Latest Accounting and Finance insights for Businesses

Different business structures in Australia (Updated 2020)

contact@lovemyonlinemarketing.com (Melody Jaimon) — Sat, 19 Sep 2020 16:00:00 GMT

For any person to do business successfully in Australia, one of the most important things is to set up the business under the correct business structure.

Your business structure can define the success of your business and each entity has its own per-requisites and impacts upon the business itself. The business structure you will select is also dependent on various elements such as the type of business, the number of people you will hire, partnerships in the business, and the long-term development plan of your business.

When choosing your business structure it is recommended that you seek the advice of a professional accountant to ensure the saving of both time and money (during setup and afterward). Your accountant should understand Australian business economics and legal regulations deeply and can provide solutions/advice in selecting the best business structure.

Below are the main business structures you will come across in Australia.

Sole Trader Business Structure

It is considered as one of the easiest forms of business structures in Australia. In sole trader structure, a person, alone is responsible for all business operations. Setting up this plan of business is also easier because it involves very limited legal and tax regulations. The income tax you receive on sole trader business structure is measured based on your personal tax rates. Although your personal liabilities will be unlimited but since you will not be considered as an employee under this structure, you are devoid of paying payroll tax or superannuation. This helps you immensely and as your business grows you can alter your business structure later on. However, you will need the assistance of accountant to help you out in the changing of your structure and income tax deductions.

Trust Business Structure

Unlike sole trader, trust business structure is a complex thing to set up and requires rigorous workout and regulation. In this setup, a person or company will become a trustee for the assets of a beneficiary. They will conduct and do business on the behalf of the beneficiary. There is a chance of maximising savings by proper distribution of profits, a process in which both parties can obtain several tax benefits. An accountant will be able to define the proper strategy to obtain maximum tax benefits, this is a crucial service for the better management of your economical taxation and accounting matters.

Partnership Business Structure

Like the name suggests, the partnership involves two or more people in managing and operating a single business together. For those eager entrepreneurs who specifically wants to raise their finances, this business structure is the best option. However, when a business is done in partnership, written agreements should also be done. Disagreements can happen when two or more people operating a business in making decisions. To avoid such hassles, a written agreement can benefit and constitute all within the partnership.

Company Business Structure

A company is considered as a legal entity under Australian business laws. When a person forms a company, it should be registered with ASIC ( Australian Securities & Investments Commission ) and this same government authority also regulates them. It is the costliest business structure to set up. The company must have shareholders or directors that are responsible for the operations of the company. The income tax that the owners receive is at per the tax rate of the company itself. The company owners can be eligible for tax deductions but it is important to get professional advice or assistance to help you set up and manage your business structure properly.

With this overview explore the business structure you think would fit best with your circumstances. If you would like advice on what structure is best suited to your business, ND Accounting offer a 30 minute free consultation. Book online here .

Finding the best accountant for your Business (Updated 2020)

contact@lovemyonlinemarketing.com (Melody Jaimon) — Fri, 18 Sep 2020 17:00:00 GMT

Is your accountant working hard enough to reduce your taxable income?

Does your accountant plan ahead and give advice?

Are you starting out in business and looking for an accountant?

Individuals and businesses find it hard to choose an accountant when starting out in business or some businesses have an accountant but have a misconception that by changing accountants it will be difficult and they will not know enough about their business and tax affairs.

Nothing could be further from the truth. A good accountant should, in only a very short space of time, using the financial statements and tax returns prepared by your previous accountant, get a very clear picture of how a business operates and what the tax and financial issues are.

Because your accountant should be a dependable business adviser, you need an accountant that you can trust, get along with and can provide a personalised service.

What does an accountant do?

The basic services of an accountant is keeping track of how much a business owes and how much it is owed, creating financial statements (such as balance sheets, PAYG, BAS, income statements, GST and cash flow statements), and reconciling bank statements.

Additional services include:

Assistance with Business Plans: A business plan should question the validity of your ideas, the product/service target markets and so on and then be regularly reviewed and updated.
Advice on your correct Business Structure: Your business structure will define the success of your business in Australia since each module has its own per-requisites and impacts upon the business itself.
ABN’s: If you are running a business you will need an ABN.
Implementing Financial Management Systems
Handling Taxes: A good accountant can potentially save your business thousands of dollars through proper tax planning
Managing Payroll
Bookkeeping: One of the main reasons small businesses struggle is because there isn’t a good bookkeeping system in place.

Here are some questions or information that you need when changing an accountant or selecting an accountant:

What is their experience?

You want someone that deals with small businesses, especially those in your field.

Is timely service delivered?

Numbers are constantly coming in from your business so make sure you are getting reports at least monthly.

Who will be servicing the account?

Will it be the person you are meeting with or someone else that you don’t know?

What services can you expect beyond reporting?

Will the accountant handle your taxes, payroll?

Will you get business consulting as well?

A good accountant should become a valuable member of your team, helping you with the financial of your business so you can get on with what you are good at.

