Tax Advice and Updates
Do you have an FBT liability this year?
It is a common practice for employers to provide additional items on top of an employee’s salary or wage.
Some of these items could include.
- Car or other vehicles owned or leased by the business available to employees for private use.
- Loans provided at reduced interest rates to employees.
- Employee released from an owed debt.
Tax Alerts – Be aware of the risks
Recently the Australian Taxation Office issued the following alerts to help you recognise some of the ‘dodgy’ agreements that are out there. It is important that you are aware of these so that you do not get caught in the midst of something potentially illegal or at the very least frowned upon.
Your Land Tax Is Now Due – Do You Know What You Owe?
Land tax is a tax on the land you own in NSW as at midnight on 31 December of the previous year. Land Includes:
• Vacant land
• Land where a house, residential unit or flat has been built
• Holiday homes
• Company title units
• Residential, commercial or industrial units
• Commercial properties, including factories, shops and warehouses.
The Season of Giving is Upon Us - Tax Deductible Donations
For so many of us Christmas is a time to spend with family and friends, eating, giving and receiving presents and enjoying each others company. It is also the time of giving to those less fortunate. Both Individuals and organisations alike can claim a tax deduction for such donations.
In order to make a tax deductible donation, the donation or gift must be made to a Deductible Gift Recipient (DGR). Only certain organisations are entitled to receive income tax deductible gifts and tax deductible contributions. To check if an organisation is a DGR, you will need to refer to the ATO’s website. One common misconception is that all charities are DGR’s, however this is not the case. For this reason it is important to ensure that the charity you are donating to is a DGR.
The recognition criteria for tax deductible donations are that they must:
• be made to a DGR
• really be a gift
• be a gift or money or a certain type of property
• comply with any relevant gift conditions
• Amount must exceed $2
Maximise the return on your investment property - know what expenses you can claim
Owning an investment property can be a rewarding experience, both financially and emotionally. Apart from the purchase cost of the property there are numerous other costs involved such as bank fees and interest, body corporate fees, conveyancing costs as well as stamp duty and other tax liabilities.
However, all of these extra costs need not leave the avid investor completely out of pocket. With a little tax knowledge and some professional advice you may be able to claim a majority of the expenses associated with the purchase, ongoing maintenance and the process of generating income from your investment property, as tax deductions.
Will your bookkeeper be compliant under the new Tax Agent Services Act 2009?
Legislation for the Tax Agent Services Act 2009 has been drafted and is intended to be enacted early in 2010. The new regulations will see that bookkeepers who are currently preparing and lodging Business Activity Statements (BAS) for a fee are now required to meet standard eligibility criteria and must be registered to perform those services.
Have You Taken Advantage of The Business Tax Break?
By now, most business owners would have at least heard about the small business tax break, however many of those owners may not have taken advantage of this incentive. The deadline is drawing near but it’s not too late to capitalise. Here is what you need to know to do so.
Keep the tax man away from your Christmas party!
Christmas is slowly creeping up on us and most of the annual party preparations are underway. Not only will business owners be preparing Christmas Parties, they will be considering what gifts, if any, they will provide to clients and employees. However, an important issue to consider is the possible Fringe Benefits and income taxes that may be applicable when providing ‘entertainment’ to staff and clients.
Selling an asset? How will Capital Gains Tax affect you?
To understand Capital Gains Tax, you must first understand what capital gains means. Put simply, Capital Gains are the difference between the buy and sell price of an asset i.e. profit. Capital gains tax (CGT) is the tax you pay on any capital gain (profit on an asset) you make and include on your annual income tax return. There is no separate tax on capital gains; it is merely a part of your income tax. You are taxed on your net capital gain at your tax rate.
Reduce your tax bill AND increase your wealth using imputation credits
Unlike income from cash or bonds, which is fully taxable at your marginal tax rate, Australian shares receive attractive tax concessions through the dividend imputation system.
Australia’s dividend imputation system can reduce and in some cases eliminate tax liabilities for domestic share investors. Given companies have already paid tax at the company tax rate, investors receive an offset in the form of imputation credits, these credits are equal to the amount of tax they pay on dividends. The higher the franking level the greater the benefit.
