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Tax Time Tips for 2018

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Here are some great Tax Time tips by Dr Steve Enticott from CIA Tax.

My number 1 tip is to use the attached CIA tax checklist. Whilst reviewing the checklist, pull out a copy of last year’s tax return and review those items as a prompt for collating the data for this year’s tax return.

Co-contributions for Super
This is something you should DO. 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!

However, your income must be under $51,813 (plus reportable super and FBT) to potentially qualify. For details click here:

Small Businesses
Prepay your expenses where you can and don’t be too hasty getting out your invoices prior to June 30 if it’s been a great income year.

Don’t forget the $20,000 immediate deduction on assets has again been extended another 12 months (2018) for those with a turnover below $10m.

These 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.

Super Contributions
To be claimed in this tax year they need to be paid before June 30, and ‘yes’ in many cases you should contribute to Super. For example; An average earner saves 19.5% 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 bit on the younger side burdened with a lot of bad debt (non-investment lending) then speak to CIA Tax about doing the numbers on super contributions first.

Super SGT Amnesty
Late in paying Super? Just don’t be, those days have ended. There are no more excuses and the ATO are watching every single payment timing with draconian penalties pending. However, if you have been slightly remiss the ATO has one last amnesty brewing in the wings. For details click here.

(Also, a very handy tool to leverage an employer who hasn’t paid your super!)

Attention Employees
Make sure you have paid for all your work-related expenses prior to June 30. Bring costs forward when you’ve had a great income year as this tip becomes even more important.

Capital Gains
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 offset the CGT liability (or losses carried forward from prior years) and consider selling out losses before June 30 to offset gains – call CIA Tax to discuss other methods.

Medicare levy surcharge and Rebate Reduction income tests
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 for 2017/18 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.

Personal super contributions made are to be claimed as a deduction (now that salary and wage earners can claim.) No major changes for 2019 tax year (phew!) For all of us the concessional cap payments into super are $25,000. This includes super SG and salary sacrifices.

• For under 65’s they may be able to also contribute $300,000* Non-Concessional all at once.
• For over 65’s they will need to pass the work test, but forget about it for over 75’s sadly.

* Superannuation has become very complex, so never contribute until you’ve cleared it with your advisor.

Superannuation Spouse Contribution of $3,000
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.

Don’t forget - Sunglasses, hats and sunscreen for taxpayers that work in any outdoor occupation (including driving) they are tax deductible. However they cannot be claimed unless you keep the receipt!

Repairs and maintenance on investment properties
Consider bringing these forward so you can enjoy your tax deduction in the current financial year.

Pre-paying Interest
As an example, on a loan of $300,000 it may cost $15,000, but it could get you up to $7,350 back as a tax refund this year. Requires negotiation with your lender.

Claim Everything
This one 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 appropriateness of the claim.

SINGLE TOUCH PAYROLL (Shouting to get your attention!)
If you have 20 or more employees on 1 April 2018 it’s mandatory to adopt STP reporting for 1 July 2018 (everyone else at 1/7/19).

The Small Business Superannuation Clearing House
The SBSCH service has become part of ATO online services; that is the ATO online portal or you can log into your MyGov service.

Want to know more?

Dr Steve Enticott is the natural person licenced to give the advice and is Sole Director of Logicnet Pty. Ltd. His ASIC Authorised Representative No. is 379 754. CIA Wealth is the business name of Logicnet Pty Ltd.
This is general advice only and has been prepared without taking into account your particular objectives, financial situation and needs. Before making an investment decision based on this information, you should assess your own circumstances or consult a financial planner.