2020 Tax Returns + 3 Ways To Make The Most Out Of It!

Did you know that the average Australian received a tax refund of $2,381?  That’s enough to splurge on some new furniture or an LED Smart TV, right?  Well, before you head down to your local shopping centre with your tax refund in hand, take a look at three ways we’ve come up with to spend your tax return.  We’re confident that the following strategies will help you make the most out of your tax return and create positive change in your life.

#1 SET UP AN EMERGENCY FUND

Research conducted in last year’s Financial Consciousness Index found that a concerning 13.4 million Australian’s do not have emergency savings to fall back on if there were unable to earn an income for more than three months.  The study also found that 7.5 million Australian’s struggle to pay their bills and are not saving money regularly.  With this is mind, why not use this year’s tax return to set up an emergency fund and make this the start of your savings plan.  Our team at Canny Advisory can help you with budgeting and saving to ensure that you have the right financial plan in place to set yourself up for success.

TIP // speak to one of our Financial Planners or Advisers to find out the easiest way to make this happen without even noticing!

#2 MEET WITH AN ESTATE PLANNING LAWYER

As the saving goes, there are only two certainties in life; death and taxes.  Unfortunately, more than half of Australian adults do not have a will.  So, with this year’s tax return, why not protect your loved ones and sit down with an estate planning lawyer to draw up a will or testamentary trust.  Our team at Canny Legal can help you with your estate planning needs, including wills, enduring powers of attorney and medical power of attorney.  Getting this sorted can be the final way you say ‘I love you’ to the people you love the most.

TIP // check out www.cannygroup.com.au/wills to complete your Will in the comfort of your own home, without having to leave your couch!

#3 STARTING YOUR SIDE HUSTLE

If you have an idea of starting a side business, use this year’s tax return to kick-start this once and for all.  it doesn’t take much more than $2,381 to get started these days: a basic website and some Facebook or Instagram ads to attract your first paying customers.  Why not make this the start of your side hustle and see if you can generate a return on investment and get your business off the ground.  It’s also worth keeping in mind that our team at Canny Accounting can help you to take your side hustle to the next level.  We will ensure that you’re equipped with the knowledge to manage your side hustle the right way and take advantage of opportunities as they present themselves.

TIP // speak to one of our team to ask them about booking your ticket to our FREE Side Hustle webinar to help you get started the right way!

So, how will you spend your tax return this year?

 

Chris Graham – Client Services

HAPPY EOFY – Tax Tips for Small Business + Sole Traders

What a time we have had over the last six months, first with the devastating bush fires and now with the Covid-19 pandemic, it certainly has been a different time, the likes that many of us have not seen before.

Many small businesses and sole traders would have been entitled to receive Government assistance during this period including grants and concessional loans for those affected by the bush fires and JobKeeper reimbursements, cash flow boost for employers and State Government grants for those affected by the Covid-19 pandemic.

Of these assistance packages some will be tax-free, while others will be considered taxable income.  Here are some of the packages and their tax treatment:

  • DISASTER RELIEF PAYMENTS [BUSH FIRES] // these are non-taxable payments + do not need to be included in your tax return
  • JOBKEEPER REIMBURSEMENT [COVID-19] // as the name implies, these are reimbursements + are therefore considered taxable income
  • CASH FLOW BOOST [COVID-19] // these payments are tax free.  They are not required to be paid back once the business’ cash flow improves
  • STATE GOVERNMENT BUSINESS SUPPORT FUND GRANT [COVID-19] // this one-off payment to eligible businesses is considered taxable income

Due to Covid-19, your business income may have been affected to such a degree that you will not have any issues with the 2020 Financial Year tax, but if you will here are some tips to help reduce your taxable income:

  • SUPPLIER INVOICES // pay any supplier invoices prior to 30 June, even if they are not due until July or later.
  • SUPERANNUATION // pay the June quarter superannuation obligations prior to 30 June.  Generally, it takes 5-7 business days for payment to be received by the employees superannuation fund, so payment will need to be processed earlier to allow for this.
  • BUSINESS OWNERS // if you are a business owner, you could pay an additional superannuation contribution to maximise the $25,000 concessional contributions cap.
  • SOLE TRADER // if you are a sole trader, you may take a concessional contribution to your superannuation fund and claim a tax deduction for it.
  • INSTANT ASSET WRITE-OFF // the threshold currently stands at $150,000, so any piece of equipment or business vehicle, below this threshold, will be able to be deducted in full in the 2020 financial year, if purchased and in use by 30 June 2020.

