Super is in the house

Have you heard about the Small Business Superannuation Clearing House?  No?  You aren’t alone.  I believe that this has been one of the most overlooked and unspoken government initiatives that is around.

If you’re in business, you know how hard it is when each staff member has their own fund which you need to contribute to.  The deadline comes around and you’re scrambling to find the half a dozen different fund details to pay everyones super into.  It’s a pain…to put it in the nicest terms.  Every time I get a new staff member I find myself mentally willing them to choose the fund that’s the same as the majority of my existing staff.  I don’t think I’ve got any magical powers because my mental willing has never worked and I have ended up contributing to a variety of funds too.

Enter the solution:  The Small Business Superannuation Clearing House.

  • The basic concept is that you can pay all of your super to the clearing house in one electronic transaction and then they will take this payment and split it up between all of your staff separate superannuation funds.
  • It’s available for employers with staff of 19 people or less.
  • It’s done online, you need to register here using your ABN and email address.
  • Once you’ve registered, you setup all of your employees with their fund details and then these are kept on file and pre-fill each time you pay your super so there is no time wasted re-entering data.

The Small Business Superannuation Clearing House decreases the time required by you in order to meet your compliance obligations in paying staff super.  The time saving sounds wonderful and I love the efficiency of this idea but most of all I love the cost – Free!!

Tax Tips for Property

It’s been busy at the office;  the calendar is full of appointments with our individual clients who use our services for tax return preparation.  It’s great to catch up with them all and find out what’s been going on in the last year – job changes, new babies, purchase of investment properties, retirement and for one client; all of the above!  Changes in circumstances often effect your tax position so it’s important to communicate with your advisors to keep us in the loop with what’s going on.  This helps us to advise you properly before the fact so that in the long run, you can relax knowing that your affairs are in order.

Here on the Gold Coast, the real estate market is either wonderful or woeful depending on whether you are a buyer or a seller.  It’s no secret property prices aren’t what they used to be so it’s a great time for investors with available funds to be entering the market.  From a tax viewpoint, owning an investment property can be very advantageous if you know what you can and can’t claim and you’re smart with the way you manage your investment.

My top tips for maximising your tax refund are:

  • Get a Quantity Surveyor report.  This report will outline the non cashflow deductions you can claim and this helps increase your refund.  The report puts a value on items such as flooring and inbuilt appliances which allows for depreciation and building write off claims to be made in your return.  The cost of the report is also tax deductible.
  • Be careful with your loan.  The interest on the funds used to purchase your property are deductible provided that you don’t taint the loan.  This means not drawing any surplus funds from the loan for private purposes even if you have been paying extra off.  It also means not combining the investment loan with your home loan or any other non investment loan.  Once the loan is tainted, the interest is not only difficult to calculate but you lose some of the benefit of the deduction.  This is the most common mistake that I see.
  • Where the property is negatively geared and costing you to hold during the year with some reimbursement coming from your tax refund, consider getting an income variation prepared by your accountant.  An income variation serves the purpose of estimating the tax refund you expect at the end of the year and instead of waiting until tax time to receive it, providing you surplus cash in your usual pay cycle.  This can assist with your cash flow during the year, especially for high cost properties.
  • If you’ve purchased the property during the year, don’t forget to claim the cost of the settlement adjustments.  It’s very common to end up reimbursing the vendor costs such as rates and water and these are deductible to you.
  • If you’ve taken finance for the property during the year, be sure to keep track of the fees charged by the bank.  Generally these can be claimed over a 5 year period and banks are notorious for charging these to other personal accounts and the deduction can be lost.
  • Don’t forget about the little things like travel and telephone expenses.  If you’ve been inspect the property, collect rent, do some maintenance – these trips can be claimed.  Telephone expenses for property related calls are also deductible.

If you’d like any further information about any of these details please give me a call at the office on 07 5576 0011 or email me at kyelie@iqaccountants.com.au.  I’ve got a particular interest in property and am happy to answer any questions no matter how silly they may seem. In fact, those questions are my favourite!

Schoolkids Bonus

I have a love/hate relationship with Centrelink – or the Department of Human Services as they are now called.  While this social service is wonderful, as an accountant unless I am specifically authorised by my client to deal directly with this government organisation they won’t speak to me.  Instead they collect information from the Australian Taxation Office which is great but it becomes a little bit of a process.  The information goes from you to me to the ATO and then to Centrelink and then Centrelink contact you – usually by letter.