ND Accounting works alongside businesses to develop business plans, manage the bookkeeping, identify risks and the structure for taxation as well as implementing financial management systems. For a free 30 min consultation book online here .

How Do I Get a Tax File Number - The Facts (Updated 2020)

contact@lovemyonlinemarketing.com (Melody Jaimon) — Fri, 18 Sep 2020 17:00:00 GMT

If you want to lodge a tax return in Australia you will need a tax file number (TFN) to do so.

What is a tax file number?

TFNs, Tax file numbers are a nine digit number issued by the Australian Taxation Office. Your TFN is yours for life and is the same number even if you change your name, change jobs, move interstate or go overseas. It is an important part of your tax and superannuation records, as well as your identity.

How do I apply for a tax file number?

A new taxpayer receives a tax file number within about a month of making an application and providing proof of identity. How you apply for a TFN will depend on your circumstances:

Foreign passport holders, permanent migrants and temporary visitors

To work in Australia, temporary visitors and permanent migrants need authorisation (a valid visa) from the Department of Home Affairs.

You can apply for a TFN if you meet all the following three conditions:

You are a foreign passport holder, permanent migrant or temporary visitor.
You are already in Australia.
Your visa is one of the following:
a permanent resident visa
a visa with work rights
an overseas student visa
a visa allowing you to stay in Australia indefinitely (including New Zealanders automatically granted a visa on arrival).

To apply online you must have a valid passport or relevant travel documents. If you don't have a valid visa, you can't apply for a TFN. Apply here .

Australian residents

Applying for a tax file number (TFN) is free. You can apply for a TFN if you're an Australian resident, that is if either you:

were born in Australia
have taken out Australian citizenship

If you are an Australian resident for tax purposes.If you are the Australian resident the quickest way to apply is here online .

People living outside Australia

People living outside Australia with Australian sourced income need to apply for a tax file number (TFN) to claim a refund of any tax withheld, from an Australian bank account or from dividends from Australian shares.

You can apply for a TFN if you:

receive income from an Australian source, other than interest, dividends or royalty payments, such as rental income
receive income from Australian business interests
have a spouse who is an Australian resident and is applying for family tax benefit
are a member of an Australian superannuation fund that
you expect to receive benefits from
you intend to make personal contributions to
contributions are made to on your behalf
need to lodge an Australian tax return or apply for an Australian business number (ABN). You can download the form here .

Business and TFN’s, Tax file numbers

The type of TFN that you need depends on your business structure.

If you operate a partnership, company or trust, your business will need its own TFN.

A TFN can be obtained at the same time as an Australian Business Number (ABN), using the same application form.

Sole traders use their own personal TFN.

Should I see an Accountant to manage my tax return? (Updated 2020)

contact@lovemyonlinemarketing.com (Melody Jaimon) — Fri, 18 Sep 2020 16:00:00 GMT

Are you debating between seeing an accountant or filing your own tax return? We explain the benefits of seeing a qualified accountant.

Benefits of Seeing an Accountant for Your Tax Returns

A Professional Accountant Can Save Your Time

Tax codes and formalities can be quite complicated to understand and process. With the help of a professional accountant, you will be completely relieved from the hassles of filing your tax. Getting a tax agent is convenient, the whole affair becomes easier and you don’t have to get caught up in complexities of the financial software. Your qualified accountant will take on the job of preparing and lodging your return.

Reliable Advice You Can Trust

While it can be much cheaper to lodge your own tax return online an accountant will often identify additional areas for extra deductions which can increase your refund and make valuable tax saving suggestions that an online program cannot. A qualified accountant is dedicated to their profession and understanding how the Australian tax laws and tax systems operate. They will not only help you process your refund smoothly but they can guide well on how to plan the year ahead and can answer your questions all year round. The value of this advice can easily exceed the additional cost of consulting with a professional. For example, an accountant can provide you advice on subjects concerning you such as:

Business planning
Tax-friendly ways to save on your child’s education
Reduce taxes on capital gains
Negative gearing

You can claim this back next year as an expense

Expenses relating to preparing and lodging your tax return from an accountant can be claimed as a deduction for expenses in managing your own tax affairs. At ND Accounting the lodgment fees can be paid directly from your return.

Greater tax return

Did you know that if you were to use a accountant for your return you would pay a small fee but receive a much greater return on your tax?

It’s true, professional tax accountants are in business for a reason.

What do I bring with me to complete return

To complete your return you will need the following:

Your Tax File Number
Group Certificates for all jobs
Interest Statements (incl. bank interest)
Information about any dividends
Details about any other income
Details of your deductions including work-related expenses or charitable donations
A summary from any private health policies
Some details about your spouse’s taxable income and taxes

At ND Accounting we make it easy to access a qualified accountant, with an option now to book online. Reserve your time here .

Tell me everything about Fringe Tax Benefits (Updated 2020)

contact@lovemyonlinemarketing.com (Melody Jaimon) — Wed, 16 Sep 2020 17:00:00 GMT

“Fringe Benefits Tax (FBT) is the most misunderstood tax.”

