Maintaining robust financial health is crucial to the success and longevity of small businesses. By implementing effective strategies and best practices, you can boost your business’s financial position, navigate challenges, and stay ahead in today’s competitive marketplace. This article aims to provide small business owners with practical insights into cash flow management, budgeting, tax planning, and strategic financial analysis – all essential components of a successful business’s financial foundation.

Whether you’re just starting or running an established enterprise, improving your business’s financial health is vital to growth and stability. Equip yourself with the knowledge, tips, and best practices required to transform your financial management and secure a prosperous future for your business. Don’t miss out on these valuable insights to propel your small business towards long-term success.

1. Effective Cash Flow Management for Small Businesses

Cash flow management is critical to the financial health of small businesses, as it is often a primary indicator of your company’s overall financial performance. Healthy cash flow ensures you have sufficient funds to cover expenses, repay debt, and invest in growth opportunities. Here are some tips for effective cash flow management:

  • Set up a cash flow forecasting system: Regularly monitor and update cash flow forecasts to help you identify potential cash shortfalls and take corrective action. A good rule of thumb is forecasting your cash flow 3-6 months in advance.
  • Expedite invoicing and collection processes: Send invoices promptly and implement systems to track outstanding payments, offering incentives for early payment, and utilising effective collection strategies for overdue accounts.
  • Manage expenses wisely: Regularly review your expenses and identify cost-saving opportunities, such as renegotiating contracts with suppliers, reducing overheads, and streamlining operations.
  • Maintain a cash reserve: Set up an emergency fund to cover unexpected expenses or cash shortfalls, providing a financial cushion during challenging times.

2. Budgeting Best Practices for Small Business Success

Budgeting is an essential practice for successful small business financial management, as it ensures fiscal discipline and serves as a roadmap for allocating resources effectively. Below are some best practices for effective budgeting:

  • Set clear financial goals: Establish short-term and long-term objectives for your business, with quantifiable and time-bound targets. These goals will inform the budgeting process and help guide spending decisions.
  • Create a detailed and realistic budget: Use historical financial data, industry benchmarks, and market research to develop an achievable budget. Factor in projected revenue, expenses, and profit margins to ensure your budget aligns with your financial goals.
  • Regularly monitor and adjust your budget: Keep track of your budget’s performance by consistently comparing actual financial results with projected figures. Adjust your budget to respond to changing market conditions, business performance, and financial goals.
  • Involve relevant stakeholders: Collaborate with staff and key stakeholders when developing and monitoring your budget, as this process not only helps create a sense of accountability but also ensures the input of those with a detailed understanding of different aspects of your business.

3. Tips for Effective Small Business Tax Planning

Proactive tax planning can help small businesses minimise tax liabilities and remain compliant with tax regulations. Here are some valuable tips to optimise your tax planning:

  • Keep accurate and up-to-date records: Maintain detailed records of all financial transactions, including income, expenses, and tax deductions. Utilise accounting software to simplify your record-keeping and reduce the risk of errors.
  • Understand eligible tax deductions: Familiarise yourself with the deductions available to small businesses, such as operating expenses, depreciation, and employee-related costs. Consult with a professional accountant to ensure you’re claiming all eligible deductions.
  • Track changes in tax legislation: Stay informed about any changes to tax laws and regulations that may affect your business, as they can impact your tax planning strategies and overall tax liability.
  • Seek professional advice: Engage the expertise of a qualified accountant or tax advisor to assist with tax planning and ensure compliance with complex tax laws and regulations.

4. Implementing Strategic Financial Analysis to Drive Business Growth

Strategic financial analysis involves evaluating your business’s financial performance to identify areas of improvement and inform growth-oriented decision-making. Implementing this practice can provide valuable insights into your business’s financial health and guide data-driven business strategies. Here’s how to incorporate strategic financial analysis into your small business management:

  • Regularly examine key financial ratios: Analyse essential financial ratios, such as profitability, liquidity, and debt ratios, to assess your business’s performance and stability. Compare these ratios to industry benchmarks to determine your competitive position.
  • Monitor your income statement: Examine your income statement periodically to identify revenue, expenses, and net profit trends. Use this information to find cost reduction, expansion, or market diversification opportunities.
  • Evaluate your balance sheet: Regularly assess your balance sheet to gain insights into your business’s financial position, including your company’s assets, liabilities, and equity. Maintain an optimal debt-to-equity ratio and ensure adequate liquidity for operational needs.
  • Consider external factors affecting your business: Analyse external factors, such as market conditions, competitor performance, and economic trends, to anticipate potential challenges and seek growth opportunities.

