Latest News
Earning income for personal effort
Taxpayers should remember that, if over half their income is from a contract for their personal effort or skills, then their income is classified as personal services income (‘PSI’). Taxpayers can receive PSI in almost any industry, trade or profession, e.g., as a financial professional, IT consultant, construction worker or medical practitioner. Taxpayers who earn […]
Prepare for upcoming lodgments of SMSF annual returns
SMSFs need to appoint an auditor no later than 45 days before they lodge their SMSF annual return (‘SAR’). In preparation for lodgment of the SAR, SMSF trustees also need to: complete a market valuation of all the SMSF’s assets; prepare the SMSF’s financial statements; and provide signed copies of documents to their auditor, so […]
Using the ATO’s Small Business Benchmark
The ATO has updated its small business benchmarks for 2021-22. These benchmarks help taxpayers compare their business turnover and expenses with other small businesses in the same industry. Taxpayers can access the benchmarks on the ATO’s website, and then calculate their benchmark using the ATO app ‘Business performance check’ tool. For example, consider Deb who […]
How to claim working from home expenses
Taxpayers who have been working from home this financial year, and who consequently incurred work-related expenses, have two ways to calculate their work from home deduction: the actual cost method; or the fixed rate method. Using the fixed rate method, taxpayers can claim a rate of 67 cents per hour worked at home. This amount […]
Avoiding common Division 7A errors
Private company clients who receive payments, benefits or loans from their private companies need to ensure compliance with their additional tax obligations (which are often referred to as their ‘Division 7A’ obligations). There are multiple ways in which business owners may access private company money, such as through salary and wages, dividends, or what are […]
Penalties soon to apply for overdue TPARs
Businesses that pay contractors to provide certain services may need to lodge a Taxable Payments Annual Report (TPAR) by 28 August each year. From 22 March, the ATO will apply penalties to businesses that: have not lodged their TPAR from 2023 or previous income years; have received three reminder […]
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Have You Declared ALL Your Business Income?
When it comes to reporting your business income, make sure you are including all your income. If you are lodging through a tax agent, such as Taxwise, make sure you tell us about all your income. It’s crucial to get this right, as you can only claim a deduction for expenses that are related to […]
New Gig Economy Reporting
Additionally, the MYEFO also announced the Government’s intention to implement a new third party reporting regime for the sharing economy. This will apply to businesses who operate via online platforms within the ‘sharing’ or ‘gig’ economy (e.g., Uber and Airbnb). It is proposed to be introduced in two stages, starting from 1 July 2022 (for […]
Proposed New Record-Keeping Course
One new tax-related measure of note in the MYEFO was the announcement the ATO would be provided with a new discretion to direct taxpayers (found to be lacking in their substantiation efforts under audit) to undertake an approved record-keeping course, instead of applying financial penalties. This is yet another measure designed to tackle the ‘black’ […]
2019-20 Mid Year Economic and Fiscal Outlook
Treasury has released its Mid-Year Economic and Fiscal Outlook (‘MYEFO’) for 2019/20 forecasting a surplus of approximately $5 billion.
The ATO’s Bushfire Crisis Response
In response to the devastating bushfires across large parts of Australia, the ATO has been keen to advise those impacted that it understands peoples priority is their family and community. If taxpayers live in one of the identified impacted postcodes, the ATO will automatically defer any lodgments or payments, meaning that income tax, activity statement, […]
Lifestyle Assets Continue To Be An ATO Audit Target
The ATO has revealed it will request a further five years’ worth of policy information from over 30 insurance companies about taxpayers who own marine vessels, thoroughbred horses, fine art, high-value motor vehicles and aircraft. The ATO expects to receive information about assets owned by around 350,000 taxpayers from 2016 to 2020 as part of […]