To maximise tax deductions for motor vehicle expenses ensure you have a valid log book that covers the minimum 12 week period.

Its not too late - start your logbook before 30 June and make a a claim this year. The logbook can overlap a year end.

If you already have a log book, don't forget that you also need to take a note of your odometer reading on 30 June every year

Small businesses can claim an immediate tax deduction for assets costing less than $6,500. So if you need office equipment or other assets and you have a small business entity, purchase these items before 30 June to get the deduction this year.

As always, don't spend your hard-earned money on things you don't need just to get a tax deduction. Its not worth spending a dollar to save 30 cents.

To help grow Australian workers' savings for retirement, the compulsory super guarantee rate will gradually increase from 9% to 12%. When you make super payments on behalf of your employees based on the minimum 9% super guarantee rate, you will need to increase this rate on which you base your calculations to 9.25% on 1 July 2013.

The Super Guarantee rate will increase gradually from 9% to 12% from 1 July 2013 as follows: 

                        2013/14             9.25%

                        2014/15             9.5%

                        2015/16           10%

                        2016/17           10.5%

                        2017/18           11%

                        2018/19           11.5%

                        2019/20           12%

What you need to do

If you require any assistance contact BASMAN RETURNS for Superhero Service for your business.

BASMAN RETURNS - Chartered Accountants - TAX TIP # 2 - Lodge your tax returns on time - Penalties for not lodging on time range from $110 to $4,250 depending on how long the return is overdue and the size of the entity.

Contact the BASMAN for superhero service for your business.

BASMAN RETURNS - Chartered Accountants - TAX TIP # 1 - Physically pay super contributions before 30 June to secure the tax deduction. 

Note that the concessional superannuation cap (Limit) for 2013 is $25,000 for persons of any age. Contributions in excess of $25,000 for the year will be taxed at 46.5%.

Hands up if you only think about your Australian Business Number (ABN) when filling out your quarterly Business Activity Statement?  

Most of us only think about our ABN in the context of fulfilling our taxation obligations but your ABN is more than just another number helping to distinguish your business from hundreds and thousands of others.   When you apply for an ABN, your business identity information becomes part of the Australian Business Register (ABR).   A whole-of-government community asset, the public rely on ABR information to confirm the identity of businesses they use to supply goods and services through the ABN Lookup website.  

ABR information is used by local, state and federal governments to support planning and decision making for economic development, infrastructure investment and disaster recovery - helping to build and support communities throughout the country.   

Local councils across Australia use ABR information to identify emerging businesses and sectors to prepare for growth and to plan for and provide necessary services and infrastructure for their communities.

More and more, local councils are turning to ABR information to assist with disaster recovery. With the recent recurrent flooding in Queensland, local councils are geo-coding ABR information to identify businesses and industries in and around flood zones, helping to contribute to flood mitigation, response and recovery strategies.  

ABR information was also used to identify home-based businesses and primary producers impacted by the Victorian Black Saturday Bushfires to provide these businesses with information on government assistance programs available to help them rebuild including emergency grants, low-interest loan schemes, and free business advice and counselling services.  

There is one easy thing that you can do to help improve the ABR and be a good corporate citizen - check that your details are up-to-date on the ABR.   

If your details have changed, it is a legal requirement that you update your ABN listing within 28 days.

If you need any assistance or advice for your business do not hesitate to contact Alan Beck at Basman returns

Doing the books and staying on top of cash flow can be a chore and headache for many small businesses. To help you stay in control without the stress, we've partnered with the world's easiest accounting system Xero.

Xero is online so you can receive automatic bank statement feeds into your XERO accounting system daily. No more data entry or downloads. You'll have much greater visibility of your cash flow and it's and quick and easy to reconcile your bank transactions.

Following are details of some changes to the small business tax deduction rules that apply from the 2012-13 year:

You can now claim (write off) an outright deduction for most depreciating assets purchased that cost less than $6,500 each. This has increased from $1,000.

From 2012-13, if you buy a motor vehicle for use in your business, you can claim an immediate $5,000 deduction. The remainder of the cost is deducted through the general small business pool at 15% for the first year and 30% for later years.

From 2012-13, most depreciating assets that cost $6,500 or more (regardless of their effective life) can all be 'pooled' under the simplified depreciation rules and deducted at a single rate of 30%. The exception is newly acquired assets which are deducted at 15% for the first year.

If you had a long life pool (which no longer exists), its closing balance is rolled over to form part of the opening balance of the general pool for the 2012-13 income year (to be depreciated at a rate of 30% instead of 5%).

