Top small business $20k deduction Q&As

Top small business $20k deduction Q&As

In a recent speech, Small Business Minister Bruce Bilson stated that a lot of his time talking about the $20,000 immediate deduction for small business was convincing people it was not a hand out. 

“I have spent a lot of my time explaining that asset write-off mechanisms aren’t grants, they are not gifts, they are not cash backs. They are a way of expensing a purchase in an asset that can contribute to a functioning business. Now, if you are not making any income there is not a huge benefit in you being able to write-off additional expenses at a faster rate.” 

Tax scams catching out the unwary

Tax scams catching out the unwary

Every tax time is an opportunity for scammers to target the unwary.

This time around, the scammers are phoning and claiming to be from the prosecutions department of the ATO. They then state that they believe you have committed fraud and the Sheriff’s Office has been called. You can of course make this all go away by transferring cash using the details they provide or by giving your details to them. All of it is fake.

Landlords Beware: Key issues for property investors

Landlords Beware: Key issues for property investors

There has been a lot of negative conversation about negative gearing lately. But, if you are currently negative gearing your investment property, should you be concerned?

Negative gearing is when you claim more in deductions than you earn for an income producing asset that you have purchased using debt. It is not limited to property, you can for example negatively gear shares, but property is the dominant negatively geared asset claimed by Australians.

What will change on 1 July 2015

What will change on 1 July 2015

For Business

  • Small business tax cut - 1.5% for companies and 5% tax discount for unincorporated small businesses under $2m (capped at $1,000)*
  • Employee share scheme rule changes to make the schemes more attractive particularly to start-ups (covered in our April update)*
  • 'Fly in fly out' and 'drive in drive out' (FIFO) workers will be excluded from the Zone Tax Offset (ZTO) where their normal residence is not within a 'zone'*
  • Start-ups able to immediately deduct a range of professional expenses required to start up a business – such as professional, legal and accounting advice.*
  • The way work related deductions for car expenses are calculated will change. The '12% of original value method' and the 'one‑third of actual expenses method' will be removed. The 'cents per kilometre method' will be modernised, replacing the three current engine size rates with one rate set at 66 cents per kilometre to apply for all cars.

Superannuation

  • The terminally ill will be able to access super earlier*
  • Employers with 20 employees or more must use SuperStream for employee contributions.

Individuals

  • Changes to family tax benefits – income test changes, add on child payment removed, and changes to large family supplement.
* announced change not yet law.

“This information has been prepared without taking into account your objectives, financial situation or needs. Because of this, you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs”.