News

Expanded super for older Australians

By April 12, 2019 Super

The 2019-20 Federal Budget has placed a strong focus on the growth of the economy whilst also having the intention to look after older Australians.

Older Australians will benefit from the work test exemption age being extended from age 64 to 66. The work test requires an individual to work at least 40 hours in any 30 day period in the financial year in order to make voluntary personal contributions.

This change in age will now allow individuals aged 65 and 66 who previously didn’t meet the work test to contribute three years of after-tax contributions in a single year, meaning up to $300,000 can be injected into an account with less than $1.6 million in super (tax-free pension threshold). This adjustment aligns with the increase for the Age Pension from 65 to 67.

Spousal contributions can now be made until age 74, up from age 65, without having to meet the work test. Under spousal contribution regulations, an individual can claim an 18% tax offset of contributions up to $3,000 made on behalf of a non-working partner. A further $3,000 can be contributed but with no tax offset.

If you have a total superannuation balance of less than $500,000 at the end of June 2019, you may be entitled to give more than the general concessional contributions cap and make additional contributions for any unused amounts. The 2019-20 financial year is the first year you

will be entitled to carry forward unused amounts, and they will expire after a period of five years.

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How collaboration can help grow your business

By April 12, 2019 Business

In a market that is full of entrepreneurs and small businesses, collaborating with a business that complements yours can be a powerful tool to share your marketing budget and be introduced to new audiences. Regardless of what industry you are in, combining resources and efforts with another business can enable you to easily reach goals and builds mutually beneficial connections.

Grow your network:
Making lasting connections with a target audience is the key to being successful. Partnering with other businesses can help expand your networks, introducing you to people that you may otherwise not have the opportunity to meet. Collaborating with others can enable expansion of your client portfolio and customer base, with each party benefiting from the other’s audience.

Educational:
One of the biggest benefits of business collaboration is the opportunity for learning. Every interaction with a business different from your own can give you insight into something you may not have considered before. With two parties bringing different skill sets, perspectives and strengths to the table, there are many opportunities for mutual learning and growth.

Save time and money:
Collaborative relationships can involve successfully splitting intellectual contribution, manual work and even expenses. If you enter into a partnership with another business where part of the agreement involves sharing development and marketing costs, then you could combine your budget while also reducing expenses. With the opportunity to increase profits, ensure that your collaborator puts in the same amount of time and resources as you, so the working relationship doesn’t suffer due to an unfair or uneven workload.

It is also worth considering that while there are many potential benefits, a number of risks may come with business partnerships. For example, cultural differences or clashes in business philosophies could occur and create conflict. You should be considering processes carefully before going ahead, and consult a financial or business advisor if you need further assistance.

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Made a mistake on your BAS? Here’s what you need to know

By April 12, 2019 Tax

Lodging a business activity statement (BAS) is something all business owners will be familiar with, however, mistakes can still be made. You must ensure that you have reported carefully and correctly to avoid incurring a penalty. In the event an error has been made in the reporting of your activity statements, here is what you will need to know to rectify the misreporting.

If you have made a mistake or left something out on a previous activity statement, in most cases you are able to correct the errors on your next statement or lodge a revised statement. Remember, correcting a mistake on an earlier BAS is different from making an adjustment.

An error or mistake relates to an amount that was incorrect at the time of lodgement and can be fixed by revising the original BAS or making the relevant changes on your next BAS. Examples of a mistake include:

  • Clerical or transposition errors.
  • Double-counting of your purchases.
  • Reporting a taxable sale/purchase as GST free, or reporting a GST free sale/purchase as taxable.

An adjustment relates to a report that was correct at the time of lodgement but a situation has since occurred that changes the amount of reported GST. When you become aware of the need for an adjustment, you can report it in the activity statement for the current reporting period. Examples of when to make an adjustment are:

  • If the price of a purchase changes.
  • If the goods are returned and the sale has been cancelled.

In order to keep a level playing field for small businesses that are doing the right thing, the ATO takes stronger action against those that they believe are deliberately attempting to cheat the tax and super systems. To avoid falling into this category, all mistakes must be corrected within four years. You can do this through myGov, on the Business Portal of the ATO, from your business software if it is enabled for Standard Business Reporting (SBR), or by contacting the ATO.

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2019 Budget: Rewarding working Australians

By April 2, 2019 Tax

The 2019 Federal Budget focuses on rewarding working Australians, with the emphasis on a two-pronged approach for “hard-working” individuals.

Individual taxes:
From the 2018-2019 income year, the low and middle-income tax offset (LMITO) has been increased by $550. This now means individuals can have their tax reduced by up to $1,080 and dual income families up to $2,160 after lodging tax returns for the 2018-19 year.

In 2024-25, the 32.5% tax rate will be reduced to 30%, creating only three tax brackets for Australians. It is projected that by 2024-25, 94% of taxpayers will face a marginal rate of 30% or less. With this new plan, the 19% rate threshold (24% of taxpayers) will be increased from $41,000 to $45,000, the 30% rate (70% of taxpayers) will be $45,001 to $200,000 and the 45% rate (6% of taxpayers) will be over $200,000.

Expanded super for older Australians:
Older Australians will benefit from the work test exemption age being extended from age 64 to 66. The work test requires an individual to work at least 40 hours in any 30 day period in the financial year in order to make voluntary personal contributions.

This change in age will now allow individuals aged 65 and 66, who previously didn’t meet the work test, to contribute three years of after-tax contributions in a single year, meaning up to $300,000 can be injected into an account with less than $1.6 million in super (tax-free pension threshold). This adjustment aligns with the increase for the Age Pension from 65 to 67.

Spousal contributions can now be made until age 74, up from age 65, without having to meet the work test. Under spousal contribution regulations, an individual can claim an 18% tax offset of contributions up to $3,000 made on behalf of a non-working partner. A further $3,000 can be contributed but with no tax offset.

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