Personal Tax

  • Insurance Policy ActionThis year’s Productivity Commission inquiry into superannuation highlighted concerns that many Australians’ super benefits are being eroded by fees and inappropriate insurance premiums.

  • 099FederalBudget2018SpecialEditionOn Tuesday, 8 May 2018, Treasurer Scott Morrison handed down the 2018–2019 Federal Budget, his third. In what is widely perceived to be an election Budget (and certainly the last full Budget before the next Federal election), the Treasurer forecast a return to a modest deficit of $2.2 billion in 2019–2020 and an increase to surplus in 2020–2021. In the lead-up, the Treasurer signalled the need to “exercise the restraint that has been so important in ensuring that we bring that Budget back to balance”.

  • BUDGET 2019

    PERSONAL TAXATION

    Personal tax cuts: low–mid tax offset increase now; more rate changes from 2022

    In the 2019–2020 Federal Budget, the Coalition Government announced its intention to provide further reductions in tax through the non-refundable low and middle income tax offset (LMITO).

  • 085 AIRBNBHomeSharingTaxingImplicationsDo you rent out a part of your home, or a holiday home, on Airbnb, Stayz or another sharing site? Perhaps you see this as a way of making a little extra income to help the household budget or to save for that holiday. But what you may not be aware of are the long-term tax implications of such a move, which may lead to a case of short-term gain causing long-term pain.

  • 134AustralianResidencyTestTax residency is a complex area where the decision is made based on individual circumstances. As the world becomes more global and interconnected, there seem to be more cases where people who have considered themselves not to be Australian residents anymore have been caught up in the net.

  • Are you declaring personal use of business trading stock?For business owners in industries such as hospitality and food retail, using small amounts of the business’ trading stock for personal use is a reality of day-to-day operations.

  • Gig Platform ClaimsHave you ever considered joining a site like Airtasker to make some extra cash? If so, you’ll need to keep the ATO happy. Here, we explain the tax issues that arise when you earn money performing “gigs” through Airtasker, or any other online platform that connects workers with third-party hirers looking for help with one-off tasks.

    It’s important to understand that these platforms are used by everyone from “moonlighters” making some extra dollars on top of their regular job, through to self-employed people running substantial businesses (eg tradespeople) who use these platforms to pick up extra clients. Certain tax issues like GST registration can therefore depend on the person’s particular circumstances.

    Is this money assessable income?

    Yes, you must declare this income in your tax return. This means you must keep records of the amounts you earn.

    If the platform charges you a fee or commission, you must declare the gross amount of income you earn. For example, if Sally earns $100 from a gardening gig and pays the platform a $15 service fee, she must declare the full $100 as income in her tax return.

    However, you’re entitled to claim relevant deductions, including platform fees and commissions. You may also be able to deduct other expenses you incur in generating the income, including equipment and some car expenses. If your expenses also entail some personal use, you’ll only be able to claim a portion of the expenses. Your tax adviser can explain exactly what you’re entitled to deduct and how to substantiate this. In the meantime, ensure you keep receipts of all expenses related to your gigs.

    How does GST work?

    If your annual turnover is $75,000 or more, you must register for GST. Below this threshold, registration is optional. Being registered for GST means:

    • You must report and remit GST of 10% to the ATO. This involves additional administration, and you’ll need to take this into account when deciding what price you’re willing to perform a “gig” for. Other workers you’re competing against who aren’t GST-registered may be willing to perform a gig at a lower price.
    • However, you can claim GST credits on the GST components of business expenses you incur, including the GST included in any platform fees. (Note that where you can claim a GST credit for an expense, you can only claim the GST-exclusive part of that expense as an income tax deduction in your annual tax return.)

    If you’re below the $75,000 threshold, seek advice from your adviser about whether GST registration would be worthwhile in your situation.

    Do I need an ABN?

    If you must register for GST (or wish to do this voluntarily), you’ll need an ABN. But what if your turnover is below $75,000 and you don’t want GST registration? While you’re not legally required to have an ABN, there are downsides of not having one: in some cases, businesses who hire you may have to withhold tax at the top marginal rate from the payment if you don’t provide an ABN.

    Anyone who carries on an “enterprise” may apply for an ABN. Most gig platform users, as independent contractors performing services to make money, arguably carry on an enterprise. If you’re only planning to use gig platforms very occasionally (or as part of a genuine “hobby” like photography or crafting, rather than to make a profit), talk to a tax adviser about your ABN needs.

    More time earning, less time on tax!

    Whether you’re using gig platforms occasionally or as part of a significant business, let us handle all your tax issues. We offer expert advice and assistance with deductions, ABNs and GST, freeing you up to spend more time pursuing your income-earning opportunities.

  • 156BlitzOnSharingEconomy 720x454The sharing economy is booming in Australia with a large proportion of the population either making it their full-time job or making a little extra money on the side. However, with the boom comes the all-seeing-eye of the ATO which is now firmly focused on the sharing economy.

  • ATO impersonation scams on the riseThe ATO is warning taxpayers about scammers who impersonate the ATO in order to obtain the taxpayer’s personal information or even to demand payment of a fake tax debt.

  • 067ATOSpotlightOnVisaHoldersSponsorsAndMigrationAgentsThe ATO has launched the latest round of their data-matching program to include all visa holders, visa sponsors and migration agents.

  • 009AvoidAnATOAuditYourEssentialGuideToSmallBusinessBenchmarksThe Australian Bureau of Statistics recently estimated that unreported business income totals around $24 billion, or 1.5% of our nation’s gross domestic product. To reduce the amount of money circulating under the radar, the ATO constantly monitors the cash economy to ensure small business owners report all of their income.

