For employees and Employers alike

Superannuation guarantee payments by your employer is set to rise to 10.5% from 1 July 2022 for the 2022–23 financial year the SG percentage rate is set to increase by 0.5% every year until it reaches 12.0% from 1 July 2025.

Claiming covid test / RAT expenses

Again, for employees and business alike these are tax deductible expenses and can be claimed.

Be Generous

Making deductible donations in June is the best time to do so as you’ll soon see the tax benefit!

For Business

Last chance? the temporary full expensing and temporary loss carry-back (to the year 2019) until 30 June 2023. Why last chance? well the author just ordered a new vehicle and delivery is not until April 2023 so with supply chain delays start thinking ahead and not just for June 30.

Prepay your expenses for 2022/3 before June 30 when you can and don’t be too hasty getting out your invoices prior to June 30 even more so if it’s been a great income year.

Stocktakes can be counted on Cost price, Replacement Price or even Actual values which is one of our greatest tax planning tools for those that carry stock. Get counting!

For Employees

Work-related expenses anything at all connected to your income in any major or minor way (see final point in this section) pay them prior to June 30 when you’ve had a great income year to smooth the tax pain or delay them if next year is going to be a better/bumper year.

Don’t forget – Sunglasses, Hats and Sunscreen for taxpayers that work in any outdoor occupation (including driving) they are tax deductible – keep receipts!

Claim Everything This one each year is a bit tongue in cheek, though correctly claiming expenses is our expertise. Your job is to think of absolutely anything that has a connection with your incomes and let us measure the correct appropriateness of claim.

Audits

The ATO are back at it post covid and their stated four areas of focus are:

• Recordkeeping (car logbooks, receipts etc)
• work-related expenses (must be connected to work activities especially study)
• rental property income and deductions (genuine repairs not capital improvements)
• capital gains from crypto-assets, property, and shares (these are all tracked by ATO)

Superannuation tips for all ages

Whilst there are no major changes for current tax Superannuation has become so complex that we recommend that you never contribute until you’ve cleared it with your advisors first.

• The Superannuation Guarantee rate is increasing to 10.5%, effective 1 July 2022

• The tax deductible cap into super is $27,500 which includes super SG and salary sacrifices. Don’t forget personal super contributions can also be claimed as a deduction but you must have a confirmation from your superannuation fund that they have received and processed your notice of intent to claim form.

• The limits for non-deducted superannuation is $110,000 annually or $330,000 for 3 years (below 67’s) For under 67’s they may be able to also contribute $330,000* Non-Concessional all at once. For over 67’s they will need to pass the work test (this year – no work test in 2023) and be restricted to $110,000. Forget about it over 75 sadly unless downsizer or employer contributions. Must be under the $1.7m super balance cap (except downsizer and employer).  

• To claim deductions this tax year super needs to be paid WELL before June 30 (Now!)

And yes in many cases you should contribute for example; An average earner saves around 20% of tax on their contribution so even if they put the money into the safe cash option of the fund, they have already had one great investment year!

However, if you are on the younger side burdened with a lot of debt then speak to us about doing the numbers on super contributions before you do. 

• Make larger super contributions when you haven’t used all of your concessional cap in earlier years. Unused cap amounts can be carried forward for up to five years before they expire. 2018/19 was the first financial year you could accrue unused cap amounts. To be eligible to make catch-up CCs, your total super balance at the prior 30 June must be below $500,000.

• Superannuation Co-contributions for super is something you should still DO. Up to a 50% matching rate on up to $1,000 of after-tax contributions, so a maximum amount $500 FREE from the ATO into your super!! Income thresholds must be below $56,112

• Superannuation Pensions remember, you need to have made your annual drawdowns by June 30 and the good news continues for 2022/3 with the minimum amount drawdown has been halved.

• Superannuation Spouse Contribution of $3000 The amount of the offset is 18 per cent of the spouse contribution you make (max. offset of $540) reducing your own tax. Spouse income must be under $37,000 to get the full offset, then it gradually reduces to zero at $40,000. Again, there are always other conditions that effect spouses’ income (reportable amounts) so check with CIA first or your Superfund to avoid disappointment.