Secure Your Small Business’s Financial Future with Expert Accounting Services

A proactive approach to financial management is crucial for small businesses seeking to improve their financial health and achieve lasting success. Business owners can cultivate a strong financial foundation by implementing effective cash flow management strategies, maintaining a disciplined budgeting process, staying informed on tax planning essentials, and utilising strategic financial analysis.

At SMB Accounting, our team of experienced accountants and advisers is dedicated to providing the necessary tools, insights, and expertise to strengthen your business’s financial health. Let us support you in implementing these best practices and taking your small business financial management to new heights. Contact us today to discover how our small business accounting service can help you secure a prosperous future for your business.

In an evolving financial landscape, navigating the complexities of Self-Managed Super Funds (SMSFs) demands not only understanding but also strategic intelligence. SMB Accounting offers a comprehensive suite of services designed to adeptly guide you through the intricate world of SMSFs. 

Self-managed super funds (SMSFs) offer Australians more control and flexibility over their retirement savings, empowering them to make investment decisions tailored to their financial goals. However, navigating the world of SMSFs can be complex, with countless rules, regulations, and responsibilities that come with managing your own super fund. 

Armed with extensive knowledge and financial acumen, we ensure that your journey through SMSF management is seamless, effective and aligned with your financial goals. By understanding the complexities of SMSFs and enlisting the support of the knowledgeable team at SMB Accounting, you can successfully navigate this intricate financial realm and secure a prosperous future for your retirement.

SMB Accounting Strategies for Effective SMSF Management

1. Basics of SMSFs

Self-managed super funds (SMSFs) are private superannuation funds that individuals can establish and manage independently, providing them with greater control over their investments. Unlike traditional super funds, SMSFs allow trustees to build a diversified and personalised investment portfolio tailored to their specific financial goals and risk appetite. Common features of SMSFs include:

  • Structure: SMSFs can have up to four members, and each member is a trustee of the fund or acts as a director of the fund’s corporate trustee.
  • Investment choices: Trustees have more control over the investment strategy and can choose from a wide range of assets, including shares, property, cash, and fixed-income products.
  • Minimum requirements: To establish and manage an SMSF, individuals need to have a clear understanding of the fund’s objectives, financial risks, and regulations. Additionally, trustees need to comply with the superannuation law, including administration and reporting requirements.

2. Advantages and Disadvantages of SMSFs

There are several benefits and drawbacks associated with SMSFs, which should be carefully considered before deciding whether to establish your own fund.

Advantages:

  • Greater control: SMSFs offer more control over investment decisions, enabling trustees to develop a tailored strategy focusing on their specific financial goals and risk tolerance.
  • Diversified investment options: Trustees have access to a broader range of investment options, including direct shares, residential or commercial property, and collectables.
  • Tax management: SMSFs offer strategies for efficient tax management that can minimise tax liability and maximise retirement savings.
  • Estate planning flexibility: SMSFs provide flexibility for estate planning purposes, allowing members to incorporate binding death nominations or reversionary pensions.

Disadvantages:

  • Time and effort required: Managing an SMSF can be time-consuming, as trustees must make all investment decisions, monitor regulations, and complete ongoing administrative tasks.
  • Costs: Due to the fund’s administration costs and the cost of engaging professionals for support, SMSFs can be more expensive to run than traditional super funds, particularly for lower-balance funds.
  • Compliance risks: Trustees are responsible for ensuring the fund complies with superannuation law. Non-compliance may result in financial penalties or the loss of the fund’s concessional tax treatment.

It’s essential to weigh these advantages and disadvantages before deciding if an SMSF is the right choice for managing your retirement savings.

3. Navigating SMSF Regulations

Complying with SMSF regulations is crucial to ensuring your fund remains eligible for concessional tax treatment and avoiding potential penalties. Key compliance aspects that SMSF trustees must adhere to include the following:

  • Investment strategy: Trustees must create, adhere to, and regularly review the fund’s investment strategy, taking into account members’ risk profiles, objectives, and liquidity requirements.
  • Sole purpose test: SMSFs must be maintained solely for the purpose of providing retirement benefits to members, and trustees must ensure that all investment decisions align with this core objective.
  • Reporting and administration: SMSFs are required to submit an annual return, including financial statements, a compliance audit, and various regulatory reports to the Australian Taxation Office (ATO).
  • Prohibited transactions: Trustees must avoid specific transactions, such as lending money or providing financial assistance to funds’ members or their relatives.