The latest change is the abolition of the Education Tax Refund. I have spent all year telling people to keep the tax invoices for school expenses including uniforms to now tell you that this was totally useless as Education Tax Refund is no longer.  The box on the tax return to make the claim has been removed.  Sorry if you were one of the diligent people who did keep the receipts, if only there was a crystal ball.

The new payment is called the Schoolkids Bonus and it will be paid directly by Centrelink/Department of Human Services.  The benefits are that eligible families will receive the payment ahead of the school year (generally in January) which means the funds can easily be used to assist with back to school expenses. There’s no requirement to keep receipts or make a separate claim.

To be eligible you need to be receiving or be entitled to receive Family Tax Benefit Part A for a dependant child who is:

  • 5 to 11 years of age (primary education) or
  • 12 to 15 years of age (secondary education) or
  • 16 to 18 (or turning 19 years of age in the school year) and
  • in full time secondary study or exempt from full time study.

For this year a payment was made in June to compensate for not being able to claim this in your 2012 income tax return.  If you didn’t receive a payment, it could be because you were waiting to receive your Family Tax Benefit after your tax return was lodged or your child completed high school at the end of 2011.  I recommend lodging your tax return as soon as possible and then once you receive your notice of assessment contacting Centrelink on 132 468 if you still haven’t received your payment.

The payments for this year are $409 for a primary school child and $818 for a secondary school child.  In January these amounts will increase to $410 and $820 respectively.  As the payment is no longer part of your income tax return, we will have no way of tracking whether you have or will be paid these amounts so please make sure you have received this payment for the 2012 year if you are entitled to it.  As always, happy to answer any questions you may have about this or any of our blog posts.

We’re running for breast cancer

A quick community service announcement – If on October 22nd you telephone the office and I’m not available, it’s probably because I’m still completing the 5km “fun” run from the day before.

IQ Accountants are putting a team in for the 5km Pink fun run. The whole concept is to overcome the challenge of the run through participation while having fun and raising money for the National Breast Cancer research.  We are thrilled to support this very worthy cause although admittedly, I am slightly concerned about losing face to my very fit and fast staff members!!

If you would like to make a donation to the National Breast Cancer Foundation – click here to go to our fundraising page.Don’t forget to print and keep your tax invoice to claim on your year end tax too 🙂

Now I’m off to start training!  If anyone has any tips or hints on how I can go from zero running to 5kms – please email me, any assistance is appreciated.

The Cloud is here

Have you heard about the cloud?  Apparently it’s this mysterious no mans land style place where you send all of your information to be stored and retrieved at a later date.  I’ve been hearing about the cloud for years; I’d go to a seminar and the speaker would declare “Cloud Accounting is coming – get ready!”  I’d dutifully research and check out the cloud accounting options, speak to my clients and come to the realisation year after year that this was not something necessary right now.

Well – times change and as someone who hates change but tries very hard to embrace it, I need to tell you that Cloud Accounting is here and it’s something that should absolutely be investigated for your business.  In very basic terms, cloud accounting allows you to do your bookkeeping online.  There are many benefits from being able to access your data anywhere, anytime right through to cost and efficiency savings (my favourite!)

From an accountants viewpoint, cloud accounting offers us more direct access to your data and the ability to make changes to your file while you continue working on your live data file.  In my opinion, this is good and helpful but not in the “I can’t live without this” status.  I am more interested in the benefits that directly effect you.  If you or your employees do some data entry that is then finalised by your bookkeeper, there’s no longer a reason for your bookkeeper to take your computer or file offsite – you can both simply work simultaneously.  It’s also great if you need some assistance with just a few transactions on your data file, we can easily log in and help you out.

In the last 12 months both Quickbooks and Myob have come a really long way with their developments in this area.  Quickbooks online is mac and pc compatible and there’s 3 difference editions, each with their own capabilities as far as GST, invoicing and expense tracking.   This allows you to only pay for what you need and the fee is charged on a monthly basis.  Quickbooks is offering a 30 day free trial to see you if you like it.  Similarly Myob offers “Live Accounts” with the same free trial and monthly payment options.

Whether you currently use Quickbooks, Myob or are considering looking into Xero – I strongly recommend that you contact your software provider and ask about the options available to you.   I’m happy to assist anyone thinking of changing over – just give me a call at the office on 07 5576 0011.

