Tax Advice and Updates
The importance of determining sources of income
As an individual, you must pay tax to the Government in proportion to your earnings for the financial year period. In addition to the marginal tax income rates that are used to calculate the base amount of tax payable, taxpayers may be eligible to claim deductions or offsets that may further reduce the amount of tax payable.
Important Dates to Note
December Quarter Super is due on 28th January 2012
Last day for superannuation guarantee contributions to be made to a superannuation provider for quarter 2 2011-12 (1 October - 31 December).
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Carrying Forward Losses
Corporate entities are afforded a lot of tax benefits and flexibility in the way that they manage their tax affairs, particularly in their treatment of available tax losses. One such benefit is the ability to carry forward losses accumulated in one income year for deduction against assessable income gained in future years. The general limitation is that the company that incurred the loss must be one and the same entity as the claiming company so in order to utilise a prior year loss, a company must satisfy either the Continuity of Ownership Test or the Same Business Test.
Is Land Tax applicable to you?
Land tax is a tax levied on the owners of land in NSW as at midnight on 31 December of each year. In general, your principal place of residence (your home) or land used for primary production (a farm) is exempt from land tax. Landowners are generally liable for land tax when the unimproved value of taxable land exceeds certain thresholds. You may be liable for land tax if you own or part-own:
Maximising your share portfolio
When we consider purchasing shares we generally think about capital growth. That is, whether the share price has gone up or conversely, gone down. If you are considering investments that provide steady income, Australian Industrial Shares may be a solution. The Australian Industrial Share price may rise or fall, but generally they continue to pay dividends to shareholders. For example, the dividend return of the S&P/ASX 300 Industrial index was 5.6% for the financial year ending 30 June 2011.
Tips on keeping good records for your Business
Keeping good records requires more than just knowing which records to keep and for how long. It also includes setting up systems and maintaining records in a way that makes it easier for you to monitor the progress of your business to track business is improvement, which items are selling and changes that are required – knowing how best to keep records can be the difference between the failure and success of your business.
ATO Compliance Focus for 2011/12
The Australian Taxation Office recently released its Compliance Focus for the new financial year. The Compliance program expresses the ATO’s particular concerns and their plans to combat them, with a focus on tax and superannuation compliance. A number of their concerns may implicate small business owners, and these are listed below.
SMEs – Watch out for the audits undertaken by the ATO, Payroll Tax and WorkCover
An audit is a review of the annual accounts and is usually carried out by an independent person or party, or a firm of accountants who are also accredited auditors. It is used to identify whether your business complies with accounting standards and relevant laws, regulations and government directions. Audits can also be of benefit to a business by highlighting opportunities for improved accounting and financial systems. The most common types of audits are usually related to various taxes such as GST and Payroll but can also be for other business areas such as Workers Compensation or Occupational Health & Safety.
Watch out – OSR coming down hard on Grouping of companies
Many businesses are required to pay Payroll Tax to the Office of State Revenue (OSR). Payroll Tax is a state-based tax imposed on wages that are paid or payable in the relevant state, and is generally applied to the annual payroll of employers/grouping of linked employers. Wages includes most payments for services made by an employer to employees, directors and contract workers who are deemed to be employees.
It’s getting harder to negotiate repayment of outstanding tax debt over time with the ATO
Tax debt is the amount of tax incurred during previous financial years that you still owe to the Australian Tax Office (ATO). Debt to the tax office can become increasingly difficult to manage when the ATO enforces its penalties for late payment, thus creating even more debt for you. However, if you undertake the right measures and heed some advice you should be able to avoid these penalties and perhaps even some tax debt.