By staying informed and working closely with professionals like the team at SMB Accounting, trustees can successfully navigate the SMSF compliance landscape and ensure their funds remain on track.

4. SMB Accounting’s Role in SMSF Management and Audits

The team at SMB Accounting offers invaluable assistance for SMSF trustees, guiding you through the complexities of managing your fund and providing expert audit services. By partnering with SMB Accounting, you can expect the following:

  • Expert advice: With extensive knowledge of the SMSF sector, our team can provide tailored advice on investment strategy, compliance, and reporting, enabling you to make better-informed decisions for your fund.
  • Comprehensive SMSF audits: Our experienced SMSF auditors assess your fund’s financial statements and compliance with superannuation law, ensuring any potential issues are identified and addressed promptly.
  • Time-saving: By entrusting the management and auditing of your SMSF to professionals, you can focus on other aspects of your life and business while knowing your retirement savings are in capable hands.
  • Risk mitigation: Partnering with the team at SMB Accounting helps mitigate the risk of non-compliance, as our expertise will aid in keeping your fund within the parameters of superannuation law and regulations.

Tackling the Complexities of SMSFs with SMB Accounting

Successfully navigating the world of SMSFs can be a rewarding investment in your future retirement. By understanding the basics and considering the advantages and disadvantages, you can make an informed decision about whether an SMSF is the best fit for your financial needs.

When managing your SMSF, enlisting the support of the knowledgeable team at SMB Accounting is crucial to ensuring your fund remains compliant and achieves your desired financial objectives. Let our accountants in the Sunshine Coast, QLD, guide you through this intricate journey, confidently securing a prosperous retirement for you and your fellow SMSF members.

Losing your Tax File Number (TFN) can be frustrating and worrisome, especially if you need it for an important financial transaction or tax-related matters. 

Although it’s essential to keep your TFN safe and secure, sometimes accidents happen, and you may find yourself searching for that elusive number. 

But don’t worry—we’ve got you covered. In this blog post, we’ll discuss the steps to take when you’ve lost your TFN and how to avoid such situations.

Step 1: Stay Calm and Search Thoroughly

Before you jump to conclusions and assume that your TFN is gone forever, take a deep breath and retrace your steps. Have you checked all possible locations, such as email records, past tax returns, or your Australian Taxation Office (ATO) correspondence? Sometimes, a simple search can save you a lot of trouble.

Step 2: Contact Your Tax Agent or Accountant

If you’re still looking for your TFN after a thorough search, the next step is to contact your tax agent or accountant. They may have it on file and can provide the necessary information. Remember, your tax agent or accountant is there to help you, so don’t be afraid to reach out to them.

Step 3: Contact the Australian Taxation Office (ATO)

If you still need help finding your TFN and your tax agent or accountant can’t help, it’s time to reach out to the ATO. You can call them on 13 28 61, and they’ll assist you in retrieving your TFN. 

Be prepared to answer a series of questions to verify your identity, such as your name, address, date of birth, and other personal information. The ATO may also ask for details about your financial history and tax records.

Once you’ve successfully verified your identity, the ATO will provide you with your TFN via mail. If you receive it by mail, expect it to arrive within 10-14 business days. Please note that the ATO will never send your TFN via email or text message due to security reasons.

Step 4: Update Your Records

Now that you have your TFN ensure that you update your records accordingly. Store your TFN securely and inform relevant parties, such as your employer, financial institution, or tax agent, about your updated TFN. This will help prevent future issues or delays in processing your tax-related matters.

Tips for Keeping Your TFN Safe

To avoid finding yourself in a lost TFN situation again, follow these tips for keeping your TFN safe and secure:

1. Store Your TFN Securely

Keep your TFN in a safe place, such as a locked filing cabinet or secure digital storage. Avoid carrying it around in your wallet or purse, as this increases the risk of losing or stealing it.

2. Be Cautious with Your TFN

Only provide your TFN to trusted parties and authorised individuals, such as your employer, financial institution, or registered tax agent. Never share your TFN on social media or with unknown individuals.

