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Depreciation - the tax deduction lots of property investors forget to claim!

There are lots of property related tax deductions that all investors claim: council rates, water rates, property management fees, repairs. But depreciation is one that many claims people don’t even know about.

Think of it as compensation for wear and tear. Buildings suffer wear and tear, and so do their contents. If you are renting out a property, you can claim this as a tax deduction.

To claim depreciation, you need a Quantity Surveyor to put together a document called a Depreciation Schedule. It sets out how much you can claim every year as a deduction.

Depending on when your property was built, the Quantity Surveyor will estimate the construction cost at the time it was built and they will put a value on it. You will claim this at 2.5% per year.

You can even claim depreciation on renovations done by a previous owner.

Tax Time 2017 Income Tax Return Checklist

The time has now come to complete your 2017 Income Tax Return. Please ring for an appointment to complete your Tax Returns this year with either Donna, Tynna, or Max.

Taxation Advice
It is important that anyone considering an investment proposal seeks our advice with regard to the taxation consequences and options available to minimize taxation. For example, there can be very significant tax advantages available by holding an investment in a Self Managed Super Fund rather than your own name.
We provide a full range of taxation services including:

  • Advice regarding the best tax structure for the formation of new businesses. It is always best to discuss your new business proposal before committing to any new venture.
  • Company & Family Trust returns.
  • Formation & administration of Self Managed Super Funds.
  • Investment property tax advice.
  • Bookkeeping.
  • Our mobile lending service offers a wide range of finance options for home & investment loans plus vehicle financing.

Please review the above PDF of our checklist and tax tips, to assist with the preparation of your returns.

Kind regards,

Max Connelly
B.Comm (NSW Uni.) FIPA JP

Changes for Investment Property Owners from 1st July 2017

Do you own an Investment Property? If the answer is YES, expect some big tax changes with new rules coming into force on 1st July 2017.

If you purchased a property that had installed fridges or dishwashers, you were entitled to claim tax deductions by depreciating them. Owners are now only entitled to claim things they have purchased themselves.

If you have an Interstate or Overseas Investment Property, you are no longer allowed to claim any trips to visit your property against tax.

So if you are planning on visiting your Overseas or Interstate Investment Property soon, we suggest a short trip to inspect it before 30th June 2017.

If you would like to schedule an appointment for Tax Advice regarding your Investment Property, please contact A Grade Tax on (02) 4731 1405.

 

Are you struggling with an outstanding ATO Debt?

Whether you are a Business, Superannuation Fund, Trust, Partnership, Sole Trader or just an individual and you have an outstanding ATO debt but are finding it hard to make ends meet, we may be able to assist you with establishing an ATO Payment Plan.

 

We are happy to help where we can. Contact us on: (02) 4731 1405 to discuss your options.

Are you withholding the right amount of Tax from your Employees or other Payees?

The ATO have produced a range of tax tables to assist you with your calculations on how much you need to withhold from payments you make to your employees or other payees.

For the most up to date Tax Tables, visit the ATO at: https://www.ato.gov.au/Rates/Tax-tables/

Here you will also find a link to a tax withheld calculator that does the work for you by calculate the correct amount of tax to withhold.

If you would like more information or would like to organise an appointment for Tax Advice with one of our business specialists, please call us on (02) 4731 1405.

 

 

Have You Been Scammed?

The ATO are stressing for you to be aware of any emails, phone calls, faxes or SMS’ you receive, claiming to be the ATO.

If you have been contacted by the ATO advising you that you have a debt outstanding, we strongly advise that you contact us on (02) 4731 1405 so we can clarify this information for you.

If you would like to verify or report a scam to the ATO, or you would like to see some examples on what to look out for, please visit the ATO at: https://www.ato.gov.au/general/online-services/identity-security/verify-or-report-a-scam/#Phonescams

Where is your Super going?

Did you read the Sunday Telegraph on April 23rd 2017? If you missed it, not to worry, here is an overview of the article on page 8…

 Six of Australia’s largest Industry Superannuation Funds have all paid more than $5 Million to unions in the past 10 years.

When you look at the statistics, there are roughly 5 million Australians who have industry Super Funds but only 15% of workers belong to a union. It makes you think about what they are doing with your Superannuation, doesn’t it.

If you would like more information on choosing a Superannuation Fund that is right for you, visit ASIC’s MoneySmart website at: https://www.moneysmart.gov.au/superannuation-and-retirement/how-super-works/choosing-a-super-fund

Now is the time to make non-concessional (after tax) Superannuation Contributions before 30th June 2017!!

If you have been thinking about making Superannuation Contributions, now is the time to do it!

Take advantage of the current $180,000 after-tax contributions cap and the $540,000 bring-forward cap before 30th June 2017.

From 1st July 2017, the non-concessional Contributions cap will drop dramatically to $100,000 per annum and $300,000 bring-forward cap. That is a dramatic difference to the $540,000 bring-forward cap prior to 30th June 2017. Also note that if your Superannuation balance total is equal to or more than $1.6 million, you will not be able to make non-concessional Contributions from 1st July 2017.

If you would like some assistance from a Tax Professional and would like to organise an appointment for Tax Advice, please contact us on (02) 4731 1405.

Superannuation Changes 1st July 2017

Super'n Changes

Superannuation Changes and what it means to you!

 

In the coming months, we will see some big changes to Australia’s Superannuation Rules. 

Did you know that from 1st July 2017:-

 

  •  If you are under 75 years old, you are eligible to make tax deductible super contributions at any time rather than resorting to salary sacrifice;
  • Before-tax contributions will reduce to $25,000 and after-tax contributions will reduce from $180,000 to $100,000 per year;
  • Individuals will have a limit of $1.6 million held in a super pension account which is tax free. Anything over this amount needs to be invested in a taxed superannuation fund;
  • Tax-free investment earnings will no longer be beneficial with transition to retirement pensions; 
  •  If your spouse earns less than $40,000 per annum and you make super contributions to your partner’s superfund, you are entitled to claim the $540 low Income Spouse Contribution Tax Offset. 

 

Now is the time to start reviewing your Superannuation and assess how these changes will affect you.

 Here are some ideas on what to look into before these changes come into effect:-

 

  •  Planned Asset Sales are a good way to increase your Superannuation prior to the new financial year;
  • Think about increasing your salary sacrifice prior to the lower caps start for pre-tax contributions; 
  •  Take advantage of after-tax contributions capped at $540,000 now, before it decreases to $300,000 in the new financial year

 

Tax Concessions for Small Business

Small Business Tax Concessions

Small business taxpayers have access to a range of tax concessions. Some of the recent concessions available are:

•instant write-off for assets costing less than $20,000 each
•immediate deduction of professional expenses for small business start-ups
•tax discount of 5% up to $1,000 for unincorporated small businesses
•1.5% small business company tax cut
•no fringe benefits tax for providing multiple electronic devices to employees
•no income tax liability for asset roll-overs when a small business is restructured
•accelerated depreciation for primary producers.

To qualify for the first six concessions businesses must have a total turnover of less than $2 million for the year they use the concession or the year before that. However, all primary producers can access accelerated depreciation regardless of turnover.

Click here for additional information.

 

As usual if you require any clarification on any tax issues, please contact A Grade Tax Penrith.

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