What is a fringe benefit?

A fringe benefit is generally defined as a benefit not being salary, wage or other cash remuneration, derived from employment.

The advantage of a fringe benefit arrangement is two-fold: it provides employers with a way to give employees an incentive without increasing wages; as employees can exclude fringe benefits from their taxable income and it is deductible to the employer as a business expense.

What is the fringe benefit tax?

Fringe benefits tax (FBT) is a tax payable by employers when they provide fringe benefits to employees.

The FBT year runs from 1 April to 31 March.

The current FBT rate ending 31 March 2018, 2019, 2020 and 2021 is 47%.

The fringe benefits tax is separate to income tax and is calculated on the taxable value only of the fringe benefits provided.

As an employer it is important that you determine whether there are any tax advantages in offering fringe benefits to your employees.

Is your business liable for FBT?

You may be providing a fringe benefit tax if your business is providing any of the following:

Car and car parking benefits
Entertainment benefits
Expense payments
In-house benefits (e.g: free or discounted goods produced by the employer)

Is every fringe benefit subject to tax?

It is important to note that mobile phones, laptops, iPads etc. are usually exempt from Fringe Benefit Tax. Below are some examples of benefits that are not considered for FBT.

Computer and tools of trade
Mobile phones.
Calculators
Briefcases
Some taxi travel to or from the workplace
Some car parking
Some minor benefits that have a value of less than $300

How do I register for the Fringe Benefit Tax?

It is recommend that you register for FBT once you have established that you are paying FBT.

You can Register for FBT:

Online – if you already have an ABN using the Australian Government Business Registration Service
By phone – if you're an authorised contact for the business, phone on the business enquiries line
Through your registered tax agent; or
By lodging your annual FBT return.

If you are providing your employees with additional benefits you can learn how to calculate your FBT via the ATO website here .

How to submit a Fringe Benefit Tax?

Fringe Benefits Tax (FBT) tax year runs from 1st of April to 31st of March. You must then lodge your return and pay the total FBT amount you owe by 21st of May.

You can pay either annually or quarterly instalments with your (BAS), Business activity statement.

However if the FBT you were liable to pay for the previous year was $3,000 or more, you must pay quarterly FBT instalments with your activity statement with your annual FBT return and any related liability due no later than 21 May.

Keep track of your Fringe Benefit Tax records

The ATO requires Fringe Benefit Tax records be kept for a period of five years from the date of the relevant transaction.

The FBT records you need to keep show:

The taxable value of each fringe benefit provided to each employee. Some examples of records you may need to keep are invoices, receipts, travel diaries, logbooks, odometer records and employee declarations
The method you used to allocate the taxable value of a fringe benefit
That 100% of the taxable value of the benefits has been allocated to employees.

So what is the reportable fringe benefit?

Although FBT is paid by the employer, the benefits received by the employee must also be reported by the employer on the employee’s PAYG payment summary (formerly known as group certificate) as reportable fringe benefits if the benefit exceeds $2,000. This is a ‘grossed up’ taxable value exceeding $2,000 in value in an FBT year. (1 April to 31 March)

While employees do not pay income tax or Medicare levy on fringe benefits the amount of reportable fringe benefits is taken into account by the government and is included in means (income) testing. This can affect an individual’s liability/eligibility for a range of government charges/entitlements.

Medicare levy surcharge (not the standard Medicare levy);
Deduction for personal superannuation contributions;
Government Super Co-contribution;
Tax offset for eligible spouse superannuation contributions;
Higher Education Contribution Scheme (HECS) and Higher Education Loan Program (HELP) repayments;
Child support obligations; and
Entitlement to certain income-tested government benefits (refer to Centrelink website for more information).

Summary

For additional information the tax office provides an FBT guide for employers, available on its website www.ato.gov.au .

If you’re not sure if your business has a FBT liability or not contact us here and will be able to accurately advice on the fringe tax benefit, based on your circumstances.

Superannuation Guarantee Facts (Updated 2020)

contact@lovemyonlinemarketing.com (Melody Jaimon) — Wed, 16 Sep 2020 16:00:00 GMT

Why was the superannuation guarantee set up?

The establishment of compulsory superannuation was a direct result of the financial challenges being faced by an expanding ageing population. The scheme was introduced on the 1st of July 1992 so all workers can save for retirement relieving the pressure on Australia’s age pension.

Exemptions include employees under the age of 18, those working less than 30 hours a week and those with pay totalling less than $450 per month.

How much are the contributions to Superannuation?

Since the introduction of the Superannuation guarantee governments on both sides have introduced significant changes to the system. Employees can now choose the fund they’d like to manage their superannuation savings and even set up a self-managed fund.

The Employer Super Guarantee is currently at 9.5 per cent. This rate is expected it increase to 10 per cent as at 1st July 2021.

When do the contributions need to be paid?

