Across income tax implications in respect of the NDIS?

Tax guide on the National Disability Insurance Scheme
The National Disability Insurance Scheme (NDIS) came into effect on July 1, 2013.

Under the new system, disability support will be provided to eligible participants or their representatives on their behalf.

The income tax and GST implications should not be overlooked. If you are a supplier of disability support to participants, have you considered whether GST applies to your supplies? For participants or representatives who receive NDIS payments, have you considered whether the payment received is income tax exempt?

We run through the GST and income tax treatment affecting the relevant parties in February's newsletter.

The new National Disability Insurance Scheme can have both income tax and GST implications, depending if you provide support to participants of the scheme or receive support yourself. Contact GJB to find out more about the GST and income tax implications in respect of the NDIS.  Read more…

Audit your SMSF before annual return deadline

Timely tip for SMSFs
You may just be getting back into your regular routine, but one thing to take note of if you are a SMSF trustee is that the 2012-13 SMSF annual return deadline is fast approaching.

Lodgement dates
For the 2012-13 annual return, the deadline for SMSFs that are wise enough to use a tax agent is May 15, 2014. This is in contrast to those trustees of SMSFs who are self-preparers, where the relevant dates for the 2012-13 annual return are:

- October 31, 2013 - for new registrants that prepare their own annual return (note that this date has now passed), and
- February 28, 2014 - for SMSFs that are not new registrants.

Note that earlier lodgement dates may apply where the fund has previously failed to lodge on time or have more than one return overdue.  Read more…

Senior Australians and Pensioner Tax Offset explained

After working (and paying taxes) for most of your life, it can be a good feeling to get to that stage of your life where it's time to get some pay-back from the taxman
Your golden years can be given an extra glow by claiming the Senior Australians and Pensioner Tax Offset (SAPTO), if you qualify.

Your golden years can be given an extra glow by qualifying for the Senior Australians and Pensioners Tax Offset (SAPTO). We explain what this is and how you can claim it. And if you are a member of an SMSF, and are wise enough to use our services to help run it, we provide some timely tips in the run up to the annual return deadline.

What is a 'tax offset'?
Generally speaking, a tax offset can reduce your tax bill, but doesn't lessen "taxable income", just the tax owing on it. So a tax offset can reduce tax to zero in theory, but will never in itself result in a refund. And since receiving an offset can make you liable for less tax, you can earn more income before paying any tax (and the Medicare levy). Read more…
Private health insurance rebate: FAQs
By now, most people would know that the private health insurance rebate is being income-tested

This effectively means that, if you have private health insurance, the rebate you are entitled to receive depends on your annual income, your age and the number of dependent children you have.

We have prepared a table summarising the thresholds, which are indexed annually. Income thresholds aside, many people remain confused on the finer aspects of the rebate. Plus our question-and-answer style guide covers a range of questions â€" from who is eligible for the rebate to how to claim it. 

If you do have private health insurance, the amount of rebate you are entitled to depends on a multiple of considerations. GJB outlines a comprehensive range of questions that typically arise, which we clarify in our February 2014 newsletter. Of course, always contact GJB on 02 6686 3130 if you have any questions or would prefer to discuss how the private health rebate applies to you.

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Also in February's issue:
Senior Australians & Pensioner Tax Offset explained: page 4
Timely tip for SMSFs: Audit your fund before annual return deadline: page 5
Tax guide on the National Disability Insurance Scheme: page 7

Small business benchmarks - February 2014
The Tax Office's small business benchmarks provide a snapshot of what it sees is happening in an average business operating in a particular industry by using financial ratios.

The benchmarks are developed from information provided by businesses on their tax returns and activity statements. As such, the benchmarks are a useful tool to help you assess your business's performance against similar businesses.

Critically, however the Tax Office also uses benchmarks to identify businesses that may be avoiding their tax obligations, for example, by not fully declaring their total cash income.

You could say that by developing benchmarks for small businesses, the Tax Office is drawing a line in the sand, and making it clear what it expects from businesses in their relevant industry.  The relevant benchmarks published fall within two categories: Read more…

Super contributions and problems of excess?

The treatment of excess superannuation contributions has been a contentious issue for some years
With many falling victim to the punishing excess contributions tax through inadvertently going over the limits.

The reasons this can happen include an employer making contributions that may fall within a different financial year, expense reimbursement or debt forgiveness which is directed to super, or perhaps a pay increase giving rise to more salary sacrificed super than expected.

The situation has not been made easier by successive governments changing the contribution cap limits on a relatively frequent basis, which has made keeping within these limits an, at times, elusive task.

But whatever the reason, breaches of the concessional and non-concessional super contribution caps has been an all too familiar apprehension for many pre-retirees, faced with having to pay an extra tax on the excess.  Read more…

Trusts - what are they and how do they work?

Trusts 101
One of the big motivations for considering using a trust will be to protect assets.

Property and other assets can be moved into a trust for protection from creditors, to maintain an estate until a beneficiary becomes old enough to have legal possession, or isolate valuable assets from a trading company that may be more exposed to litigation, for example.

Trusts, if set up in the right way, can help you legally minimise some tax liabilities. But it is a tricky area, and the taxman is always on the lookout to close perceived loopholes or an over-enthusiastic stretching of the scope for reducing tax. Read more…

Has the ATO made a wrong call on your tax assessment?

If you believe your tax assessment is incorrect, here's what to do
The first step is to go over your tax return or activity statement to check details against your notice of assessment.

If you still believe the assessment is wrong, or if you have extra information that may change it, an amendment can be sought from the Tax Office (with which we can help you).

But if the Tax Office disagrees that there is a mistake, you can lodge an objection to that decision. You can also object if it amends an assessment and has taken a different stance to you (for example, you wanted to include a deduction but were allowed only part of it).  Read more…
Can interest and borrowing costs on investments be claimed as deductions?
Investors are frequently faced with questions and issues regarding the correct tax treatment of certain aspects of financial products, and sometimes the various features of these products.

An important question that crops up on a regular basis is whether investors can claim tax deductions for interest and borrowing costs that they have incurred in the process of funding their investment.

Generally, it is not safe to simply assume that you will be entitled to claim such expenses, even if the issuer of the product suggests that these costs are tax deductible for some or for all investors â€" and this is especially the case where the arrangement is highly complex. Ideally, investment products that are covered by a product ruling from the Tax Office will provide certainty about the most pertinent tax treatment.

Depending on the investment, possible tax outcomes, which depend upon the relevant product and its features, there are several considerations to bear in mind. For more on deductions for investments, check with us at GJB on 02 9686 3130. Read the full article on page 6 in December's newsletter.

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How much do you need to establish an SMSF?

Costs for self-managed super funds
Many take the plunge and establish a SMSF these days, but it is not a decision that should be taken lightly.

Do you know the optimum conditions for setting up an SMSF, how it compares to APRA-regulated funds and what the average account balance of an SMSF should be to remain viable?

Luckily the Australians Securities and Investments Commission (ASIC) has helped us out by partnering with market research consultancy Rice Warner to find out what the minimum cost effective balance for an SMSF should be. We go into the various costs involved in operating an SMSF, and how these costs compare to APRA-regulated funds. Read more…