Cyber Awareness To Stay Safe

Universal Computer Solutions are leaders in their field and it’s no wonder that we trust them when it comes to all areas of Cyber Awareness.  Managing Director, and friend of our business has put together this article about Cyber Awareness to ensure that nobody is taken for a ride.  Introducing, Cyber Awareness To Stay Safe – Accountants Geelong l Canny Group.

As we increase our reliance on technology in both business and our private lives, it seems that more and more often we are hearing of systems being “hacked” or businesses and individuals defrauded of their funds and life savings.  And over the COVID-19 Pandemic, cyber criminals have only ramped up their activities.

In recent months we have seen a major security breach at RMIT University in Melbourne, a suspected cyber-attack has forced hospitals in Melbourne’s east to take their IT systems offline and delay non-critical surgeries, and it was not too long ago that the whole Barwon Health system across Geelong was crippled by a virus that destroyed critical data and records.

Unfortunately, as IT systems become more and more difficult to break into from a technical perspective, cyber criminals are searching for the weakest link in the equation: the unsuspecting end user.  According to Cyber Security statistics last year, over 95% of security breaches were the result of human error (namely, criminals fooling people into divulging their details, or allowing access to their systems).

People, unlike computers, can be fooled and manipulated much easier than trying to crack into a highly secured modern system, so the most used vector for all of the above examples is by trying to fool the end user either by email, phone call, or text message into divulging passwords, allowing access to their computer or mobile phone, even handing over their online banking details, but pretending to the a “trusted” source, and subsequently defrauding or taking advantage of the situation.

There are many motives for such attacks, but by far, the most common these days is simply financial, and once again, it is estimated that the worldwide information security market is forecast to reach $170.4 billion in 2022 (according to the Gartner Group).

So, it is no wonder that it is an ever-growing magnet for the criminal underworld.  Fortunately for us, it’s also a no-brainer to avoid such exploits and stop the criminals in their tracks purely by using some common sense measures:

  • Do not provide sensitive personal information (like usernames and passwords) over email
  • Watch for email senders that use suspicious or misleading names
  • Inspect URLs carefully to make sure they’re legitimate and not imposter sites
  • Do not try to open any shared document that you’re not expecting to receive
  • If you can’t tell if an email is legitimate or not, please contact your Information Technology help desk
  • Be especially cautions when opening attachments or clicking links if you receive an email containing a warning banner indicating that it originated from an external source

DO NOT //

  • Open any email attachments that end with; .exe .scr .bat .com, or other executable files you do not recognise
  • “Unsubscribe” it is easier to delete the e-mail than to deal with the security risks
  • Ever click embedded links in messages without hovering your mouse over them first to check the URL
  • Respond or reply to spam in any way.  Use the delete button

ALWAYS //

  • Check the email “from” fields to validate the sending.  This “from” address may be spoofed
  • Check for so-called “double-extended” scam attachments.  A text file named “safe.txt” is safe but a file called “safe.txt.exe” is not
  • Report all suspicious emails to your Information Technology help desk
  • Note that www.microsoft.com. and www.support.microsoft.software.com are two different domains

It’s important to remember, that big companies will *NOT*

  • Call you on your phone OR text you asking for your username or password (or any other personal details)
  • You will *NEVER* get an email from you bank, telco, internet provider (or any other business) requesting you to “click here to verify your details” (or any such nonsense)
  • And you will *DEFINITELY* never get a call from “Microsoft” telling you that your computer is infected with a virus!  (you might get called from your IT Provider who you know on a first name basis, but not Microsoft, Apple or your mobile phone provider!)
  • Or from the Australian Tax Office telling you that you are going to be arrested if you don’t pay a bogus fine

So always be *super* suspicious (err on the side of caution).  If you get an email, or text, or phone call, *SEEK ADVICE* from your IT Support provider if you think that it might be legitimate, and they will help you out and clarify if/when action needs to be taken.

You can also go to the Australian Competition & Consumer’s Commission’s website specifically set up to advise the public to see if a particular scam describes the symptoms of what you are experiencing – save this link to your favourites tab and use it any time you get a text, email or phone call which doesn’t sound right!

So, don’t become the next person to be fooled and taken advantage of.  It could cost you, your employer (and your contacts and people who you frequently correspond with) dearly.  Just like the measures we used during the COVID-19 lockdown, an ounce of prevention is worth a ton of cure.  Be ultra cautious, stay safe, and don’t get taken for a ride!

If you would like to know more from Universal Computer Solutions, get in touch and we can help to put your mind at ease!

 

Nenad Saffin – Managing Director

Universal Computer Solutions

Don’t Be An April Fool + Get Caught Out With An Audit

Don’t Be An April Fool + Get Caught Out With An Audit. 

It is something that a lot of taxpayers dread.  An audit from the ATO.  It invokes images of being interrogated in a windowless room.  Having to provide receipts for every deduction you’ve claimed in your life.  Rummaging through a shoebox to find the receipt for a $5 donation you made 10 years ago.  Being hauled off to prison over a few hundred dollars.  We have put together this article to be able to arm you with everything you need to know and how not to be an April fool when it comes to an audit from the Australian Taxation Office (ATO), introducing; Don’t Be An April Fool + Get Caught Out With An Audit l Canny Group

The reality is a little different.  The ATO does thousands of audits each year – Income Tax Returns, Business Activity Statements, Superannuation, Capital Gains, Fringe Benefits, Individuals, Trusts, Companies, Superannuation Funds, the list goes on.

The ATO also has a time limit to conduct audits.  For most taxpayers with simple tax affairs, the ATO usually has two years from the date an assessment is issued. For more complex taxpayers, the time limit increases to four years.  However, where the ATO suspect fraud or evasion there is no time limit.

Why does the ATO conduct audits?

The Australian tax system is based on the concept of self-assessment. That is, the information that you submit to the ATO is initially accepted as being correct and the onus is on you to ensure that your tax return complies with the taxation laws.

If the ATO suspects that the information you have provided may not be correct, they may decide to conduct a review or audit to verify its accuracy.

In 2020, it was estimated that ATO audits resulted in additional revenue of $9.5 billion and in the previous 4 years the total additional revenue was over $40 billion.

What are Reviews + Audits?

Depending on your circumstances, the ATO may initially conduct a Review.  A Review can be a simple and quick process of the ATO requesting source documents and workpapers.  Whereas an audit is a more in-depth examination of the tax issue that has arisen.

The review is generally conducted by an ATO Audit Officer who studies your financial records and tries to match them to the lodged reports.  This could include requesting a transaction listing for the period being audited, looking for proof of payments made (e.g. bank statements, payment receipts) and contacting your suppliers to verify the integrity of invoices provided.

The ATO may request payroll reports or contractor payment summaries as well.  Once these records are provided and the documents are reviewed by a case officer, they may then decide whether the review was satisfactory.

