Posts Categorized: Tips of the week

$30000 asset write-off limit

So what if you want to buy an asset costing more than $30,000 (ex GST)?

Well as a small business, you will be able to claim 15% depreciation on the cost of the asset. So a $50,000 asset bought today will still generate a $7,500 tax deduction in the 2019 tax year (and $12,750 next year).

Buy the same asset on say 7th July, and your claim for next year is only $7,500.

And you still may be able to write-off the balance in the 2020 year for an asset costing more than $30,000. The $30,000 limit also applies to the undepreciated pool balance. We had one client buy a vehicle for $35,000. Come July 1 2019, the pool balance will be $27,500 (as that is the only asset they are depreciating). They can write off the balance of the car in the 2019/20 year.

Please refer to our three part series of 21 tips and traps for the instant asset write-off. Or better yet, call us on 9899-7511 to discuss your situation and opportunities.

Super contribution warning

A quick super contribution warning.

In order to claim a tax deduction for a personal or employer super contribution, it must be paid by year end.

This year is a bit of a trap with June 30 falling on a Sunday.

Another trap is that I just read that the ATO’s own employer super clearing house requires payment to be made by the close of business on Monday 24th June. Pay later than that and the contribution will go into the next financial year. That’s a real problem if you have retired and are aged over 65 as you will thereby breach the work test rule in the first week of July 2019.

Some clearing houses and super funds close off earlier than the 24th. Make sure you now what you cut-off dates are.

Be ready for STP

Single Touch Payroll (STP) will be here in just 4 weeks!

It is critical to use the month of June to prepare yourself. Don’t fall for the trap of delaying and then finding you can’t meet your first pay run in July.

Our clients will be receiving weekly STP reminders and action steps. Please fill in the contact form if you want either STP assistance or to simply receive the weekly STP emails.

Single Touch Payroll webinar

Are you wondering what you should be doing in preparation of Single Touch Payroll?

Do you know that from 1^st July all employers in the country are required to report how much every employee will be paid, the PAYG WH tax thereon as well as what their super will be at the time of payment? And yes whilst there are exemptions it just means more work later.

You need to be ready for Single Touch Payroll now or in the process of getting ready.

So do you know what you need to do before 1^st July?

So do you know what you should be doing from 1^st July?

If you can’t answer these questions then you need to attend out STP webinar on Tuesday 28^th May at 5pm.

You can enrol by clicking on the following link:-

https://zoom.us/webinar/register/a10dbea62247ddf5d746f627e8486654

Improving cash flow

Want to improve your cash flow?

Not much of a question really – of course you do.

For some it is easy as making it easier for your customers. For those providing a good or a service, it can be as easy as taking payment upon or before delivery. And for some this can be as easy as using Square, Pay-pal and other such options.

You are asking for payment at the time – and isn’t easier to ask to be paid at the time of the exchange? You are also making it easier for your customer / patient to pay you.

Want other cash flow tips? We have hundreds obtained from our experience of working with a wide range of clients form different industries. Call us.

Family Tax Benefit Part A

Those with family incomes under $53,728 receive the full amount of Family Tax Benefit Part A – that’s $4,753.84 for a child under 13, $6,184 for a child aged 13 to 15 as well as for those children aged 16 to 19 who met study requirements.

That’s a lot of money. In fact for a family with 12 and 14 year old children, the benefit is more than the tax to be deducted from a salary of $53,728.

The entitlement is reduced by 20% for every dollar of income in excess of $53,728.

One still receives a base rate of the Family Tax Benefit Part A of $1,525.16 for each child up until an income of $94,316. Thereafter, your entitlement reduces by 20% for every extra dollar of family income.

Income is defined as adjusted taxable income which includes reportable fringe benefits and reportable employer super contributions.

To receive this entitlement, you MUST lodge your Tax Return for the previous year by 30^th June. So if you haven’t lodged your 2018 Tax Return you better get cracking!

Single Touch Payroll

Single Touch Payroll will apply to all employers from 1^st July 2019. Whilst extensions have been offered we recommend not relying on them in the majority of cases as it will create more work later.

There are a number of things to do and matters that as an employer you need to have in order before July. Keep an eye out for notification of our upcoming webinar.

In that webinar we will set out the when, what, why and how of Single Touch Payroll.

We look forward to seeing you then.

Contractor or employee?

Contractor or employee? You better get it right as the implications for doing so can be financial crippling. And then there is the time and mental frustration of dealing with such disputes.

The critical thing is to get the classification right.

You then have to get the right documentation in place.

If they are an employee then you need to do a few things including determine the right award, give them a letter of offer and issue the National 10 Employment Standards.
All too many business owners fail to document a contractor relationship. Agreements are looked through by investigators to avoid shams and find the true relationship. Sadly though, some business owners lose the fight as they have don’t have a contractor’s agreement to prove their position – leaving the investigators to pretty much accept whatever the payee claims.

Does it cost to establish a contractor’s agreement? Yes (but it’s insignificant considering what it can save you)

Should you get one off the web? No (how many times do do it yourself lawyers use say a USA agreement or be clueless about the differing considerations used by the ATO, State Revenue Office and WorkCover).

Will the process reduce the possibility of any claim as both parties are fully aware of the relationship? Absolutely.

We would welcome the opportunity to discuss your situation.

$30000 instant asset write off trap

There are a few traps with the $30000 instant asset write off trap to be wary of.

To qualify you need not only to buy the asset but have it installed ready for use before 1st July 2019.

And please note that this increased threshold only applies to asset acquired after Budget night (2nd April).

A Budget warning

A Budget warning! A Federal Budget is only a series of announcements. No announcement has effect until it is legislated. For that to happen, a bill must be passed by The House of Representatives before being passed by the Senate. From there it is effectively a formality for abill to receive Royal Assent.

That all said, the increased instant asset write-off of $30,000 has passed the Senate.

With an election pending, other announcements may never see the light of the day. Many announcements morph into quite different legislation.

Keep an eye on our posts to find out what is eventually becomes law and how you will benefit or be affected.