Going, Going…….Gone

I really hate being the bad news girl.  There’s nothing worse than having to tell a client that there’s an unexpected tax debt. In the perfect world, no one would ever have a tax debt and I could be like a heroine – always ringing to advise of the massive tax refund you are due.  Sadly, they don’t make heroine capes in my size.

In the 2013 financial year (that’s the one we are in now:  July 2012 – June 2013) I fear that I’m going to be the bad news girl to many unsuspecting clients.  In fact, many of you are probably incurring a tax debt right now without even being aware of it – sneaky as it is.  Let me explain…..

The government announced the change to the private health insurance rebate some time ago but this only took effect on July 1st.  In very basic terms, anyone who:

  • has an adjusted taxable income of more than $84,000 (or double that if you are a family)  and
  • has private health insurance

will no longer be entitled to the full 30% rebate.

The government has a going, going, gone phase out system and the thresholds drop by 10% depending on your income level.  There was a period of grace where higher income earners could prepay their private health insurance and gain the benefit of the 30% threshold but this needed to be done prior to June 30th.

Sneaky again, the rebate is calculated on adjusted taxable income.  Adjusted taxable income includes your taxable income, adjusted reportable fringe benefits, tax free pensions/payments, reportable super contributions, net investment losses and child support paid.

As things stand now, if your income is too high and you’re still receiving the 30% rebate – you are incurring a tax debt.  The only exception to this is if you have notified your private health insurance fund and elected to decrease your rebate.  I have asked dozens of clients whether they have done this and I am yet to find someone who has.

This is all going to sneak up on us when it comes time to prepare the 2013 income tax returns.  The ATO are going to reconcile your income against the rebate you have been receiving and if you’ve received too much rebate, they will include the overpayment as a tax liability with your 2013 return.  This means any refund owed to you will be taken as a payment and you could still end up with a debt.

The simple solution to avoid the debt is to do as follows:

  • Consider what your adjusted taxable income for July 2012 – June 2013 is going to be.  If it’s less than $86,000 for singles or $168,000 for families there is no need to do anything.
  • If your income is more than this, contact your private health insurance company and advise them.

Or if you come up with a better solution let me know.  I already considered hiding under a rock and hoping it all goes away but my husband pointed out I’m not rock shaped.  So plan B is contortionist camp.  Wish me luck!

Due Dates

Confession time.  I am sometimes so busy reminding my clients to lodge their Business Activity Statements that I often forget about my own and it gets left until the final minute.  It’s that age old problem where my own accounting gets done last………….let’s not even talk about the time I paid all my staff superannuation but forgot to pay my own!

While I’m happy to contact clients to remind you that it’s BAS time or Payment Summary time or Building Services Authority time (honestly the list is endless) – I want to share with you a calendar that integrates right into your email system.  The system automatically builds a 12 month schedule tailored to your business lodgement and payment needs.  It’s basically a yearly planner that will remind you when you need to meet a reporting obligation.

I’m a big fan of the calendar as I know that it’s so easy to get bogged down in the day to day running of your business – you don’t have time to check the calendar for due dates.  It’s called The Small Business Calendar and you can get it from the Australian Taxation Office for free.  Click here to check it out:  http://www.ato.gov.au/content/00148826.htm

Feel free to give the office a call if you need any assistance tailoring the calendar to meet your needs.

It’s Tax Time

Whenever anyone asks “What do you do?”  I hesitate.  The conversation generally goes as follows:

“What do you do for work?”

“I’m an accountant”

“Oh…….”  Dead silence.  *Insert crickets*

My occupation tends to be a conversation stopper! We joke in the office about lying about our career choice – in fact my senior accountant often tells people she is an “Awesome Accountant” because at least that way she gets a laugh before the dead silence.  *Insert crickets*

The exception to this very common situation is in the month of July.  Then everyone wants to be my best friend forever.  The conversation generally goes as follows:

What do you do for work?”

“I’m an accountant”

“Really?  Busy time of year huh?  So while I’ve got you can I ask *insert tax question*?”

Honestly?  I love it.  I’m happy to share any information, tips or tricks that I know with any willing listener.  I only wish people would ask me questions all year round.