 

Danny Grigg – Senior Accountant

BComm CA

 

HAPPY EOFY – Tax Tips for Individuals

It’s that time of year again, Tax Time! For individuals who have a tax agent, like Canny Group and their accounting team on hand, we will lodge your tax return for you on your behalf and you have until 15 May 2021 to do this.  However, if you are lodge your own tax return you have until 31 October 2020 to have it lodged.

Either way, we have put together some tax tips that you should consider before 30 June 2020 to help; reduce your taxable income, maximise deductions, take advantage of tax offsets, accessing free money from the Government as well as COVID-19 incentives and advice for retirees.  Everyone has been impacted by COVID-19 in many different ways, and we have put together these tips to help you be as prepared as possible and hopefully empower you to maximise your refund when it comes to lodging your tax return.

TAX TIP #1… Ways to reduce your taxable income!

SUPER CONTRIBUTION // make a personal deduction superannuation contribution.  Check with payroll to determine how much has been contributed so far.  The concessional contribution cap is $25,000 for the 2019/20 income year.

UNUSED CONTRIBUTION // do you have any carry forward unused concessional contribution from the 2018/19 income year?  If your total superannuation balance is under $500,000 at 30 June 2019, you may benefit from making a catch-up deductible super contribution.  This may be especially beneficial to those who have additional income due to sale of investments such as shares or property.

DEFER INCOME // are you nearing retirement?  It may be worthwhile to defer your income until after 30 June if your income will be smaller in the subsequent year.

TAX TIP #2… Maximise deductions!

MOTOR VEHICLE EXPENSES // individuals who use their car for work related travel can claim 68 cents per kilometre up to 5,000km for business travel or claim under the log book method of car expenses.  Canny Group’s team of accountants will be able to determine which method yields the greatest deduction.

WORK-RELATED EXPENSES // consider if you need any work-related items such as tools of trade, computer, subscriptions or work clothing and whether you could purchase or pay for those expenses before 30 June to increase your deductions.

DONATIONS // or gifts of $2 or more to a deductible gift recipient are tax deductible.  Where spouses are on different marginal rates, consider making donations by the spouse that is in the higher tax bracket to maximise the benefit of the deduction.

HOME OFFICE // if you have been working at home due to COVID-19, you may be eligible to claim a rate of 80 cents per hour for all your running expenses from 1 March to 30 June.  Multiple people living in the house could each individually claim the 80 cents per hour rate.

PROTECTIVE CLOTHING // did you buy protective items such as gloves, face masks, sanitiser to use at work due to COVID-19?  If your specific employment duties require you to have physical contact or be in close proximity to customers or clients while carrying out your duties or you are involved in cleaning premises, you can claim a deduction for protective items.  The ATO considers those that work in the following industries or occupations are exposed to the risk of illness in the course of working:

  • Medical Industry
  • Cleaning Industry
  • Airline Industry
  • Hairdressing + Beautician Industry
  • Retail, Cafe + Restaurant Industry

TAX TIP #3… Take advantage of tax offsets!

SPOUSE OFFSET // receive a $540 tax offset by making a personal contribution up to $3,000 to super on behalf of your spouse.  Only available if your spouse’s taxable income is less than $37,000.  A lower tax offset may be available if you contribute less than $3,000 or your spouse earns between $37,000 and $40,000.

LOW + MIDDLE INCOME OFFSET // individuals on a taxable income of $37,000 or less will receive up to $255 tax offset and those on taxable incomes between $48,000 and $90,000 will receive the maximum $1,080 offset.  Incomes between $90,000 and $126,000 will receive partial offset.  This is not a tax refund but a tax offset.

TAX TIP #4… Access free money from the Government!

CO-CONTRIBUTIONS // receive a Government co-contribution of up to $500 paid into your superannuation by making an after-tax superannuation contribution of $1,000 or more.  Full amount is available to those with taxable income less that $38,564 and a reduced amount is available to those with taxable income less that $53,564.

TAX TIP #5… COVID-19 impact!

JOBKEEPER + JOBSEEKER // JobKeeper and JobSeeker payments are assessable income and need to be included in your tax return.

STIMULUS PAYMENT // the $750 stimulus payment that was provided to social security, veteran and other income support recipients and eligible concession card holders is tax free and does not need to be included in your tax return.