3. Monitor Your Accounts

Regularly check your tax and financial accounts for suspicious activity. If you notice discrepancies or unauthorised transactions, report them immediately to the ATO and your financial institution.

4. Be Vigilant Against Scams

Be aware of phishing and other fraudulent activities targeting your TFN and personal information. Remember, the ATO will never ask for your TFN or personal details via email or text. If you receive a suspicious message or call claiming to be from the ATO, report it immediately.

Conclusion

Losing your Tax File Number can be a stressful experience. But it’s important to remember that there are steps you can take to recover it and protect your personal and financial information. By following the steps outlined in this blog post, you’ll be well on your way to handling a lost TFN and getting your tax affairs back on track.

If you are looking for Sunshine Coast accountants or Fraser Coast, we can help you. SMB Accounting does individual tax returns, small business accounting with various small business accounting packages available, audits, and more. Contact us today or sign up for our newsletter to learn more!

 

In broad terms there is to be a surplus of $4.2bn however an underlying cash deficit of $13.9bn. Australia’s growth is estimated to slow to 3.25% in 22/23 to 1.5% in 23/24, with a recovery to 2.25% in 24/25

Inflation is expected to fall to 3.25% in the 23/24 year and further to between 2-3% in the 24/25 year

Here are some highlights from the budget.

Personal Tax

  • Stage 3 Tax Cuts – there were no tax rate changes for personal tax. The stage 3 tax cuts are still to be implemented from 1st July 2024 with the 32.5% tax rate being reduced to 30% for incomes between $45k to $200k, with the 37% tax bracket being totally removed
  • Medicare Levy (ML) Thresholds – the ML have been increased across all categories

 

Small Business

  • Instant Asset Write-off Threshold – this is set at $20k (up from $1k). This removes the Covid measure of unlimited amount for an asset write off being fully deductible. Assets greater than $20k can be deducted at 15% in the first year and 30% in subsequent years.
  • Small business Energy Incentive – businesses will be able to claim an additional 20% deduction on spending that supports electrification and more efficient use of energy.
  • Amall business lodgement penalty amnesty – Small businesses with aggregate turnover of less than $10m will be given an amnesty which will remit failure-to-lodge penalties for outstanding tax statements lodged in the period from 1 June 2023 to 31 December 2023 that were originally due between 1 December 2019 to 29 February 2022.
  • PAYG and GST instalment uplift factor – The GDP uplift factor will be set at 6% (rather than 12% as would otherwise apply under the statutory formula) for instalments with respect to the 2023-24 income year that fall due after the measure is legislated.

Business Taxation Measures

  • Build-to-rent properties – For eligible new build-to-rent projects from 9 May 2023, the rate for the capital works tax deduction (depreciation) to 4% per year
  • FBT rules for electric vehicles – The Government confirmed that plug-in hybrid electric cars will not be eligible for the FBT exemption for electric cars from 1 April 2025

 

Superannuation

  • Super account balances above $3m – despite pushback from industry, the Government has confirmed its intention to apply an extra 15% tax on total superannuation balances above $3 million from 1 July 2025, including in relation to defined benefit schemes. No further details were released so it is expected the proposed changes will operate as previously announced (ie, unrealised gains will be subject to the extra 15% tax).
  • Payday super – employers will be required to pay their employees’ super guarantee at the same time as their salary and wages from 1 July 2026
  • Pension drawdowns: no reduction in minimum – the Budget did not announce a further extension to 2023-24 of the temporary 50% reduction in the minimum annual payment amounts for superannuation pensions and annuities.

 

Please feel free to share to any person you may think may benefit If you need any assistance, please get in contact with us at

 stephen@smbaccounting.com.au

 P 1300 854 159

 

Regarding work travel expenses, it can be challenging to know precisely what you can and can’t get reimbursed for. Fortunately, a few standard fees can be refunded, depending on the company’s policy. 

You can get reimbursed for these nine things from your work travel expenses as long as they’re included in the company’s audit process:

1. Airfare

Airfare is typically one of the most expensive parts of any work trip, so it’s essential to make sure you are reimbursed for this expense. Many companies will provide you with a travel voucher or credit card to pay for your flight and then refund you for the cost.

2. Lodging

Depending on the company, you can get reimbursed for your lodging expenses. This could include the cost of a hotel, Airbnb, or other lodging arrangements. Be sure to check the company’s policy to make sure you are within the allowed limits. For example, if you need to stay in a hotel while travelling for work, you can get a refund for the cost of your stay. You will need to keep your hotel receipts to send to your company.