Your business can benefit from timely and accurate BAS Return preparation and lodgement.

Lodging your BAS on time, every quarter, provides you with a snapshot of your business' financial position. From quarter to quarter you can use this information to track your business performance and growth.

Lodging your BAS on time means that you maintain a good lodgement history with the ATO.If you find yourself in a situation that may require a deferral of payment or if you need to organise a payment arrangement, a good lodgement history will give you an advantage.

To find out more about using BAS preparation work to generate useful information that will help you to Improve Your Business Performance contact Alan Beck at BASMAN RETURNS to find out more (for FREE).

Phone: 0419 671 602

email: alan@basman.com.au

Website: www.basman.com.au

You may have tax and superannuation obligations if you employ or contract workers into your business, either full-time or part-time. This includes your family members and you, if you are a director. Your obligations may include:

You have responsibilities from the day your employee (or contractor) starts working for you to the day they stop. You also have some responsibilities if you stop being an employer altogether.

Preparing to engage workers If your business is about to engage workers (either employees or contractors) for the first time, you will need to know how to set up the necessary taxation and superannuation arrangements.

Worker's first day When a worker starts work you will need to:

Worker's payday On payday you will need to determine the rate of tax that you need to withhold from payments you make.

Payments and reporting Most reporting and payment responsibilities occur when you complete and lodge your activity statement, usually monthly or quarterly. An annual report and a balancing payment (or refund) may be required. Superannuation payments are required at least quarterly.

Worker's last day When an employee or contractor stops working for you, you'll have final reporting and payment obligations. If they are eligible for an employment termination payment (ETP), you will have additional PAYG withholding obligations.

No longer an employer Once you stop engaging workers, you need to ensure you have met all your final payment and reporting obligations. You also need to cancel your PAYG withholding registration.

Keeping records Keeping employment and contractor records is an essential part of running your business and helps you to claim all your deductions. You must keep your records in an accessible form (either printed or electronic) for five years.

If you would like any further information or assistance contact Alan at BASMAN RETURNS on 0419 671 602 or send an email to alan@basman.com.au

The Tax Office's new Employee or contractor homepage has information you need to work out whether your workers are employees or contractors including:

If you get the decision wrong, you risk having to pay penalties.

For more information, visit Employee or contractor or contact Alan at BASMAN RETURNS

Doing the books and staying on top of cash flow can be a chore and headache for many small businesses. To help you stay in control without the stress, we've partnered with the world's easiest accounting system Xero.

Because Xero is online you can receive automatic bank statement feeds into your XERO accounting system daily. No more data entry or downloads. You'll have much greater visibility of your cash flow and it's and quick and easy to reconcile your bank transactions.

 

Personal services income (PSI) is an issue currently drawing the attention of the ATO

PSI is income that an individual taxpayer earns predominantly as a direct reward for his or her personal efforts by, for example, the provision of services, exercise of skills or the application of labour.

Examples of PSI are fees earned by a professional person on his or her own account, income payable under a contract for services or where the payment under the contract relates wholly or principally to the labour of the person concerned.

The PSI rules in the tax law limit deductions available to individuals in receipt of PSI if they are not able to satisfy the required personal services business tests. The fundamental rule is that an amount is not deductible to the extent it relates to gaining or producing PSI if the income is not payable to the individual as an employee and the amount would not be deductible if the income were payable to the individual as an employee.

The rules also attribute income derived by an interposed entity, after allowing for a limited range of deductions, to the individual providing services to the interposed entity. The PSI rules do not apply to individuals or interposed entities carrying on a "personal services business".

For the average person, these rules rapidly descend into a complicated mess and the ATO is concerned that people are not applying the law correctly.

If you have any concerns about PSI in your business contact Alan at Basman Returns on 0419 671 602 to find out more.

Tax changes that will apply to small businesses from the 2012-13 income year onwards include:

If you have any queries call Alan at BASMAN RETURNS on 0419 671 602

The issue is more complex than it appears and I will be contacting clients with Trusts to provide a solution. If you are unsure if this applies to you, please contact Alan Beck on 0419 671 602 or via the website at www.basman.com.au

 

It's important to understand that there is a difference between avoiding tax and minimising tax.

It's only natural to want to minimise the amount of tax you pay and there are many legal ways to do this. At this time of year particularly, you might be considering entering into a tax-effective investment or other tax planning arrangement. However, you need to be cautious of ending up in a tax avoidance scheme. There's nothing to like about the consequences of that!

