a great Christmas and were able to put your feet up! The Chesterton team are back in business and ready for January so please pop into the office to say hello, we would love to see you!
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Monthly tax tip:
It is now January and that means taxpayers can no longer claim the shortcut method for home office expenses (80 cents per hour working from home between 1 March and 31 December 2020). Since the COVID-19 lockdowns, many taxpayers are choosing to continue to work from home – but how can they now claim their home expenses that are used for work? The fixed rate method allows a taxpayer to claim 52 cents per hour working from home which covers depreciation of furniture, electricity and repairs made to home office equipment. This method does not cover expenses relating to phone, internet, printing/stationery and the depreciation of computer equipment so these expenses would need to be calculated separately, including receipts and logbooks kept to show the calculation of the claims.

The other method available is the actual cost method. This method allows you to claim for all home office expenses (e.g. electricity, phone, internet, depreciation of furniture and office equipment, etc.) but you would need to calculate the portion they relate to work – which can deter taxpayers from using this method as opposed to the fixed rate method. This method would require substantiation to show how each expense was calculated, e.g. diaries, receipts, logbooks and phone call logs, so you must be a good record keeper. We recommend keeping substantiation for both methods so the claims can be compared and the highest claim is used. If you are unsure what records must be kept or how you would claim the expenses for your home office then please contact our office so we can advise you.

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!
21 January:

  • Lodge and pay December 2020 monthly business/instalment activity statement

28 January:

  • Make super guarantee contributions for quarter ending 31 December 2020 to funds by this date
  • Make the December monthly business declaration for the JobKeeper Scheme

December Newsletter!

Welcome to our December monthly newsletter!

This year has certainly flew by and I think it’s safe to say that we are all thankful to move on from 2020! We will be closing for the Christmas holidays on Friday the 18th from 3pm and will return in the New Year on Monday the 4th from 8.30am. The whole team at Chesterton Accounting wish you, your staff and your families a joyful and safe Christmas!
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Monthly tax tip:
It’s the time of year again for gifts, bonuses and parties! But what exactly is tax deductible? Gifts to customers can be tax deductible if they are given in hopes of increasing your taxable income (e.g. to retain a client or to encourage further sales) and gifts to employees are also tax deductible if they are consistent and are given to retain employees. Christmas parties are generally considered non-deductible entertainment however can be claimed in the correct circumstances. If the Christmas party is held on business premises, during paid staff hours and work continues once it ends then the food purchased would be considered a staff expense (e.g. a lunch-time pizza party). If however, the party happens after work hours at an external location then it won’t be tax deductible (e.g. drinks and nibblies at the local pub at 5pm after work). Please contact our office if you would like to know if your Christmas gifts and party expenses can be tax deductible.

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!
1 December:

  • Pay income tax for medium and large taxpayers, including companies and superannuation funds for the 2020 financial year

14 December:

  • Make the November monthly business declaration for the JobKeeper Scheme

18 December:

  • Closing date of our office for the Christmas holidays – anything received after this date will not be processed/lodged until we return in January

21 December:

  • Lodge and pay November 2020 monthly business/instalment activity statement
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