3. Incidentals

Incidental expenses, such as parking fees, internet access, and other costs you may incur while travelling, can typically be reimbursed. Be sure to save any receipts for these expenses to be refunded.

4. Business Supplies

You can be reimbursed for these expenses if you need to purchase any supplies for your work trips, such as office supplies or business cards.

5. Transportation

You can be reimbursed for the cost if you need to take public transportation, such as a bus or train, to get to your work destination. Be sure to save your tickets or receipts to be reimbursed.

6. Meals

Depending on the company policy, you may be able to get a refund for meals while travelling for work. Some companies provide meal allowances or reimbursements for meals purchased while on the job. Remember to compile all receipts and any paperwork related to meals so you can submit them for reimbursement.

7. Car Rental

If you need to rent a car while travelling for work, you can get a refund for the rental cost. Many companies will reimburse you for or at least part of the rental. Compile all your receipts and run them for the company audit process. Wait for it to be refunded.

8. Parking Fees

You can get a refund for the cost of the parking and let it run on your company’s audit process. The companies will reimburse you for the parking, or at least part of it. Keep all your receipts and any paperwork related to the parking so you can submit them for reimbursement.

9. Conference Fees

Suppose you attended a conference or seminar connected to your job. Be sure to keep any receipts from the conference and submit them for reimbursement.

Conclusion

When it comes to working travel expenses, there are a few ordinary expenses that can be refunded. Be sure to check your company’s policy on reimbursement to make sure you are within the allowed limits. You can ensure you get the most out of your work travel expenses with the correct information.

SMB Accounting offers a range of services for small businesses, from individual tax returns to small business accounting, SMSF audits, and Xero accounting software-based accounting. With competitive rates and flexible payment options, our business is suitable for anyone looking for a reliable and efficient audit process and accounting service. Contact us today!

During tax season, self-managed superannuation funds (SMSFs) are subject to several financial and compliance checks. SMSFs may qualify for tax breaks on investment income if specific requirements are met. 

One of these regulations mandates that an authorised SMSF auditor conduct an annual audit of SMSFs. This article will give a thorough introduction to SMSF auditing. 

What Exactly Is an SMSF Audit?

Before submitting annual tax returns, SMSF holders must undergo an annual audit. An ASIC-registered auditor performs an SMSF audit to verify the financial statements’ accuracy and your fund’s compliance with superannuation laws.

The Australian Taxation Office (ATO) mandates an audit even in cases where no contributions or payments were made during the fiscal year. The auditor will provide a letter of engagement outlining the scope of their work during the audit. You have 14 days to respond if more information is needed. 

Another excellent way to make sure that there are no mistakes or inaccurate numbers in calculations that could harm your fund is to have them reviewed by a knowledgeable and objective specialist.

Why SMSF Audits Are Necessary

For several reasons, your SMSF must comply with super law. If funds fail to recognise and address compliance problems, the ATO may impose significant financial penalties on them. 

Numerous SMSF regulations are additionally intended to safeguard you and ensure that your investments comply with the fund’s definition. You can avoid compliance fines and investment losses by using an audit to help you find strategic flaws in your fund.

According to the ATO, an annual SMSF audit is necessary before submitting a yearly return. A few essential steps must be taken to ensure all deadlines are met. According to the ATO website, you must appoint an SMSF auditor at least 45 days before your annual return is due. You will be subject to financial penalties if you do not file your tax return by the deadline.

What Happens during an SMSF Audit?

SMSF auditors examine an SMSF’s operations for financial and compliance issues as part of their auditing process. According to Australian Auditing Standards, the fund’s financial statements are audited (balance sheet, income statement, and member statement). The compliance audit determines how well the fund complies with all relevant superannuation laws.

Following the conclusion of these financial and compliance audits, an SMSF auditor must complete an independent auditor’s report document provided by the ATO. Within 28 days of the auditor receiving all required documentation, the trustees must receive this report. 

SMSF trustees should act quickly to fix any violations with the help of their auditor. A fund’s audited annual return must be submitted to the ATO, and trustees are mandated by law to ensure that all related taxes are paid in full.

