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As the 2024 End of Financial Year (EOFY) approaches, it's time to get your financial affairs in order and maximize your tax return. Here are some essential tips to help you make the most of this EOFY season: 1. Organize Your Records: Gather all your financial documents, including receipts, invoices, bank statements, and employment records. Keeping everything organized will make the tax filing process smoother and ensure you don’t miss any deductions. 2. Maximize Deductions: Review your expenses and identify deductible items. Common deductions include work-related expenses, charitable donations, and self-education costs. Consider pre-paying some expenses before June 30 to claim them in this financial year. 3. Superannuation Contributions: Boost your retirement savings and potentially reduce your taxable income by making additional superannuation contributions. Be mindful of the contribution caps to avoid extra taxes. 4. Investment Considerations: Review your investment portfolio and consider tax implications. Selling investments before June 30 can help you manage capital gains and losses effectively. 5. Small Business Concessions: If you run a small business, take advantage of the various tax concessions available, such as the instant asset write-off for purchases made before June 30. 6. Review Private Health Insurance: Ensure your private health insurance policy meets the requirements to avoid the Medicare Levy Surcharge. Consider adjusting your coverage if necessary. 7. Seek Professional Advice: Consulting with a tax professional can help you navigate complex tax laws and identify opportunities for tax savings. Their expertise can ensure you comply with regulations while maximizing your return. 8. Lodge Your Return Early: Filing your tax return early can result in a quicker refund. It also gives you ample time to address any issues that may arise during the filing process. 9. Tax Offsets: Check if you qualify for any tax offsets, such as the low and middle-income tax offset (LMITO). These can reduce the amount of tax you owe. 10. Stay Informed: Keep up to date with any changes in tax laws and regulations. #taxtips #eofy #sydneytax #sydneyaccountant

If you use your car for work related journeys, other than to and from work, it’s likely that you can claim your car expenses on your tax return. The Australian Taxation Office (ATO) provides several methods for claiming motor vehicle expenses for business purposes, each with specific requirements and limitations. Cents per Kilometre Method You can claim up to 5,000 business kilometers per car per income year using the cents per kilometre method. For the 2022–23 income year, the rate is 78 cents per kilometer. This method covers all vehicle running expenses, including depreciation, so separate claims for depreciation are not allowed. No written evidence is needed, but you must be able to justify the number of business kilometers driven (Australian Taxation Office). Logbook Method The logbook method requires you to keep a detailed logbook for at least 12 continuous weeks, which should reflect your travel for the entire year. The logbook should include the start and end dates of each journey, odometer readings, kilometers traveled, and the purpose of each journey. This method allows you to claim the business-use percentage of each car expense, including depreciation (Australian Taxation Office). Depreciation If you use the logbook method, you can claim depreciation on the business portion of the car's cost. For the 2022–23 income year, the depreciation claim is limited to $64,741 or the car’s cost if it's less than this amount (Australian Taxation Office) (Australian Taxation Office). GST and Luxury Car Tax When purchasing a car for business use, you can claim a GST credit for the business-use proportion of the car’s cost, up to the car limit ($64,741 for 2023–24). However, you cannot claim GST credits on luxury car tax paid. If leasing a car, you may claim a GST credit for the GST included in each lease payment (Australian Taxation Office). Records Regardless of the method used, maintain records such as loan or lease documents, tax invoices, and registration papers. Accurate and detailed record-keeping is crucial to substantiate your claims (Australian Taxation Office). For more detailed information, visit the ATO website on motor vehicle expenses and purchasing a motor vehicle. #motorvehicle #deduction #carexpenses #taxtime