CORONAVIRUS SUPPLEMENT // the $550 Coronoavirus fortnightly supplement is taxable income and will need to be included in your tax return as income.

EARLY RELEASE OF SUPER // individuals who have applied for and received the early release of superannuation will not nee to pay tax on the amounts release from super.

TAX TIP #6… Retirees!

REDUCE PENSION // the minimum drawdown requirements for account based pensions has been halved for the 2019/20 and 2020/21 income year.  This will benefit retirees with account based pension by reducing the need to sell investment assets to fund minimum drawdown requirements.

SOCIAL SECURITY // in light of the low interest rates on savings, the Government has reduced social security deeming rates from 1 May 2020.  You could be eligible for Centrelink entitlements such as the age pension or Commonwealth Seniors health care card with the lowering of deeming rates.

 

Helen Yau – Manager + Financial Planner

CA, BCom, Dip FP, SSA

Adapt to Change + Come Out Thriving

Life has changed for us on a global scale and we are experiencing a collective loss of the world we once knew.  We are all unique and experiencing the grief in different ways.  We may be feeling the loss of physical touch or connection, playing sport, change in routine, gatherings with family and friends, workplace changes, job loss, loss of someone we know due to the virus, and most of all; our freedom.

Children are experiencing it too and may be showing it in their behaviour as they too miss connection with their family and friends, their sports, activities and school.

Our workplaces have changed whether it is dramatically, slightly or somewhere in between.

As if our working day didn’t already include enough moving pieces to manage, a lot of the population are now working and living under one roof 24 hours a day.  You may be living with family, friends or housemates; emotions will be fluctuating and at times we may feel like we are on an emotional roller-coaster, but keep in mind that difficult emotions don’t often last and will pass.

Many of us are home learning our children while working.  Our kids are having virtual morning school sessions, we are on zoom meetings, we all have work/school deadlines that need to be met. We are trying to get as much work done while kids nap or in their recess time and many of us are attempting to wedge the rest of the workday into the early mornings and post-bedtime.

We are all juggling our role as best we can on a day to day basis.  Some days are great and others may be very challenging.  It is important to know we are all in this together and that even though we are physically distancing we need to remain connected socially to those that love and support us; our family, friends and colleagues.  We will help each other through this time.  We will forge stronger bonds with some friends and work colleagues and we may also notice the leaders or managers in your workplace that thrive during this and other’s that struggle with offering compassion, empathy and kindness.

In these unusual times keep things simple.  To maintain good mental and emotional health, here are some ideas to help you sail through the coming months and allow yourself to ‘Thrive’ and not just ‘Survive’.

  1. Complete one satisfying activity and one pleasurable activity each day. Anything more is considered a bonus.
  2. Focus on the things we can control, rather than those out of our control. This may include our mindset each day, finding the fun in our day, switching off the news, having a break from social media if we are finding it too negative, being kind and showing gratitude towards others and ourselves.
  3. Get good quality sleep. Sleep is essentially our life support system; our swiss army knife of good health.  It is not only vital for our physical recuperation; it is essential for our emotional and mental health restoration.  Following good sleep hygiene is high on my priority list for better brain cognition, emotional stability and physical endurance.
  4. Go outside and soak in the Vitamin D we receive from the sun. Not only is Vitamin D essential for our bone health but for proper brain development and functioning.  Low levels of vitamin D can be associated with depression, anxiety and seasonal affective disorder (SAD).  Sunlight is the best form of Vitamin D.  Your body also needs it to absorb calcium so it’s a double bonus; by walking or exercising outdoors, you get your dose of Vitamin D but you are also strengthening your bone density which helps prevent osteoporosis, muscle spasms and aches.
  5. Do something that nourishes and nurtures your mind, body and soul. We are bounded for many hours a day within our four falls with our family or friends and it’s important we have some time out from each other.  Whether it is talking a warm magnesium bath, reading a book, going for a walk, colouring or painting, dancing to an uplifting song, writing a story, swimming in the ocean, calling a friend for a chat, gardening or knitting.  These mindful activities will help enormously with your mental health and keep you sane over the months ahead.
  6. Drink water regularly. It is important to stay hydrated.  Water helps with our motivation, clarity, productivity and our mood, along with all the awesome things water does for our body.
  7. Check in with our emotions and tune into how you are feeling regularly. The best way to do this is take time to breathe.  Do some regular deep breathing exercises to instantly calm our nervous system, boost brain function, reduce blood pressure and feel more relaxed and focussed instantly.  There are lots of different techniques which include Box breathing, alternate nostril breathing, 4-7-8 technique, abdominal breathing, yogic breathing (pranayama) or just taking a moment to focus on our breathe.  There are also great ones for your kids too like finger breathing, hot air balloon, bumble bee breath, elephant breathing and shoulder roll breathing to name a few.  These are also great for adults and have the fun element too.
  8. If you are saving several hours a day from not travelling to work, what positive things can you do in this time? Some of the activities that may have popped into your mind after reading #5.
  9. Be curious about things you notice, see or read. It will enhance your creativity and improve both your mental and emotional wellbeing.
  10. Eat well! Nourish yourself with fresh foods.  Consume a variety of foods that are nutrient dense. Choose a rainbow of fruit and vegetables.  Eat when we are feeling calm, happy or relaxed, rather than when we are stressed or upset as our digestion switches off if our mind is in a flight/fight state.