Auditors must use a contravention report document provided by the ATO to report any super legislation violations (contraventions) to the ATO within 28 days of their discovery during the compliance audit. Trustees should use the ATO’s SMSF early engagement and voluntary disclosure service if any breaches go unresolved.

The ATO will take the voluntary disclosure of any violations by SMSF trustees into account when determining the range of penalties it may impose after opening its investigation.

Conclusion

By law, trustees of SMSFs must have their funds audited by an independent SMSF auditor to ensure ongoing compliance with Australian super laws. ATO has the power to impose a range of sanctions for noncompliance, depending on the severity of the violation.

SMB Accounting is the firm for you if you are an accounting firm looking for highly efficient and comprehensive audit work. We are one of the leading SMSF audit firms. Our offices complete audits for accountants all over Australia with a guaranteed 24-hour turnaround time. All work is completed in-house, with NO outsourcing.

For many of you, tax time makes you sick to your stomach. But it doesn’t have to. You don’t need to lose sleep waiting for the call from your accountant or stressing when you pull out a shoebox full of receipts. Today, we will teach you how to organise your receipts for easier preparation for next year’s tax time.

1. Collect and Keep All Relevant Receipts

Many people think that if a receipt says “scrap metal” or “receipt for deposit”, it doesn’t have to be kept. But in truth, it does. You never know when this information will come in handy. If you have spent many an hour sorting through old receipts, trying to find a specific one for some reason, you know how time-consuming and frustrating it can be.

The easiest way to avoid this is to collect all relevant receipts and stick them in one place. You can save these receipts in a shoebox or buy a “receipt keeper” and store all your receipts in that.

If you do not keep all receipts, you can find yourself in a situation where you lose a receipt and end up with a higher tax bill.

2. Don’t Use Highlighter on Your Receipts

When the holidays roll around, many people like to highlight their receipts to make it easier to find the right ones come tax time. The problem is when you go to file them, the highlighter ink bleeds through, and you can’t use the receipt.

What you can do is write on your receipts with a pencil, and it will not bleed through. That way, you can highlight your receipts and use them again in your next tax season without fear of any interference from the ink.

3. Have a Filing Cabinet for Your Receipts

It is okay to have receipts from this year in your shoebox, but it is also a good idea to start putting them in a filing cabinet. Next year you won’t be searching through a mess of crumpled receipts to find the one you want. You will be able to look it up by date and type.

If you decide to use a filing cabinet, you will label it with a sticky note and a permanent marker. If it has both the purchase date and the receipts, you will be able to quickly go through the filing cabinet and find the receipt you need.

4. Put Taxable Purchases in One Area

If you suddenly start receiving an influx of receipts and you have nowhere to store them, you can start storing all your business receipts in one place. This way, you can easily file them later on and not stress over the mass amounts of receipts you are now receiving.

Get Those Receipts and Taxes in Order

Preparing for your taxes is stressful enough, even without the added headache of receipts. But receipts and taxes go hand in hand, and you can’t go with one without the other. As long as you have a small organisation, you can easily find receipts when you need them and be confident that you are filing the right amount for your tax return. If you want to make it easier on yourself, you can put your receipts in a filing cabinet, label them and never have to stress over receipts again!

SMB Accounting is one of the best accounting firms on the Sunshine Coast. We do individual tax returns, small business accounting with various small business accounting packages available, SMSF audit and Xero accounting software-based accounting business. Contact us!

TAX TIME IS NOW!

 

June 30 is fast approaching , so you should start thinking about any work-related and/or income-generating expenses you paid since last July 1, but also if you are planning on some expenditure n the near future to bring it forward before June 30

To recognise expenses that may be suitable as tax deductions, you should consider:

  • Was the expense related to your work or income-generating activity?
  • You have spent the money, and your employer didn’t reimburse you
  • You have an official record of the expense – e.g. receipt or bank statement?

Note: If the cost was for work and personal use (e.g. home internet) combined, you need to decide the percentage of the expense related to your work or income-generating activity.

To assist, we have recognised 8 tax deductions you may be able to claim on your tax return:

  1. Dry-cleaning, clothing and laundry expenses

You may be able to claim these costs, if you purchased clothing specific for your employment/business, protective clothing or work uniforms directly related to your job. There is also a claim for related cleaning costs, as work-related expenses.

Though, you’re unlikely to be able to claim costs for conventional clothing or non-compulsory work uniforms.

To claim these costs as tax deductions, you need to have written evidence of these costs, such as diary entries and receipts.

