DEDUCTIONS YOU CAN CLAIM
According to the Australian Taxation Office (ATO) website, there are 4 things you need to claim a work-related deduction:
The ATO allows you to claim up to $300 for work related expenses without having kept any receipts – but you must have spent the money and it must be related to your employment.
If the expense was for both work and private purposes, you can only claim a deduction for the work-related portion.
If the cost of any item is over $300, it will have to be depreciated (a portion of the cost claimed each year over its effective life).
THE “TAX TRAP” YOU NEED TO AVOID
Everyone wants to increase their tax refund (or reduce their tax payable). Henson Lloyd here to help you to do this!
Tax saving strategies generally involve you spending money on “something” which creates for you a tax deduction. The “something” you spend your money on could be an expense, an asset, or an investment related payment (like superannuation or prepaid interest on an investment loan).
However – please don’t fall into a common trap of spending money just to get a tax deduction. You only save tax based on the marginal tax rate proportion on the amount you spend, NOT the full amount you spend.
For example, if you earn say $85,000 a year, your marginal tax rate (including Medicare levy) is 34.5%. This means any extra dollar you earn will be taxed at 34.5%, and any extra dollar you claim as a deduction will save you 34.5%.
So, if you spend $100 on something that you can claim a deduction for, you will get back $34.50 from the ATO. But it will still cost you $65.50. So only spend money on what you NEED, not just to create extra tax deductions for yourself.
LINKS TO MORE INFORMATION ABOUT SPECIFIC DEDUCTIONS
It’s our job as your accountants to make the lodgement of your Tax Returns as easy and simple as possible.
We do this every day, so we know all the ins and outs of what to claim to make it easy for you.
If you want to have a look at some of the specific deductions you can claim, here are links to the ATO website (it’s actually pretty good for the ATO):
We’re here to help you! To make an appointment with us to discuss and prepare your 2019 Tax Return please contact us on the phone numbers below.
Effective first full pay period after 1st of July 2019
Minimum adult rate is now $19.49 – you need to add 25% loading if casual.
Applies to an Award/Agreement free employee – other than juniors, trainees and employees with disabilities – See Fair Work Site for further information.
Undeclared cash-in-hand payments to employees and contractors will no longer be eligible for a tax deduction, the ATO has warned, as part of a crackdown on undeclared earnings.
The new rule was unveiled as part of the 2018–19 federal budget. It will take effect for all payments made from 1 July this year, for income tax returns lodged for the 2019–20 financial year and beyond. According to the ATO, the new rule aims to level the playing field where businesses pay workers in cash to avoid PAYG withholding obligations, and where contractors do not provide an ABN or withhold any tax and cash payments they receive.
ATO assistant commissioner Peter Holt said in a statement that the removal of tax deductions for cash payments is just one way it is tackling the black economy. “It’s fairly straight-forward: do the right thing and you can claim a deduction. Deliberately do the wrong thing and you’ll miss out on a deduction and risk being penalised,” he said. “The Black Economy Taskforce estimates that the black economy is costing the community as much as $50 billion, which is approximately 3 per cent of gross domestic product (GDP). This is money that the community is missing out on for vital public services like schools and roads. “Businesses that operate in the black economy are undercutting competitors and gaining a competitive advantage by not competing on an even footing.”
Mr Holt also warned that employers not complying with PAYG withholding requirements can be penalised. He noted that cash is “a legitimate way of doing business, and we recognise that some industries do tend to take more cash than others”, but that it is often being used to avoid paying tax and superannuation. “When cash is used to deliberately hide income to avoid paying the correct amount of tax or superannuation, it’s not only unfair, it’s illegal,” Mr Holt said.
Every day, ten men go out for beer and the bill for all ten comes to $100.
If they paid their bill the way we pay our taxes, it would go something like this…
The first four men (the poorest) would pay nothing
The fifth would pay $1
The sixth would pay $3
The seventh would pay $7
The eighth would pay $12
The ninth would pay $18
The tenth man (the richest) would pay $59
So, that’s what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. “Since you areall such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20”. Drinks for the ten men would now cost just $80.
The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But whatabout the other six men ? How could they divide the $20 windfall so that everyone would get his fair share?
They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would eachend up being paid to drink his beer.
So, the bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of thetax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.
And so the fifth man, like the first four, now paid nothing (100% saving).