For Investors

Repairs and maintenance on investment properties?Consider bringing forward so you can enjoy a tax deduction in the current financial year as with all other costs!

Pre-paying interest Say,on a loan of $300,000 it may cost $12,000 but it could get you up to $6000 back as a tax refund this year. Discuss with your lender!!

Made a capital gain

During the past year, for example, the sale or part sale of a business (including investments the business has made), shares or a property. If the answer is a ‘yes’ then you should be thinking about your options for managing the CGT liability.

Start by looking for capital losses to sell down to offset the CGT liability (or losses carried forward from prior years) to offset gains – call to discuss.

Medicare levy surcharge & Private Health Insurance Rebate

For the rates of Medicare levy surcharge that applies or the amount of rebate you are entitled to see the rebate and surcharge levels applicable are:

• Single parents and couples (including de facto couples) are subject to family tiers.
• For families with children, the thresholds are increased by $1,500 for each child after the first.

Book a time

No newsletter can ever contain or explain the full tax benefits to an individual’s circumstances so if you have any tax concerns reach out ASAP and we’ll bring the tax deducting expertise.

CIA tax TV

Watch our weekly MONEY series on Ticker Tv – by following CIA tax on YOUTUBE to stay right up to date

https://youtube.com/c/CIATaxDrStevenEnticott

Carbon Landscapes

Is CIA’s supported climate positive corporate social responsibility project and we encourage everyone to support our awareness efforts by becoming free members (or take on a greater involvement)  www.carbonlandscapes.com.au

Well last night’s budget is all about an Election and what we don’t speak about Inflation.

Before we look at the typical pre-election budget boosts let’s consider (without mentioning trillion dollar debts) the very obvious day to day inflation we are all feeling. Inflation is what this budget hopes to partly alleviate but will likely instead accelerate so where might it take us?

We can see 4 scenarios for growing inflation:

1. The Governments and Reserve banks have no real idea and they are just kicking debt and inflation further down the road to see what happens.
2. Alternatively, they are playing a dangerous game of deflating debt by running up inflation. Our 2-minute view on this is here: https://www.youtube.com/watch?v=RGX7JWjIhGk
3. We end up like Japan with high debt combined with low interest rates for decades to come. Our 2-minute view on this is here: https://www.youtube.com/watch?v=gRXVgebd2qQ
4. Allowing inflation to run significantly ahead of interest rates to crash out (at worst) the current paper currency or at least make it more attractive (at best) to hasten in the era of digital currency which is eventually inevitable with more budget resources this year being tipped that way.

However for the moment we remain economically optimistic (as no one really knows) and what we do know with inflation is that those holding assets (or looking at taking on further assets) will likely do well for the run up on in inflation (as cash loses value) then after that history repeats so keep your eye on the investment clock cycle: https://www.youtube.com/watch?v=hiHK00LVqQE

Let’s enjoy (for most) some (election) budget night relief.

Fuel Costs

In a bid to relieve cost of living pressures for millions of Aussies the government pledged to temporarily reduce the 44.2 cents a litre fuel excise by cutting it in half.

“For the next 6 months, Australians will save 22 cents a litre every time they fill up their car.”

Cost of living tax relief

The LMITO was a one-off tax offset worth up to $1,080 available to those earning from $48,000 to $126,000 a year. “Mr Speaker, tonight I also announce a new one‑off $420 cost of living tax offset for more than 10 million low‑and‑middle income earners, Individuals already receiving the low- and middle-income tax offset will now receive up to $1,500 and couples up to $3,000 from 1 July this year”

LMITO will, however, end in the 2022 financial year.

Cost of living payments

The Government proposes to provide a $250 economic support payment to help eligible recipients with higher cost of living pressures. The payment will be made in April 2022 to eligible recipients of the following payments and to concession card holders:

• Age Pension • Disability Support Pension • Parenting Payment • Carer Payment • Carer Allowance (if not in receipt of a primary income support payment) • Jobseeker Payment • Youth Allowance • Austudy and Abstudy Living Allowance • Double Orphan Pension • Special Benefit • Farm Household Allowance • Pensioner Concession Card (PCC) holders • Commonwealth Seniors Health Card holders • Eligible Veterans’ Affairs payment recipients and Veteran Gold card holders. The payments are exempt from tax.