If the officer believes you have not complied with the obligations or a review is not satisfactory given the complexity of the matter or due to some other reason, they may then refer the matter to the audit department.  When this happens, a review gets converted into an Audit.

An ATO Audit is simply a verification of compliance and the accuracy of figures stated on a tax return, activity statement or any other lodged statements.  Hence every tiny bit of information could be subject to audit.

A typical audit will involve meeting with the ATO where they will provide information regarding what is being audited, the periods under audit and what information they will require.

While the ATO will usually use a cooperative approach to gathering information from the taxpayer, they do have legal powers that give them full and free access to places, books and documents and can exercise these powers without notice.

When the ATO has completed its audit, it will provide its position to the taxpayer in writing.  They will also advise if they intend to amend your assessment.  There may be additional tax, penalties and interest charges payable.

If you disagree with the ATO’s decision you can lodge an objection or appeal.  This will be then looked at by someone within the ATO, but not the same person that made the initial decision.  If you are not satisfied with the outcome, you can pursue the matter through the Administrative Appeals Tribunal or the Federal Court.

 How does the ATO know who to audit?

To decide who to audit, the ATO use data matching, benchmarking, tip offs, newspapers, and even social media! There is also the possibility that you can be audited by random selection.

The ATO now has access to a huge amount of data. They receive data from banks and financial institutions, Medicare, Centrelink, Workcover, land titles offices and planning authorities, as well as property title transfers, tenancy agreements, new car purchases, share registers, managed investments funds, building contractors – and many more.

Benchmarking allows the ATO to compare data across various industries to identify any taxpayers that are claiming high deductions or not declaring all income.

There have even been cases where ATO officers have read newspaper articles or viewed something on social media and conducted a review or audit.

And it is not just the ATO. State Revenue Offices also conduct audits in relation to state taxes such as stamp duty, payroll tax and land tax. Declaring rental income on your income tax return may trigger a State Revenue Office to review your land tax registration.

And the state governments talk to each other. A payroll tax audit by one state may lead to a payroll tax audit in another state if a business is operating in multiple states.

Audit Insurance

Complying with an audit can be a time-consuming exercise. You may be required to provide reports and other source documents dating back many years.

Audit insurance will cover you if you hire a professional lawyer or accountant to complete the tax audit on your behalf.  Even if no adjustments are required after the audit, you could be left with considerable professional fees.  Audit insurance does not cover you if you are required to pay additional money to the ATO after the completion of the audit process.

Canny Group offers Audit Shield service to our clients. This insurance covers audits, enquiries, investigations and reviews into the following:

  • Capital Gains Tax
  • Fringe Benefits Tax
  • GST/BAS
  • Income Tax
  • Land Tax
  • Payroll Tax
  • PAYG
  • Superannuation Guarantee
  • SMSFs + many more!

The best way to avoid an audit is to comply with the law.  Maintaining accurate records can assist in responding to an audit, as you are able to provide information to the ATO in an efficient manner.  If you are in a high-risk category or have complex tax affairs, you should also consider taking out Audit Insurance to avoid being left with a large accounting bill at the end of an audit.

Get in touch with our team today, so that we are able to talk you through the process and ensure that you don’t be an April fool + get caught out with an audit l Canny Group.  We are the accountants Geelong locals and surrounding areas trust to ensure their accounting and tax needs are met and are covered should you find yourself in the face of an AUTO audit.

 

Dale Knight l Accountant

CA B.Acc 

Our Women In Accounting, The Roadblocks + Their Advice

Our Women In Accounting Share Roadblocks + Advice l Canny Group

 

This 8th of March 2021 marks the 110th anniversary of International Women’s Day – a day celebrated throughout the world in a myriad of ways.  We wanted to showcase the amazing women that we have in our office (and running it) by letting you get to know our accounting team who are women.  We have put together this blog post with the hope that it will help you overcome any roadblocks and take on some advice if you’re looking to break into the world of accounting, introducing, Our Women In Accounting Share Roadblocks + Advice l Canny Group.

In China, the day is celebrated similar to Mother’s Day by showering loved ones with gifts and thanks whereas women in Italy are encouraged to embark on women-only adventures and celebrate with other women in the region while leaving others behind. And in other countries, the day is marked for demonstrations and protests like the upcoming scheduled protest against the Miss World contest in the United Kingdom.

This year at Canny Group we wanted to shine some light on our very own International Women.  We as a team want to celebrate International Women’s Day 2021 by spotlighting the women accountants in our office and finding out how they achieved success, what hurdles they faced along the way and what advice would they have to give to other accountants who are up-and-coming and looking to break into the amazing world of accounting.

These are our Women that we are celebrating this International Women’s Day!

Krystine Canny-Smith l Director

What was the road you took to become the accountant you are today?

Okay, here is my story. I didn’t complete Year 12. There had been a lot of other things going on in my life and study wasn’t a priority. After working for seven years, I decided I would like to study commerce. I applied as a mature age student and wasn’t offered a place even though I got a high score on the mature age tests (at that time they were called STAT tests).

I went into Deakin University and just arrived at the door of the selector. After speaking with him, he offered me a place on the spot. I loved University and found that I was an academic in the right environment and ended up winning awards on graduation.

Have you found any roadblocks along the way that relate to being a woman?

The biggest roadblock I found was having children and making my family a priority. I was fortunate as I worked at our office at Canny Group, and we, at Canny Group, endeavor to assist our team to make family a priority. So, I was able to bring my kids to work, work remotely and adjust my hours as needed. I would be a liar if I said it was easy though. I have had many nights with broken sleep and then trying to work through a full day. It is my memories of this that drive me to help parents to work and be productive while also having a balanced family life.

I know there are lots of roadblocks for other professional women. I have seen it with friends who are forced back to full-time work after having children with no flexibility and with employers who don’t value caring for children highly. I have also seen women who receive lower wages be written off as only deserving of lower wages because they took time to raise kids and prioritise family. These sorts of situations just cement my resolve to ensure that women I work with are treated equally and allowed to thrive.

Do you have any advice to up-and-coming accountants today?

My advice to up-and-coming accountants is to be persistent. If you receive a no, it is just a step on the way to yes. That doesn’t mean it will magically happen or is easy – it just means that you go back and work harder, work differently and keep at it until you achieve what it is you are striving to achieve. If I had accepted that I didn’t receive an offer for a university place, I would not be where I am today.

 

Amanda Wilkens l Director

What was the road you took to become the accountant you are today?

I left high school and went straight to university – a gap year was not even heard of then.  Deakin University was in its formative years at the time, and I had done very well in all the science subjects, so I enrolled to study Nutrition. I loved university life, but the only thing I did well was going to parties.

After my marks took a dive, I decided to change to Commerce, and I left university and went to the Gordon TAFE to study bookkeeping. I found this very easy, and it made perfect sense to me. Then I decided to apply for a job as an accountant even though I wasn’t qualified.