Tax planning is essential for maximizing business profitability and ensuring compliance with tax laws. Here are comprehensive tips for effective tax planning in 2024: 1. Understand Tax Deductions and Credits Business Expenses: Ensure you claim all allowable business expenses, such as rent, utilities, and salaries. Depreciation: Use accelerated depreciation methods like temporary full expensing to immediately deduct the cost of eligible assets. Research and Development (R&D) Tax Credit: If applicable, claim R&D tax credits to offset expenses related to innovation and development. 2. Optimize Business Structure Entity Type: Review whether your current business structure (sole trader, partnership, company, trust) is the most tax-efficient. Family Trusts: Consider using family trusts to distribute income among family members in lower tax brackets. 3. Income Timing Defer Income: If possible, defer income to the next financial year to delay tax liabilities. Accelerate Deductions: Bring forward deductible expenses to the current financial year to reduce taxable income. 4. Superannuation Contributions Concessional Contributions: Maximize concessional contributions to superannuation funds, which are taxed at a lower rate. Non-Concessional Contributions: Consider non-concessional contributions to boost retirement savings without immediate tax benefits but with long-term advantages. 5. Fringe Benefits Tax (FBT) Planning FBT Exemptions: Provide benefits that are exempt from FBT, such as portable electronic devices used primarily for work. Salary Packaging: Use salary packaging to include fringe benefits, reducing taxable income. 6. Utilize Losses Carry Forward Losses: If your business has incurred losses, ensure you carry them forward to offset future profits. Loss Harvesting: Sell underperforming assets to realize losses that can offset other taxable gains. 7. Review Financial Statements Regularly Cash Flow Management: Monitor cash flow to ensure liquidity and the ability to meet tax obligations. Reconciliation: Regularly reconcile accounts to catch any discrepancies early and maintain accurate financial records. 8. Invest in Tax Software and Professional Advice Accounting Software: Use accounting software to streamline tax calculations and ensure accuracy. Tax Professional: Engage a tax professional or accountant to stay updated on tax law changes and get tailored advice. 9. Keep Detailed Records Documentation: Maintain detailed records of all income, expenses, and deductions. Retention Period: Keep records for at least five years, as required by the ATO. 10. Plan for Changes in Tax Legislation Stay Informed: Keep up-to-date with any changes in tax legislation that may affect your business. Adapt Strategies: Be ready to adapt your tax planning strategies to align with new laws. To assist you on how to save more in tax, book a call with us today. #taxplanning #taxmatters #taxtime #eofy #businesstips #soletrader #smallbusiness #sydneytax #sydneyaccountant

You are required to lodge a tax return if you meet certain income thresholds, received specific government payments, had business income, foreign income, or certain other conditions apply. If you are unsure about your requirement to lodge, consult with a tax professional or use the ATO's online tools and resources to determine your obligations. If you don't lodge a tax return in Australia when you are required to, several consequences can follow: Penalties and Fines: The Australian Taxation Office (ATO) can impose penalties for failing to lodge a tax return on time. These fines can accumulate over time, significantly increasing the amount you owe. The failure-to-lodge penalty is currently $222 for every 28 days the return is overdue, up to a maximum of $1,110. Interest on Unpaid Taxes: If you owe taxes and do not lodge your return, the ATO may charge interest on the unpaid amount. This interest is calculated daily and compounds, which can lead to a substantial increase in your debt over time. Delayed Refunds: If you are entitled to a tax refund, not lodging your return means you won't receive your refund. This can affect your cash flow and financial planning. Audit and Compliance Activity: Repeated failure to lodge tax returns can attract the attention of the ATO, leading to an audit or compliance review. This scrutiny can be time-consuming and stressful, and it may uncover other tax issues that need resolution. Impact on Government Benefits: Failing to lodge a tax return can affect your eligibility for certain government benefits and support payments. Many government assistance programs use your tax return information to determine your eligibility and the amount of support you receive. To avoid these consequences, it is important to lodge your tax return by the due date or contact the ATO if you need assistance or an extension. If you are behind on your tax returns, it's advisable to address the issue as soon as possible to minimize penalties and interest. Read more here https://lnkd.in/gNui5xT5 #taxtime #taxmatters #lodgement #ato #taxreturn #taxplanning #accountant #bookkeeping #tax #sydneyaccountant

Maximize Your Tax Deductions Before 30 June As we approach the end of the financial year, it's crucial to take advantage of all the tax deductions you're eligible for. Here are some common tax-deductible items for businesses and individuals: Work-related expenses: Uniforms, tools, and travel costs. Home office expenses: Electricity, internet, and office supplies. Vehicle and travel expenses: If used for work purposes. Self-education costs: Courses related to your current employment. Donations: Contributions to registered charities. Investment expenses: Fees for investment advice or account-keeping. Business expenses: Advertising, rent, and equipment purchases. 🕒 Don't wait until the last minute! Review your expenses and ensure you're claiming everything you’re entitled to before 30 June. Need help? Our expert bookkeeping services can ensure your financials are up-to-date and maximize your deductions. 📞 Contact us today for a consultation at 0491-616288 #TaxTime #TaxDeductions #EOFY #Australia #Bookkeeping #FinancialTips #SmallBusiness #TaxSavings

Receiving a gift card typically does not count as taxable income, as gifts are generally exempt from tax. This means that if you receive a gift card from a friend or family member, you do not need to declare it on your tax return. The Australian Taxation Office (ATO) recognizes that genuine personal gifts are not meant to be a form of income, thus ensuring that they are free from tax obligations. However, it is essential to ensure that the gift is truly given out of generosity without any strings attached or expectations of services in return. The scenario changes if the gift card is received in a professional context, such as from an employer to an employee. In such cases, the ATO may consider the gift as part of the employee's remuneration package, making it subject to income tax. Similarly, if a business receives a gift card, it might be treated as assessable income, especially if the card is connected to the business’s operations. Therefore, the context in which a gift card is given and received plays a crucial role in determining its taxability. #taxmatters #taxtips #taxableincome #giftcards #ato #sydney #taxtime