If you've been investing for a while, or you're quite financially savvy, you might think it couldn't happen to you. Apart from the fact that, on face value, many tax avoidance schemes appear legitimate, often people promoting these arrangements also use pressure tactics or offers of exclusivity to influence you to 'sign on the dotted line' before you have a chance to really investigate what you're getting into or seek any external advice.

It's always worth taking the time to check things out where your money is concerned. A little time and effort now might save you a lot of trouble later. And a lot of money. 

For more information call Alan Beck at BASMAN RETURNS on 0419 671 602 or email alan@basman.com.au

The Superannuation Guarantee (Administration) Amendment Act 2012 received royal assent on 29 March 2012.

In the legislation:

If you require any assistance contact Alan Beck CA on 0419 671 602 or visit the website at www.basman.com.au

From 1 July 2012, businesses in the building and construction industry will need to report to the ATO each year, the total payments they make to each contractor for building and construction services.

Business operators in the industry are encouraged to check how they keep their records to make sure they have the details that will be required for the new Taxable payments annual report.

The first annual report is due 21 July 2013 for payments made in the 2012-13 financial year. In the first year businesses that lodge their business activity statements quarterly, may lodge by 28 July 2013.

For more information, refer to:

If you own a business that employs staff, and provide remuneration to your employees in a form other than straight salary, you may be liable for fringe benefits tax (FBT). The upside for your workers is that they do not then have to pay income tax on the value of the benefits that attract FBT.

FBT is separate to income tax, is based on a 'taxable value' of the benefits provided, and is payable at the current FBT rate of 46.5%. The Tax Office has even given FBT its own tax year, from April 1 to March 31 (with the FBT return lodgement deadline May 21, but possibly later if you use the services of your tax agent).

Under the tax law, a fringe benefit is deemed to arise when one of the categories of benefits (see below) is provided by an employer, an associate of the employer, or a third party under an arrangement with either of the former. The benefit might be provided to the employee or an associate (widely defined).

The law contains several different categories of fringe benefits, which include:

·         car fringe benefit

·         debt waiver

·         loan fringe benefit

·         expense payment

·         housing fringe benefit

·         living away from home allowance

·         airline transport

·         board (accommodation)

·         entertainment

·         tax-exempt body entertainment

·         car parking

·         property fringe benefit

·         residual benefits (that is, any that are not covered by the preceding).

The rules for calculating the taxable value of a fringe benefit are subject to two separate 'gross-up' rates – a higher and a lower gross-up rate. Grossing-up means increasing the taxable value of benefits you provide to reflect the gross salary employees would have to earn at the highest marginal tax rate (including Medicare levy) to buy the benefits after paying tax.

The higher gross-up rate is used where the employer is entitled to a GST credit for GST paid on benefits provided to an employee, known as GST-creditable benefits. The lower gross-up rate is used where there is no entitlement to a GST credit.

Minor benefits (that is benefits that have a GST-inclusive value of $300 or less) are generally exempt from FBT. However a condition to maintain this exemption is that such minor benefits must be offered with ‘infrequency and irregularity’. There can also be other conditions (check with us). Examples of minor benefits can include the occasional lunch, birthday gifts, flowers on special occasions, the Christmas party, or a one-off interest free loan. Note also that there can be multiple minor benefits (that is, each can have a value of less than $300) – for example Christmas lunch on one hand plus a Christmas gift on the other.

Providing certain work-related items to staff will not make you liable for FBT. These include protective clothing, a briefcase, a mobile phone, calculator or tools of trade, portable computer (limited to one per year for each employee) and other items. There are other benefits that escape the FBT net, however a condition of exemption is that the benefit or item is primarily used to enable your employee to do their job.

Salary of course is not a fringe benefit, and a super contribution is exempt. Entitlements under employee share acquisition schemes are not deemed to be a fringe benefit, nor are termination payments.

You are providing a fringe benefit if, for example, you allow a staff member (or their associates) to use a work vehicle for private purposes, provide a loan or reimburse a worker for a private expense, such as school fees.

Also a car provided to an employee by the popular 'novated lease' arrangement is considered a fringe benefit, and typically gives rise to an FBT liability for the employer (see more on novated leases for cars in our last newsletter, or ask us for a copy).

The FBT rules pertaining to cars changed recently for situations where a vehicle is available for private use and the ‘statutory formula’ method is used to determine the taxable value. The value of the car benefit (on which the amount of FBT is based) is taken on the actual purchase price of the car. Under the statutory formula method the number of kilometres travelled determines the statutory fraction applied to determine the taxable value.