I got the job anyway. There was no mentoring, no training – I just taught myself.

I married, had two children, and moved away from Geelong while I went back to university to complete my degree on campus part-time. I then fell pregnant with my third child and used to sneak one daughter into lectures and bribe her with food to keep her quiet.

I completed my final exams at home under supervision having given birth two months prior, so that I could feed the baby in between exams. All the children came to work with me, and, at one stage, I had a cot in my office.

This sounds great, but it was not ideal. I was very lucky though to have the flexibility to do it, so that I could continue with my career whilst being a hands-on parent at the same time.

Have you found any roadblocks along the way that relate to being a woman?

When I first started working, even though I was employed to prepare financial statements as an accountant, it was me who was told to manage the reception counter and answer the phones when our receptionist was sick or on leave – because I was a girl. There was a junior male accountant in the office at the same time as me, but no one would have considered asking him. That was not work for a man!

Overall though, I have not had too many road blocks – I just developed a thick skin and didn’t let anything stop me in what really was a ‘man’s world’ in the 80s and 90s. It is so different now with so many women studying and working in the accounting industry.

Do you have any advice to up-and-coming accountants today?

My advice would be to take your time and learn the fundamentals of accounting. This is not taught so much at university these days, and I find that young accountants can use a software program but do not understand the logic behind it. Accounting, of course, is not just about numbers.

Make sure you are widely read and be interested in what is happening in the economy of the world and how this impacts upon what goes on in our own country. Be interested in the people you meet – everyone has something to teach you!

 

Fenting Lin l Accountant

What was the road you took to become the accountant you are today?

I came to Australia after completing Year 11 in China and went to Gordon TAFE in Geelong to study English. I had to pick a subject from the skilled migration board to study afterwards. There were not many to choose from at the time, and my parents suggested that I might be interested in studying Accounting as I was ok with numbers. Little did we know Accounting is not so much about numbers, but I survived!

After completing the Advanced Diploma at Gordon TAFE, I went straight to Deakin University to finish my Bachelor in Commerce, majoring in Accounting. I then went on to complete the CPA after joining Canny Group full time in 2015.

Have you found any roadblocks along the way that relate to being a woman?

I have not really had major roadblocks due to being a woman apart from changing my full-time work to very part-time to accommodate for my young child. I have been lucky during my working life, before and after having my family, by being given flexibility to work when I can.

I have also seen some of my friends who have had to give up their jobs after giving birth to their first child and unable to return to work for a long period of time. When they eventually decided to go back, there were not many options to choose from because they could not commit to set days/times.

Do you have any advice to up-and-coming accountants today?

I have enjoyed working as an accountant, and it is a very broad industry. Being in the public practice accounting firm, you will get to know a lot of useful information which could apply to you, your life and your circumstances. You’ll never stop learning, that’s for sure!

 

Gabriella Gibney l Senior Accountant

What was the road you took to become the accountant you are today?

My father is a Chartered Accountant and his accounting work with KPMG saw him seconded from Northern Ireland to South Africa and then eventually to Australia. I guess going through high school I always had in my mind that the Accounting/Finance Industry was BIG, it was global and it had a lot of paths. I think because of this I decided in VCE that I would like to do Commerce as it opened up so many opportunities.

When I finished my VCE, I decided to leave all my friends behind (they were all going to Bendigo University) and go off alone to Geelong to study Commerce at Deakin University. The course seemed quite broad, and I liked the idea of being able to choose what I majored in. I ended up majoring in Accounting, Finance and Commercial Law, and I started working in a Public Accounting Firm in Geelong while in my last semester. I then went on to complete my Chartered Accountants Grad Diploma all while working full time. Completing this was a huge achievement as was a lot of hard work and commitment.

Have you found any roadblocks along the way that relate to being a woman?

I haven’t really had any specific roadblocks in my journey as a woman, but I have observed some struggles some other women have faced such as a lack of promotion to senior/management positions in largely male dominated firms or lack of flexibility when it comes to family commitments. I guess before I had children, I did wonder how my career in the Accounting Industry would be impacted. I guess for me I am truly lucky to be in a firm that embraces family first, and I think the Industry itself has come a long way. Women can absolutely have a family and a career.

Do you have any advice to up-and-coming accountants today?

My advice to up-and-coming accountants is to just really think of the opportunities that accounting can provide as accounting is so diverse. Just know that you can take many different paths and you really will learn so much once you start working in a practical role.

  

Helen Yau l SMSF Manager + Financial Advisor

What was the road you took to become the accountant you are today?

In high school, I enjoyed accounting as a subject so it was clear to me that I would go to University to study commerce. When I graduated from University, I initially worked for one of the Big 4 accounting firms at that time as an Auditor. It was not long until I realised that this was not something that I could see myself doing for the rest of my career, so I asked for a transition to work as Tax Accountant.

I enjoyed my work as an Accountant, so this led me to complete my Chartered Accountant Graduate Diploma. The change in legislation and my accounting experience then led to complete my Diploma of Financial Planning and become a Financial Adviser. I now have the joy of working as an Accountant and Financial Adviser.

Have you found any roadblocks along the way that relate to being a woman?

My roadblock was trying to find that balance between work and family. When my children were young, they were not well and required a lot of care, so I made the choice to reduce my work hours to care for my family. Some career women may find themselves putting their career on hold to raise their family. Fortunately for me, Canny Group were flexible and were able to cater to my changing circumstances. Personally, I did not feel a reduction in my work hours affected my career as I still had the environment to continue to grow as an Accountant and realise my potential. Finding that work life balance meant I could have a successful career and a happy family life.

Do you have any advice to up-and-coming accountants today?

There are many challenges that women may face in their career but your mental attitude to each challenge will have an impact on the outcome. If we can adopt a positive mindset and try to view our challenges as an opportunity to learn and to grow, we will more likely be able to face challenges with an “I can do it” spirit.

My other advice is, we should never feel we need to face challenges alone or have the answers to everything. It is ok to reach out for help and guidance along the way. This is not a reflection of our weakness but demonstrates that we recognise that we all are just humans and need the support of those who care about us.

 

Jamie Arrington l Accounting Manager + Senior Accountant

What was the road you took to become the accountant you are today?

When I was in high school back home in Ohio, I really gravitated towards two subjects – accounting and chemistry. I excelled in both and in my last year of high school, I studied and tested out of accounting part way through the year and took the other half of the year to tutor other students in my class while in chemistry, I took the tests and exams before other students in the class to keep up with my fast-paced learning.

When I went off to University in Ohio, I picked Bachelors of Science majoring in Accounting at Wright State University rather than a chemistry degree because my dad convinced me I would have an easier time finding and keeping a job in my adult life. Three and a half years after starting University, I was at a strange and fearful stage in my life and I decided to change my major from Accounting to Computer Science.

