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Individual tax brackets 2014

Date posted: Friday, June 20, 2014

Every year there’s confusion surrounding just how individual income is taxed. The below figures from the ATO website, allow you to see the current tax brackets and exactly how each bracket is taxed.

The following rates for 2013-14 apply from 1 July 2013 and are applicable to individuals who are Australian residents for tax purposes

Taxable income	Tax on this income
0 – $18,200	Nil
$18,201 – $37,000	19c for each $1 over $18,200
$37,001 – $80,000	$3,572 plus 32.5c for each $1 over $37,000
$80,001 – $180,000	$17,547 plus 37c for each $1 over $80,000
$180,001 and over	$54,547 plus 45c for each $1 over $180,000

The above rates do not include the Medicare Levy of 1.5%

To find out how the tax brackets can affect your taxable income; give us a call, send us an email or book in for a visit.

We specialise in servicing individuals and businesses in the South Eastern Suburbs including Pakenham, Lakeside, Berwick, Nar Nar Goon, Garfield, Tynong and Koo Wee Rup.

Can I claim tax back on my work clothes?

Date posted: Monday, June 9, 2014

So you’ve been giving your credit card a work out and you bought an awesome designer bag, the latest adidas high-tops, and a few tops that you’ll most definitely wear at work eh?! And now you’re not sure what clothing you can claim as an expense on for your upcoming tax return – right?

Read on to see if your clothing falls into one of the categories you are entitled to make a claim on.

Work Uniforms
If you’re required to wear a uniform that is unique and distinctive to the organisation or brand that you work for, then you are able to claim for the purchase of the uniform.

Occupation-Specific Clothing
This relates to clothing that is specific to your occupation and is not every day in nature, such as the overalls a mechanic might wear. We’re afraid however that this does not include garments you bought specifically for work but are actually every-day clothes as well. Likewise this does not include that gorgeous dress you bought for a work event.

Protective Clothing
Clothing and footwear required to protect you from the risk of illness or injury while carrying out your duties, such as work boots or a specific type or brand of work gear, are deductible.

Clothing, Laundry and Dry-Cleaning Expenses
You can also claim a deduction for the cost of buying and cleaning occupation-specific clothing, protective clothing and unique, distinctive uniforms.

Just be sure that when you make a deduction you have some form of written evidence that you purchased the clothing and records or written evidence of your cleaning costs.

To find out more about what you can and can’t claim this financial year give us a call, send us an email or book in for a visit. We specialise in servicing individuals and businesses in the South Eastern Suburbs including Pakenham, Lakeside, Berwick, Nar Nar Goon, Garfield, Tynong and Koo Wee Rup.

Tax benefits of a novated car lease

Date posted: Monday, May 26, 2014

Are you looking at leasing a new car either for yourself or your business? While the finance options for leasing a new car can be a little confusing, the tax implications for you or your company should be considered before you get into your brand new ride.

Leasing a car involves providing regular pre-approved payments for the use of a car. At the conclusion of the lease period the car must either be returned, purchased so a new lease agreement for the vehicle can be established.

Car leases can also be wrapped into salary packages for both employees and employers to reap potential tax benefits. Novated car leases are a popular example of a leasing option, with benefits for both employees and employers. Put simply, a novated lease allows an employer to make lease payments for an employee’s car as part of a salary sacrifice arrangement.

The benefits of a novated lease for employees:

–       Vehicle costs are paid from pre-tax income which means a lower rate of income tax is payable

–       GST is removed from the financed amount

–       Employees can select the vehicle of their choice and it is theirs to drive all the time

The benefits of a novated lease for employers:

–       Lease payments are usually tax deductible on vehicles used for business requirements

–       There is little to no cost to the business

–       Lower employee costs, such as Payroll Tax

If you want to know more about leasing a car and how it can benefit you or your business, give us a call, send us an email or book in for a visit. We specialise in servicing individuals and businesses in the South Eastern Suburbs including Pakenham, Lakeside, Berwick, Nar Nar Goon, Garfield, Tynong and Koo Wee Rup.

What’s the Fringe Benefits Tax (FBT) and How Does it Impact Me?

Date posted: Wednesday, February 19, 2014

As an employer, you are required to pay a tax on non-cash (or fringe) benefits provided to employees. These benefits include services and privileges allowed to employees as well as physical goods.

What is classified as a ‘fringe benefit’?

To put it simply, benefits provided to an employee because they are an employee are considered to be a ‘fringe benefit’. This includes giving employees:

• Company cars for personal use
• A cheap or discounted loan
• Private health insurance
• Entertainment in the form of meals or recreational activities

What is not classified as a ‘fringe benefit’?

Employers are not required to pay FBT on the following goods and services:

• Employee relocation expenses
• Superannuation
• Work related items such as protective clothing and tools

How does this impact me?

Whether you’re an employee or employer the Fringe Benefits Tax impacts you. While employers pay the FBT, fringe benefits must also be reported on an employee’s PAYG payment summary and tax return.

