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Tax Time Savings


Always a big newsletter – and for even more cost-of-living tax time saving tips attend our annual Kingston Arts tax saving seminar on May 28th at 6pm or ask us for the recording of it after that date!

   


For employees and Employers alike  

Superannuation guarantee payments (on wages) is set to rise to 11.5% from 1 July 2024. Then there’s one more (to 12.0%) from 1 July 2025 then that’s it for rises (for a while).

For people with a HECS-HELP debt  

Whilst there has been some well publicised relief (its coming!) to have even more HECS relief…  

# Every year # HECS-HELP amounts owing on the 1st of June receive indexation (go up).   If you are trying to pay off or pay down your debt a little faster, do it several days ahead of the 1st of June indexation date each year and save on some accrued interest… it all helps (pun intended!)  


Be Generous  

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

For Business  

The maximum instant asset write off level is set at $20,000 for small/medium businesses (under $10m turnover) so if you have had a good year and you need a new asset for the business do so before June 30.  

Prepay your expenses 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.  

Your job is to get counting and let us work out the best planning methods to use.      

Working from home changes  

Major changes – From 1 March 2023 a record of all the hours you worked from home is required and an area of audit they will be focused on.  

Fixed Rate Method  

67 cents per hour for every hour worked from home.  inclusion of phone and internet expenses as well as electricity and gas usage, computer consumables and stationery costs all in that per hour rate.  taxpayers will now separately claim the decline in value of work-related equipment, office furniture, and any other running expenses not covered by the rate per hour.     

Actual Cost Method  

We do have the option of claiming the actual costs for home office, which will allow for phone and internet to be claimed separately, however we would then need calculations for the costs for electricity and gas or we could simply ignore them.   You don’t incur additional running expenses if other members of your household (who are not working from home) are in the same rooms as you while you are working from home.  

ATO Example: Working from a lounge room Lee works from her lounge room while her partner and 3 children watch television. Lee isn’t incurring any additional costs for lighting, heating, or cooling as a result of working in that room, so she can’t claim a deduction for them.  

ATO Example: Electricity for cooling and heating Ben works at home several days per week and keeps a record of the total hours he works from home. His record shows he worked a total of 768 hours from home in 2022–23. When he works from home, Ben sits in a separate room of his house and always uses a separate air conditioner in the room when he is working.   His air conditioning unit is a small with a 3.5-kilowatt (kw) capacityBased on the unit’s energy efficiency rating, the unit costs Ben 1.09 kw per hour to run.Based on his electricity bills, Ben pays 27.81 cents per kilowatt hour for electricity Ben calculates the cost of cooling and heating for the room he uses when he is working from home as:   1.09 kw per hour × 27.81 cents per hour = 30.31 cents per kw hour 768 hours × 30.31 cents = $233 (rounded up to the nearest whole dollar).  

ATO Example: Phone, data and internet If you receive an itemised phone or internet bill, you need to work out your work-related use over a continuous 4-week period. You can use your work-related percentage for the 4-week period to work out your expenses for the whole income year.   For example, you can mark your work-related calls on your monthly phone bill and work out your work-related use based on the number of those phone calls compared to your total calls. Similar method for internet use hours.    

For Employees  

Claiming covid test / RAT expenses once again, for employees and business alike these are tax deductible expenses and can be claimed.  

Don’t forget – Sunglasses, Hats and Sunscreen for taxpayers that work in any outdoor occupation (including driving) they are tax deductible – please 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 income and let us measure the correct appropriateness of claim.    

Audits  

True to audit form the ATO stated areas of focus are:

– Incorrectly claiming work-related expenses (home office log books)
– Inflating claims for rental properties (loan balance movements a focus)
– Failing to include all income when lodging (sharing economy & crypto)    

Superannuation  

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 11.5%, effective 1 July 2024  

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 have processed your notice of intent to claim form. Age based limits for those wanting to claim personal super contributions are applicable so discus first with CIA tax.  

The limit for non-deducted superannuation is $110,000 annually or $330,000 for 3 years. Forget about it if over age 75 unless downsizer or employer contributions. Additionally, you must be under the $1.9m super balance cap (except downsizer and employer) again, it’s one to discuss with your superannuation fund advisors or discus the caps with CIA tax.  

Contribution caps are increasing for 2024-25  

– Concessional Contributions Cap $27,500 go to $30,000
– Non-Concessional Contributions Cap $110,000 go to $120,000
– Bring forward $330,000 over 3 years go to $360,000 over 3 years

The total superannuation balance threshold, which is relevant for making non-concessional contributions, remains at $1.9 million during the 2024-25 financial year.  

The transfer balance cap also remains unchanged at $1.9 million.    

To claim superannuation deductions this tax year super needs to be paid WELL before June 30 we suggest at the latest the 15th of June to (likely) be safe.  