Contributions to superannuation funds are made every three months, by employers on behalf of their employees. Contributions must be made by the 28th day following the end of each quarter (that is, by 28 October, 28 January, 28 April and 28 July).

How are contributions made to Superannuation?

Under SuperStream, employers are required to make super contributions electronically in a standard format.

This can be done, by using your current accounting/payroll system (if you are subscribed for payroll features), such as MYOB, Xero, QuickBooks and other packages.

Other ways to make super contributions electronically, is by registering with the Australian Taxation Offices, Small Business Superannuation Clearing House , or registering with an existing super fund applicable to your industry, such as REST for retail owners, and have them act on behalf of your business, as your clearing house.

What is the Superannuation guarantee charge?

The Superannuation Guarantee Charge (SGC) scheme requires employers to pay a set, minimum amount of superannuation each quarter for each employee.

It is a legal requirement for your employer to make SGC payments into your superannuation account by the due dates .

If an employer doesn’t pay the minimum amount, the employer is liable to pay the SGC (simular to a tax). Contributions must be paid to a complying super fund or retirement savings account (RSA) or ATO.

Information provided on this site is for general guidance only. For personalised accounting advice and assistance book a time here .

How do I get an ABN? (Updated 2020)

contact@lovemyonlinemarketing.com (Melody Jaimon) — Tue, 15 Sep 2020 17:00:00 GMT

If you are running a business you will need an ABN, even if your business is not going to register for GST.

However you must also register for GST if you are a business and your current/expected annual turnover is $75,000 or more (or $150,000 or more for a non-profit organisation) and/or you provide taxi travel (regardless of turnover). Click here it find out more about GST and business.

What is an ABN?

An Australian business number or ABN is a unique 11 digit number that identifies your business or organisation to the government and community.

Why do I need an ABN?

It helps people to see that you have an established business.
For sole traders and partnerships, you need an ABN to register a domain for your website. The is the www.companyname.com.au
If you want or need to register for GST, you must first get an ABN
ABN is mandatory for certain dealings with some Government and non Government bodies. (For example you need an ABN to open a bank account for your new business which every new business should do.)
You can’t lodge a tax return as a business without an ABN.

What do I need to apply for an ABN?

You can’t get your ABN until you have created the legal entity (ie the company), so you need to set up the company first and then do the ABN registration.

For sole traders, the only information that you may need is your Tax file number, address, DOB and bank account details. You will also need to decide if you want a business name or need to be registered for GST.

For a ‘partnership ABN registration’, you will need your partner’s details including address, DOB and TFN, Tax file number.

For a ‘company ABN registration’, you will need the same details for each director.

Three ways to apply for an ABN

There are three ways to legally apply for an ABN

through the Australian Business Register portal , in the same way that people can do their own tax returns, they can also do their own ABN registration
using the services of a Registered Tax Agent – this is the simplest way to apply

Considerations before registering for an ABN

Business Structure

Your business structure will define the success of your business in Australia since each module has its own pre-requisites and impacts upon the business itself. Registering your ABN as a sole trader is simpler and least expensive but that doesn’t make it a good reason. Multiple owners can set up as partnerships or companies.

Brand

How your business is going to be branded? Do you want a business name? If so, then its a good idea to check the availability of the name and domain before doing the ABN registration.

GST Registration

You need to decide on this when you do your ABN registration.

TFN registration

If you set up a new partnership or company, then you need a TFN and you might as well do it at the same time as getting your ABN rego.

Business Plan

A business plan should question the validity of your ideas, the product/service target markets and so on and then be regularly reviewed and updated. Read more here .

For further assistance book an online obligation free 30 minute consultation here .

GST Information and Facts for Businesses (Updated 2020)

contact@lovemyonlinemarketing.com (Melody Jaimon) — Tue, 15 Sep 2020 17:00:00 GMT

When to register for GST and how does GST work and affect operations.

What is GST?

GST stands for goods and services tax. It is a 10% tax added to the cost of most goods, services and other items sold or consumed in Australia.

GST is generally excluded from the sale of basic food (unprocessed food such as fresh meat, fruit & vegetables), some education courses and some medical, health & care products.

Who must register for GST?

If you are in business, the threshold for registration for GST is $75,000 or more. ($150,000 or more for non-profit organisations)

Once your turnover reaches this threshold you must register.

Turnover is your business’s gross income/sales, not your business’s profit.

If you haven’t registered for GST and become aware that your GST turnover will exceed the $75,000 per year threshold, you will have to register for GST within 21 days.

How do I register for GST?

You must complete an application to register for GST.

You need an ABN to be part of the GST system. Your ABN will also be your GST registration number.

You can register:

online via the Australian Taxation Office (ATO)’s Business Portal
by calling 13 28 66
through your registered tax or BAS agent.

How do I calculate GST on a good or service?

To calculate the GST, you simply add an additional 10% on top of your service/sale price.