I realise that payment summary statements (or if you’re old school – group certificates) are issued in the first couple of weeks of July but why does the hype die down so quickly after that?  Surely not everyone who is required to lodge a tax return lodges in the month of July.  Of course I know the answer to that, it’s no.  We do of course get another tiny spike of interest in our careers towards the end of September when the Australian Taxation Office start advertising that the due date deadline is looming.  However once we explain that if you appoint a tax agent (like us!) to prepare your tax work, you actually have until May everything goes silent again.

I know that it’s too often that I meet with a client and there are deductions that should be claimed that aren’t, simply because the client didn’t realise the claim was available.  They leave knowing what information to keep and looking forward to the opportunity to claim but it’s all next year.  Last year I tried to count the number of clients that were astonished once I explained the home office expenses calculation of 34 cents per hour that the ATO allow if you do work from home.  If you do 3 hours a week work from home that’s an extra $55 in tax deductions to claim without keeping receipts.

So here’s my tip:  Ask your tax questions all year round.  If you come across something you think is applicable – contact your advisor and get an answer there and then.  Don’t just store the information in your brain, it might get filed away and not be found until after you next lodge your return.

IQ Accountants provide tax checklists which you can refer to in order to work out what deductions can and can’t be claimed.  It’s also a great tool to assist in collation with your tax documents.  Email info@iqaccountants.com.au if you’d like a checklist.

Happy New Financial Year

My friends point and laugh at me each year when I post this as my Facebook status but I honestly get a kick out of every July 1st.  There’s something cleansing about a fresh financial year and I look forward to catching up with all my individual tax return clients that come into the office only once or twice a year.  At the IQ office, we take a little bit of time at the beginning of each financial year to prepare for the year ahead and this involves reviewing our procedures and implementing some great ideas we haven’t had a chance to do anything about during our busy time.

While traditionally most people celebrate New Year on January 1st with a list of resolutions, I believe that the New Financial Year on July 1st is also a great time to make a list of business resolutions.  Are you already thinking about the personal resolutions that you made earlier in the year that have gone by the by?   Well, let’s make a pact – how about making some New Financial Year resolutions with me and sticking to them?

Here’s how:

  1. Be realistic – come up with one or two resolutions that you can actually achieve.  We all want to make a million dollars this year but if you turned over $250k last financial year, it might still be a few years off.
  2. Make your goal specific – you’ll appreciate it when you look at the yellow sticky note still stuck to your computer later this week and wonder what you meant when you wrote it down.
  3. Be accountable – tell your staff, your other half, your clients.  Make sure these people are going to remind you and ask you and motivate you to stay true to your resolution. Email me at kyelie@iqaccountants.com.au and I’ll happily keep in touch with you to make sure you are on track.
  4. Reward yourself – make your goal measurable so that you can reward yourself when you achieve what you want.

I’ll share my resolution with you – I am going to take this piece of writing and make a blog.  Then I am going to keep it up and running and post to it – weekly.  I plan to tell my staff about this concept in their performance reviews on Friday to keep myself accountable and I’ll also be sharing the blog link with clients, so I’ll have no excuses not to keep up with it.  If I can keep my resolution until christmas, I am going to reward myself with a day at the day spa.  Bliss!!

Now don’t just close this page and forget about your resolution – write it down now and then get started.  And don’t forget to check back in and keep me accountable.

Happy New Financial Year!!

Welcome to the Blog

Hi and welcome to the blog.  I am the owner of an accounting firm – IQ Accountants located in Burleigh Heads on the Gold Coast.

I am also a wife and a mother to 2 kids, aged 2 and 9 months.  Juggling motherhood, my own business and staff as well as keeping in contact with my wonderful family and friends, I am not the stereotyped boring accountant – I promise!

As an accountant, blogging is not my thing but I’m giving it a go after attending a bootcamp run by a professional partner a couple of months ago.  I understand that the Australian Tax System can be complex and am passionate about education.  I am committed to explaining, educating and informing clients in all areas of taxation in easy to understand terms.  At IQ Accountants, my team and I keep in touch with our clients and return all phone calls and emails within 24 hours.  We give the service that we would want to receive.

Education doesn’t just start and finish with my client base – I want to help anyone who wants my help. I realise that I can share some of my skill set with more than just my current clients and this blog is about doing just that.

Being in business myself, I know that it can be like a roller coaster; exciting, scary, thrilling, petrifying and like the wait in the line, sometimes time consuming.  This blog is for anyone who is in business or wants to learn about business.  It’s also for anyone after some tax tips along the way.

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