By now, most people are probably aware that the tax-free threshold is going up.

But what about some of the other changes that are on the way as a result of the Clean Energy reforms?

The government have made good use of the media to let taxpayers know that they are increasing the tax-free threshold. What you may not have heard is that some marginal tax rates are also increasing, and there are major cutbacks to the low income tax offset (LITO) ahead.

So let’s take a look. Watch the 2 minute summary below or scroll down to read about it.

Marginal Tax Rate Changes

The tax-free threshold, of course, is the amount of income that you can earn before you’re required to pay income tax. It’s currently stated as $6,000. However, in reality, the low income tax offset creates an effective tax-free threshold for most people of around $16,000 at the moment.

Australia currently has tiered marginal income tax rates of 15%, 30%, 37%, and 45%.

Next financial year will see changes to the first and second tier. Specifically, from the 1st of July, 2012, the tax-free threshold will increase to $18,200. Once you’ve exceed this amount, you’ll then pay 19% tax; previously, it was 15% on the excess above the tax-free threshold. Then, income exceeding $37,000 will be taxed at 32.5%. Of course, Tier 2 is usually 30%, and this is increasing again to 33% by 2015/2016.

Low Income Tax Offset Changes 

As with the number of other tax offsets lately, the low income tax offset is also poised to be gradually phased out.

At the moment, the maximum low income tax offset rebate is $1,500, and you’ll receive the full $1,500 if your taxable income is under $30,000.

More taxpayers will be eligible for the maximum rebate in 2013, as the threshold is increasing to $37,000. However, the amount has been reduced to just $445 for next financial year, and, of course, this is decreasing again to $300 in the next round of tax changes.

What’s the difference?

What does this mean for you in real-dollar terms? I’ve quickly calculated the effect of these changes on a number of incomes to give you an idea of the bigger picture

If your taxable income is $37,000, you’ll pay $1,078 less tax but receive $775 less low income tax offset. That’s a net benefit to you of $303 in the 2013 year.

It’s a similar result for incomes of $60,000 ($303 overall saving).

At $85,000 you’ll see a tax saving of just $3 in the 2013 financial year.

It’s worth stating that you won’t necessarily be better off by a few hundred dollars in the 2013 year. Keep in  mind that aside from the changes above, we’ve also seen the end of the the entrepreneur’s tax offset and the phasing out of the dependant spouse offset. Don’t forget some big changes to the private health insurance rebate, Medicare levy surcharge, pensioner tax offset, and a whole host of other areas.

There are a lot of things to stay aware of when it comes to your income tax.

An opportunity exists for an experienced Office Administrator to join the team at Alan Lewis Accountants. We are a fast-growing  Central Coast firm based in Lake Haven.

This role is hands-on and requires someone who is self-motivated and has the ability to work independently as you will be responsible for managing the many day-to-day functions of a busy professional office.

We are looking for someone with a track record in office administration.  Your administrative experience may come from a different field, but you must have a proven ability to work under pressure and prioritise.

Key responsibilities:

•  Initial contact for enquiries, telephone calls and visitors.  Managing the calendar of a busy office.
•  Monitoring incoming and outgoing mail and emails, responding where necessary.
•  Invoicing and monitoring accounts payable.
•  General office duties such as filing, banking and providing administrative support to other staff members.

To be successful you must have:

• Excellent communication skills, both written and verbal.
• High standard of customer service
• Ability to work independently and to deadlines
• Strong computer skills
• The ability to produce business correspondence and proofread own work with a high degree of accuracy.

The right candidate can become a key part of our small team and will be afforded plenty of opportunity for future training and development.

This is a part-time role of between 24-32 hours, though there will be an opportunity for an  increase in hours available over the busy tax period (between July and October). Salary is negotiable, based on skills and experience.

If you are the right person for us, please email christie@lewistaxation.com.au. Your email should include a cover letter telling us why you’d be perfect for the position.

A couple of years ago, I was compelled to write the post Job Applications: What NOT to do – 10 quick tips. If you are looking to apply, I would encourage you to give it a quick read.

As it stands at the moment, almost anyone under 65 in entitled to a 30% private health insurance rebate, and it’s even more if you’re over 65. Most people receive this benefit directly in the form of reduced insurance premiums. Otherwise, it can be claimed in your income tax return.

There’s been a bit of talk lately about changes to the Private Health Insurance Rebate and Medicare Levy Surcharge. Watch the 2 minute summary below or scroll down to read about it.

