Tax Accounting Services – Getting the MAX from your TAX

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Child Care

Do you have small children and have you paid for approved childcare? If you haven’t yet received your 2004 – 2005 Child Care Benefit (CCB) you have until the 30th June 2007 to claim your 2004 – 2005 CCB. Go immediately to www.familyassist.gov.au or phone 13 61 50 and complete the necessary forms and register for the benefit.

CCB is a payment made by the Family Assistance Office to assist with the cost of child care. CCB for approved childcare can be received during the financial year as reduced child care fees or as a lump sum payment after the end of the financial year when you do your tax return. If you are behind with receiving the 2004-2005 benefit then get in your application before June 30th or you will lose it.

Super Co-Contribution

Get Johnnie Howard to give you some extra $$! This is not something to leave to the last minute on the 30th June. Organize it now. What is the super co-contribution?

Mr. Howard has agreed to match every $1 that you personally contribute to superannuation with a payment of $1.50. This means you could be getting up to a total of $1,500 to add to your superannuation fund. If your assessable income and reportable fringe benefits is $28,000 or less you get the lot, but Mr. Howard’s contribution will begin to phase out if your income is above $28,000 and completely cuts out if your income is above $58,000.

You must receive at least 10% or more of their income from “eligible employment”. I don’t think this is very fair for the self-employed, but “eligible employment” means working as an employee. I understand this is changing in the next financial year.

Put Big Dollars into your Super before the 30th June.

There is a one-off opportunity to put up to a million dollars into super this year. This is great if you have just won the lotto or if you have inherited a cool million. One client who is nearing retirement and wants to downsize has sold his large family home to drop money into super. Sale of your home is capital gains free, but before you start thinking of selling investment property or shares to dump money into super, it is wise to check carefully so you don’t end up being caught by capital gains.

Variation of income tax

If you have a rental property with a heavy mortgage or you receive an allowance from your employer such as a motor vehicle allowance you can apply to have your income tax reduced.

It takes a number of weeks to get it in place even if you have already had an application approved in the last financial year. Now is the time to apply for the “variation” or reduction of your income tax. Otherwise you could be waiting a while before it kicks in. If you wish to do it yourself go to http://ato.gov.au/taxprofessionals/content.asp?doc=/content/00096490.htm or you can ask Easy Tax to do it for a small fee.

Deductions

If you have outstanding invoices for work or business-related expenses, get them paid before the 30th June so you can get those deductions and claim them in the 2007 financial year.

Also, pre-paid expenses paid for up to twelve months in advance are deductible in the year in which they are paid. This includes such things as subscriptions, business travel, seminars that are business-related, or other expenses such as educational courses that provide further training in the area in which you do business or work.

Provided the expense is directly related to the source from which you earn your income it is deductible. I have always thought it wonderful that you could pre-pay business expenses and get the refund before you actually use the service or product.

What does that mean? Suppose you intend to travel overseas and attend a conference directly related to the field in which you earn your income. Well, you can purchase the ticket in the 2007 financial year and claim the expense in your 2007 tax return, but you don’t have to take the trip till after the 1st of July 2007. You can actually pay for the service up to twelve months in advance or eleven months into the 2007-2008 financial year. Lovely, the refund can help fund that trip!!

What if the expense is partly business-related and partly personal? Well then you get only the business-related portion as a deduction. Remember, it must truly be directly related to your income-generating activities.

I am sure a lot of people are going to start thinking – “what do I need for business in the next twelve months?” Now is the time to spend before the 30th June.

Giving the Max to Get more Tax

Now is also the time to make sure others benefit from your donations. Make your tax-deductible donations now, so you can claim them back in the 2007 financial year. To be tax-deductible donations must be to eligible gift recipients who are registered with the Tax Office. To claim donations back, your donation must truly be a gift (you can’t receive something for it), and the donation must be to a registered organization.

Easy Tax, professional tax accounting services, contact us today.

 

Take advantage of our small business accounting services during which we will help you to refine your needs and consider an accounting and tax planning solution for your business going forward… make an online enquiry today or call us on +61 2 9419 5322 and let us help you solve your accounting or tax problems.

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