  • Bad trustee behaviour can lead to disqualificationA tribunal decision upholding the ATO’s call to disqualify an SMSF trustee from acting as a trustee again is a reminder of the importance of SMSF trustee responsibilities.

  • 113BewareOfClothingDeductionsThisTaxTimeBeware of work-related clothing and laundry expense claims this tax time, the ATO is cracking down on individuals making unsubstantiated and exaggerated claims. It has reminded taxpayers that only uniform, protective or occupation-specific clothing that you are required to wear to earn your income can be claimed as work-related clothing.

  • 064BitcoinPart1PersonalInvestorsThere has been plenty of press coverage on bitcoin, but what are the tax consequences if you decide to join the craze? Well, that depends on whether you are running a business, or if you are acquiring bitcoin for personal investment. Here we examine the tax effects if you choose to invest in bitcoin on a personal level.

  • 076BitcoinPart3CryptocurrencyComplianceBitcoin is “neither money nor a foreign currency” the ATO warns, but it is still an asset that can be treated as income or counted as capital gains. In Part 3 of our series on bitcoin, we look at the compliance implications of operating bitcoin and how the ATO intends to monitor cryptocurrencies in general.

  • 054BlackEconomyTaskforceWhoCouldBeIncludedIn a bid to crack down on tax evasion, the Government has proposed to extend the taxable payment reporting system to two new high risk sectors identified by the Black Economy Taskforce: cleaning services and couriers. The Government cited the improved tax compliance in the building and construction industry as a model of what can be achieved in newly targeted sectors. We will keep you up to date with developments in this area as legislation is enacted.

  • 084BlowingTheWhistlePart1Whistleblowers in Australia are about to get more robust protection. In this two-part look at the new legislation introduced by the government, the implications of changes in whistleblower protections under corporations law will be examined firstly. While the introduction of the completely new whistleblower protections under the taxation regime will be examined in part 2.

  • 087BlowingTheWhistlePart2In part 2 of the look at the new legislation introduced by the government to ensure more robust protection for whistleblowers, we will examine the introduction of the completely new whistleblower protections under the taxation regime. Specifically, the new regime will be introduced to better protect people who disclose information to the ATO on tax avoidance behaviour and other tax issues.

  • 101Budget2018WhatsInItForYouIt’s May, which means it’s Budget time. In the last full Budget before the next Federal election, the Treasurer delivered an election Budget with enough sweeteners for everyone including businesses, income tax relief for individuals, measures to boost superannuation, and help for older Australians.

    The 2018-19 Budget was handed down on 8 May by Treasurer Scott Morrison. In the last full Budget before the next Federal election, ScoMo delivered what was widely perceived to be an election Budget with lots of sweeteners for everyone. So what’s in it for you?

  • BudgetBusinessIncentivesIs your business planning to purchase new assets? Perhaps new tools, a vehicle or computer upgrade? If so, you may be able to take advantage of the Coalition’s expanded “instant asset write-off” incentive.

  • BudgetOver60sSuperBenefitsIf you’re in your 60s, this year’s federal Budget brings some good news: the Coalition is relaxing some of the contributions rules for your age group, giving you more time and opportunities to put away funds for retirement.

  • BudgetTaxCutsWith a federal election just around the corner, both major parties have put personal tax breaks front and centre of their Budget plans. Make sure you understand each party’s tax policy as you head to the polls this autumn.

  • Catching up on superannuation contributionsThe government’s new measure to allow those with less than $500,000 in superannuation to “catch up” on missed superannuation contributions is a great opportunity for anyone who takes time out of work or otherwise has “lumpy” income that means they have a varying capacity to make contributions from year to year.

  • BoostSuperSavingsThe compulsory superannuation guarantee rate – currently 9.5% – is set to increase over the next few years. But if you’re an employee, will relying on compulsory employer contributions be enough to meet your retirement goals?

  • Superannuation Fund Extra MembersDid you know that SMSFs may soon be able to have up to six members? A large member group in an SMSF creates a number of important planning issues that need to be carefully managed

  • Dealing with an excess super contributions determination

    Dealing with an excess super contributions determinationThe ATO has begun issuing determinations to individuals who exceeded their concessional super contributions cap for the 2017-18 financial year. These determinations will also trigger amended income tax assessments and additional tax liabilities.

  • Downsizer superannuation contributionsThe government’s new opportunity for “downsizing” Australians to contribute some of the sale proceeds from their home into superannuation may appear to be a very attractive strategy for many individuals who wish to use equity in their home to boost their retirement savings.

  • 090EmployeesBenefitFromNewInsolvencyDecisionDo you know if the company you work for is a corporate trustee of a trust or a company trading in its own right? Many employees wouldn’t have a clue and until recently, if you were an employee of a corporate trustee and it became insolvent, your claim for employee entitlements wouldn’t have any more weight than all the other unsecured creditors calling for their piece of the liquidated pie. A series of court cases, most recently a decision by the Federal Court, has now changed that in your favour.

  • 152ExcessiveCardSurchargesBannedAustralia’s consumer law has changed to limit the amounts that businesses can surcharge customers for using payment methods such as credit, debit and prepaid cards. A ban on excessive card surcharges now applies to all merchants, irrespective of their size, from 1 September 2017. Excessive card surcharges charged to customers by businesses are banned following changes to law made last year.

  • Extra 44,000 taxpayers hit with Div 293 super taxAn extra 44,000 taxpayers have been hit with an additional 15% Division 293 tax on their superannuation contributions for 2017-18. The ATO has issued these Div 293 tax assessments to a further 90,000 taxpayers after an initial run in late 2018.

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