E.g. You operate an electrical business, your hourly rate is $60/hour. You would charge an additional 10% on top of the $60/hr, therefore making the grossed up sale value to be $66/hr.

Or, you can simply just multiply your costs before GST, by 1.1, to give you the total amount to invoice inclusive of GST.

However reverse GST calculations are quite tricky.

To figure out how much GST was included in the price you have to divide the price by 11. ($110/11=$10)

To work out the price without GST by dividing the amount by 1.1 ($110/1.1=$100)

How does the GST system work?

Once you have registered for the GST system, you will need to determine:

If your sales include GST or are GST Free
Issue tax invoices for your taxable sales
Claim GST credits for any business purchases that include GST
Report GST on either a Cash (as you pay) or accrual basis (invoiced but not yet received or paid)
Prepare and lodge your Business Activity Statements each quarter, by the due dates to avoid penalties

Once registered for GST and in possession of an ABN, it is necessary to complete GST returns, which are included in the Business Activity Statement (BAS).

Business activity statements, are automatically sent to businesses or their tax agents 2 weeks prior to the month or quarter ending. The BAS’s are usually due by the 28th of the following month after end of the quarter, with the exception of the December BAS which is due the 28th of February.

Options for Reporting & Paying GST?

Returns are completed quarterly or monthly. Most businesses report and pay their GST quarterly, however monthly returns are compulsory for bodies with a turnover in excess of $20 million.

Simpler BAS is the default reporting method for small businesses with a GST turnover of less than $10 million:

What to report

On your monthly or quarterly BAS, or your annual GST return, you must report the following GST information:

G1 Total sales
1A GST on sales
1B GST on purchases.

Full reporting method ($10 million or more)

If your GST turnover is $10 million or more, you must report using the full reporting method.

What to report

On your monthly or quarterly BAS, you must report the following GST information:

You remain on full reporting while your GST turnover is $10 million or more.

For more personalised advice you can contact ND Accounting on 4272 3048 or book a free 30 minute consultation online here .

G1 Total sales
G2 Export sales
G3 Other GST-free sales

G10 Capital purchases
G11 Non-capital purchases

1A GST on sales
1B GST on purchases

Tax Tips for New or Small Businesses (updated 2020)

contact@lovemyonlinemarketing.com (Melody Jaimon) — Tue, 15 Sep 2020 17:00:00 GMT

Small businesses take up 97 percent of all businesses in Australia. Running your own business has many advantages however the truth is according to the Australian Bureau of Statistics, more than 60 percent of small businesses cease operating within the first three years of starting.

Below are some tax tips that will really benefit you if you own a small business or setting up a small businesses.

#1 Make sure you have a business plan

44 percent of the small businesses that ceased operating in the first three years suffered poor strategic management. Having a business plan should take into consideration business goals, objectives, target market information and financial forecasts that you are aiming to achieve over a certain period of time.

Review this regularly and keep it updated so you can control of the direction your business is heading.

#2 – Set up a bookkeeping system

Taking care of your finances is vital to the survival of your small business, especially when you may not have as much flexibility as larger businesses in terms of cash flow. Seek the advice of a qualified accountant/bookkeeper to set up a bookkeeping system suitable to your business requirement. A good bookkeeping system not only keeps your invoices and accounts up to date it also helps you understand what is happening inside your business by easily preparing financial reports. This then provides you with a foundation for making the right monetary decisions.

#3 Keep a record of work related deductions

Even with an amazing accountant who effortlessly handles all of your paperwork they will still need all invoices and receipts organised to be able to do your financial reporting correctly. Stay organised so you don’t miss any valuable deductions. Deductions must be directly related to you earning an income and include

Vehicle and travel expenses – including travel between work and home
Clothing, laundry and dry-cleaning expenses
Gifts and donations
Home office expenses – including a percentage of internet expenses and mobile phone
Interest, dividend and other investment income deductions
Self-education expenses
Tools, equipment and other equipment
Accounting and tax agent fees

Instead of handing your accountant a suitcase full of receipts there are plenty of options for scanning, tracking, and managing your receipts. Evernote, OneNote and Google Drive all have options to scan and store receipts. There are also some amazing apps such Receipt Bank that you can also use to scan, categorise and store your invoices and receipts in your accounting software.

#4 Hire a Good Accountant

Knowledge is power. If you don’t have a good accountant, you’re probably not being as strategic as you could be in how you manage your money and this can cost you in the long run.

An accountant is someone who offers high-level tax and financial advice. Your accountant will also lodge all of your compliance work with the tax office, including your quarterly BAS, PAYG tax and company income tax.

If you need personalised advice you can book online for a free 30 minute consultation here .

Why write a business plan? (Updated 2020)

contact@lovemyonlinemarketing.com (Melody Jaimon) — Sat, 12 Sep 2020 17:00:00 GMT

Many people dream of being their own bosses and starting their own business for a better lifestyle. The unfortunate reality is 90% of start-up businesses fail.

