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Warning issued over tax avoidance schemes

Posted on June 30, 2014 by admin


The ATO has recently advised taxpayers to seek a second opinion on before entering into any tax avoidance schemes. According to the ATO tax avoidance schemes are designed to appear legitimate, even to savvy investors. In particular taxpayers should be wary of complex financing schemes that rely heavily upon round robin financing schemes and non-recourse loans. Essentially, if the scheme involves reducing you’re your taxable income by declaring deductions that you are not entitled to, it is likely to be illegal. If a provider tries to dissuade you from telling people about the scheme, or discourages you from seeking a second opinion, you should take this as a warning sign. Claims of ‘risk free’ or ‘zero risk’ tax avoidance schemes should also be treated with suspicion. Entering into an illegal tax avoidance scheme, even if you were unaware that it was illegal, can result in a hefty tax burden.


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Claiming a computer as a tax deduction

Posted on June 25, 2014 by admin


If you use a piece of equipment, such as a computer, for work related activities then you may be able to claim it as a tax deduction. If the item is valued at over $300 then you cannot claim the entire cost in the year of purchase. Instead, you will need to calculate the depreciation in value each year. When equipment is used for both professional and personal use, as computers so often are, then you can only claim a tax deduction for the equivalent portion that is used for professional purposes. For example, if you use the computer half for work and half for leisure then you may only claim half of the value of the depreciation of the computer as a tax deduction. The ATO has indicated that it will be focusing on tech related expenses this year, with a particular focus on ensuring that individuals accurately report the work/personal breakdown of use. It is advisable to retain all documentation, including diary entries if necessary, relating to the use of a computer you are claiming as a tax deduction. There are also other costs associated with a computer used for work purposes that can be used as tax deductions, such […]


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Changes to self managed super funds in 2014

Posted on June 20, 2014 by admin


From July 2014 there will be a new range of penalties that will apply to SMSF trustees in breach of superannuation rules. Currently, the only significant financial penalty that has applied to non-compliant SMSF trustees is the penalty tax that allows the ATO to confiscate half of your assets. However, from July11 2014 the ATO will be able to impose a range of financial, administrative and educational penalties. One feature of the new regulations will prohibit trustees from paying fines from their SMSF assets. As an SMSF trustee, it is your responsibility to make sure that you are aware of all changes to legislation.


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Changes to non-concessional super contributions

Posted on June 6, 2014 by admin


Non-concessional contributions to superannuation are contributions that are made from your income after tax. In the 2013-14 financial year the cap on non-concessional super contributions was $150 000, with contributions exceeding this being taxed at 46.5%. As non-concessional contributions to super have already been taxed this meant that contributions exceeding the cap were potentially being taxed at 93%. Many Australians over the age of 60 were making substantial contributions to their super in order to take advantage of the tax breaks and accidentally exceed the cap. In the 2014-2015 financial year, the cap on non-concessional super contributions will be raised to $180 000. The government has also announced that it will lift the non-concessional contributions tax. Individuals may withdraw their excess contributions, along with any earnings, and have these taxed at their usual marginal tax rate. This will apply to excess contributions made after 1 July 2013. Further details of the plan have not yet been decided, as the government is consulting with the superannuation industry.


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Claiming tax deductions on investment properties

Posted on June 5, 2014 by admin


If you own a rental property or are considering purchasing an investment property, it is important to be aware of the tax deductions you can claim. Claiming all of the legitimate deductions on your investment property can save you a lot of money. On the other hand accidently claiming illegitimate deductions can cost you a lot of time and energy, potentially even leading to an investigation by the ATO. There are some immediate deductions that you can make on a rental property, for example, advertising fees, agent costs, repairs and administrative expenses. Legal fees that are directly related to renting a property, for example those associated with debt recovery, may be claimed. However, you may not claim legal costs incurred at other times, for example the solicitor’s fees when you purchased an investment property. There are also long term costs associated with investment properties that you can claim as deductions. These include borrowing costs, depreciation on equipment and deductions on structural improvements. Many costs associated with the loan you have taken out on an investment property are legitimate deductions, but interest on the loan is not. Examples of legitimate costs include mortgage registration, stamp duty on mortgage and loan application fees. […]


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How does the super guarantee charge work?

September 20, 2017

Employers who do not pay the minimum amount of super guarantee for their employee(s) by the due date may have to pay the super guarantee charge (SGC).

The charge is made up of super guarantee shortfall amounts including any choice liability calculated on your employee’s salary or wages, interest on those amounts (currently 10 per cent) and an administration fee ($20 per employee, per quarter).

Employers must report and rectify the missing payment by lodging an SGC statement by the due date and paying the SGC to the ATO. Employers may be able to use a late payment to reduce the amount of SGC, however, they must still lodge an SGC statement and pay the balance of the SGC to the ATO.

The ATO prioritises the collection of unpaid SGC debts. If an employee reports an employer for unpaid super, the ATO will investigate on their behalf.

Employers must lodge their SGC statement and pay the charge by the due date.

Quarter Period Due date
1 1 July – 30 September 28 November
2 1 October – 31 December 28 February
3 1 January – 31 March 28 May
4 1 April – 30 June 28 August

If a due date falls on a weekend or public holiday, the payment can be made the next working day.

Once the statement has been lodged and the SGC is paid, the ATO will transfer the super guarantee shortfall amount and any interest to the employee’s chosen super fund.