Superannuation

The federal government is extending the 50 per cent reduction to minimum superannuation drawdown requirements for retirees into the 2023 financial year.

Under the reduced minimum drawdown rates, self-funded retirees aged between 65 and 74 must withdraw 2.5 per cent of their account balance each year to be eligible for tax-free status on their earnings.

The minimum drawdown rate is currently 3 per cent for ages 75 to 79; 3.5 per cent for ages 80 to 84; 4.5 per cent for ages 85 to 89; 5.5 per cent for ages 90 to 94; and 7 per cent for ages 95 and above, while a rate of 2 per cent applies to those under 65.

Tax deductibility and FBT exemption for COVID-19 test expenses

The Government proposes to make the costs of taking a COVID-19 test to attend a place of work tax deductible for individuals from 1 July 2021. The Government also proposes to ensure Fringe benefits tax (FBT) will also not be incurred.

For small businesses (turnover under $50m)

Skills and Training Boost will provide a new 20% bonus deduction for eligible external training courses for upskilling employees from Budget night. In addition, businesses will receive a similar 20% bonus deduction for expenditure on digital technologies (e.g. cloud computing, eInvoicing, cyber security and web design) for investments of up to $100,000 per year.

Well, that’s the 2022/3 highlights

There are plenty of other lesser budgetary gems around employee share schemes, digitisation of the economy, first homeowners and our GDP to Debt levels amongst other industry specific changes that can all be found here: https://budget.gov.au/index.htm

Christmas Break – Farm land boom opportunities – Christmas gifting – Busting money myths – How to structure side hustles – Safe Havens for Endangered Species – ASIC scam – Deep cleaning rebates in Victoria

CIA tax will be closed for the Christmas break from Wednesday 1pm on the 22nd of December until 9am Wednesday the 12th of January (this email will be monitored for urgent matters in-between this period) we wish you all a wonderful and restful (for those on holidays!) break during this break.

GOOD NEWS – There’s still time to sneak your tax return into 2021 – just get it in fast!

Farm land boom and next farm opportunities:

Video: https://www.youtube.com/watch?v=0Co9HinR6Ww

Podcast: https://soundcloud.com/user-207440115/regional-farm-investment?si=2074eb6377e143f88f2cee7ca1ab4f93

Christmas gifting for the have and the have nots:

Video: https://www.youtube.com/watch?v=eQVQbF5_p2Q

Podcast: https://soundcloud.com/user-207440115/how-to-do-christmas-gifts-right?si=c08843af561a40c39fecedf3d5cc7705

Money Myths Busted:

Video: https://www.youtube.com/watch?v=VPzMQdaV4Yc&t=584s

Podcast: https://soundcloud.com/user-207440115/working-files?si=219ac6fc47aa429081b9b64106499af9

How to structure a Side Hustle:

Video: https://www.youtube.com/watch?v=x-7cyBi51JY

Podcast: https://soundcloud.com/user-207440115/how-to-structure-a-side-hustle-for-tax-and-the-risks?si=e4e625276d434aa8af5b2adc9d165c47

Safe Havens for Endangered Species

CIA tax’s own side hustle (social enterprise) proudly announces a new climate partnership that is helping protect the beautiful Mallee Emu Wren amongst other endangered species.

Safe Havens for Endangered Species – First Option Bank

One to watch out for…

‘Scammers are offering to help consumers recover funds, usually lost via an initial scam. In this follow-up scam, they ask for payment to help retrieve funds.’

https://asic.gov.au/about-asic/news-centre/articles/warning-scammers-are-impersonating-asic/

For those businesses that may need to do a deep clean due to a positive COVID case:

The rebate will cover up to 80 per cent of the cleaning costs at each worksite, capped at a grant of $10,000 (for a total cleaning cost of $12,500).https://business.vic.gov.au/grants-and-programs/covid-safe-deep-cleaning-rebate