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Getting Your Taxes Right: A Quick Guide With tax season in full swing, the Australian Taxation Office (ATO) has some important reminders for rental property owners and taxpayers. Reporting Rental Income: Report rental income in the year you receive it, not when your agent transfers it. Report the full income before expenses like property management fees are subtracted. Types of Rental Expenses: Non-deductible Expenses: Includes personal use costs and capital expenses. Immediate Deductions: For expenses like loan interest, council rates, repairs, and assets under $300. Long-term Deductions: For expenses like 'capital works' and loan setup costs over multiple years. Choosing PAYG Instalment Method: Two methods: Instalment Amount (for steady income) and Instalment Rate (for variable income). You can adjust instalments if needed. GST Fraud Conviction: A man sentenced to 7.5 years for fraudulent GST refunds. ATO's Operation Protego tackles GST fraud. Unused Concessional Contributions Cap: If your super balance is under $500,000, you can contribute more than the regular cap, rolling it over for up to five years. Deduction for Personal Super Contributions: Ensure you meet 'notice requirements' to claim a deduction. Accuracy and timely notifications are crucial. Disclaimer: the above comments in this blog post are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances. To read more download our monthly practice update below:

ATO Updates: What You Need to Know 1. SMSF Auditors: Trustees must appoint approved SMSF auditors annually, 45 days before filing. Audits are mandatory, even with no activity. Auditors must be independent. 2. Easier Tax Returns: The ATO is giving taxpayers with simple affairs the ‘green light’ to lodge their annual income tax returns. The ATO simplifies tax returns for most, but remember to add income from rentals or side gigs and await your notice of assessment. Tax-time tips include: include all income assess circumstances that occurred this year records, records, records wait for notice of assessment stay alert to scams 3. 'Dependant' Differences: 'Dependant' varies for superannuation and tax. Ensure you understand who qualifies for tax-free super death benefits. 4. NALI Ruling: Interest income from a unit trust isn't NALI if it's not excessive, per AAT. 5. Luxury Car Tax Rules: ATO clarifies factors to determine a vehicle's principal purpose for Luxury Car Tax (LCT). Commercial vehicles designed for goods transport are excluded. Disclaimer: the above comments in this blog post are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances. To read more download our monthly practice update below:

Stay Tax Savvy: Updates You Need to Know from this month: Keeping up with tax changes is a must. Here are key updates: 1. GST Credit for Reimbursements: Employers can claim GST credits for business-related employee reimbursements, not allowances or notional expenses. 2. TPAR Reminder: Taxable Payments Annual Reports (TPAR) for contractors in specific services are due by August 28th. Maintain payment records to stay compliant. 3. Deduction Tweaks: Deductions have changed: Cents-per-kilometre method increased from 72c to 78c per km. Car depreciation limit raised to $64,741. Work from home expenses updated from 52c to 67c per hour, and taxpayers are no longer required to have a dedicated home office space. 4. Downsizer Contribution Extended: Older Australians can boost super with main residence dwelling sale funds, known as "downsizer contributions", of up to $300,000 per individual or $600,000 per couple. The age requirement has been lowered from 60 to 55 for these downsizer contributions. 5. Excess Contribution Reallocation Denied: AAT ruled no special circumstances for reallocating excess concessional contributions. Stay informed, consult pros, and act wisely. Always refer to official sources for details. Disclaimer: the above comments in this blog post are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances. To read more download our monthly practice update below:

Here's a snapshot of key developments in taxation this month: 1. Super Guarantee Rate Increased From July 1, 2023, the super guarantee rate for employee payments rises to 11%. Businesses must update payroll systems accordingly. 2. AMP Fined $24 Million for Charging Deceased Customers AMP Group companies have been fined $24 million by the Federal Court for wrongfully charging insurance premiums and advice fees from over 2,000 deceased customers. 3. Changes to Minimum Super Income Payments Starting 2024, COVID-19-related reductions in minimum drawdown requirements for account-based pensions will end. 4. Private Company Loan Compliance The ATO reminds taxpayers to comply with private company loan repayment rules to avoid adverse tax implications. 5. Indexation of Transfer Balance Caps Personal transfer balance caps will be indexed from July 1, 2023. Report events by June 30, 2023, for accurate cap calculations. 6. Non-Deductible Masters Course Fees The AAT ruled that tuition fees for a Masters course aren't tax-deductible if not directly related to current work. To read more download our monthly practice update below:

Federal Budget 2023/24 Highlights & ATO's Tax Time Focus The 2023/24 Federal Budget, revealed by Treasurer Jim Chalmers on 9 May 2023, introduces significant measures for economic growth. Key points include: Superannuation Changes: Employers must pay superannuation alongside wages starting 1 July 2026. Small Business Incentives: Businesses under $50 million turnover get a 20% deduction for energy-efficient expenses. Capital Works Deduction: Depreciation rate for new build-to-rent projects rises from 2.5% to 4% per year. Instant Asset Write-Off: Small businesses ($10 million turnover) can instantly write off assets up to $20,000 until 30 June 2024. Depreciation Relief: Temporary full expensing extended to 30 June 2023; opt-out limit suspended until 30 June 2024. Superannuation & Tax Changes: Adjustments to non-arm’s length income provisions, tax concessions for >$3 million super balance, and Medicare levy exemptions. ATO's Tax Time Focus: The ATO concentrates on three areas: Rental Property Deductions Work-Related Expenses Capital Gains Tax 'Side Hustles' and ATO: The ATO addresses modern 'side hustles' and emphasizes proper registration and tax compliance, offering guidance for new businesses. Ride Sourcing Data-Matching: The ATO gathers ride sourcing data to enhance compliance monitoring and education campaigns. Stay informed, report accurately, and ensure a successful financial year ahead. To read more download our monthly practice update below:

The 2023/24 Federal Budget includes several measures aimed at personal income tax, small businesses, superannuation, tax integrity, and other areas. 1. Personal income tax measures: The Medicare levy low-income thresholds will be increased to provide cost-of-living relief for low-income individuals. Lump sum payments in arrears will be exempted from the Medicare levy to ensure low-income taxpayers are not burdened with higher payments. 2. Small business measures: The instant asset write-off threshold will be temporarily increased to $20,000, allowing small businesses to immediately deduct the full cost of eligible assets. The Small Business Energy Incentive will enable businesses to deduct an additional 20% of the cost of eligible assets promoting electrification and energy efficiency. A lodgment penalty amnesty program aims to encourage small businesses to re-engage with the tax system. Quarterly tax instalments will be halved to provide cash flow support. 3. Superannuation measures: The non-arm's length income provisions will be amended to limit taxable income for self-managed superannuation funds and exempt large APRA regulated funds. The frequency of superannuation guarantee payments will increase to align with salary and wages payments. Earnings on superannuation balances above $3 million will be taxed at 30%. 4. Tax integrity measures: The general anti-avoidance rule will be expanded to address tax reduction schemes and income tax benefits. Compliance programs for personal income tax, engagement with taxpayers, and superannuation guarantee underpayment will be extended and funded. The Serious Financial Crime Taskforce and Serious Organised Crime program will be merged and funded for further disruption of criminal activities. 5. Other budget measures: The capital works tax deduction for Build-To-Rent Developments will be accelerated, and the withholding tax rate on eligible fund payments reduced. The eligibility for FBT exemption for plug-in hybrid electric cars will be sunsetted. The measure providing pensioners with a Work Bonus income bank credit will be extended. To read more, download a budget summary provided by the NTAA below:

As we approach the end of the financial year, there are several important updates that taxpayers should be aware of to ensure compliance with tax regulations. In this blog post, we summarize three key updates: the last chance to claim deductions under temporary full expensing, the residential investment property loan data-matching program, and the guidelines for calculating electric vehicle home charging rates. Last Chance to Claim Deductions under Temporary Full Expensing: The temporary full expensing measure, available for the 2021, 2022, and 2023 income years, is set to end on 30 June 2023. Under this provision, businesses with an aggregated turnover of less than $5 billion can claim a deduction for the full cost of eligible new assets, including costs of improvements and eligible second-hand assets. Taxpayers can choose to opt out of temporary full expensing for some or all of their assets and claim deductions using other depreciation rules by notifying the ATO in their tax return. Residential Investment Property Loan Data-Matching Program: The Australian Taxation Office (ATO) will acquire residential investment property loan data from authorized financial institutions for the 2021/22 through to 2025/26 financial years. This data includes client identification details, account details, transaction details, and property details. The ATO will use this information for education, online services, data analytics, insights, and compliance activities to ensure tax and super obligations are met and to detect fraud against the Commonwealth. Electric Vehicle Home Charging Rates: The ATO has released draft guidelines outlining the methodology for calculating the cost of electricity when an electric vehicle (EV) is charged at an employee's or individual's home. Employers and individuals who meet the criteria can choose to use the methodology outlined in the draft guidelines or determine the actual cost of electricity. The draft guidelines provide an EV home charging rate of 4.2 cents per kilometer for the FBT or income year commencing on or after 1 April 2022. However, if charging costs are incurred at a commercial station, a choice must be made between using the EV home charging rate or the commercial charging station cost. To read more download our monthly practice update below 

Staying informed about changes in tax regulations is essential for individuals and employers alike. In this blog post, we will discuss some key updates that you should be aware of. From a new super tax for high-income individuals to exemptions for electric cars, these updates can have a significant impact on your financial obligations. Let's dive into the details. New 15% Super Tax: Starting from July 1, 2025, the government plans to impose an additional 15% tax on individuals with more than $3 million in superannuation. This tax will apply to the annual movement in the value of the superannuation balance above the $3 million threshold. It's important to note that there is no limit on the size of superannuation account balances. FBT Obligations: Employers need to be prepared for their Fringe Benefits Tax (FBT) obligations for the 2023 financial year. If you have provided fringe benefits to your employees or their associates between April 1, 2022, and March 31, 2023, you must self-assess your FBT liability, lodge an FBT return if necessary, pay the FBT owed by the due date, and calculate the reportable fringe benefits amount for each employee if it exceeds $2,000. FBT Exemption for Electric Cars: Since July 1, 2022, eligible electric cars and associated expenses are exempt from FBT. To qualify for the exemption, the car must be a zero- or low-emissions vehicle, used by a current employee or their associate, and not subject to luxury car tax. This exemption presents an opportunity for businesses to embrace eco-friendly transportation options. Tips to Reduce Study and Training Loan Balances: If you have a study and training loan balance, it's essential to consider methods of reducing the balance to avoid a hefty tax bill. While interest is not charged on these loans, they are subject to indexation based on the consumer price index. You can inform your employer about study loans, adjust withholding amounts, and make voluntary repayments before June 1 to minimize the impact of indexation. Reminder of March 2023 Quarter Superannuation Guarantee (SG): Employers should be aware that the Superannuation Guarantee (SG) obligation for the January 1, 2023, to March 31, 2023, quarter is due by April 28, 2023. Failing to pay the correct amount on time may result in penalties and interest. Moreover, the compulsory SG rate increased to 10.5% from July 1, 2022, and will further increase to 11% from July 1, 2023. To read more download our monthly practice update below

Significant change to claiming working from home expenses