  1. Home office expenses

With the crisis of the virus affecting us all most of us have had to result in working from home, there are several home office expenses you may be able to claim as tax deductions.

These include:

  • Phone and Internet expenses
  • Computer consumables (e.g. printer paper and ink) and stationery
  • Home office equipment (e.g. computers, phones, printers, furniture and furnishings) – you may be able to claim either:- The full cost of the items, if it’s less than $300; or
    – The decline in value (also known as depreciation) for items over $300.

Most people won’t be able to claim:

  • Home expenses, like mortgage interest, rent and rates
  • Costs of general household items, like coffee, tea and milk

Please review the criteria’s before you consider on claiming an amount for home office expenses in your tax return.

For example, you should consider whether you can claim the temporary ATO-approved ‘shortcut method’ (of 80 cents per hour for all additional running expenses) for the period 1 March 2020 until 30 June 2020.

You should consider which method is best for you and the criteria you need to meet to claim a deduction.

  1. Education

If your studies were work-related and you enrolled in an eligible course, you may be able to claim a tax deduction.

  1. Industry-related deductions

You may also claim tax deductions for work-related expenses specifically related to your occupation and industry.

You can check the list of occupations and industries on the ATO website to see what industry-related tax deductions you can claim.

  1. Vehicle and travel expenses

While you generally can’t claim expenses for getting to and from your regular workplace, there are some work-related vehicle and travel expenses you may be able to claim.

These include:

  • Where your work requires you to attend multiple workplaces or locations
  • Car expenses where you need your car to perform your work duties
  • Accommodation expenses when you’re required to travel for work

 

  1. Other work-related expenses

Other  work-related expenses you may be able to include as tax-deductible expenses, depending on your work and individual circumstances. Expenses to consider include:

  • Overtime meals
  • Books, periodicals and digital information subscriptions
  • Safety goggles and protective sunglasses
  • Union fees, subscriptions to associations and bargaining agents fees
  1. Gifts and donations

If you gave a gift or donation to an organisation (e.g. your favourite charity), you may be able to claim a tax deduction. However, there are specific rules that apply.

Generally, you can claim any donation you made above $2 if it was to a ‘deductible gift recipient’. For gifts, different rules apply depending on the type of gift.

  1. Investment income

You may be able to claim investment income tax deductions if you’ve received:

  • Interest payments on your savings
  • Dividends from your investments in shares
  • Rental payments from an investment property
  • Another type of investment income

If you’ve received any of these, you could be entitled to claim for costs related to this income, such as interest charged on money borrowed to buy stocks or rental properties.

You may also be able to claim money you paid for investment advice.

Things to note

  • It’s important to remember that tax laws are complex, and you should ensure that you’ve confirmed you can claim an expense before including it in your tax return. Contact SMB Accounting for further clarification.
  • The Australian income year ends on 30 June. You have from 1 July to 31 October to lodge your tax return for the previous income year. If you use a registered tax agent to prepare and lodge your tax return, you may be able to lodge later than 31 October.
  • The information provided is of a general nature and doesn’t take into account your personal financial or business situation – we suggest contacting us at SMB Accounting if you need clarification.

 

Please feel free to share to any person you may think may benefit 😊

If you need any assistance, please get in contact with us at

 stephen@smbaccounting.com.au

 P 1300 854 159

You may now be working from home more than ever and you will be incurring costs of working from home, outlined below are various details as to  what you can claim and how to claim those deductible expenses at tax time

In order to be able to claim, all of the following must apply:

      • You must have spent the money.
      • The expense must be directly related to earning your income.
      • You must have a record to prove it.

No deduction can be claimed for items that your employer has provided or where you have been reimbursed for the expense.

If you are not reimbursed by your employer, but instead receive an allowance from them to cover your expenses when you work from home, you:

      • must include this allowance as income in your tax return.
      • can claim a deduction as outlined.

Expenses you can claim

You will be able to claim a deduction for the additional running expenses you incur if you work from home,. These include:

      • electricity expenses associated with heating, cooling and lighting the area from which you are working and running items you are using for work
      • cleaning costs for a dedicated work area
      • phone and internet expenses
      • computer consumables (for example, printer paper and ink) and stationery
      • home office equipment, including computers, printers, phones, furniture and furnishings – you can claim either the:
        • full cost of items up to $300
        • decline in value for items over $300.