A year later, I met and fell in love with an Australian and made the very big decision to move to Australia. I attended the University of Newcastle, and I decided to go back to my accounting education. I graduated with a Bachelors of Commerce two years after moving and obtained my Diploma of Chartered Accountancy not too long after while working in Newcastle at a public practice accounting firm. I worked in Newcastle for about five years and in that last year, I got married, had a baby and decided to move to Ballarat to be closer to my daughter’s father’s family.

I have been with Canny Group since that move four years ago excluding a tiny blip of time I took to explore other avenues.

Have you found any roadblocks along the way that relate to being a woman?

When thinking of a response to this question, I was thinking of a way to answer it without mentioning my children – after all, women are much more than the children they do or do not have. But my life is so centered around having to care for them that I can’t honestly answer this question without them – they are my life. So, my biggest and most major roadblock in my career as a woman was trying to find that balance between caring for my children and continuing to advance in my career as a full-time accountant. It’s still a struggle to this day!

As others in this article have answered, I have been very lucky to work for two amazing women at Canny Group who understand, respect and trust me as an individual and allow me to continue advancing through my career while managing my tiny, beautiful family at home. I have worked for many amazing people in my life, but I don’t think I would be where I am today without Krys and Mandy.

I would also say that my partner’s work has also made this roadblock in my career a bit harder to budge – I don’t know how many times he has had to have a conversation with his bosses about taking some time off work to help care for our children. It is both disappointing and saddening that his workplace isn’t as understanding as mine.

Smaller roadblocks I face along the way before having children seem so small in comparison. When I was in university in Ohio, I had a professor, who owned her own accounting practice, say to our class that she would never consider a woman who didn’t wear a skirt to an interview for a role as it was unprofessional for women to wear pants. I made a mental note to never apply for a job at her firm. I can also remember a boss I worked for not long after graduating telling me to make sure I wore make-up the next day to a client meeting – I must have looked rough that day.

Do you have any advice to up-and-coming accountants today?

My advice to the up-and-coming accountants is take it a day at a time and remember to breath! I wouldn’t be where I am today if I didn’t take a second, remember to breath and try not to get overwhelmed by all the … work! You will get there, just keep going. This has applied to all aspects of my life from family tragedy to my career to having a baby. Make it to the next day and keep going – keep chipping away at that iceberg.

 

We have a team of expert accountants under our roof who are more than happy to help you with any and all of your accounting needs.

Get in touch today, to find out how our team can help you!

 

 

How To Make Powerful Business Decisions In 2021

WELCOME TO BUSINESS 2021!

I think it is fair to say that we all hope 2021 brings in change for us, that we can live and run our businesses with more normality.

How to Make Powerful Business Decisions in 2021

The time to plan is now. The New Year is a great time to set or revisit plans, not for making new years resolutions (which often fall by the way by the end of January), but for considering this: Decisions x Actions = Results.

What decisions do you need to make to optimise what 2021 will bring to your business? And do you know the key to making your decisions more powerful? Support those decisions by writing down the key actions that need to happen to implement the decisions. Then set a timeline for those actions. Finally note who is responsible for making sure those actions happen. This does not have to be the person “doing”, but someone needs to be accountable for the actions.

And you know what, suddenly you have powerful decisions, with action steps and accountability!

To the person accountable in your business (including you), support them by letting them now that they can let accountability be their friend! They (or you) know what has to be done, and by when. Simple, clear, powerful.

Link your decisions to your financial results – YES, you should do a Budget!

Once you have made your plans, you should update your budget to include:

Resourcing the plan – your actions steps may involve increasing or decreasing investments in particular areas of your business. By including expectations in your budget, you can track the financial impact of your plan, and you might even refine your actions as you see the impact.

Reporting against budget – the most effective way to improve the power of your budgeting is to establish reporting to measure variations from budget, and a rhythm within your management team for reviewing this. This may include your finance manager, or your external business adviser / accountant. By setting these reviews in concrete, you and your team remain accountable.

Flexing your budget – It is ok to update your budget through your reporting period, but you should always refer any changes back to your original budget. This means you can retain the relevancy if there is significant change, but also understand in your review process what has changed from the original budget.

The next budget cycle – you should include the ability for you to add notes to your budget, so that come next budget cycle you can use those notes to guide your new budget development.

The difference between a “Budget” and a “Cashflow Forecast”

Often these two are referred to in the same way, but what if you had a budget of $3M in sales, spread evenly over the year, but your clients changed from paying you on 30 days to 90 days due to their cashflow? That’s a $500,000 cashflow difference! You should always understand both your budget, but also your cashflow.

We are fortunate that the uptake in Cloud Software has improved the availability of software that can provide budgets, cashflow forecasts and management reporting using real time data.

If you would like help setting your plans for 2021, including action plans, but not forgetting budgets and cashflow forecasts, please let us know!

Is there a place for Love in business?

When business owners reflect, I am sure there are many aspects of their business that show a place for love in business.

Relationships

Love is about relationships, and business owners who neglect relationships can find themselves without loyal customers and employees, so I hope you agree relationships matter in business.

Courtship

I am sure the business owners out there can remember “courting” customers, and likely too is that great “first dates” with prospective customers stick in your mind.

Once the customer is won though, here are three ways you can keep the “spark of love alive”:

  1. Great service– This will mean different things to different businesses, but one thing you can do that can build your relationship is simply do what you say you will.
  2. Communicate often– You might think that your customer does not want to hear from you, but if you give them a reason to listen or read, then regular communication is a great way of building your relationship.
  3. Surprise + thrive – keep your customers exited by your actions, an unexpected card or gift might warm their heart.

Don’t forget to love thy self

Self care (or love) too, is vital for business owners, and I don’t just mean giving yourself a bonus.

Rather, think of this quote from Mathatma Ghandi:  “If you want to change the world, start with yourself”, words that go well with this quote from George Bernard Shaw: “Progress is impossible without change, and those who cannot change their minds cannot change anything.”

The start of a new year is a great time to put some effort into developing yourself.

Not Just Customers

Love those around you. Beyond your customers, don’t forget to give your team some love too. This might be through beefing up your communications, letting your team know you care, and helping them deliver results too!

And finally, as a business owner, you are uniquely positioned to “Love from Afar”. The opportunities today to give to those in need may well be endless, we support a number of different local sporting clubs, as well as an initiative started by our founder, Stanley J Canny called Best Buy Books where we supply books to all of the school children in the northern suburbs of Geelong to ensure that they have book packs as well as books in their school library, but surely a great characteristic of love is to give without any expectation of receiving.

Find a charity that resonates with you, and let your customers, suppliers and team know what you are doing. You might be surprised at their reactions.

So, yes, I believe love has a place in business, but perhaps beyond how you may have thought.

