Here, our financial experts take a close look at what’s happening in the world of finance.
We uncomplicate breaking announcements from the Reserve Bank of Australia (RBA), the Australian Taxation Office (ATO), the Australian Securities and Investments Commission (ASIC) and the Federal and State Governments so you can understand how those changes will impact you, your family or your business.
If you’re wanting to stay up-to-date on topics such as interest rates, tax planning, superannuation, the Federal Budget, incentives and schemes, HELP debt, deductions, concessions, depreciation, investment properties and much more, this is where you’ll find the answers.
Knight is with you every step of the way as you strive for financial success. If you’d like some additional information regarding any financial news, please reach out for a consultation to plan your next step.
Home based businesses
1. Cost of room’s utilities These claims must be apportioned and if the portion is based on anything other than the floor area the claim must be clearly documented. 2. Phone costs If a telephone is used exclusively for business, owners can claim for the rental and calls but not the installation costs. 3. Decline in value This can apply to items such as desks and computers. If the equipment is also used for personal use then the claim must
Review of management accounts
This is best done with a tax advisor as they can help to identify tax areas and opportunities that may require further consideration. A few key areas that need to be reviewed prior to year end include: Owner’s salary Business owners should consider the salary they are receiving. Owners should review the overall position of their business with the view of increasing or decreasing their personal salary accordingly. Owners may often find that there is an added cost in paying
Claiming deductions for plant and equipment
Due to the potential changes affecting capital allowances, it is important that businesses understand what they are entitled to this year end. The capital allowances for small business entities this year end is: small business entities would be able to claim a deduction for the value of a depreciating asset that costs less than $1000 (rather than the $6500 before 1 January) in the income year in which the asset is first used or installed ready for use small business
Work-related travel expenses
However, eligible individuals are able to boost their tax refund with some deduction claims. Individuals are able to claim a deduction if they incur any travel related expenses that directly relates to their specific job function. Depending on the individual’s circumstances they can claim the cost of transport, incidentals, and meals for overnight trips. However, they must be able to provide the necessary documentation. Some of the travel expenses that can be claimed on a tax return include: air, bus,
New penalties for SMSF trustees
The ATO has warned SMSF trustees about a new range of administrative penalties that can be imposed for a range of breaches of the law. This includes breaches that may be inadvertent. This new legislation received Royal Assent on 18 March 2014 and will make new penalties available to the ATO for breaches that occur on or after 1 July 2014. The legislation will also apply to contraventions that were made prior to 1 July 2014. Examples of breaches of
Year end super strategies
1. Spouse contributions The spouse super tax offset allows higher earning taxpayers who contribute super for their non-working or low income earning partners to be eligible for a tax break. To be eligible for this benefit the lower earnings spouses’ income, total reportable fringe benefits, and reportable employer superannuation must have been less than $13,800 in the financial year. 2. Salary sacrifice A salary sacrifice arrangement is where an individual agrees to forego part of their future salary or wages
Tax tips for property investors
Here is a list of tax tips for property investors: 1. Renovations by previous owner Individuals may be eligible for a deduction for depreciation on the cost of improvement by a previous owner, provided items are identifiable and itemized in a depreciation schedule. 2. Repairs at time of purchase Repairs made to the property are generally deductible provided they relate to wear and tear, but not repairs carried out within the initial 12 months of owning the property. 3. Prepay
2014 year end tax tips
1. Bad debts Bad debts are taxable sales that have been overdue for 12 months or more and have no chance of being recovered. It is important to write off bad debts before year end. It must be bad, not merely doubtful and must have been previously included as assessable income. 2. Trust distributions Trustee distribution resolutions are needed before 30 June 2014, or individuals can expect to pay 46.5 per cent on trust profits. 3. Prepaid interest There is
2014 Budget Wrap
Budget Overview This week the Treasurer tonight handed down his first Budget and a first Budget since the change of Government in the last election. There was much speculation and conjecture regarding this Budget with a clear warning that all Australians will need to contribute to the pain of fixing the Budget. To that end the Government also held firm on its commitment not to make adverse changes to superannuation but there are some welcome amendments that will benefit financial