All Posts By

Sophie Kokiousis

Oct 12
0

Rental Property Income and Deductions

By | Tax

Tax time focus on rental property income and deductions

The ATO is focusing on four major concerns this tax season when it comes to rental properties.

Concern 1: Include all rental income

When preparing tax returns, make sure all rental income is included, such as from short-term rental arrangements, renting part of a home, and other rental-related income like insurance payouts and rental bond money retained.

Concern 2: Accuracy of expenses

Not all expenses are the same – some can be claimed straight away, such as rental management fees, council rates, repairs, interest on loans and insurance premiums. Other expenses such as borrowing expenses and capital works need to be claimed over several years. Depreciating assets such as a new dishwasher or new oven costing over $300 are also claimed over their effective life.

Concern 3: Capital Gains Tax upon sale of a rental property

When selling a rental property, capital gains tax (‘CGT’) needs to be considered and any capital gains or capital losses need to be reported. When calculating a capital gain or capital loss, it’s important to get the cost base calculation right. It is also important to note that when selling any property for $750,000 or more, vendors/sellers must have a clearance certificate otherwise 12.5% will be withheld. These clearance certificate applications can take up to 28 days to process so to avoid delays, sellers should apply as early as practical using the online form.

Concern 4: Record keeping

Records of rental income and expenses should be kept for five years from the date of tax return lodgements or five years after the disposal of an asset, whichever is longer.

If you are thinking about purchasing a rental property please reach out to your local accountant for more information.

Jun 06
0

2022/23 FEDERAL BUDGET

By | Uncategorized

Assistance for employers to up-skill their employees

The Federal Budget announced a skills and training boost to support small and medium-sized businesses in training and upskilling their employees. The boost will apply to eligible expenditure incurred from 7:30pm on 29 March 2022 (i.e. Budget night) until 30 June 2024. Small and medium-sized businesses (“SMEs”) (with aggregated annual turnover of less than $50 million) will be able to deduct an additional 20% of costs incurred on external training courses provided to their employees.

When to Claim?

For eligible expenditure incurred by 30 June 2022, the boost will be claimed in tax returns for the following income year. For eligible expenditure incurred between 1 July 2022 and 30 June 2024, the boost will be claimed in the income year in which the expenditure is incurred

Technology investment boost

The Government also announced a technology investment boost to support digital adoption by small and medium-sized businesses. The boost will apply to eligible expenditure incurred from last night (29 March 2022 i.e. Budget night) until 30 June 2023. Small and medium-sized businesses (with aggregated annual turnover of less than $50 million) will be able to deduct an additional 20% of expenditure incurred on business expenses and depreciating assets that support their digital adoption (such as portable payment devices, cyber security systems or subscriptions to cloud-based services). An annual cap will apply in each qualifying income year so that expenditure up to $100,000 will be eligible for the boost. This equates to a maximum additional deduction of $20,000 per eligible year.

When to Claim?

For eligible expenditure incurred by 30 June 2022, the boost will be claimed in tax returns for the following income year. For eligible expenditure incurred between 1 July 2022 and 30 June 2023, the boost will be claimed in the income year in which the expenditure is incurred

Modernising the PAYG instalment system

The Government will enable companies to choose to have their PAYG instalments calculated based on current financial performance, extracted from business accounting software, with some tax adjustments. This will support business cash flow by ensuring instalments reflect current performance.

When will it be in Place?

Subject to advice from software providers about their capacity to deliver, it is anticipated that systems will be in place by 31 December 2023, with the measure to commence on 1 January 2024, for application to periods starting on or after that date.

New option for Reporting Contractor Payments (“TPAR”)

The Government will provide businesses with the option to report contractors’ payments (via accounting software) on the same lodgement cycle as their activity statements.

When will it be in Place?

Subject to advice from software providers about their capacity to deliver, it is anticipated that systems will be in place by 31 December 2023, with the measure to commence on 1 January 2024, for application to periods starting on or after that date.

COVID-19 business grants to be non-assessable non-exempt (“NANE”)

The Government has extended the measures that enable payments from certain state and territory COVID-19 business support programs to be made non-assessable non-exempt income (‘NANE’) for income tax purposes until 30 June 2022. This measure was originally announced on 13 September 2020. The Government has made the following state and territory grant programs eligible for this treatment since the 2021-22 Mid-Year Economic and Fiscal Outlook:

  • New South Wales Accommodation and Support Grant.
  • New South Wales Commercial Landlord Hardship Grant.
  • New South Wales Performing Arts Relaunch Package.
  • New South Wales Festival Relaunch Package.
  • New South Wales 2022 Small Business Support Program.
  • Queensland 2021 COVID-19 Business Support Grant.
  • South Australia COVID-19 Tourism and Hospitality Support Grant.
  • South Australia COVID-19 Business Hardship Grant.