In many cases you should contribute when appropriate 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 or burdened with a lot of debt then speak to us about doing the tax effective numbers to super contributions before you get too excited.   

Make larger super contributions when you haven’t used all your concessional cap in earlier years. Unused cap amounts can be carried forward for up to five years before they expire. To be eligible to make catch-up CCs, your total super balance at the prior 30 June must be below $500,000 contact us to know your possible shortfall.  

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 $58,445 to receive any pro rata bonus.  

Superannuation Pensions remember, you need to have made your annual drawdowns by June 30 it is essential to maintain the tax-free status.  

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 that can be paid early!  

Pre-paying interest Say,on a loan of $300,000 it may cost $15,000 but it could get you up to $7,500 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 found at:

https://www.ato.gov.au/individuals-and-families/medicare-and-private-health-insurance/medicare-levy-surcharge/medicare-levy-surcharge-income-thresholds-and-rates


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 minutes 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  


 

6pm Tuesday May 28th – Tax Saving Seminar + 2024 Budget Update

6pm Tuesday May 28th – Tax Saving Seminar    Reduce the cost of living Tuesday 28th May at 6.00pm for our annual tax planning session – Kingston Arts Centre – reply to this email to book in or let us know if you’d prefer a link to the recording after the event.

Additionally, our newsletter will follow event with plenty of tips to save at tax time.     

2024 Federal Budget Highlights  Not a lot in tax to say other than a treasurers third budget in an election cycle is the  pork belly budget (generosity for re-election) and the government was clearly conflicted in wanting to give but held in check by cost of living and inflation. In one hand they give and the RBA puts up interest rates which would have a stronger negative outcome. The only real new thing is everyone including those who don’t need it get a $300 break on their power bills ($325 for small business) during an election year and the continuation of the $20,000 instant asset write off for small and medium business. Cuts to student debts, stage 3 tax cuts for everyone all were well reported before last nights budget. 

All the documents are here:  https://budget.gov.au/content/documents.htm  


2024 Victorian Budget Highlights  All about attempting to manage Australia’s biggest debt pile with no major new taxes  as Victoria is the highest tax state already (can’t tax Victorian people much more) with some trimming in state spending, nothing too tax exciting to report (fortunately!).

Budget papers at – https://www.dtf.vic.gov.au/state-budget/2024-25-state-budget  


Working from home changes Reminder; since 1 March 2023 there has been major changes to how we can claim. You need a recorded log of all the hours you worked from home is now required. 

Read More – https://ciatax.com.au/june-30-tax-saving-tips/    


Sales, sales, sales Save 100% when you don’t buy anything discretionary. But it’s not 100% it’s much, much more – Invest savings for far more.  You save much more than 100% when you avoid a spend! 

Watch Here: https://www.youtube.com/watch?v=3ooL4HHH1f4  

   

Carbon Landscapes Join with us in our climate positive corporate social responsibility projects for more information visit us at  www.carbonlandscapes.com.au  



TAX DEADLINES, LAND TAXES, RICHER PATHWAYS & OUR KOALA’S

CIA Tax - Growth, Wealth, Tax

Tax Deadlines
Traditionally tax has a May 15th deadline (for just about everyone) who was with an agent or on a tax agents listing for last year. What that means is time is rapidly running out if you haven’t yet lodged and it really is time to check in with CIA tax urgently and avoid unnecessary ATO scrutiny’s.  

Land Tax Pain
It’s quite a year of shock for many receiving those dreaded State Revenue Office letters this year. Some are even land tax newbies receiving them for the very first time with the introduction of lower land taxing points.

In the history of CIA tax we have never received so many contacts on this topic, even more so from Victoria with the introduction of the new COVID recovery land tax and an upcoming extension to vacant property taxes (holiday homes etc). 

You can dispute the taxed values, but generally most valuations are done conservatively and that is not easy to do. Regardless we do encourage everyone to not just accept the valuation, and do some research and test its validity. 

Land tax will not go away and it is time to consider or reconsider your asset investment classes.

For example: We have been assisting impacted clients who are looking at selling down their rental property. Yes, that may mean paying some CGT tax (after reducing it as much as possible) to pay down their own home loans (non deductible / bad debt) reducing land taxes significantly and re-investing (deductible / good debt) into tax friendlier simple shares (like ETF’s) that have dividend income (with tax credits) and no compounding land tax issues. When you do the numbers it often makes a lot of sense. Going further and introducing a family trust at this point can also be a very tax efficient structure to go forward into the future with.

If land tax is really effecting you, let’s do the numbers on your investments – it might just make sense for you to and help alleviate some of the pain.     