It will be interesting to see what our workplaces look like after this.  Our leaders and managers have the opportunity to choose quality work over quantity of work from their team. They may now value the creative ideas that emerge after a midday walk, rather than having sat at our desk without a break.  They may stop rewarding the faster response over the better and more thought out response, or the longer workday over a more productive workday.

Will the values of the workplace change?  Will employers and managers rely more on the ‘soft skills’ like Emotional Intelligence including: resilience self-regulation, self-awareness, motivation, empathy and social skills which are all prime at this point of time more than ever.

As Ben Crowe, an expert on Mind Health said, ‘It’s our decisions, not the conditions, that determine our mindset, our attitude, our outcomes and our self-worth’.

We are often looking for the extraordinary moments, let’s look at making meaningful moments during this pandemic and these will be the most memorable when we look back on this time of our lives.  Our grandkids and their grandkids will be learning about this time in history class.

I would like to end with this quote.

‘Hard times are like a washing machine,

They twist, turn and knock us around,

But in the end, we come out cleaner, brighter and better than before’.

 

Let’s remain hopeful and optimistic.  See you on the other side!

 

Jo Surkitt – Revitalize Lifestyle

__________________________________________________________________________________________________________

For more information on Jo Surkitt head to www.josurkitt.com.au

Jo has just released a free meditation on Adapting to Change.  Here is the link:

https://www.youtube.com/watch?v=UAJKaRjYP_s&feature=youtu.be

Jo Surkitt runs a series of sessions on Creating Positive Change.

The series is called: Move from Overwhelmed to Empowered

Session 1: Resilience: Adapting to Change during a pandemic and mindful movement

Session 2: Excellent Sleep Practices – Create your best sleep hygiene

Session 3: Cleanse, detox, declutter your life – Creating optimal health

For more information about the online programs head to https://www.josurkitt.com.au/online-training

Business Pivot OR Business Adaptation?

As we look forward to relaxation of lockdown in our lives and businesses, it can be difficult to find or maintain motivation.  But let’s take a look at a quote attributed to Albert Einstein: “In the midst of every crisis, lies great opportunity”.So, the question is, what opportunities are there for you, or for your business?

Business Pivot or Business Adaptation – What is your “great opportunity”?

You might think in these JobKeeper days that you or your business has to undertake a significant “Pivot”, and radically change the way you do things to ensure not just survival but success.

But equally, that may not be what you want, or more importantly what your customers want. You may need to make smaller changes, refine processes, update your systems or even just modify the language you use to talk to your customers.

Be it Pivot or Adaption, considering your customer needs and wants should be a significant part of your plan.

Now, this article is about motivation, so the words above are about WHY you may want to change. The most difficult part can be making the first step.


STEP ONE // DO NOT LET THE OPPORTUNITY PASS

STEP TWO // WHEN IN DOUBT, REFER TO STEP ONE

 

Every one of you who has got this far does need to find your own motivation.  Is the crisis enough, or is there something about your situation that you really want to change?  Sometimes the biggest obstacle is not knowing how you can possible achieve your goals.  This is where the team at Canny Group can really help. We spend time with our clients understanding goals.

But it is the next part that can be the “secret to motivation”.  Rather than stopping at identifying goals, we can work with you to identify the action steps, what you actually have to do, to move toward your goals. Not only that, we can keep you accountable to those actions.

This could be to do with your business goals, where our Accounting team will work with you.