Canny loves Business

Yes, Canny Loves Business, so if you love your business and want it to thrive, we can help you set your goals for 2021 and beyond.

Our Business Advisory Team can assist with advice on your systems, support for your budget development, cashflow forecasts, management reporting, and even become part of your team that reviews your performance against budget on a monthly or quarterly rhythm.

If you love your family and want to set them up for success after you are gone, then come and see our team about estate planning.

If you love fishing, or travel , then link up with our financial advisers to understand and optimise your savings and investments so you can do what you love sooner than you might have thought.

Difference Between A Bookkeeper + An Accountant

For those of us who have bad memories of maths classes in high school, we might think that bookkeepers and accountants are part of that rare breed of people who really like numbers, and who are a necessary evil for the rest of us at tax time or to keep our companies, businesses, and organisations out of trouble. A common question we are often asked is what is the difference between a bookkeeper and an accountant and Canny Group have both under the one roof!

If pressed to explain what the difference is between bookkeepers and accountants, many of us might have a vague idea but would probably struggle to accurately identify a clear role description for each profession. While both have an important role to play, knowing the specific strengths and expertise of each can help to ensure that tasks can be allocated based on meeting compliance requirements without overspending – both for businesses and individuals.

Put simply, it is a bit like the difference between a GP and a medical specialist!

What is Bookkeeping?

The general definition of bookkeeping is keeping a regular record of all financial transactions – either for a business or for personal expenditure. Of course, all companies and businesses expend money – even if they are a not-for-profit organisation – so bookkeeping is a key part of any business.

Some of the general business tasks that bookkeepers regularly assist with include:

  • Processing financial transaction documents such as invoices, payments and receipts, and statements
  • Maintaining an accurate and current general ledger
  • Payroll administration
  • Collating information for monthly and annual financial reports
  • Managing accounts payable and receivable
  • Preparing and lodging business activity statements (BAS)
  • Advising on bookkeeping and payroll systems and software.

What is Accounting?

Accounting can be defined as recording, analysing, and reporting an organisation’s financial transactions. This is not just to meet legislative requirements (such as paying tax) but also to plan future expenditure to maximise and increase profit. Accountants provide high level advice on:

  • Business start-up and establishment
  • Financial due diligence
  • Taxation and auditing
  • Corporate reporting and compliance
  • Superannuation funds and payment
  • Financial management and investment.

While of obvious value to companies, businesses and organisations, accountants are also used by individuals with large or complex investments and share portfolios, for managing family trusts, and by self-funded retirees.

There are also different areas of specialisation in accounting, including financial accounting, management accounting, insurance and risk, taxation, auditing, and insolvency. A specific, high level specialisation is known as forensic accounting, which uses auditing and investigative skills and methods to determine instances of fraud and suspicious financial activity. Forensic accountants’ reports are used in criminal trials as evidence and to assist in recovering financial losses for businesses that have been targeted by scammers.

Forensic accountants are also employed to do financial due diligence in the event of purchasing a business or investing in a business. In this context they focus on key issues such as:

  • Inaccurate or unrealistic financial projections
  • Understated liabilities and expenses
  • Overstated revenue
  • Overvalued assets
  • Governance/managerial deficiencies.

Accountants may also provide advice on the best accounting software and systems, and this is an area that can often change rapidly – such as the current focus on cloud-based accounting. Cloud accounting makes business financial records safer and more secure and reduces the chance of errors, leaving accountants more time to spend advising clients on business growth and profit maximisation.

Fundamental differences or just a higher pay grade?

While there may be some overlap between the services that bookkeepers offer and those of accountants, for the purposes of business it is advisable to use the services of both in a complementary way. For example, while you may want the higher analytical skills of accountants to prepare and lodge your annual financial records in compliance with company legislation requirements, you probably do not want to pay them to do any of the collating tasks or basic checking tasks that would form part of a bookkeeper’s duties.

While a good bookkeeper can keep you up to date with profit and loss, balance sheet and general ledger details, an accountant can give in depth advice on strategies to increase profits, minimise taxation and invest in the future. The level of scrutiny and analysis an accountant applies to all areas of an organisation’s finances means that they are able to make accurate financial projections.

Similarly, while a bookkeeper may be valuable in saving time by comprehensively collating and checking all documents required for an annual corporate tax return, an accountant’s deeper knowledge of taxation legislation will ensure that their preparation of the return will be compliant and will maximise all chances of the best financial outcome for the business.

Compliance is becoming more and more complex in many industries, and since the Global Financial Crisis large financial organisations – including banks – have come under scrutiny. Any business with a reasonable financial turnover is increasingly subject to regulatory and statutory guidelines and keeping up with them is essential. Accountants who specialise in this area can guide business managers and directors through the stormy waters of audits and financial reporting. As well as ensuring compliance, annual auditing and review of financial statements will enable an accountant to provide important information on future risks and opportunities, and to remain viable in a competitive market.

Risk management, once a favourite of government departments, is now becoming more of a focus in all areas of business. The current COVID-19 crisis has taken a huge toll on businesses worldwide, and those with a proactive and future-proof approach are more likely to thrive. This is something that a good accountant – who follows the markets and international trends – will be able to advise on.

So where does the buck stop?

In conclusion, both accountants and bookkeepers provide valuable – and often complementary – services, and the future-focused proactive business, company or organisation will use the services of both. There is a fundamental difference between the two professions and recognising this will assist businesses in the most economic and efficient use of their areas of expertise.

Viewing your bookkeeper and accountant as a team, dedicated to maximising efficiency and saving you money, is the best way to ensure that all your personal, corporate, compliance and financial needs are given expert treatment by dedicated professionals

We are lucky enough to have both bookkeeping and accounting under the one roof to help our clients.

Setting Your 2021 Financial Goals

CANNY ACCOUNTING l Expert Advice for Setting Your 2021 Financial Goals

Letting your trusted team of advisors at Canny Accounting, Canny Advisory + Canny Legal help you set and achieve your financial goals!

Last year we all learned a lot about our spending habits, thank you COVID-19!  Now let us help you put some plans into action that will really help to improve your financial life going forward.  These are all very achievable and with the help of Canny Accounting, Canny Legal and Canny Advisory we can set you on a path to financial order. 

Money is just a tool and learning to get your financial life in shape is just learning to use that tool well. We want you to feel in control of your money, not the other way around. And it’s not all about the money either, we have listed some other great strategies for you to consider as well. 

Here are some manageable tips to get you started…

QUICK + EASY WINS WITH YOUR BANK

You get charged around 20% interest on credit card balances.  Unpaid credit card balances are the fastest way to go backwards financially.

Focus on reducing your Credit Card balances to NIL before you do anything else.  Then keep your spending down so you can repay your credit card balance each month.