The position up to 7.30pm on 10 May 2011 was:

 

For example, an employee using a car valued at $34,000 would get a tax liability of $6,528 if they drove 24,000km, but that liability would drop to only $3,591 if they drove more than 25,000km.

But starting on 10 May 2011, the government introduced a flat 20% to be applied across all bands, but to be introduced over four years, as per the following table.

New contracts entered into after that date will operate under the new rates, but contracts existing before then will still run out under the old rules, unless a significant change occurs to the arrangement after 10 May 2011 (such as extending the term of a car lease).

The impact of the changes will generally be dependent on the number of kilometres travelled annually by the employee. For example: an employee travelling less than 15,000km annually would benefit from a reduction in the fraction from 26% to 20% once the new rules become applicable.

The FBT record keeping regime for small businesses contains a threshold under which full records need not be kept (although you will still need to show the value of benefits on employee payment summaries). The threshold for 2011-12 is $7,391, but it increases each year. As long as benefits paid do not exceed 20% more than the previous year, the exemption can still apply.

For businesses, it makes no difference whether you are a sole trader, partnership, trustee, corporation, unincorporated association or government body, or whether you pay other taxes such as income tax – as an employer providing taxable benefits in connection with employment, you will be liable to the FBT provisions. All that is required is that the employee receives the benefit in their capacity as an employee of the business. Also an employee is deemed to have received a fringe benefit if that benefit is directly received by the employee's 'associates' – in the main, these would be family members and relatives. So this catches the school fees paid for an employee’s children or the interest-free loan made out in the wife's name.

While an item’s ‘primary use’ is important to determine if a taxable benefit has been provided, the Tax Office bases its decisions on the employee's 'intended use' at the time the benefit is provided.

Other documentation and declaration requirements can seem very particular. For travel, for example, a diary of the trip will need to be kept only if the employee is away for six continuous nights or more, but documentary evidence of travel expenses need to be kept no matter the duration of travel. If the trip is within Australia and not entirely for business purposes, receipts must be kept for food, drink, accommodation and incidentals. But if the trip is deemed to be entirely for business, these are not needed. And if overseas and solely for business, only accommodation receipts are required.

Once a business registers for FBT with the Tax Office it will be allocated an FBT number (which is actually the same as the tax file number)

There may be strategies available to reduce the amount of FBT you are required to pay. The most obvious of course is to replace fringe benefits with straight salary, or simply focus on providing only those fringe benefits that are deemed exempt under the FBT law. Or share some of the cost and use employee contributions to reduce the taxable value of the benefit. With a car, for example, an employee could agree to contribute to some of the operating costs, such as fuel, that you do not then reimburse. This then reduces the taxable value of the fringe benefit provided.

You can also provide a benefit that your employee would normally be able to claim as an income tax deduction, had they paid for it themselves. Operating under the 'otherwise deductible' rule, you can reduce the taxable value of the fringe benefit by the amount your employee would have been able to claim. Assume a staff member incurs a work expense that would have been a one-off wholly deductible amount for the employee in their own tax return, such as a subscription to a professional accounting body for an employee of an accounting practice. If you reimburse the employee for this expense (as a fringe benefit for them) the taxable value would be zero (but the employee won't get the deduction).

The Queensland Government is running a series of 1 hour webinars (web-based seminars) in 2012 to help small business owners improve their skills and their business.

The free webinars cover a variety of topics, including:

All webinars are interactive and allow you to give, receive and discuss the topic in more depth.

Cheers

From 1 July 2012, the tax-free threshold will rise from $6,000 to $18,200, and the maximum value of the Low-income tax offset (LITO) will be reduced from $1,500 to $445.

The first marginal tax rate will be increased from 15 per cent to 19 per cent, and will apply to that part of taxable income that exceeds $18,200 but does not exceed $37,000.

The second marginal tax rate will be increased from 30 per cent to 32.5 per cent, and will apply to that part of taxable income that exceeds $37,000 but does not exceed $80,000.

For more information contact BASMAN RETURNS

You may have tax and superannuation obligations if you employ or contract workers into your business, either full-time or part-time and including family members or yourself as director. 

If your business is about to engage workers (either employees or contractors) for the first time, you will need to know how to set up the necessary taxation and superannuation arrangements.

When a worker starts work you will need to:

On payday you will need to determine the rate of tax that you need to withhold from payments you make.