It could be to do with your financial or retirement goals, where our Advisory team will work with you.  And if you have goals with succession planning, litigation or asset protection the Legal team will work with you.  Best of all, if you have goals the encompass a mixture or all of these, you can rest easy knowing we will work together to help you achieve them all.

A FINAL WORD ON MOTIVATION FOR CHANGE:

“It is not the most intellectual of the species that survives; it is not the strongest that survives; but the species that survives is the one that is best able to best adapt and adjust to the changing environment in which it finds itself”

This quote could almost have been tailored to the times we find ourselves in today, but is also one that is often mis-represented as being a quote from Charles Darwin tied to his work “On the Origin of Species”.  It was actually written by the significantly less famous Leon C. Migginson in “Civilisation Past and Present” in 1963.  Fast forward 57 years and the quote holds true.

 

Adam Ramage – Senior Business Adviser + Accountant

B.Bus CA

Self-Education

It’s February and so in keeping with the ‘Back to School’ theme I thought I would revisit the opportunities that are available for self-education and professional development.

Whether you are supported by your employer or not you may be able to claim a tax deduction for self-education expenses if they relate to your current work activities.  You cannot claim the costs however if it is for the purpose of new employment or to open up a new income earning occupation. Some of the costs that you can claim are:

  • COMPUTER + STATIONARY CONSUMABLES EG. PAPER, PRINTER CARTRIDGES
  • COURSE FEES [IF PAID BY YOU]
  • PURCHASE OF EQUIPMENT, OR IF THE COST IS OVER $300, DEPRECIATION OF EQUIPMENT
  • INTERNET USAGE
  • STUDENT UNION FEES
  • TEXTBOOKS
  • TRAVEL; BETWEEN HOME + THE PLACE OF EDUCATION + BETWEEN WORK + THE PLACE OF EDUCATION

Likewise, there are also opportunities to claim the cost of professional development.  If you are in an occupation that requires a certain number of certified professional development hours, the costs of attending relevant seminars and conferences can be quite high, however if they are relevant to your employment they can be claimed as a tax deduction.  If you are a business paying this cost for your employees this is a claimable business expense.

Aside from the bonus of a tax deduction, it is a great idea to keep up to date with ideas, techniques and changes in the law no matter what industry you are in.  Maintaining your knowledge is both good for your self esteem and enhances your chances of maintaining your employability.

If you are thinking of taking on additional study and are unsure about how this will affect your tax or your business, just call our office and one of our qualified team will be happy to help you.

 

Amanda Wilkens – Director

CPA

Side Hustle

SIDE HUSTLE is a fresh new seminar to add to our FREE seminar series kicking off 2020!

Sitting down with director Amanda Wilkens for a session to discuss all things business and what you need to know about having a side hustle. She will talk about having things set up correctly, what you need to consider about having a job and a business on the side as well as;

  • WHERE TO BEGIN, WHAT TO DO + WHAT YOU WILL NEED?
  • WHAT EFFECT DOES MY SIDE HUSTLE HAVE ON MY MAIN INCOME JOB?
  • HOW TO MANAGE MY SIDE HUSTLE + JOB AT THE SAME TIME
  • WHEN IS IT TIME FOR MY SIDE HUSTLE TO TAKE OVER?

You will come away from this session with the knowledge of how to take your side hustle to the next level and be armed with the knowledge that you’re doing things the right way and not missing any opportunities.

FREE tickets available via eventbrite: https://www.eventbrite.com.au/e/side-hustle-tickets-88964979649

REFRESHMENTS INCLUDED + ALL CHILDREN WELCOME!

Kick-Ass New Years’ Resolutions

It is common to come up with New Years’ resolutions in January that reflect the way we feel after all the celebrations over Christmas and New Year.  We can pretty much guess that the resolutions will revolve around:

  • Partying less;
  • Eating more healthily; and
  • Exercising more.

That’s all great, however these reflect only the prior three weeks.

What if we could put together resolutions that reflected the prior year or several years?  These resolutions would generally revolve around;

  • Holidaying more frequently;
  • Spending more time with family and friends;
  • Purchasing a house or paying off the one we have; and
  • Becoming more financially independent and secure.

These resolutions are great to work with, and the good news is that they don’t exclude the first set of resolutions – there is no reason why we can’t do both!  Here are the top three questions I am asked by clients starting their road to a “kick-ass” financial future.