According to the government, the Private Health Insurance Rebate is the fastest growing cost to the health system. It’s no surprise that they would want to scale it back.

Under the new legislation, means testing of the rebate will start from the next financial year.  In addition, the Medicare Levy Surcharge will increase for some taxpayers.

What stays the same?

If you’re an individual earning under $83,000, or a family with income less than $166,000, you won’t be affected at all by the changes. Your rebate is going to continue as usual, and you won’t have to worry about the Medicare Levy Surcharge at all.

What is changing then?

From 1st July 2012, we’ll see the introduction of  three new ‘Private Health Insurance Incentive Tiers’. You might recall that the idea of health insurance tiers was first announced in the 2009-10 Federal Budget.

As your income increases, the subsidy starts to decrease before cutting out entirely once you’ve reached Tier 3.

As you can see in the table above, the cut-off point is $129,000 for singles and $258,000 for families. Once you have reached the cut-off threshold, you will no longer be eligible for any portion of the private health insurance rebate. More concerning for taxpayers in tier 2 and tier 3 are the changes to the Medicare Levy Surcharge.

Medicare Levy Surcharge

As it is today, the Medicare Levy Surcharge (MLS) is calculated at a flat rate of 1%. This is in addition to the 1.5% Medicare Levy.

Under the changes, the MLS is also going to start to increase as you go up each tier; starting at the usual 1%, increasing to 1.25% and finally hitting 1.5% for tier 3 taxpayers.

For upper income taxpayers without private health insurance, this could mean as much as an extra $1,935 for singles or an extra $3,870 for members of a family. Ouch!

If you have any questions at all, use the comment section below or you can read the details of the Fairer Private Health Insurance Incentives Bill 2012 online.

It’s widely known that the Tax Office counts restuarants, coffee shops and cafes amongst the high-risk cash economy businesses.  Data matching is one of the main indicators used to detect businesses under-reporting their cash income. So, in a continuing effort to combat these practices, the ATO is now taking a greater interest in the coffee industry.

Coffee Supplier Data Matching Program

The ATO will collect the details of individuals and businesses that have purchased more than 15kg of coffee per week in either of the  2009-10 and 2010-11 financial years.

Information will be sourced from:

• Segafredo Zanetti Australia Pty Ltd (suppliers of Segafredo)
• Cantarella Bros Pty Ltd (suppliers of Vittoria Coffee, Aurora and Delta)
• SL/DE Holdings (Australia) Pty Ltd (suppliers of Piazza d’Oro and Douwe Egberts)
• Valcorp Pty Ltd (suppliers of Lavazza)
• Primo Coffee Pty Ltd
• Complete Coffee Pty Ltd (suppliers of Primo Caffe Bar Coffee Range and Caffe Di Stefano Signature blend)
• Coffex Coffee Pty Ltd 

It is expected that records of more than 8,000 individuals will be matched.

Second Commissioner of Taxation Bruce Quigley says, ‘the message to tax cheats is clear – with increasing sources of information coming to the ATO, if you don’t play by the rules, you are more likely to be caught and penalised’.

This program was announced in the Commonwealth Government Notices Gazette GN7.

Of course, there are many more  data matching programs than just the nine we have covered recently. I think we’ve covered enough compliance stuff  for this week so we’ll wrap up the series here. Thanks for sticking with us.

Yes, I’m still posting on the subject of ATO Data Matching. I had planned to wrap up our little series after 7 days but as the ATO have recently announced details of further data matching initiatives, let’s continue.

Unsurprisingly, the Tax Office have their sights on the cash economy…. and that means a particular focus on the building industry.

Building Industry Data Matching

The ATO will collect the details of individuals and businesses that hold trade accounts with purchases between $10,000 and $3M in the 2009-10 financial year.

This information will be sourced from Westfarmers Limited (Bunnings Group Ltd)

I’m reminded of a case a couple of years back when Tax Office Benchmarks first came into play. A brickie was caught out under-reporting income based on nothing but purchases information the ATO collected from his suppliers. Using this information, they issued a default assessment based on what they thought his income would have been. The penalties were horrific.

This type of data matching is nothing new, but it is something to be aware of.

In addition to checking  trade accounts, the ATO will be obtaining complaints and/or licensing information for the 2009-2010 and the 2010-2011 financial year from:

• NSW Fair Trading
• Queensland Building Services Authority
• Government of South Australia Consumer and Business Services.