What is rich?
• It’s the ability to have choices
• Dr Stevism; Create a surplus & invest it
• Surplus of 3 T’s = Time, Talent & Treasure
• Key is to INVEST any surplus. Don’t waste it

Video: How to rich – TODAY (youtube.com)
Podcast: Stream How to rich – TODAY by Dr Steven Enticott | Listen online for free on SoundCloud    


Join us Koalas in our nature positive safe haven works!
https://carbonlandscapes.com.au/ Contact us if you would like to get tax efficiently involved with us in looking after some of our most critical species.  

Christmas Break – It’s summer, so start a business – Free start up mentoring – Buying a nature positive island



2023 has been a huge year of change (once again) and it appears the interest rate rise cycle seems to have ended its run for a while and we go into 2024 with a sense of economic optimism, well we at CIA are anyway. 

CIA is closed from Friday 1pm on the 22nd of December until 9am Wednesday the 10th of January and we wish you all a wonderful and restful break.

In 2024 we’d love to see many of our clients start a business no matter how big or small and to assist we will be doing free mentoring sessions over summer (contact Dr Steve: sje@ciatax.com.au for further details.

To get you started here are 4 * one-minute clips to get your thoughts going over the summer break.  

Profits are better than wages: Wages are fixed • Profits are the gap between income and expenses • Opportunity to increase income and decrease expenses = for bigger profits.   Video: https://www.youtube.com/watch?v=djbk9Yt7YGQ Podcast: https://soundcloud.com/user-207440115/profits-are-better-than-wages

How to start a fun business: Pick something you love to do • Small scale commercialisation • Expand it.  Video: https://www.youtube.com/watch?v=vWz3CUFzdDI Podcast: https://soundcloud.com/user-207440115/how-to-start-a-fun-business

How to start a booming business: Make a list of consumer problems • Think tank the issues • Do the do-able solutions Video: https://www.youtube.com/watch?v=MopYKPnJ_48 Podcast: https://soundcloud.com/user-207440115/how-to-start-a-booming-business  

Start a business to sell a business: Staff buyout • Competitor buyout • New entrant targeting Video: https://www.youtube.com/watch?v=stXCX0y5xWg Podcast: https://soundcloud.com/user-207440115/cm-1610-moneymin-sellbusinessa

If you don’t yet have a copy of Dr Steve’s business success book “The Man with a Plan” they are freely available to clients in the reception area of CIA tax.   

Safe Havens for Endangered Species – Buying Islands Another big year supporting CIA’s nature positive works at: https://carbonlandscapes.com.au/ Contact us if you would like to get involved!  

Tax Season Due Dates (+ the Money Lucky Series)

Tax returns are due end of October if you are not with a tax agent or were late in lodging last year’s tax return. The good news is if you are with CIA tax or join CIA tax before this deadline, we can add you to our late lodging lists and buy you some precious time:  https://ciatax.com.au/october-tax-deadline/

Working from home (reminder!)  The way you have been claiming home office (working from home expenses) has now significantly changed here are the new methods:  https://www.ato.gov.au/Media-centre/Media-releases/ATO-announces-changes-to-working-from-home-deductions/

CIA tax – Ticker Tv  Green screens are fun, never ceases to amaze us how well they work.  Did you know that once in lifetime opportunities come along every 7 weeks (authors opinion) but are you spotting them? are you lucky enough? Well, the following four 1 minute clips below can attune you to those and help to change your mindset!   



How to be money lucky #1 New Opportunities How to be money lucky #1 https://www.youtube.com/watch?v=bYgTB9vG-ss Dr Steven Enticott (CIA tax) & Mike Loder (Ticker News) aired 26th September 2023 

How to be money lucky #2 Resilience Bounce How to be money lucky #2 https://www.youtube.com/watch?v=pa2oP1eUBJQ Dr Steven Enticott (CIA tax) & Mike Loder (Ticker News) aired 3rd October 2023 

How to be money lucky #3 Opportunistic Optimism How to be money lucky #3 https://www.youtube.com/watch?v=Z5zhLRLgmlA Dr Steven Enticott (CIA tax) & Mike Loder (Ticker News) aired 10th October 2023 

How to be money lucky #4 Action instincts How to be money lucky #4 https://www.youtube.com/watch?v=GmU3a8thFpE Dr Steven Enticott (CIA tax) & Mike Loder (Ticker News) aired 17th October 2023         

Melbourne Cup Day Weekend To celebrate the end of the tax season intensities CIA tax will be closed for the 4-day cup weekend (that’s Monday 6th and Tuesday 7th November).  

Carbon Landscapes Nature is everyone’s business, and all industries rely on a healthy environment. Globally more than half of GDP depends on nature. We help great businesses better integrate nature to their business to benefit our natural environment. Join with us (and others) at CIA tax to contribute to our nature positive future.  
https://carbonlandscapes.com.au/