It’s too hard to know where you are financially with just one bank account.  Using 3 different accounts to keep your Bills money and your Cash Savings separate from your Everyday Account helps you tell at a glance what you can afford to spend each week.  Go ahead and set these up now.

Pay yourself first!  Have your bills and cash savings covered automatically – and then spend what’s left in your everyday account.  So easy to keep on track by this one simple strategy.  Set up auto transfers using internet banking to transfer a set % of your wages each week into your Bills Account and into your Cash Saving Account.

Aim to create a cash reserve to last you for 3 months.  Most income protection insurance takes 1 to 3 months to start up – so you’ll need a cash reserve if anything stops you working.  You can set up Cash Savings account separate to your everyday account.  Try to put aside into this account 5% of your weekly pay and build up a 3 month cash reserve.

Your bank won’t offer you an interest rate reduction on your loan unless you ask for it.  So… ask for it!  This could save you thousands of dollars each year.  When contacting your bank to ask for a reduction in your interest rate, have quotes available from another bank to show that you have done your homework and you know what is available out there!

BE TAX EFFECTIVE

Being smart about where you keep your cash savings can reduce your overall family tax payable.  By moving your family savings into either a home loan offset account or into the name of your partner or spouse who has a lower tax rate can save you money.

We always advise clients not to have debt – if they are in that enviable position.  But many of us are not.  So, if you do have debt, the next best thing is that it is tax deductible debt.  If you are considering borrowing money to buy an asset that is for work or business purposes, or perhaps an investment property where you should be able to claim the interest being charged, this is ‘good debt’ in that it is at least tax deductible.  You should therefore prioritise getting rid of ‘bad debt’ such as credit card debt and your home mortgage as it is of no advantage to you in terms of tax deductibility.

Part of your savings plan may be to contribute to superannuation (on top of what your employer is putting in).  Make sure that you understand how before and after tax contributions work so that you are getting the most benefit.  When you contribute before tax, that is you get a tax deduction for your contribution, the maximum amount that can go into your super fund from any source is $25,000 in one year.  When it is an after tax contribution there is a maximum of $100,000 per year that can go into your fund (or you can bring forward 2 extra years) You can also have a combination of both.

Other simple tax tips are – Keep all your receipts for anything that is purchased to help you do your job and record the travel that you do in your own car that relates directly to work.  If you are studying and it is related to your current job, keep all your fees (not if you are paying via HELP) and any reference books, stationery, uni parking and internet costs to do with study and we will determine if you are able to make a claim.

GET YOUR AFFAIRS IN ORDER + THEN REST EASY

Make sure that if you are running your own business, you have a robust structure set up to protect your personal assets.  If you are operating as a company, give some thought to who would be your replacement should something happen to you.  We can help you to document a successor director.

While we are on this subject, give some thought to an Advance Health Directive.  If you are unconscious or incapacitated and cannot make personal health decisions – you will need someone who can.  This can be covered during an estate planning session with one of our lawyers and of course there is the matter of an effective Will.

If you die without a Will, the Public Trustee will charge your estate (could be up to 5% of the total estate) and your wealth may not go where you want it to.  With your instructions and Canny Legal guidance, we can help to have your wishes carried out.  Also, if there comes a time where you are incapacitated and cannot make decisions, you will need someone who can make financial decisions on your behalf.  We can facilitate a Power of Attorney and you can rest easy that that is done!

We are here and happy to help you get rolling with the journey to reaching your goals, you just have to make the first move.

Personal Income Tax Rate Changes To Get Excited About

There has been some exciting changes to the personal income tax rates thanks to the new Federal Budget that has been handed down.  However, there is certainly some confusion around what the tax cuts actually mean and who is effected by them.

Essentially, there are three “tax brackets” that have changed, and these changes have been backdated to 1st July 2020.

  • The 19% rate applies to income between $18,200 – $45,000
  • The 32.5% rate applies to income between $45,001 – $120,000
  • The 37% rate applies to income between $120,001 – $180,000

The Budget was applied on 6th October 2020, so when you do your 2021 income tax return, you will benefit from the excess tax you have been paid between 1st July and 6th October 2020 as a larger refund (or reduction in the amount that is payable).  So let’s put into practice these changes for the exciting personal income tax rates so you can see where the benefits lie…

FOR EXAMPLE

Oliver earns $44,000 per year;

  • Under the old tax rate, he would pay $5,847 (excl Medicare Levy)
  • Under the new tax rate, he would pay $4,902 (excl Medicare Levy)

Taylor earns $79,000 per year;

  • Under the old tax rate, he would pay $17,222 (excl Medicare Levy)
  • Under the new tax rate, he would pay $16,142 (excl Medicare Levy)

WHAT IS THE MEDICARE LEVY?

The Medicare Levy helps fund some of the costs of  Australia’s public health system, known as Medicare.  The Medicare levy is 2% of your taxable income, in addition to the tax you pay on your taxable income.  It is possible for there to be a reduction or exemption from paying the Medicare Levy, depending on your and your spouse’s circumstances.  You need to consider your eligibility for a reduction or an exemption separately.  Have a look at the Medicare Levy calculator to work out your Medicare levy.

LOW INCOME TAX OFFSET

As an added bonus, there has also been some changes to the Low Income Tax Offset and the Low and Middle Income Tax Offset, see below:

  • The Low Income Tax Offset has also increased to $700 per year for incomes under $37,500 and then reduces
  • The Low and Middle Income Tax Offset has been retained for another year and is $1,080 for taxable incomes between $48,001 – $90,000.  A further $255 for taxable incomes of less than $37,000

If you would like more information on any of the Federal Budget that was handed down earlier this year, get in touch with our team and we would be happy to go through these changes with you.

 

Amanda Wilkens – Director

CPA

International Men’s Day – “Better Health For Men + Boys”

“Try not to become a man of success, but rather try to become a man of value” – Albert Einstein

On the 19th of November, Australia and over 80 other countries will host the annual international men’s day to celebrate and reflect on the men in our lives whether it be a father, brother, uncle, nephew, husband or friend and to express appreciation for their efforts and contribution to our lives and society as a whole.

It has been found that men are less likely to see treatment for depression, and this can intensify the associated personal and financial problems they experience.  Melbourne psychologist Shaun Delaney, author of the study Divorce and the experience of Australian men, says “research has consistently found that men avoid or delay seeking help for physical and mental health problems”.  A common issue encountered by Delaney in his interviews with men was a feel of despair over the loss of financial security and a pessimism about future projects.

Stephen Carbone from the mental health advocacy group Beyond Blue, says despite increasing awareness about depression, men very often do not recognise that they have a mental health condition, or if they do are less likely to reach out.  “There is a reluctance to seek help, so they struggle on without help and put themselves more at risk,” Carbone says.  The symptoms of depression can include persistent flat moods, pessimism, hopelessness about the future, irritability, anger, diminished confidence and lack of motivation.  “All of these conditions affect your day-to-day life including your ability to do your work to the best of your ability,” Carbone says.