Tax deductibility of COVID-19 test expenses

From 1 July 2022, the costs of taking a COVID-19 test to attend a workplace will be tax deductible for individuals. In making these costs tax deductible, the Federal Government will also ensure Fringe Benefits Tax (“FBT”) will not be incurred by businesses where COVID-19 tests are provided to employees for attending work

Further ATO Compliance Audits

The ATO will extend their Tax Avoidance Taskforce by two years to 30 June 2025. Established in 2016, the compliance audits will continue to focus on targeting high wealth individuals and their tax avoidance.

Sharing of Single Touch Payroll (‘STP’) data 

The Government has committed to the development of IT infrastructure required to allow the ATO to share STP data with State and Territory Revenue Offices on an ongoing basis. Funding for this measure has already been provided and will be deployed following consideration of which States and Territories are able, and willing, to make investments in their own systems and administrative processes to pre-fill payroll tax returns with STP data.

May 04
0

Tax deductibility of COVID-19 test expenses

By | Tax

The Morrison Government is taking action to ensure that COVID‑19 tests (including Polymerase Chain Reaction and Rapid Antigen Tests) are tax deductible for hard‑working Australians, and exempt from fringe benefit tax for businesses, where they are purchased for work‑related purposes.

To remove any doubt, the Government will introduce legislation to make clear that work‑related COVID‑19 test expenses incurred by individuals will be tax deductible. This applies both when an individual is required to attend the workplace or has the option to work remotely.

By introducing this legislation, the Government will also ensure that fringe benefit tax will not be incurred by employers if they provide COVID‑19 testing to their employees for work‑related purposes.

This change will take effect from the beginning of the 2021‑22 tax year and will be in place permanently.

This action recognises that COVID‑19 tests are an important tool for mitigating transmission risks and absences from the workplace.

If you have any other questions in regards to tax deductions for the 2021/22 financial year, please email sophie@advantagebusinessgroup.com.au

Apr 14
0

Super for more employees

By | Superannuation

Generally, if you pay an employee $450 or more (before tax) in salary or wages in a calendar month, you must also pay super guarantee for them. Salary or wages includes any overtime.

From 1st July 2022, you’ll need to pay super guarantee contributions to an employee’s super fund regardless of how much they are paid. Employees will still need to satisfy other eligibility requirements. This includes other workers who are eligible for super including contractors.

ELIGIBILTY

Generally, all employees are eligible for super. It doesn’t matter if the employee is:

  • Full-time, part-time, or casual
  • Receiving a super pension or annuity while working (this includes employees on transition to retirement)
  • A temporary resident, such as a backpacker
  • A company director
  • A family member working in your business.

CHECK YOUR ELIGIBILITY HERE

Employees aged under 18

You must pay super for an employee aged under 18 years if:

  • they work for you more than 30 hours per week
  • you pay them $450 or more (before tax) in wages or salary in a calendar month.

Domestic or private workers

Domestic or private workers do work:

  • relating personally to you (not to a business of yours)
  • relating to your home, household affairs or family – such as a nanny, housekeeper or carer.

You must pay super on payment for work of a domestic or private nature if:

  • they work for you more than 30 hours per week
  • you pay them $450 or more (before tax) in wages or salary in a calendar month.

You may also have to pay super for domestic workers or carers if the following both apply:

Contractors

You must pay super for contractors if:

  • you pay them mainly for their labour
  • you pay them $450 or more (before tax) in a calendar month.

This is the case even if they quote an Australian business number (ABN).

International workers

Your worker is eligible for super even if they are a temporary resident, such as a backpacker or a working holiday maker.

If you send an Australian employee to work temporarily in another country, you must continue to pay super contributions for them in Australia.

For employees working overseas, you can apply for a certificate of coverage so you don’t have to pay super in the other country as well.

However, you do not have to pay super for:

  • non-resident employees who work outside Australia
  • some foreign executives who hold certain visas or entry permits (phone us on 13 10 20 for information)
  • employees temporarily working in Australia who are covered by a bilateral super agreement. You must keep a copy of the employee’s certificate of coverage to prove the exemption.

If you’re a non-resident employer, you do not have to pay super for resident employees for work they do outside Australia.

Self-employed

If you’re self-employed as a sole trader or in a partnership, you do not have to pay super guarantee for yourself.

Armed forces reservists

You do not have to pay super for members of the army, naval or air force reserve for work carried out in that role.

High income earners who opt out of super

You do not have to pay super for high-income earners working for multiple employers who ask you not to pay super guarantee to them.

You must have an SG employer shortfall exemption certificate for the employee. We will send you the certificate after the employee has applied to us to opt out.

Contact Advantage Business Group for any SUPER questions!