Business plans are not just created if you’re seeking finance for your business, it’s a tool for understanding how your business is put together. A business plan should question the validity of your ideas, the product/service target markets and so on and then be regularly reviewed and updated.

Having a business plan:

Can help you prioritise

It gives your business direction, defines your objectives, maps out strategies to achieve your goals and helps you to manage possible bumps in the road

Gives you control over your business

The planning process helps you learn about the different forces and factors that may affect your success. If you're already in business, it helps you to step back and look at what's working and what you can improve on.

Is vital to help you get finance

f you're seeking finance for your business, you'll need to show banks and investors why they should invest in your business

What should be in your business plan?

Executive Summary

Your executive summary is placed at the beginning of your business plan but it is usually completed at the end of writing your business plan. It is your pitch, highlighting points within the plan and why it is going to be successful.

Business name, location, equipment, insurance and business structure

This includes your ABN and business structure. This section also gives an overview of capital requirements.

Products and Services

It is important to work out what you are selling, who you are selling to and why would they need it.

Marketing is a must – New business owners may spend as much as 50 to 75 percent of their time marketing their start-ups. It is vital to understand your competitors and target market so you can plan short and long term marketing strategies and cost.

Goals

Make realistic business goals for the period of time that the plan covers. Set milestones for each step.

Management structure and staff – Include key staff members and roles.

Pricing and Financials

This is a detailed financial plan with summary. This will include sales forecasts, assumptions, annual income and expenditure, profit and loss statement, cash flow statement and balance sheet. Once again you contact a professional that offers accounting and taxation services to assist.

You’ll need to make quite a few decisions about your business including its structure, marketing strategies and finances before you can complete your plan. ND Accounting can assist, book in your free 20 minute consultation here .

In the meantime you can start with a blank piece of paper, a whiteboard or a ready made template, the ATO have a great template - click here to access it .

Investment Properties - How to reduce tax on your investment property

contact@lovemyonlinemarketing.com (Melody Jaimon) — Mon, 29 Jun 2020 04:30:00 GMT

Many of the expenses involved in owning an investment property are tax deductible. You can claim deductions for the interest paid on the investment loans, agent management fees, insurances, council and water rates.

Here is a link to the list of general expenses you can claim an immediate deduction on .

You are also able to claim the following:

Repairs and Maintenance

Repairs are any works you carry out on your property to restore something to its original state or function. The ATO determines a repair as, such as replacing part of a damaged fence.

The ATO determines maintenance as work completed to prevent damage or deterioration, such as oiling a deck.

Here is a link to the Repairs, Maintenance & Capital Expenditure quick reference chart .

Write-off or Scrapping when renovating

If you remove an asset, you would be able to claim a deduction for the residual value of the removed asset. To take advantage of deduction for scrapping assets, you must obtain a depreciation schedule both before and after the renovations. This will ensure that you have evidence should the ATO wish to conduct an audit.

Prepay Expenses

Why not pre-pay your investment property expenses and bring forward the deduction?

Borrowing Costs

There are some borrowing expenses you can claim on your investment property. Some of these costs are:

Broker Fees
Legal fees and costs associated with preparing and filing of mortgage documents
Title search fees charged by your lender
Valuation fees required for loan approval
Loan establishment fees
Mortgage insurance
Mortgage stamp duty

Pay As You Go (PAYG) Variation

Rather than waiting until you lodge your income tax return to receive a lump refund, you can submit a PAYG Variation application with the ATO, which will instruct your employer to vary or reduce the amount of PAYG withheld from your income paid each pay cycle.

Here is the PAYG Withholding Variation Application

Capital Works Deduction

Tax deductions for capital works include building costs, the cost of altering or the cost of capital improvements to the surrounding property. This could include, major renovations, adding retaining walls, building extensions. The rate of deduction is generally 2.5% per year for 40 years following construction.

You should engage the services of a qualified Quantity Surveyor such as BMT Quantity Surveyors or MCQ Quantity Surveyors to discuss the depreciation potential of your investment property(s).

The depreciation schedule has a one-off fee which is 100% deductible.

Investment Properties - Repairs Vs Improvements

contact@lovemyonlinemarketing.com (Melody Jaimon) — Thu, 25 Jun 2020 14:40:00 GMT

Investing in property carries numerous tax benefits. From negative gearing concessions to depreciation, there are many ways for you to reduce your taxable income. However, many taxpayers get confused on what is a repair and what is an improvement and what they are able to claim immediately and what should be claimed over a period of time.

IMMEDIATE TAX DEDUCTIONS

The Australian Taxation Office (ATO) allows you to claim costs associated with the upkeep on your property, such as repairs and maintenance. These include:

Repairs

Repairs are any works you carry out on your property to restore something to its original state or function. The ATO determine a repair as, whatever work you carry out must rectify defects, damage or deterioration of the property and must restore it to the state is was in before the damage took place.

For instance, if a tree fell on your property and destroys the fence, you’d have to replace the fence using the same materials as the original in order to restore it to the same state it was in before it was damaged.