Still have questions? You can find out more by giving us a call, sending us an email or booking in for a visit. We specialise in servicing individuals and businesses in the South Eastern Suburbs within the Cardinia Shire.

What to Bring to your Tax Appointment

Date posted: Sunday, August 4, 2013

We’ve talked about SBE (small business entity) and non-SBE taxpayers, now it’s time to actually claim your tax. Here are some things you’ll need to bring with you when you come to your next tax appointment with us.

• Stocktake details as at 30 June
• Debtors listing (including a list of bad debts written off) as at 30 June.
• Creditors listing as at 30 June

Let us help you simplify your tax and accounting today. Give the Pakenham Taxation + Accounting team a call on (03) 5940 1836 and let one of the experts help you claim all your tax.

 

Maximising Deductions for SBE Taxpayers: Prepayment Strategies

Date posted: Sunday, July 21, 2013

Continuing on from our last topic about maximising deductions for SBE (small business entity) taxpayers, we’ll now look at prepayment strategies.

So what does this mean for SBE taxpayers?
SBE taxpayers making prepayments before 1 July 2013 can choose to claim a full deduction in the year of payment where they cover a period of no more than 12 months (ending 1 July 2014). Otherwise, the prepayment rules are the same as for non-SBE taxpayers.

The kinds of expenses that may be prepaid include:

• Rent on business premises or equipment
•  Lease payments on business items such as cars and office equipment
• Interest
• Business trips
• Training courses
• Business subscriptions
• Cleaning

Let the team at Pakenham Taxation + Accounting make life a little easier by helping you with all your end of financial year needs. Call the team on (03) 5940 1836 and make a booking today.

Maximising Deductions for Non-SBE Taxpayers: Accrued Expenditure

Date posted: Sunday, June 23, 2013

Our last topic for non-SBE (non-small business entity) taxpayers is accrued expenditure.

So what is accrued expenditure?
Accrued expenditure is expenses incurred during the current financial year. Non-SBE taxpayers (and some SBE taxpayers) are entitled to a deduction of expenses incurred during the current financial year, even if they have not yet been paid.

So what are some expenses that may be accrued?

• Salary/wages and bonuses – the accrued expenses for the days that employees have worked but not been paid as of June 30
• Interest – any accrued interest outstanding on a business loan that has not been paid as of June 30
• Commercial bills – the discount applicable to the period up to June 30, where the term of the bill extends past June 30
• Fringe benefits tax – if any FBT instalments is due in the June quarter, but is not payable until July, it can be accrued and claimed as a tax deduction in the 2013 income year
• Director’s fees – a non-SBE taxpayer can claim a tax deduction where the company has a definitive commitment to pay a director’s fee during the current financial year.

To find out exactly what your business can claim  contact Pakenham Taxation + Accounting on (03) 5940 1836 and make a booking with one of our experts today.

Maximising Deductions for Non-SBE Taxpayers: Accelerating Expenditure

Date posted: Sunday, June 23, 2013

So what is accelerated expenditure?

Accelearting expenditure is where a business taxpayer brings forward the expenditure on regular, on-going deductible items. Business taxpayers are generally entitled to deductions on an incurred basis. Because of this there is generally no requirment for the expense to be paid by June 30. As long as the expnse has genuinely been incurred, it will generally be deductible.

Below is a list of items, which are possible for accelerated expenditure:

• Depreciating assets costing $100 or less can be written off in the year of purchase.
• Depreciating assets costing less than $1,000. These can be allocated to a low value  pool and depreciate at 18.75% (which is half of the full rate)
• Repairs to office premises, equipment, cars or other business items
• Consumables and spare parts
• Client gifts
• Donations
• Advertising
• Fringe benefits
• Superannuation

Again we completely understand this may still be a little confusing. So if you have any question give Pakenham Taxation + Accounting a call on (03) 5940 1836 and make a book with one of our experts today.

 

 

End of Financial Year: Prepayment Strategies For Non-SBE

Date posted: Sunday, June 9, 2013

We’re now in the month of June, which can only mean one thing… the end of the financial year. For many businesses and individuals this can be a very confusing time with questions like; what can I claim on tax. And, how can my business maximise deductions? At Pakenham Taxation + Accounting we like to help reduce these stresses, so over the next few weeks we’re going to post some tips, tricks and information all relating to the end of the financial year.

To kick things off we’re going to look at how non-SBE (non-small business entities) taxpayers can maximise deductions, firstly through prepayment strategies.

So what does a prepayment strategy include?
A prepayment strategy includes any part of an expense prepayment relating to the period up to the 30th June and is generally deductible in full.

In addition, non-SBE taxpayers may generally claim the following prepayments in full:

• Expenditure under $1,000
• Salary and wages
• Expenditure required to be incurred under law.

But just wait, before you go jumping the gun you should know that prepayments can be a little confusing, so before you commit to making a payment please feel free to call the Pakenham Taxation + Accounting team to help you out with all your queries. There’s no silly questions when it comes to tax.