The sixth now paid $2 instead of $3 (33% saving).
The seventh now paid $5 instead of $7 (28% saving).
The eighth now paid $9 instead of $12 (25% saving).
The ninth now paid $14 instead of $18 (22% saving).
The tenth now paid $49 instead of $59 (16% saving).
Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare theirsavings.
“I only got a dollar out of the $20 saving,” declared the sixth man. He pointed to the tenth man, “but he got $10!”
“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar too.
It’s unfair that he got ten times more benefit than me!”
“That’s true!” shouted the seventh man. “Why should he get $10 back, when I got only $2? The wealthy get all the breaks!”
“Wait a minute,” yelled the first four men in unison, “we didn’t get
anything at all. This new tax system exploits the poor!”
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn’t show up for drinks so the nine sat down and had their beers without him. But when it came time to pay the bill,they discovered something important. They didn’t have enough money between all of them for even half of the bill!
That my dear friends, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction.Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier
Henson Lloyd Accountants invites you to join our 2019 Footy Tipping Competition.
FIRST GAME: THURSDAY 21ST MARCH 2019
1st, 2nd & 3rd Prizes up for grabs
End of season celebratory presentation for all participants.
Follow the link below for more info and to register: https://www.footytips.com.au/comps/HensonLloyd
Password: moustache Or contact Danielle at the office – 08 8431 1644
Henson Lloyd were thrilled to be a part of the ‘Professional Series Part 2’. Hosted by the Master Landscapers of SA. The session focused on finance & accounting in landscape design & construction.
Alongside other experts Lachlan & Wayne shared their finance, tax, cashflow and accounting advice for landscapers & designers.
Keep your eyes our for more info sessions in 2019.
The government has increased the threshold for the instant asset write-off to $25,000 as it looks to entice the small business sector ahead of a federal election.
Announced yesterday, Prime Minister Scott Morrison has pledged to increase the small business instant asset write-off to $25,000 from $20,000.
The write-off will be available for small business with an annual turnover of less than $10 million and will apply until 30 June 2020.
The government will be seeking to legislate the change when Parliament resumes on 12 February.
This measure is estimated to have a cost to revenue of $750 million over the forward estimates period, with an estimated 3 million small businesses eligible to access the write-off.
“The $25,000 instant asset write-off will improve cash flow by bringing forward tax deductions, providing a boost to small business activity and encouraging more small businesses to reinvest in their operations and replace or upgrade their assets,
Henson Lloyd are excited to be involved in ……
FINANCE AND ACCOUNTING IN LANDSCAPE DESIGN AND CONSTRUCTION
Three real-life design and construction scenarios are presented to our panel of experts for comment in front of a live audience.
Find out the answers to the most commonly asked questions about vehicle finance, tax and accounting for landscapers and designers.
The content of this workshop is invaluable to any landscape design or construction professional.
The experts on our panel are the best in the business:
✔️Wayne Henson, Director of Henson Lloyd.
✔️Lachlan Smyth, Director of Henson Lloyd.
✔️Matt Ford, Director of Finestream Capital.
✔️Frank Ross, MLSA President.
Our panel will be mediated by Liz Barter, Lending Manager at Finestream Capital
This workshop is FREE to MLSA members.
Thursday 21st of February at 5:30pm
To RSVP or enquire, please email firstname.lastname@example.org
HENSON LLOYD INVITES YOU TO…..
Breast Cancer : The Hidden Secret Awareness Breakfast
A new era for Breast Cancer Screening & Prevention.
THURSDAY 18TH OF OCTOBER
7:45am for 8:00am Start
150 GLEN OSMOND ROAD FULLARTON SA 5064
Guest Speaker – Dr. Stephen Birrell
Discussing how high mammography breast density lowers the sensitivity of breast cancer screening and increases breast cancer risk.
For more info, please visit www.wellendhealth.com
We hope you can join us for our Breast Cancer Awareness Breakfast. Please remember to RSVP at your earliest convenience.
At Henson Lloyd we have recently donated $2000.00 to the Buy a Bale campaign to support our Aussie Farmers in their time of need.
The Buy a Bale campaign is part of the charity Rural Aid, formed by Charles and Tracy to expand services and support to rural communities not only suffering through natural disasters but communities that need help remaining in existence, our rural communities are disappearing and need help.
For more information about the Buy a Bale campaign visit https://www.buyabale.com.au