While your super guarantee and fringe benefits tax payments are not linked to your workers' payday, you need to understand these payments, record keeping and reporting obligations and plan to meet them.

Most reporting and payment responsibilities occur when you complete and lodge your activity statement, usually monthly or quarterly. An annual report and a balancing payment (or refund) may be required. Superannuation payments are required at least quarterly.

When an employee or contractor stops working for you, you'll have final reporting and payment obligations. If they are eligible for an employment termination payment (ETP), you will have additional PAYG withholding obligations.

Once you stop engaging workers, you need to ensure you have met all your final payment and reporting obligations. You also need to cancel your PAYG withholding registration.

Keeping employment and contractor records is an essential part of running your business and helps you to claim all your deductions. You must keep your records in an accessible form (either printed or electronic) for five years.

The current state based business names system is to be replaced by a National system after 28 May 2012

The registration process will be online and will be linked to the ABN application process.

Costs will be around $30 for one year and $70 for three years - A cost reduction in most states and territories.

Existing businesses do not need to do anything, their existing business

names will transfer automatically to the national register.

If you have an queries contact the BASMAN on 0419 671 602 or by email at alan@basman.com.au

Cheers & Best wishes for a safe and happy Christmas & New Year

Alan

In most cases there are no tax implications for the home that you live in, and no tax implications when you sell it. This situation may change if you rent out part of your home or use it for work, or it's on more than 2 hectares of land. If you're saving for your first home, you may be eligible for government contributions to help you build your savings quickly.

There are usually no capital gains tax implications at the time you inherit a dwelling. Capital gains tax may apply when you subsequently sell or otherwise dispose of the dwelling.

If you rent out property to others, you must declare the income in your tax return, and you can claim tax deductions for many of the related expenses. You may have to pay capital gains tax when you sell the property.

Vacant land is generally a capital asset that is subject to capital gains tax. However, if you purchase the land for resale to earn a profit, or use the land in a business-like way, it is considered trading stock. In this case you treat proceeds from the land as ordinary income, and you may need to register for GST.

If you subdivide land - including if you subdivide land adjacent to your home - the subdivided land will generally be subject to capital gains tax. However, if you purchase land to subdivide and resell for a profit, or use the subdivided land in a business-like way, the proceeds may be treated as ordinary income and you may need to register for GST.

If you build new residential premises for sale, you'll be liable for GST on the sale and entitled to claim GST credits for related purchases. If you renovate a property and sell it for a profit, there could be implications for income tax, capital gains tax and GST.

If your property is used to run a business - whether it's commercial premises like a shop or office, or even your own home - there will be income tax implications while you own it and capital gains tax implications when you sell. You may also be liable for GST, and entitled to claim GST credits, when you buy, sell, lease or rent commercial premises.

As part of the 2011-12 Federal Budget, the government announced it would allow small businesses to claim up to $5,000 as an immediate deduction for motor vehicles, with effect for vehicles acquired from the 2012-13 income year.

The remainder of the motor vehicle value will be pooled in the general small business pool (depreciated at 15% in the first year and then 30%).

This reform is closely related to another previously announced measure that allows small businesses to immediately write-off any new business asset worth less than $6,500 from the 2012-13 income year onwards.

Contact Alan at BASMAN RETURNS for all your small business accounting and taxation needs

M: 0419 671 602 E: alan@basman.com.au

The most basic rules when you claim a deduction are:

If you have expenses from using your car to earn income you can claim deductions for costs such as petrol and car parking. However, you cannot claim the cost of normal domestic and private travel, such as holidays or trips between your home and your workplace.

If you have expenses from travelling, including using someone else's car, to earn income, you can claim deductions for costs such as petrol, car parking, airfares, train fares and accommodation. However, you cannot claim the cost of normal domestic and private travel, such as holidays or trips between your home and your workplace. Work-related travel includes expenses for vehicles with a carrying capacity of one tonne or more, or nine or more passengers (for example, utility trucks and panel vans) and for motorcycles. Claim work-related car expenses

for work-related expenses for using your car.

You can claim a deduction for the expense of buying and cleaning:

You cannot claim for everyday clothes, even if your employer tells you to wear them.

Many individuals also claim other work-related expenses. You must have incurred the expense in the course of earning your assessable income and it must not be private, domestic or capital in nature. If something is used for personal and work-related uses, keep a diary of your use for four weeks and use that to estimate the proportion that was work-related. Common expenses people claim are:

You can claim a deduction for self-education expenses when your course of study is directly connected to your current employment by either:

You can also claim a deduction for self-education expenses if, in undertaking the course, you are satisfying study requirements to receive Youth Allowance to study full-time. You can claim a deduction for expenses such as travel, computers and some course fees.

