3 easy ways to maximise your super
Posted on September 27, 2018 by admin
Superannuation is more critical than it has ever been. If having an ageing population has taught us anything, it is how managing money now can have substantial ramifications for your retirement plan. Merge your superEvery super account you have comes with a set of fees. It is worth your while chasing down inactive accounts and putting all your super into the one account to reduce fees and maximise the investment benefits. Salary sacrificeIf you can budget putting more of your salary away into a super account every month, you can reap multiple rewards. First, you can use the extra super payments to offset your pre-tax payments up to the current concessional contribution cap of $30,000 per year and after-tax contributions of $180,000. You can also build up your super while you can afford to. StrategiseYour investment strategy should depend on the amount of risk you are willing to take. This will vary on where you are in your career. A growth investment option, which is high risk, might suit you if you are in the early stages of your career development. However, as your income stabilises to your goal amount, it might be wise to change super funds to a […]
ATO developing software to stop tax avoidance
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The ATO is in the midst of developing advanced data programs to find individuals who are leaving a source of income out of their tax return. Analytical tools have been developed to utilise the amount of data the ATO receives to identify instances where income has gone unreported. This is to address the annual $1.4 billion tax shortfall caused by individuals who leave income out of their return. The ATO has identified that the most common mistakes are made by taxpayers leaving out cash wages. There are also issues with the non-disclosure of income from second jobs, capital gains on cryptocurrency, the sharing economy, the gig economy and foreign-sourced income. Concerning foreign sourced income, the ATO has identified that most funds come from the UK, USA, China, Switzerland, Hong Kong, New Zealand and Singapore. In response to this, the ATO is developing a single global standard for collection, reporting and exchange of financial account information on foreign tax residents. The ATO imposes penalties and interest for a failure to disclose an accurate statement of income tax. The penalties can range from 25 per cent up to 75 per cent of the shortfall, in addition to paying the money owed.
Paying super to different visas
Posted on September 24, 2018 by admin
Normally employers have to pay a worker super. However, this becomes confusing with the different visas that employees might be on. Some rules are listed below. Paying super to temporary residentsTemporary residents working in Australia are eligible for super guarantee. When temporary residents leave Australia, they can claim the super paid as a departing Australia superannuation payment (DASP). This is provided that they meet the requirements where you must: Be 18 years old or over (if you are under 18 you must meet the above conditions and work over 30 hours per week to be entitled to SG) and, Paid $450 or more before tax in a month. Employees working overseasAn employee sent to work overseas must be paid superannuation by their employer. The other country may require the employer or employee to pay super there as well if Australia does not have a bilateral agreement with that country. To gain exemption from the super payment in the other country, the employer needs to show the authorities in the other country a certificate of coverage gained from the ATO. Employees not eligible for super Non-resident employees, you pay for work they do outside Australia Some foreign executives who hold certain […]
Authorisations for Single Touch Payroll
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On the 1 July 2018, the Australian Government introduced Single Touch Payroll (STP) for employers with 20 or more employees. The new scheme requires employers to report payment activities each time employees were paid. Authorisations for an agent to act on behalf of an employer to streamline the process of STP are provided below. STP Engagement AuthorityIf a registered agent reports through STP for an employer, they can get written authorisation to make this declaration through an annual agreement. This authorisation will allow the registered agent to make the relevant declaration to the Commissioner when they lodge an STP at each pay event. Both parties should have a copy for their records although there is no need to provide a copy to the ATO The agreement should include: An outline of the responsibilities of both parties Agreed terms of the employer’s collation of payroll Their process for calculating and paying their employees Taxation and superannuation obligations Eligibility for the AuthorityFor eligibility to provide an agent with the powers given above regarding STP, the employer must not: Have any overdue activity statement lodgements Have any outstanding debts, unless they are covered by a payment arrangement or subject to review Currently be […]
Changes to FBT for Utes
Posted on September 14, 2018 by admin
The Australian Tax Office (ATO) has released draft guidelines changing its previous stance on Fringe Benefits Tax (FBT) for utes. Amendments originated from reports that dodgy tax returns were responsible for a loss of $8.7 billion in income tax due to wrongful claims. Failure to comply with new requirements listed below may result in a 20 percent FBT imposed on the cost of the vehicle. The requirement of a logbookNew rules require employers to ensure their workers using these vehicles keep detailed logbooks. Whether the logbooks are electronic or hard copy, it is vital that the process be effective for returns lodged in the 2019 FBT year, when the law takes effect. Employers receive confirmation via email from employees using the vehicles at the end of the 2019 FBT year with their logbook including all regulated diversions and private use. Diversions and private use rulesThe guidelines introduce capped limits for the log books to comply with. Professional travel means that the vehicle must not deviate more than 2km from its usual route. However, 1000 km of non-work related travel is allowed, provided that there is no single trip exceeding 200 km. Such regulations provide greater flexibility than previous guidelines. What […]
Employer super obligations reminder
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The Australian Tax Office (ATO) is reminding employers to check they are meeting their obligations when it comes to paying super to their workers. To help you make sure you are meeting your requirements, consider this checklist: Are you paying the correct amount? You are required to pay a minimum of 9.5 per cent of their ordinary time earnings to their superannuation fund. Are you keeping correct and up-to-date records? It is important to maintain accurate record-keeping procedures, so you have evidence to prove you have been meeting your employer super obligations. Are you paying super to all eligible workers? Like your employees, some contractors you hire may also be eligible for super contributions. Are you making payments to the right fund? Unless a worker has not provided their details, you should be paying into their fund of choice instead of your default fund. Are you making payments on time? The ATO allows employers to make contributions quarterly. Always ensure you make payments on time as late payments can incur a superannuation guarantee charge, which is not tax deductible. When making payments on time, they are tax deductible against your business income. Are you paying the right way? It is […]
Income tax return: what to report
Posted on September 6, 2018 by admin
The time to report and lodge your annual tax return for your business is fast approaching. Remember, what you must report will depend upon the type of business entity you have. Sole traders As a sole trader, you are required to lodge a tax return even if your income is below the tax-free threshold. This will include: – tax return for individuals including the supplementary section – business and professional items schedule for individuals. You must report: – The business income minus the business deductions you are eligible to claim. – The other income like wages and salary (from a payment summary), rental income and dividends, minus deductions against this income. Partnerships and partners The partnership must lodge a partnership tax return. This will include the partnership’s net income (assessable income less allowable expenses and deductions). The ATO does not require the partnership to pay tax on the income it earns. Rather, every partner must pay tax on the share of net partnership income you each receive. For you (as an individual partner) you must report: – Your share of the partnership net income or loss. – Any other assessable income like wages and salary (shown on a payment summary), […]
Winding up a SMSF
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The Tax Office is reminding individuals winding up a self-managed super fund (SMSF) that before lodging your final SMSF annual return, you must first have an audit completed by an approved SMSF auditor. When lodging your SMSF annual return, answer Question 9 in Section A: ‘Was the fund wound up during the income year?’. You should also look to complete Question M in Section D: Supervisory levy adjustment for wound up funds. By doing so, you will reduce the SMSF supervisory levy you must pay, so you do not have to pay the levy the following year. Remember also to pay any outstanding tax liabilities and lodge any outstanding returns. Otherwise, you may be subjected to compliance assessments and risk penalties. The Tax Office will send you a letter of confirmation of your wound up fund, which will include: – confirmation your SMSF’s ABN is cancelled, and – your SMSF’s record is closed on the ATO’s system. Avoid closing your bank accounts until all expected final liabilities have been settled and requested refunds received. You can pay outstanding tax liabilities, including the supervisory levy when you lodge your final SMSF annual return.