  1. WHEN SHOULD I START?  NOW, NOW and NOW!  It’s easy to think that you don’t have anything yet and don’t earn a lot so can’t start – but it’s wrong!  I started saving at 18 years old by putting away $70 a month in a savings plan.  This isn’t a lot but I found I didn’t miss the money.  When it was time to buy a house 12 years later I was well on my way to a deposit.  Remember that everyone has to start somewhere.
  2. HOW OLD SHOULD I BE TO START PLANNING A “KICK-ASS” FINANCIAL FUTURE? There’s no age required, but start now! The sooner you start the sooner you are on your way.  We have probably all heard the Chinese proverb “A journey of a thousand miles begins with a single step” and I suspect we all use this.  I know I think of that whenever I have to complete a mammoth task.  Runners often count steps on long runs, cyclists count kilometres and we all count sleeps to Christmas [even if it’s for our kids].  The best way to achieve anything is to simply start.
  3. OKAY, I’M GOING TO START – WHAT DO I DO?  There are several things to do – all steps on your journey to a “kick-ass” financial future.  Don’t be overwhelmed and don’t think you need to do them all today.  Here are a few things to look at, and I recommend aiming to tackle one item per month [or two months if your life is hectic]:
  • Review your income protection insurance. You may or may not need it, and it totally depends on your circumstances.  However, if you are the main income earner for a family and you have others relying on your income, you at least need to review it.
  • Have wills and powers of attorney prepared. Again, horses for courses, but if you have children you at least need to consider who will look after them if you are no longer able to.  Make sure you document your wishes as it isn’t enough to verbally pass them on.
  • Review your death cover. Once again, you may or may not need it, but if there will be debts within your family should you pass, you need to at least consider whether you should have death cover that is sufficient to pay off the debts.
  • Review your superannuation. Your super may be able to include income protection and death cover, so you may want to review this first.
  • Start saving. A financial plan, or even a small savings goal will put you on the right path.  Set a budget and put away even a few dollars each week.

If you decide you want to start your journey to a “kick-ass” financial future, contact us!  Our team can cover the financial advice, legal and accounting to get you on your journey.

If you just feel like you’d like more information and want to learn more before you start – our Health and Wealth seminar is for you.  It’s free and will give you lots of practical tips to start your journey.  You’ll also have the chance to meet our team in a casual relaxed setting.  Just go to our website and use the links to register.

 

Krystine Canny-Smith – Director

CPA

Christmas + Gift Giving

Christmas is a weird and wonderful time of the year, filled with family, friends, good times, presents, and that confusion of what day of the week is it, and how many days of leave are left.  Not to mention the confusion of still writing 2019 down as a date, three weeks in to the new year.

Christmas can also be very stressful when it comes to the awful topic of money, and spending money.  For those that are running a tight ship, it’s a stressful time, because they might not be able to do everything they can or want to.  Then there are those people that won’t be able to achieve what they can or want to.

The age-old adage of Charity begins at home doesn’t hold true as much as it may have in the past.  There are a lot of people doing it tough, and they need a hand through times such as this.  There are many great ways in which this can be done, whether it’s buying extra presents to donate under wishing trees, making up hampers as a work place, and donating to families in need, or simply through a cash donation to one of the many charities that help families have a great Christmas as well.  I know this is something we do at the Canny Group, and something that I do personally as well.

One hangover that you don’t want to have to deal with after Christmas, is the debt that we tend to rack up from overspending.  It’s not just credit cards, it is zip pay and afterpay as well.  As of 30 June, there was almost a billion outstanding in afterpay, and 60% of that was attributed to people aged between 18-34, which is staggering.

In December last year, $30 million was borrowed in Credit Cards.  Want to hear something scary?  If you owe $2,000 on a credit card and make the minimum repayments, it takes 17 years to clear the debt!  I guess the moral of the story is to not overspend or start planning earlier.  I know that in my family, on one side we do Kris Kringle, that way everyone gets one good present, rather than lots of presents that end up being forgotten or put away to never see the light of day again. Try not to let this time of the year overwhelm you and have loads of fun!

See you in 2020!

 

Steve Reynolds – Certified Financial Planner

BComm, Dip.FS[FP]

Christmas + FBT

It’s coming up to the Christmas holiday period which means scheduling the staff Christmas party and purchasing gifts for your employees, but as we skip into the month of December, it’s important that we remember what is deductible in relation to gifts and entertainment provided and how fringe benefits tax [FBT] relates with these actions.