If you earn income from interest or dividends, you can claim deductions for expenses, such as:

If you were not the sole holder of an account, you can only claim your share of fees, charges or taxes on the account. For example, if you held an equal share in an account with your spouse, you can only claim half of any allowable account-keeping fees paid on that account.

You can claim a tax deduction for a gift if it:

Only gifts made to DGRs are tax deductible.

You cannot claim a deduction if you get a benefit, such as raffle tickets and fundraising chocolates.

You are entitled to deductions for the expenses of managing your tax affairs, including payments to recognised tax advisers and the cost of tax reference material and travel to obtain tax advice.

Other deductions you may be able to claim include:

In some circumstances, you may be able to claim a deduction for tax losses from earlier income years.

If you inherit a dwelling and subsequently sell or otherwise dispose of it, capital gains tax may apply to the subsequent disposal. This depends on a number of things, such as when the former owner died, when they (and you) acquired the dwelling, and what they (and you) did with it.

You disregard a capital gain or capital loss you make when you dispose of the dwelling if either of the following conditions applies:

If the dwelling passed to you on or before 20 August 1996, you disregard any capital gain or capital loss when you dispose of it if:

If the dwelling passed to you after 20 August 1996, you disregard any capital gain or capital loss when you dispose of it if:

 

Even if not all of the above conditions apply to you, your circumstances may still allow for a partial exemption.

 

The legislation is complex and this information is provided as a general guide only and does not cover all possible circumstances.

 

Employers must keep adequate records showing the amount of super paid for all eligible employees.

Super records should include:

You must keep super records:

For more help contact the BASMAN at alan@basman.com.au

or call him directly on 0419 671 602.

Division 7A of the Income Tax Assessment Act was introduced to prevent private companies distributing profits to shareholders and their associates tax free, in the form of loans, property distributions, debt forgiveness transactions or other advances.

Broadly, Division 7A treats:

The legislation is complex and imposes particularly harsh penalties where it is breached.

If you require any assistance or additional information please call Alan at BASMAN RETURNS Chartered Accountants on 0419 671 602.

From the 2012-13 income year proposed amendments to legislation will allow small businesses to:

For more information contact BASMAN RETURNS

Tax Commissioner Michael D'Ascenzo today said that over 450 individuals and over 140 companies were convicted between 1 April and 30 June for tax and superannuation offences

This brings the total number of convictions for tax and superannuation offences for the financial year 2010-11 to 1,380 individuals and 318 companies; including 8 Project Wickenby related convictions.*

"The most serious offences this quarter resulted in custodial sentences ranging from six months to over nine years," said Mr D'Ascenzo.

"Offences this quarter ranged from a $3,000 fine for failure to lodge tax returns to 21 years combined jail time for three men for their role in an illegal investment scheme that would have allowed participants to claim over $46 million in fraudulent deductions.

If you have any concerns about your tax obligations contact Alan Beck at BASMAN RETURNS on 0419 671 602 for an obligation free discussion at no cost to you.

Click Here to email BASMAN RETURNS now.

The education tax refund (ETR) helps eligible families and independent students meet the cost of primary and secondary school education.

You can claim the ETR for education expenses you incur while your child attends primary or secondary school.

 

Families and approved care organisations can claim 50% of their eligible educational expenses if either of the following apply:

 

 

 

Independent students may also be eligible to claim the ETR.

 

For the period 1 July 2010 to 30 June 2011, you can claim up to:

 

 

 

If your expenses exceed your refund limit for the year, any excess can go towards your following year's refund claim, as long as you are still eligible.

With tax time here, now is the time to get your business tax affairs in order. 

 

There are some important details you need to know when running a business, like what registrations you need, how much tax and superannuation you need to pay and when, and what records to keep and for how long.

 

 

The most common tax registrations businesses need include:

 

 

Good record keeping practices are the basis for running a successful business and will help you stay on top of your tax obligations. You need records of all money coming into and going out of your business.

 

 

The deadline for lodging tax returns you prepare yourself is 31 October 2011.

 

If you are lodging through a registered tax agent, they have their own deadlines. However, if you are using a registered tax agent for the first time or a different tax agent to last year, you need to contact them by 31 October 2011.

 

Only registered tax agents are allowed to charge a fee to prepare and lodge your tax return.