As a result, men’s mental health and financial security can deteriorate, making it increasingly difficult for men to function in their day-to-day life.  The additional burden of financial stress can have serious long-term effects on their health, finances, and future prospects, including their plans for retirement.  One participant of Shaun Delaney’s study said: “As a man after 28 years of marriage I don’t have the financial means or my youth to start again.  My future is bleak, and I foresee that I will be in the workforce until I die.”

In addition, financial stress and insecurity can lead to harmful activities like gambling.  When the Victorian Responsible Gambling Foundation conducted a comparative study of men and women gamblers in Victoria in 2014, it was found that men have higher participation rates than women in most forms, including informal betting, gaming machines, table games, race betting, sports betting and Lotto.  Men also spend more on average in a year on their man gambling activities than women, $2,959 vs $664.  Gambling can exacerbate existing mental health issues and lead to sever financial stress and insecurity for these men and their families.

“It’s the nature of mental health conditions that they don’t allow you to be at your best, at your full potential,” Carbone says.  Understanding more about depression and its causes can help to empower men to overcome their illness, and it supports them in improving their lives, personal finances, and future prospects for themselves and their families.  In addition, a sound financial plan that incorporates a long-term approach to saving, investing, and achieving financial security can help to improve future prospects and lead to better outcomes.  The best time to start a new and improved financial plan is now.  It is never too late to start and sometimes it can make all the difference to someone’s outlook on life and their own financial situation.

International Men’s Day main purpose is to show the positive value men bring to the world encouraging the practical side of male identity as well as highlighting the social issues that men and boys face.  The 2020 theme is “Better health for men and boys”, focusing on mental health, improving gender relations, gender equality, and highlighting of positive male role models.

THE STATS:

November 19th is also a day to raise awareness to the challenges that men face in life – especially in relation to the international male suicide rate.  Some key statistics on social issues men face that need awareness are:

  • Men make up an average of six out of every eight suicides every day in Australia, nearly double the national road toll
  • One in eight men will experience depression and one in five men will experience anxiety at some stage of their lives
  • Men are 32% less likely than woman to visit a health professional
  • Men are twice as likely to die of drug or alcohol abuse
  • Men make up 94% of all workplace fatalities and have an average life expectancy almost five years less than women

None of these issues are unique to men specifically or are being used to try and diminish similar issues woman face but it is important to see how overrepresented men are in some of these areas.

GOOD EMPLOYEE HEALTH IS GOOD FOR BUSINESS:

It is also important to be aware about the direct impact mental health can have on a business and workplace.  Making up roughly 54% of the workforce it is important for men that workplaces encourage prioritising their own health and wellbeing and promote the message that there is nothing wrong with looking after yourself or admitting that something is wrong.

Studies show that more than half of men suffer from work-related stress; with 13% of them citing their stress as unmanageable.  Workplaces are working towards helping de-stigmatise discussing mental health and acknowledge normal feelings of sadness or anxiety especially during this year with so much uncertainty due to the global pandemic.  This will not only improve peoples’ engagement in their overall wellness but significantly boost the health, wellbeing, and peace of mind of the workforce.  The benefits towards the business have been shown to improve morale and productivity, decreased sick leave, lower turnover, and increased loyalty.

If you or someone you know needs support and would like to talk to one of our team members, our doors are always open and you are always welcome to contact us!  We have also listed a number of crisis support services that can be reached 24 hours a day:

Lifeline 13 11 14

Suicide Call Back Service 1300 659 467

Kids Helpline 1800 55 1800;

MensLine Australia 1300 78 99 78

Beyond Blue 1300 22 4636

Get Motivated For Spring Cleaning!

Canny Accounting l Spring Clean Your Business Affairs

Don’t think you need to spring clean your business affairs? Perhaps not, but what if I told you this was a great time to set yourself up for success. 

Your spring clean can get you organised, get your filing done, and get your desk and your mind clear to set goals and make great decisions!  Having clarity on your situation when making decisions and setting goals is hugely valuable. 

CAN TECHNOLOGY HELP YOU? 

You bet!  Did you know that Xero has an app called HubDoc that you can load on your phone, take a picture and send that to your digital filing cabinet?  If it is a receipt you have done this with before, it can even file the receipt for you AND send the information straight to your Xero accounting system. All from your phone! 

There are other tech tools that can help you automate your spring cleaning, and once you have it set up, keep that spring clean feeling through the year! 

WANT TO SUPERCHARGE YOUR SPRING CLEAN? 

If you don’t know where to start, then call in the experts.  We can guide your clean! 

And, when you have the hard work done, we can help you supercharge your spring clean by providing insight and advice to turn your new found clarity into actions and help you achieve your goals. 

Whether you want to set up a budget and turn that into a cashflow forecast, get to work on optimising your tax position for 2021, or considering how best to invest in your business, calling in the experts can really supercharge your spring clean! 

 

Canny Accounting have a team of experts ready to help you ensure your business is thriving and working at its best ability!  Get in touch to let us help you ensure you’re giving your business affairs the right spring cleaning they need.

 

Adam Ramage – Senior Business Adviser + Accountant

B.Bus, CA

Help Through Troubled Times

Help Through Troubled Times

Help Through Troubled Times – Accounting + Lawyers l Canny Group

What a year it has been so far.  We thought that it was important for us to remind you that we care about our client’s psychological well-being as well as financial well-being.  For those who are managing the stress of working from home, reduced income and an uncertain economic future, we understand completely how difficult it is and that’s why our teams are here to help through troubled times – Accounting + Lawyers l Canny Group.

Thankfully a wide range of assistance is available to help us get through these unusual circumstances.

HELP OPTIONS INCLUDE:

  1. Majority of banks have put together Coronavirus support for businesses, including refund of merchant fees, moratorium on loan repayments and offering unsecured Business loans for working capital purposes.
  2. Housing Victoria has provided ‘’Coronavirus Rent Relief Grant’’ for up to $3,000 for people experiencing rental hardship
  3. Department of Health and Human Services also provides ‘’Utility Relief Grant’’ for eligible accountholders for up to $650 in a two-year period
  4. Beyond Blue which provides mental well-being services has a dedicated line to provide support for people struggling to cope during the pandemic
  5. National Debt Helpline also provide free services for people who need any form of debt management assistance
  6. JobKeeper #2 is about to be rolled out
  7. ATO Cash Flow Boost still has payments until end September
  8. Another round of Support Grants to be issued from the Victorian Government
  9. The ATO are being very understanding about outstanding debts and lodgements (at the moment)

When we have Treasury clarification on the new round of assistance that is being rolled out by end of September, we will keep all clients updated further, just as we have since the beginning of the pandemic.