FBT is payable by employers on the value of certain benefits that have been provided to their employees in respect of their employment. The purpose of the legislation to ensure fair tax treatment between cash paid to employees and benefits provided to them during their employment. Fringe benefits can include but are not limited to: providing an employee a vehicle that is owned by the business to drive, providing a loan to an employee with no interest, and also functions and gifts provided to an employee at Christmas time.

Towards the end of December, many employers schedule a work breakup or event to celebrate the holidays with their employees or purchase a gift for the employees and their families. These events can include costs such as venue hire, food and alcohol purchases or booking entertainment such as a band. Are these expenses tax deductible? Is the employer entitled to claim goods and services tax [GST] back on those expenses incurred?

Generally, providing entertainment to an employee is not tax deductible unless FBT is paid. Employers cannot claim deductions for the cost of Christmas gifts purchased for employees if the gift directly provides entertainment by way of food, drink or recreation. Similarly, the expense of a staff Christmas function would not be deductible as it involves the provision of entertainment.

However, there are some exceptions. The cost of a Christmas party is tax deductible if provided on a working day on the business premises and consumed by current employees. Another exception is providing a minor benefit by ensure the cost of the Christmas party and gifts are less than $300 per employee. And when it comes to GST, the credit is available if FBT is paid or the benefit is exempt from FBT and a tax deduction can be claimed.

If you are providing more than salary and wages to an employee, now is a good time to book an appointment with one of our accountants to ensure you are not inadvertently paying more tax than necessary by providing a non-cash benefit to your employees.

 

Jamie Arrington – Manager

B.Com CA

Financial Plans Are COOL

IT IS PRETTY COOL TO HAVE AN ACTUAL FINANCIAL PLAN AND NOT JUST ‘ONE IN YOUR HEAD’

Whilst seeing a client, our discussion often turns to managing personal cash flow.  Some people are happy just living from pay-to-pay and don’t give much consideration to plans for the medium or long term.  Others haven’t really given the idea any thought but think it will all be “OK”.  However, more and more people are thinking about this, but don’t know where to start.

Financial management and retirement planning help people determine their personal saving targets, what they can afford to spend, and how best to arrange their financial affairs.  Retirement planning can quantify how much you need to have saved to retire.  When you are years away from retirement and your personal finances are ever-changing, this can seem like a challenging concept, but it is important to remember that a financial plan is a process, not a product.  It is something that requires discipline to start and at least annual maintenance and review.

A financial plan should include:

  • INVESTMENT PLANNING;
  • INSURANCE + RISK MANAGEMENT;
  • FINANCIAL MANAGEMENT;
  • RETIREMENT PLANNING;
  • TAX PLANNING; +
  • ESTATE PLANNING + LEGAL ASPECTS

Most people insure against at least some of the risks of financial loss due to death, medical issues and damage to property.  You could look at a well-structured and maintained financial plan as insuring against financial difficulty later in life.

Estate planning may also be an overlooked financial planning exercise.  The thing about estate planning is that it should go beyond simply preparing a will just to check off a box and say that it is done.  In a financial planning context, it is important to consider things like who your beneficiaries will be, joint asset ownership, income tax liabilities.  In the same way a married couple may plan for retirement together, it is important to consider what might happen if one spouse or the other died prematurely.  This may be as much a financial planning exercise as an estate law one.

Our financial planners – Samantha Butcher and Helen Yau can get you started on this journey and will assist and advise along the way.  Why don’t you call and make an appointment today, it’s that easy!

 

Amanda Wilkens – Director

B.Comm CPA

Buy Low Sell High

Buy Low Sell High is the first seminar in our free Property Seminar Series.

Buy Low Sell High is designed to provide an overview of the sale process, from engaging a real estate agent right through to handing the keys to the purchase.

We delve into:

  • WHO // you will need to engage to sell + why
  • WHAT // who does what, from the agent to the stylist right through to the broker + lender
  • CONVEYANCING // the general conveyancing process
  • SETTLEMENT DAY // what to expect + what happens if there is a delay
  • TRAPS + PITFALLS // that you should be wary of when consider to sell your property

So when the time is right to move on to your next dream home, selling your property for the best price will be a breeze!

Secure your FREE ticket through Eventbrite here.. https://www.eventbrite.com.au/e/buy-low-sell-high-tickets-75801936633

REFRESHMENTS INCLUDED + ALL CHILDREN WELCOME!