 

If you need assistance contact the BASMAN - alan@basman.com.au

You may be eligible for a refund of 50 per cent of certain primary and secondary school costs.

 

 

You are eligible for the refund if you had a child who attended primary or secondary school and:

 

 

If you were sharing care of your child, the amount of education tax refund you can claim will have to be apportioned.

If you are an independent student you may also be able to claim the 50 per cent refund.

 

 

You can claim for items such as laptops, home computers, printers, paper, textbooks, study guides, stationery, software and internet expenses.

 

 

You cannot claim the cost of school fees, school uniforms, excursions, school photos, library fees, musical instruments, sporting equipment, computer games and consoles.

 

 

If your costs were incurred in the 2010-11 income year you can claim up to:

 

There are some rules that allow you to claim expenses over the threshold in a following year. If you have some costs that exceeded the threshold last year you may be able claim them this year.

 

If you need assistance contact the BASMAN at alan@basman.com.au

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In the 2011-12 Budget, the Australian Government announced changes that will remove the ability of minors (children under 18 years of age) to access the low income tax offset to reduce tax payable on their unearned income (for example, distributions from discretionary trusts, dividends, interest, rent, royalties and other income from property).

 

This measure will not affect those minors who are, for example, disabled, an orphan, or were engaged in a full time occupation at the end of the income year.In addition, income earned by minors from the investment of any property transferred to them as a result of compensation payments, inheritances or marriage breakdown will also not be affected by this measure.

 

Minors will still be able to use the low income tax offset to reduce tax payable on their earned income such as salary and wages.

This year the ATO plans to contact over 100,000 rental property owners about their claims.

 

Here are some tips to avoid a follow-up from the ATO:

 

 

 

You can claim other expenses over a number of years, including the cost of depreciating assets, structural improvements and most borrowing costs. Assets that are part of the property such as stoves, air conditioning and hot water systems can be claimed over a number of years as a 'decline in value' deduction.You can also claim a capital works deduction (normally over 25 years) for the building construction plus any subsequent improvements made by you or a previous owner.

 

Some other examples of expenses that need to be claimed over a number of years include:

 

 

If these amounts are less than $100 in total they can be deducted immediately, otherwise they are generally deductible over five years or over the term of the loan, whichever is less.

 

 

 

If you need any assistance contact Alan Beck CA on 0419 671 602

or

email: alan@basman.com.au

 

 

 

 

 

 

 

 

 

 

 

 

 

There are two sets of rules you can use to work out how much you can claim for depreciating assets, such as plant and equipment - the simpler capital allowances rules concession and the uniform capital allowances rules.

 

Small businesses with aggregated turnover of less than $2 million can select the set of rules you prefer. Larger businesses must use the uniform capital allowance rules.

 

 

These rules provide a simplified approach to claiming depreciation on your assets. They are particularly suited to small businesses.

 

 

These rules allow you to choose from two methods to calculate how to depreciate your business assets - the prime cost method and the diminishing value method.

 

 

 

 

 

 

 

If you're in business as an individual, either alone or in a partnership, and your business makes a loss you must check the non-commercial loss rules to see if you can offset the loss against your income from other sources, such as wages.

 

If you are not able to offset your loss in the current year, you must defer the loss and may be able to offset it in a future year, either by passing one of the tests or making a profit in the business.

 

For more information contact the BASMAN

The ATO has released a Taxpayer Alert  TA2011/3 in respect of arrangements involving holiday travel claimed as a tax deduction.

 

The Taxpayer Alert describes arrangements where a taxpayer claims a deduction for expenses incurred in relation to various educational courses and seminars where the expenses have insufficient connection with the taxpayer's current income-earning activities and are private or domestic in nature. These expenses include the costs for domestic or overseas travel on a holiday activity or to a holiday destination.

 

Where an activity is undertaken both for income-earning purposes and for private purposes, it is necessary to apportion the expenses between the purposes.

 

 

If you have any queries contact BASMAN RETURNS for more information.

Cybersmart provides activities, resources and practical advice to help children, teens and parents safely enjoy the online world. Cybersmart also offers training and resources for schools and materials for library staff.

 

Developed by the Australian Communications and Media Authority, Cybersmart is part of the Australian Government's Cybersafety Program, and contains a wealth of useful information about protecting your identity and personal information online.

 

The 'Financial tips and safety checks' page on the website for the Australian Securities and Investments Commission offers money tips, advice about financial products, and information about scams and warnings.