The  tracking of all of these expenses can be challenging so the ATO  will accept a temporary simplified method (or shortcut method) of calculating additional running expenses for the period starting 1 March 2020 until at least 30 June 2020. The ATO has also indicated they  may extend this method, depending on when work patterns start to return to normal (whatever that may be in the future).

Expenses you can’t claim

If you are working from home only due to COVID-19, you:

      • cannot claim occupancy expenses such as mortgage interest, rent and rates
      • cannot claim the cost of coffee, tea, milk and other general household items your employer may otherwise have provided you with at work.

Calculating running expenses

Additional Running Expenses can be claimed in 3 different methods:

      • shortcut method ─ claim a rate of 80 cents per work hour for all additional running expenses
      • fixed rate method ─ claim all of these:
        • a rate of 52 cents per work hour for heating, cooling, lighting, cleaning and the decline in value of office furniture,
        • the work-related portion of your actual costs of phone and internet expenses, computer consumables, stationery, and
        • the work-related portion of the decline in value of a computer, laptop or similar device.
      • actual cost method ─ claim the actual work-related portion of all your running expenses, which you need to calculate on a reasonable basis.

For more information on how to calculate and claim a deduction under the actual cost method or fixed rate method see Employees Working Working From Home

Shortcut method

You can claim a deduction of 80 cents for each hour you work from home due to COVID-19 as long as you are:

      • working from home to fulfil your employment duties and not just carrying out minimal tasks such as occasionally checking emails or taking calls,
      • incurring additional deductible running expenses as a result of working from home.

You do not have to have a separate or dedicated area of your home set aside for working, such as a private study.

The shortcut method rate covers all deductible running expenses, including:

      • electricity for lighting, cooling or heating and running electronic items used for work (for example your computer), and gas heating expenses
      • the decline in value and repair of capital items, such as home office furniture and furnishings
      • cleaning expenses
      • your phone costs, including the decline in value of the handset
      • your internet costs
      • computer consumables, such as printer ink
      • stationery
      • the decline in value of a computer, laptop or similar device.

You do not have to incur all of these expenses, but you must have incurred additional expenses in some of those categories as a result of working from home due to COVID-19.

If you use the shortcut method to claim a deduction for your additional running expenses, you cannot claim a further deduction for any of the expenses listed above.

You must keep a record of the number of hours you have worked from home as a result of COVID-19. Examples are timesheets, diary notes or rosters.

If you use the shortcut method to claim a deduction and you lodge your 2019-20 tax return through myGov or a tax agent, you must include the note ‘COVID-hourly rate’ in your tax return.

Records you must keep

If you use the shortcut method, you only need to keep a record of the hours you worked at home, for example timesheets or diary notes.

If you use the other methods, you must also keep a record of the number of hours you worked from home along with records of your expenses. For more information on what those records are see Employees Working Working From Home.

 

 

Please feel free to share to any person you may think may benefit 😊

If you need any assistance, please get in contact with us at

 stephen@smbaccounting.com.au

 P 1300 854 159

As we are receiving information we are pushing the information to our clients in order that they are up-to-date.

The below we feel is very relevant to anyone who over the past few days has found they have been stood down, business owners who may have just or are anticipating or have of stood staff down and closing for the duration. Finally business owners themselves, who are now in a situation of no income through forced closure.

Following is an update from Services Australia from their Facebook page Services Aust regarding claims for the JobSeeker.this Facebook page is a very relevant to follow in these times

“Important update: If you’ve registered an intent to claim, we will contact you over the coming days to let you know what to do next. Your next steps will depend on your specific circumstances, so please wait for us to contact you. There’s no need to register more than one intent to claim, and no need to call or visit us.

  • If you register your intent to claim by Sunday 29 March, and you complete your full claim by 19 April, we’ll pay your claim from 23 March.
  • If you have lodged a full claim instead of registering an intent to claim, we will pay your claim from 23 March (or earlier if you claimed earlier), if you complete it before 29 March.
  • If you’ve lost income because of corona virus and you haven’t yet tried to access support, please go to our website for more information: www.servicesaustralia.gov.au/covid-19

Our staff are working above and beyond to make sure people can access support as quickly as possible. Thank you for your continued patience.”

Please feel free to share to any person you may think may benefit 😊

If you need any assistance, please get in contact with us at

 stephen@smbaccounting.com.au

 P 1300 854 159