Maintenance

Maintenance is any work carried out to prevent deterioration or fix deterioration. This could include things such as painting, cleaning, maintaining the plumbing or gardening. Work carried out to prevent or fix deterioration that takes place as a direct result of the property being tenanted can be claimed during the tax year in which it occurred.

DEDUCTIONS CLAIMED OVER A PERIOD OF TIME

You cannot make claim an immediate tax deduction for improvements made to your property. These are claimed over a period of time. These include:

Improvements

An improvement is considered anything that makes an aspect of the property better, more valuable, or more desirable, or changes the character of the item on which works are being carried out.

The ATO does not allow you to claim a deduction for the total cost of improvements in the year you carry them out. Improvements on a property can still have a tax benefit. These are split into two categories, being, deduction for depreciation and capital works.

Depreciation

Tax deductions for depreciation is applied to those assets that usually have a limited effective life, such as timber flooring, carpets, curtains, appliances, and furniture.

Capital Works Deduction

Repairs Before Renting

Any repairs carried out to a property when you purchased it and before it is rented out, are deemed not deductible. This applies even if the repairs were carried out to make the property suitable for tenants.

CASE STUDY:

Zoe owns a rental property in Sydney. Her tenants call to advise that the hot water is not working. Zoe rings a repair person, who visits the property and inspects the hot water system. The repair person quotes to repair the hot water system, but also advises that the hot water system may not last long and can install a new system.

If Zoe asks to have the hot water system fixed, this would be considered a repair and would be fully deductible.

If she had a new system installed, this would be considered an improvement and the new items would be depreciated over time at the applicable depreciation rate or effective life.

Here is a link to the Repairs, Maintenance & Capital Expenditure quick reference chart .

Want some more information on how we can support your business? Contact us here for a callback.

Need some assistance with your investment or investments? Contact our office here .

Key Dates for your Business July 2020 - June 2021

contact@lovemyonlinemarketing.com (Melody Jaimon) — Wed, 24 Jun 2020 11:30:00 GMT

Understanding taxation is important when you’re running a business. There are usually a number of different taxes your business needs to pay and a range of obligations you’re required to meet.

Below are key dates as a downloadable that can be printed and kept as a reference to assist including dates relating to Activity Statements, superannuation, and more as well as a summary of the different obligations.

Tax reporting requirements explained

Business Activity Statements (BAS)

Business owners who are registered for GST must lodge a BAS.

BAS is used to report and pay goods and services tax (GST), pay as you go (PAYG) instalments, PAYG withholding tax and other tax obligations.

The frequency in which you must lodge a BAS depends upon one single factor — GST turnover. Here’s how it breaks down:

Quarterly – GST turnover is less than $20 million (and the ATO hasn’t told you that you have to report monthly)
Monthly – GST turnover is $20 million or more
Annually – You voluntarily registered for GST, and your GST turnover is less than $75,000 (or $150,000 for non-profits)

Most businesses lodge quarterly, the dates are as follows:

July, August and September – 28 October
October, November and December – 28 February
January February and March – 28 April
April, May and June – 28 July

If your organisation reports and pays monthly, its activity statement and payment is due on the 21st day of the following month. For example, a July monthly activity statement is due on 21 August.

Pay As You Go (PAYG)

When you make payments to employees, certain contractors and other businesses, you need to withhold an amount from the payment and send it to the Australian Taxation Office (ATO). This is called PAYG withholding, and works to prevent workers from having a large amount of tax to pay at the end of the financial year.

You report and pay your pay as you go (PAYG) instalments through your activity statement or instalment notice.

At the end of each financial year, you need to give each of your payees (i.e. your employees and anyone else you’ve withheld payment from) a payment summary. You must also provide an annual report to the ATO.

Superannuation Guarantee (SG)

The Superannuation Guarantee – or SG for short – is the contribution you pay an employee into a super fund on their behalf.

Due dates are as follows :

1 July – 30 September 28 October
1 October – 31 December 28 January
1 January – 31 March 28 April
1 April – 30 June 28 J uly

The current rate for SG payments by your employer is 9.5%, with this rate currently set to continue until 1 July 2021, when it will increase to 10%. Generally eligible employees are over 18 and earn more than $450 per month (before tax).

Engaging with a Registered Tax Agent

A registered tax agent can help you lodge your activity statements and has additional time to lodge on your behalf. If you need a hand to manage your business financial obligations, contact us here .

Why hire a bookkeeper, what does a bookkeeper do? (Updated 2020)

contact@lovemyonlinemarketing.com (Melody Jaimon) — Mon, 22 Jun 2020 17:00:00 GMT

Why does my business need to hire a bookkeeper? What does a bookkeeper do? Why does my business need a bookkeeping and accounting package?

Why hire a bookkkeper?