When to use losses You use your current year capital losses to offset your current year capital gains. You can choose which capital gains to subtract your losses from. ▶️ If you have any capital gains that are not eligible for the CGT discount, subtract your losses from these gains first. This will result in the lowest payable CGT. ▶️ If you have prior years, also known as carry forward losses, you used them to offset your current year capital gains. If your prior year capital losses extinguished your current year capital gain, you do not have a current year capital gain. ▶️ As capital loss can be carried forward indefinitely, there is order of using your capital losses to offset capital gains. 💡There are capital losses you can't use to offset capital gains and they are listed below. 🔑 Carrying forward a net capital loss ▶️ If your allowable capital losses are greater than your capital gains, you have a net capital loss. There is no time limit on how long you can carry forward a net capital loss. 🔑 Non-allowable capital losses You cannot deduct capital losses you make from: ▶️ personal use assets, such as boats or furniture ▶️ assets that are exempt from CGT, such as cars and motorcycles ▶️ collectables below a certain value ▶️ a lease (whether the result of expiry, forfeiture, surrender or assignment) – except if its main purpose is producing income, such as for a commercial rental property or a car ▶️ paying personal services income to yourself through an entity you have set up. 🔑 Losses from collectables Capital losses from collectables can only be deducted from capital gains made from collectables. They cannot be deducted from gains made from other assets. If you do not have a capital gain from another collectable, you can carry forward the capital loss to deduct it against a gain from a collectable in a future year. A collectable is not subject to CGT if you acquired it for $500 or less (or acquired an interest in it when it had a market value of $500 or less). This means you ignore a capital gain or loss from the collectable. 🔑 Company losses A company can deduct previous net capital losses from capital gains in the current year as long as it is either: substantially under the same ownership and control still in the same line of business. 🔑 Trust losses Capital losses made by a trust cannot be distributed to the trust’s beneficiaries. The trust can carry forward its losses and deduct them from capital gains in future years. 🔑 Exempt entity losses Losses made by an entity that is exempt from income tax are disregarded. For more information and help on how to calculate you CGT, see Calculating your CGT here https://lnkd.in/gV3UewJH

Investing in property is a proven strategy for building wealth, and leveraging can amplify your purchasing power and returns. Understanding some effective leverage solutions to consider for property investments can enhance your ability to invest in the Australian property market, increase your returns, and build a robust investment portfolio. Happy investing! https://lnkd.in/ga73gx8K

The new stage 3 tax cuts will bring about several changes to tax rates and thresholds in the 2024/25 financial year compared to the current year (2023/24). These changes include: Reducing the current 19% tax rate to 16% Reducing the current 32.5% tax rate to 30% Increasing the threshold above which the 37% tax rate applies from $120,000 to $135,000 Increasing the threshold above which the 45% tax rate applies from $180,000 to $190,000 It's important to note there is no change to the Medicare levy, currently set at 2%. See tables provided to understand your potential tax savings. When you understand the changes, here are some ways you can utilise the changes for your benefit: Extra disposable income in future years: With the upcoming tax cuts, individuals with taxable income lower than approximately $146,500 will receive a higher tax cut. This means that more people will have extra disposable income from 2024/25. It may be a good time to consider contributing more to superannuation or paying down non-deductible debt, such as a home loan. Reviewing salary sacrifice or personal deductible contributions strategies: The reduction in the lowest tax rate from 19% to 16% will impact the effectiveness of salary sacrifice or personal deductible contributions strategies for individuals with lower taxable income. It's crucial to review existing strategies to ensure that taxable income is not reduced below the increased effective tax-free threshold. Additionally, individuals with taxable income between their effective tax-free threshold and $45,000 will only save up to 3% tax by utilising these strategies, compared to the current 6% tax saving. Deferring income to a future financial year: The reduction in lower tax rates and increases in tax thresholds make it beneficial to delay certain events that can result in higher taxable income. By postponing retirement, deferring a capital gains tax event, or delaying a First Home Super Saver (FHSS) scheme release, individuals can take advantage of lower tax liabilities in future financial years. #taxcuts #TaxStrategies #TaxSeason # taxplanning

Want to claim tax deductions for donations and gifts? Ensure your donations are $2 or more, made to a Deductible Gift Recipient (DGR), and keep receipts! Property donations over $5,000 need an ATO valuation. You can carry forward unused deductions for up to five years. Gifts like cultural or heritage items also qualify with proper documentation. Remember, volunteer expenses are deductible, but not your time. Want to know more? Visit our latest blog available on our website. https://lnkd.in/gJTrujyJ #TaxTips #Donations #Charity #AustraliaTax #TaxStrategies