Monthly Archives: June 2018
Are you a business owner who wants to legally minimise your tax? Or perhaps you’re an individual who wishes to legally minimise your tax? Our June edition of Tips and Traps (being our monthly newsletter) explored last-minute tax saving tips.
If you would like a copy that newsletter setting out those tax savings tips then please email email@example.com
We have a thorough tax planning process to ensure clients avoid pitfalls and take advantage of any opportunity that is legally available. Our process is to:-
- Review year-to-date numbers to the end of May.
- Understand what may have happened or will happen during June.
- Run through our seven page tax planning checklist.
- Identify all opportunities.
- Identify pitfalls that may require corrective action either now or shortly after year-end.
- Set out our recommendations in a clear and concise report. That report also addresses the timing the future payments or refunds.
- Discuss those recommendations with you in either a face to face or Skype meeting.
The end result to you is that you:-
- Are left in the best position.
- Have our advice presented to you in an understandable report (backed up with a discussion).
- Know the timing of your future tax payments – and are not left with any shocks when the Tax Returns are finalised.
Today, our process and tax savings tips have saved our clients over $400,000. This doesn’t take into account the value of other advice given throughout the year.
If you feel that your accountant is just filling in your Tax Returns and not looking after your long-term interests, then call Alex Stewart on 03 9899 7511. Our initial meeting is free of cost of obligation so you have nothing to lose (and maybe a lot to gain).
Last year’s super tax changes certainly received substantial press coverage. Most of that though was in respect of the must do corrective (and negative) aspects such as commuting under the $1,600,000 pension balance cap.
There were however some sensible and attractive changes (you may wish to refer back to our 2017 Budget Briefing paper which explored these).
One of the attractive changes is that since July 2017 employees been able to claim a tax deduction for personal super contributions. Until then, employees were denied a personal tax deduction where their employer had an obligation to pay SG (whether they paid it or not). There was an exemption for those whose employment income was minor.
So who are personal super contributions attractive to:-
- Those whose employer who won’t allow a salary sacrifice arrangement.
- Small business owners who wish to pay the super in their own name rather than having their own business pay it (which would be subject to WorkCover).
- Those who may wish to reduce the tax on their other income including interest, rent or capital gains.
- Those who can use the money more efficiently – like pay down the mortgage during the year but pull it back at the end of the year to fund the super.
- Those who are employees aged over 65 who have more than $1,600,000 in super (and are denied making further non-concessional contributions) and who have already satisfied the 40 hours in a 30 day work test during the year.
Is making personal super contributions best for you?
Well that depends entirely on your personal circumstances.
And the younger you are the more careful you have to be as super is locked away until one reaches what is called preservation age (which can be as late as age 60 even for those who retire early).
There are also other considerations like Section 293 tax.
You don’t want to have excess super contributions as you will issued with an excess contribution notice which can easily happen if you don’t fully understand all the complexities.
Moreover, you should not make such a contribution without first seeking financial planning advice as that advice will consider all of our circumstances, explain the risk and rewards of all strategies (and do so in context of other strategies) and show you the long term results from advanced financial planning modelling software.
A word of warning
There is now just one concessional (deductible) contribution limit for all employees – it is now just $25,000. And that as assessed by when the fund receives the contribution. So a contribution by an employer for the June 2017 SG quarter (which may include salary sacrifice contributions) paid into a super fund in July 2017 counts as a contribution in the 2017/18 year.
You should therefore disregard whatever appears on your pay slip as that just records what has been provisioned by your employer during the year. You must check what has been received by your super fund(s).
$2,345,900 of savings is what the MRG group saved its clients as part of its June 2017 tax planning process.
That’s a lot of money to spend on the your business, your family, equipment, holidays, your kid’s education ….
How do we do this?
It was done by following a lengthy checklist which explored clients’ ability to obtain advantages and avoid pitfalls. It was then followed by discussions and reminders to ensure plans were put in place.
And the $2,345,900 of savings doesn’t include all the other savings delivered from our advice given during the year.
While some of our work necessitates that we attend to compliance tasks, we believe the fees you pay your accountant should be an investment. In this regard, the savings we deliver to our clients were not only greater but multiple of what they paid us.
If you like to know more about how you may benefit from our tax planning process then please call us.
Great news – the $20,000 instant asset write-off has been extended for another 12 months to June 2019.
This concession was supposed to stop at 30th June 2018. Now you have another 12 months in which you can claim a full deduction on assets costing less than $20,000 ex GST. If you really need any asset(s), you might as well still buy it now. Otherwise, you can now sit back and find the best time to commit a qualifying purchase.
If you want to know more about important considerations and traps, click on the following link:-
We would welcome your call if you have any queries.
We will of course raise this as part of our year end tax planning process.
And on that subject, we have been quantifying the savings our clients received as part of our planning advise last June. We are both pleased and proud to report the collective savings to our clients has now been quantified to exceed $2,300,000. And that is not even taking into account the savings from other advice during the year!