One of the main reasons though that small businesses struggle is because there isn’t a good bookkeeping system in place. A lot of small business owners are great innovators, have plenty of enthusiasm and are the best sales people around but struggle with the financial aspects of their business. Even the best accounting software is useless if you cannot input or understand the data. Engaging in bookkeeping services allows for properly kept business records which not only generates smaller accounting fees for a business but helps a business to identify quickly and accurately whats going on in the business.

What does a bookkeeper do?

Bookkeeping involves the accurate keeping of business records. Many business owners try to do this themselves and then find themselves stressed and running behind critical deadlines. A bookkeeper saves a business owner time and stress, it enables them to focus on growing the business.”

A bookkeeper helps grow your business

Setting up a bookkeeping system

Long gone should be the days where you are paying your accountant or tax agent to sort through a shoebox of paperwork. By giving your accountant well prepared records you are paying them instead to help you with your business.

It can be difficult to set up a good system without a bookkeeping background. You have the choice of setting up your bookkeeping manually (using accounting books), electronically (spreadsheets) or use accounting software, which is usually the most efficient choice.

Make sure you choose a software package that meets your business needs and the ATO requirements so it is best to consult with your accountant on the best software for your business.

What are the advantages of accounting software?

One of the main advantages accounting software is that it enables you to use your time more efficiently.

Some key features include:

Recording your business transactions, including income and expenses, payments to workers, and stock and asset details
Automatically tallies amounts and provides ready-made reporting
Produces invoices and provides summaries and reports for GST and income tax purposes
Keeps up with the latest tax rates and tax laws, and rulings
Allows you to report certain information, such as your activity statement, to the ATO electronically (if the package meets the ATO requirements)
Requires less storage space and allows you to back up records.
Both you, your accountant and bookkeeper can access financial information easily from different locations

Should I hire a bookkeeper?

“Businesses tend to not hire a bookkeeper soon enough”.

A bookkeeper is efficient, often completing the tasks in half the time as that is the job they do day in and day out. The most important part of a bookkeeper working alongside small businesses is to help them understand the numbers, improve the cash-flow and save money in the long term.

A good bookkeeper is able to:

Set up accounting systems and software properly
Enter transactions
Perform checks, reconciliations and end of year processes
Ensure they are up to speed with legislative requirements and management reports
Undertake payroll duties and compliance
Prepare BAS returns, as a registered BAS agent or under the supervision of a registered BAS agent
Provide general business administrative support

It’s never too late to save time and stress less by starting a good record keeping system or bookkeeping system for your business. Want more information on how we can support your business? We offer free, no obligation online 30 minute consultation.

Extending the Instant Asset Write-Off

contact@lovemyonlinemarketing.com (Melody Jaimon) — Wed, 10 Jun 2020 06:47:00 GMT

The Morrison Government continues to back small business with the announcement that it will extend the $150,000 instant asset write-off for six months to 31 December 2020.

Australian businesses with annual turnover of less than $500 million will be able to take advantage of this extended time-frame to invest in assets to support their business as the economy reopens and Coronavirus health restrictions continue to be eased.

These measures will support over 3.5 million businesses. They are designed to support business sticking with investment they had planned and encouraging them to bring investment forward to support economic growth over the near term.

The instant asset write-off also helps to improve cash flow for businesses by bringing forward tax deductions for eligible expenditure. The threshold applies on a per asset basis, so eligible businesses can immediately write-off multiple assets provided each cost less than $150,000.

The extension will also give businesses additional time to acquire and install assets, as they will now have until the end of the year. Assets can be new or second hand and could include for example a truck for a delivery business or a tractor for a farming business.

Legislative changes will be made to give effect to this measure, which is estimated to have a cost to revenue of $300 million over the forward estimates period.

Hardworking Australian businesses can rest assured that the Morrison Government will do all that is necessary to support them to bounce back stronger and get to the other side of this crisis.

Should you have any queries regarding any of these key measures, please do not hesitate to contact our office on 02 4272 3048.

Creative Kids Digital Small Business Grant

contact@lovemyonlinemarketing.com (Melody Jaimon) — Thu, 21 May 2020 06:04:00 GMT

Are you a creative kid provider? Did you know Creative Kids providers can apply for up to $5000 in grants to help deliver programs remotely via online platforms?

The NSW Government is helping Creative Kids providers go digital in response to the COVID-19 crisis, expanding access to the popular program for kids across the state.
From the 6th of May 2020 eligible Creative Kids providers will be able to access up to $5000 in digital adaptation grants to help them offer creative learning activities online thanks to a $1 million injection.
Providers can apply for up to $5,000 for project expenses, including equipment, to support digital and online skills development and the delivery of online arts and cultural program/s for which Creative Kids vouchers are accepted.

To be eligible, grant applicants must: clearly demonstrate adaptation of Creative Kids activities to online delivery, describe how this support can maintain or increase voucher redemption during COVID-19, and meet the objectives of the Creative Kids program.

Frequently asked questions can be found here - Creative Kids Small Business Grant FAQs.

Creative Kids vouchers are one of more than 70 cost of living rebates and savings available from the NSW Government.