Business Advisors & Tax Accountants Melbourne

As part of the government’s election policy, financial assistance will be provided to specific apprentices on a special needs list by providing interest-free loans referred to as Trade Support Loan (TSL).

TSL will be a new income contingent loan and will have compulsory repayments raised on a taxpayer’s Income Tax Notice of Assessment (NOA) once the taxpayer’s repayment income exceeds a minimum repayment threshold. The repayment rates and thresholds for TSL will utilise the current Higher Education Loan Program (HELP) rates.

If the taxpayer has both a HELP and TSL debt, the priority is to pay off the HELP debt first.

The R&D tax incentive will be reduced by 1.5%:

  • from 45% to 43.5% for the R&D refundable tax offset; and
  • from 40% to 38.5% for the R&D non-refundable tax offset.

The government announced in the 2014-15 budget that it would impose a temporary budget repair levy of 2% on that part of the taxable income of an individual that exceeds $180,000. The levy commences 1 July 2014 and will be imposed for three years. It applies to both residents and non-residents. There are consequential changes for rates and taxes that reference the top rate of tax. As a result the top marginal rate has increased from 45% to 47%. However the levy is imposed separately to the marginal rates of income tax and cannot be reduced by non-refundable tax offsets.

The calculation of basic income tax to include TBRL:

[Basic income tax] – [Tax offsets] + [TBRL] – [Foreign income tax offset]

End of the financial year has arrived all of your tax obligations can be serviced with Balci & Associates. Contact Us now to organise a time for completing your tax commitments with your Small Business Tax Accountants.

All small businesses will receive an immediate tax deduction for every asset they purchase costing less than $20,000. Currently, the threshold sits at $1,000.

This $20,000 limit applies to each individual item. Small businesses can apply this $20,000 rule to as many individual items as they like.

Increasing the depreciation threshold will mean value-added cash flow for small businesses. It will inspire businesses to bring forward investment in the assets they need to grow their business and service their customers.

The new threshold will also necessitate small businesses spending less time tracking assets across years for tax purposes. This removes red tape and allows business owners to focus on operating and growing their business.

Any assets over $20,000 can be added together (‘pooled’) and depreciated at the same rate. These assets are depreciated at 15 per cent in the first income year, and 30 per cent per year thereafter.

If the value of the pool is below $20,000 until the end of June 2017 it can be immediately deducted too.

This temporary jump in the threshold will support small businesses to invest in new assets which will help them grow and prosper into the future.

Most employers have issued 2014 Payment Summaries. Contact Us now to organise a time for completing your tax return with your Glenroy Accountant.

There are a number of ways that business owners can reduce a whopping great tax bill. AustralianBiz CEO Joe Kaleb lists the top six you can use before 30 June, 2014. 
The first two strategies apply only to small business taxpayers, while the rest apply to all businesses.

1. Instant write-off for assets reduced to $1,000 from 1 January, 2014
Under the current law, your small business is able to claim an immediate tax deduction for “individual” assets costing less than $6,500 ex GST, including individual assets that form part of a set. This immediate write-off also applies to the purchase of new and second-hand assets which are used in your business.
Also, from 1 January 2014, you don’t have to aggregate the individual assets costing less than $1,000 which form part of a set, when applying the $1,000 threshold. For example, if you bought a team collaboration table costing $950 and 5 matching chairs costing $1,000 on 15 January 2014, your business would still be entitled to claim an immediate deduction for the entire $1,950.

2. Claim deduction for prepaid expenses
Your small business can claim an immediate deduction for certain prepaid business expenses where the payment covers a period of 12 months or less, and ends in the next income year. The most common expenses that you should consider prepaying by 30 June, 2014, include lease payments, interest, rent, business travel, insurances, business subscriptions, and etc.
However you cannot choose to prepay any expense you like as you must be able to make the prepayment under the relevant contractual agreement to get the immediate tax deduction this financial year.

3. Make superannuation contributions by 30 June, 2014
If you are self-employed and making a personal superannuation contribution, ensure you obtain the correct documentation from your superannuation fund to substantiate the deduction before lodging your tax return.
The maximum concessional superannuation contribution limits for the 2013/14 year are:

  • Individuals aged 60 and over on 30 June, 2014, have a $35,000 contribution limit
  • Individuals aged 59 and under on 30 June, 2014, have a $25,000 contribution limit

Where a concessional contribution is made which exceeds these amounts, the excess is taxed at an effective rate of 46.5%. In order to obtain a deduction in the 2014 financial year, the contribution must be received by your superannuation fund by 30 June, 2014.

4. Defer income & capital gains tax
If your business returns income on a cash basis, you will be assessed on income as it is received. A simple end of year tax planning strategy is to delay “receipt” of the income until after 30 June, 2014.

  • Businesses that return income on a non-cash basis are generally assessed on income as it is derived or invoiced. Income may be deferred in some circumstances by delaying the “issuing of invoices” until after 30 June 2014.
  • Realising a capital gain after 30 June, 2014, will defer tax on the gain by 12 months. It can also be an effective strategy to access the 50% general discount which requires the asset to be held for at least 12 months. The date of the contract is the realisation date for capital gains tax purposes. In some cases, the capital gain can be further reduced to “Nil” under the small business capital gains tax concessions.

5. Write off slow moving or obsolete stock
You have the option of valuing trading stock on 30 June, 2014, at the lowest value between the actual cost, replacement cost or market selling value. Furthermore, this valuation can be applied to each item of trading stock.
For example, where the market selling price of stock items at year-end is below the actual cost price, the taxpayer can generate a tax deduction by simply valuing the stock at the market selling value for tax purposes.
Also, in situations where a stock item has become obsolete at year-end (e.g. fashion clothing), the business may elect to adopt the lowest value between the actual cost, replacement cost or market selling value.

6. Write off bad debts
If your business accounts for income on a non-cash basis and has previously included the amount in assessable income, a deduction for a bad debt can be claimed in 2013/14 as long as the debt is declared bad by 30 June, 2014.
Your business will need to show that it has made a genuine attempt to recover the debt by 30 June, 2014, to prove that the debt is bad. It’s preferable that this decision is made in writing such as in an executive’s meeting minutes.
Your business can also claim back the GST paid on debts that have been written off as bad, or where not written off as bad, the debt has been outstanding for 12 months or more.

This article was originally posted on MYOB.