As well as the wide range of assistance that is available during these troubled times, greater protection for this brave new world as the global pandemic we are all bravely facing is also important.  It has shown us just how important it is to ensure your family is protected and provided for in the unfortunately even of the death of a loved one.

With people losing their employment and lending institutions requiring more and more guarantees from their borrowers in order to secure finance, there is a greater need to ensure our assets are not diminished and are protected from creditors.

It is important to consider if your circumstances have changed and if your will, power of attorney documents, company or trust structures (estate documents) are serviceable to your wants and needs.

It is always recommended to review your estate documents every 3-5 years.  However, within that time if your circumstances do change, your estate documents may not provide the most appropriate level of protection and may leave your estate exposed.

Additionally, if you do not have any estate documents in place, it is vitally important to consider putting these in place to protect your loved ones and to ensure they are able to administer your estate as easily as possible during their difficult time.

Check out the list below that we have put together to help you!

MATTERS TO ALWAYS CONSIDER… when reviewing your estate documents:

  1. Who is your executor?
  2. Have you separated from your partner?
  3. Have you re-married or do you have a new spouse?
  4. Are you children still considered dependant upon you?
  5. Do you have life/death insurance and permanent disability insurance cover within your super?  Is the amount you are insured for enough?
  6. Have you in place a binding death benefit nomination for your life insurance and super?  Has the nomination lapsed or is the beneficiary an authorised person (spouse, child, financial dependant, estate)?
  7. Have you provided any specific assets of your estate to people under your will but no longer in your possession?
  8. Have you lost touch with a person who would currently benefit from your estate?
  9. Is there enough protections put in place for someone you are not providing for under your estate?
  10. Has anyone names within your will passed away?  What would happen to their share?  Has that been made clear within your will?
  11. Does your trust deed or company constitution provide provisions on what happens if you were to pass away?

If you are unsure on how to answer any of these questions, please get in touch with our team.  If you require a review of your estate it is recommended you have a discussion with one of our estate lawyers who will guide you on the best course of action.  We are here to give you greater protection for this brave new world!

A bonus of Canny Group is that our team is able to provide you with a holistic service with our lawyersaccountants and financial advisors working together to provide you with the most efficient and effective advice. So let our teams help through troubles times – Accounting + Lawyers l Canny Group

How To Avoid A Tax Debt

How To Avoid A Tax Debt – Expert Accounting l Canny Group

Sometimes when you were expecting a nice little tax refund into your bank account and you end up with a tax debit, it can be a little hard to swallow and leave you wondering why!?  If you have been in this position, we have put together a few points on how to avoid this same situation happening next year and how you can prepare in advance!  Let us help you understand how to avoid a tax debt – expert accounting l Canny Group

If your refund is less than you expect, these are the most common reasons which you may not have taken into consideration:

  • The refund amount has been offset against another debt, either another tax debt (previous income tax bill, or activity statement debt), or another government agency debt (Centrelink, or Child Support Agency)
  • Compulsory payments, such as: Higher Education Loan Program (HELP); Trade Support Loan (TSL); VET Student Loan (VSL); or Student Financial Supplement Scheme (SFSS) repayments
  • You need to pay Medicare levy surcharge because you stopped paying private patient hospital cover and your income is above a certain threshold
  • New or amended income tests
  • Excess concessional contributions to a super fund
  • Your employer incorrectly reporting reportable employer superannuation contributions on your payment summary
  • Tax was not withheld from a taxable payment (such as Jobseeker payments) and your total income for the year was more than the tax-free threshold
  • You incorrectly claimed the tax-free threshold.
  • You are an employee and enough tax has not been withheld from the payments made to you by your employer
  • You are a sole trader and have not paid enough tax to the ATO throughout the year
  • Receive other income where no tax was withheld such as Centrelink payments
  • Working for more than 1 employer and have compulsory payments, such as: Higher Education Loan Program (HELP); Trade Support Loan (TSL); VET Student Loan (VSL); or Student Financial Supplement Scheme (SFSS) repayments

TIPS FOR AVOIDING TAX DEBT AT THE END OF THE YEAR

  • Claim tax free threshold only from 1 employer in a financial year
  • If you have HECS debt and you are working for 2 employers, you need to pay extra tax based on percentage of your total income from both employers. Check your HECS repayment rate on https://www.ato.gov.au/Rates/HELP,-TSL-and-SFSS-repayment-thresholds-and-rates/
  • Set up PAYG instalment payments with ATO if you are sole trader
  • Ask Centrelink to withhold tax on any benefits received from Centrelink
  • Seek financial advice if you are planning to contribute a big amount to your super fund.
  • If you are earning more than $90,000 or earning more than $180,000 as a family, seek advice to get private health insurance cover to avoid Medicare levy surcharge
  • Know in advance if you have any debts with ATO or Centrelink or another government agency.

 

Kim Sandhu – Senior Accountant

CPA – B.Com M.Acc

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

Maximising Your Tax Return – Geelong Accounting l Canny Group

It’s that time of year again, Tax Time!  For individuals who have a tax agent, like our team at 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 lodge your own tax return you have until 31 October 2020 to have it lodged.  We’ve put together invaluable tax tips and strategies for you to consider when it comes to your tax returns, introducing; Maximising Your Tax Return – Geelong Accounting l Canny Group.

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 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 lodge 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 you 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 logbook method of car expenses. Canny Group’s team of accountants will be able to determine which method yields the greatest deduction for you.
  • WORK-RELATED EXPENSES // consider if you need any work-related items such as tools for 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 of your running expenses from 1 March to 30 June. Multiple people living in their 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 // TAX ADVANTAGE OF TAX OFFSETS!

  • SPOUSE OFFSET // receive a $540 tax offset by making a person 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 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 of $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 than $38,564 and a reduced amount is available to those with taxable income less than $53,564.

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.

You can book directly via our website to see one of our accountants to complete your income tax return, or even just to have a chat to make sure that you’re on the right track!

Now that we have your sorted for maximising your tax return outcome, let’s talk about what you’re going to be doing with the hard-earned money you’re hopefully on the way to receiving back!

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.

STRATEGY #1 // SET UP AN EMERGENCY FUND

Research conducted in the 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 they 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.

So, with this in mind, why not use this year’s tax return to set up an emergency fund and make this the start of your savings plan?

STRATEGY #2 // MEET WITH AN ESTATE PLANNING LAWYER

As the saying 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 years tax return, why not protect your loved ones and sit down with an estate planning layers to draw up a Will or Testamentary Trust?

STRATEGY #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 one and for all.  It doesn’t take much more than $2,381 to get started these days: a basic website and some Facebook and Instagram paid advertising campaigns to attract your first paying customers.

So, 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?

The question is, how will you spend your tax return this year after you’ve put into place our tax tips on maximising your refund?

Get in touch with our team today, to make sure that you’re putting your best foot forward and making the most of your situation!