 

Developed by the Australian Bankers' Association, the Australian High Tech Crime Centre and the Australian Securities and Investments Commission. The website provides information about how to protect your financial identity in everyday life and minimise the damage if a problem occurs. Go to www.protectfinancialid.org.au/

 

The Australian Government's cyber security website provides information for Australian internet users on the simple steps they can take to protect their personal and financial information online.

 

 

You can only claim your business travel expenses if you have:

 

 

 

You must use a diary or similar document to record the particulars of each business activity before your travel ends, or as soon as possible afterwards. The particulars you must record are:

 

 

Your plane ticket may show all the details you need to show how much you paid for your air fares. You must keep records of those expenses for five years.

 

If your travel is for both business and private purposes, you must exclude the private expenses from your claim. If you operate your business as a company or trust, you may have to pay fringe benefits tax if the travel includes private activities.

 

Contact BASMAN RETURNS if you require further information.

 

 

The amount of motor vehicle expenses you can claim depends on your business structure. If you operate your business as a company or trust, you can claim a full deduction for expenses you incur in running a motor vehicle your company or trust leases or owns.

 

If you or other company or trust employees (or their associates) use the vehicle for private purposes, you may have to pay fringe benefits tax (FBT). The cost of FBT is also a deduction.

 

If you operate your business as a sole trader or a partnership that includes at least one individual, you can claim a:

 

 

 

If you operate your business as a sole trader or a partnership that includes at least one individual, there are four different methods that may be used to work out the amount you can claim.

 

Contact the BASMAN if you need any assistance. 

 

Quarterly activity statements for quarter 3, 2010-11 are due 28 April.

 

Note: The two-week concession has been removed if you lodge by paper

 

 

You can claim most expenses you incur in running your business as deductions to reduce your assessable income. You can’t claim private or domestic expenses, such as childcare fees. If you incur an expense that relates to both business and private use of an asset, you can only claim the business portion. 

Expenses you can claim in the year you incur them
Working or operating expenses you incur for the everyday running of your business – such as office stationery, wages and rent of business premises – are called revenue expenses. You can generally claim a deduction for these expenses in the year you incur them. 

 

Assets that have a longer life, such as motor vehicles, furniture, and plant and equipment, are called capital assets. Generally, you can’t claim the total cost of a capital asset in the first year. Instead, you claim an amount for the decline in value, or depreciation, of the asset each year over a number of years.If you’re a small business entity and paid less than $1,000 for the asset, you can claim the full amount in the year you incurred the expense. You can also 'pool' most capital assets and claim depreciation for the pool, which is simpler than depreciating the individual assets. 

 

You can generally claim a deduction for an expense in the income year you receive an invoice to pay it. Many small businesses use the cash basis method of accounting and claim deductions in the income year they actually pay the expense. If you pay in advance for something that won’t be wholly delivered until a later income year, there may be limits on how much you can claim in the year you pay the expense.

 

If you need assistance - Contact the BASMAN

You must keep records of your business transactions for five years after they are prepared, obtained or the transactions completed, whichever occurs later. If you don’t have those records, your expense claim may later be denied or reduced and The ATO may apply penalties.These records include:

 

You may also need to keep the following specific income tax records for each financial year:

 

You can store records in either paper or electronic form. However, all your business records must be readily accessible and available in English.

 

Contact the BASMAN for assistance!

 

If you have been appointed an executor of a deceased estate, you are responsible for managing the deceased estate. This includes fulfilling the tax responsibilities of the deceased estate.

 

 

When the assets of a deceased estate are distributed, a special rule applies that allows any capital gain or loss made on a CGT asset to be disregarded if the asset passes:

 

 

However, if an executor sells an asset of the deceased estate and then distributes the proceeds to the beneficiaries, the sale is subject to the normal rules and CGT applies.

 

Apart from CGT there can be are a number of additional taxation considerations. Contact the BASMAN for more information.

 

 

The fringe benefits tax (FBT) year ends on 31 March 2011, so now is a good time to consider whether you have any FBT obligations. If you provided a fringe benefit to an employee, you may have to lodge an FBT return and pay FBT.

 

For help working out if you provided a fringe benefit to an employee, and what you need to do contact BASMAN RETURNS.

 

If you pay your FBT by instalments, make sure you have lodged all four quarterly activity statements for the FBT year before lodging your FBT return.

 

You must lodge your FBT return by 21 May, however as this is not a regular business day, you have until Monday, 23 May to lodge your FBT return and make any payment.

 

If you have any queries contact BASMAN RETURNS