These details will be matched to identify non-compliance with registration, reporting, lodgement and payment obligations under tax law.

It’s expected that the records of around 20,000 individuals will be compared to Tax Office data.

Reality Check:  The ATO are aggressively using Data Matching, Small Business Benchmarks, Default Assessment Notices and other tactics to combat non-compliance.  Just because you’ve always gotten away with something in the past, doesn’t mean that you’ll continue to.

The reality is that honest taxpayers working in these industries are likely to attract some attention too. Good record-keeping is key here… from a tax office perspective, poor records are often a symptom of poor compliance.

As youself this: If a default assessment arrives, will you be able to disprove it? 

This program was announced in the Commonwealth Government Notices Gazette GN7.

Big Brother is watching! Every morning this week we’ve been having a quick look at some of the data matching programs the Australian Taxation Office (ATO) is running. This will be our final instalment in this short series. Today we’re looking at what the ATO is checking up on within the legal profession.

Legal Profession Data Matching Project

The ATO will be collecting current membership and deregistration information for members deregistered in the 2008, 2009, 2010 and 2011 financial years from several legal professional associations.

More specifically, data will be sourced from:

•  Law Society of the ACT
•  ACT Bar Association
•  The Law Society Northern Territory
•  The Northern Territory Bar Association
•  The Law Society of New South Wales
•  The New South Wales Bar Association
•  Legal Services Commissioner and Legal Practice Board of Victoria
•  Queensland Law Society Incorporated
•  Bar Association of Queensland
•  Legal Practice Board of Western Australia
•  Legal Practitioners’ Registrar of South Australia
•  Law Society of Tasmania, and
•  The Bar Association of Tasmania.

The approximate number of individuals affected by this particular data matching project is 50,000.

The ATO is looking to identify people outside of the tax system and adress non-compliance with lodging and debt repayments.

This program was announced in the Commonwealth Government Notices Gazette GN45.

All of this week we’ve been taking a quick peek at some of the data matching programs the Australian Taxation Office (ATO) is running. Today’s program is set to target employers.

WorkCover Data Matching Project

The ATO will collect names and addresses of entities within the State’s and Territory’s Workcover Authority for the 2010 financial year.

Records relating to more than 20,000 individuals registered with all of the Workcover Authorities will be matched.

Why?

The ATO hope to identify non-compliance by employers with lodgement and payment obligations under tax law.

Information for this data matching program will be sourced from:

• WorkSafe Victoria
• WorkCover South Australia
• WorkCover New South Wales
• WorkCover Queensland
• WorkCover Western Australia
• WorkCover Northern Territory
• WorkCover Australian Capital Territory
• WorkCover Tasmania

This program was anounced in the Commonwealth Government Notices Gazette GN45.

Every morning this week we’ve been outlining some of the data matching programs the Australian Taxation Office (ATO) is running. In today’s instalment we’re looking at one of the ways the ATO identifies ‘wealthy’ taxpayers.

Pleasurecraft Data Matching Program

The ATO is matching data related to the ownership of pleasurecraft.

The objective is to identify individuals who have insured pleasurecraft with a value of $25,000 or more.

This information, when combined with other wealth indicators, will assist in identifying taxpayers whose net wealth is such that their affairs should be reviewed under the highly wealthy individuals or wealthy Australians programs.

The matching process will be applied to about 110,000 insurance records.

The information will be supplied by the following marine insurance companies:

1.  Suncorp Metway Insurance Ltd
2. GIO General Limited
3. Australian Alliance Insurance Company Limited
4. Vero Insurance Limited
5. Club Marine Limited
6. QBE Insurance (Australia) Limited
7. Wesfarmers General Insurance Limited
8. Nautilus Marine Insurance Agency Pty Ltd
9. Insurance Australia Limited
10. CGU Insurance Limited
11. Insurance Manufacturers of Australia Pty Limited
12. Associated Marine Insurers Agents Pty Ltd
13. RACQ Insurance Limited

This program was anounced in the Commonwealth Government Notices Gazette GN48.

Each morning this week we’ve been taking a quick peek at some of the data matching programs the Australian Taxation Office (ATO) is running. This will be our fourth instalment in the series. Today the ATO have their sights on temporary visa holders in an effort to target refund fraud.

DIAC/ATO Temporary Visa Data Matching Project

The ATO has collected the names, addresesess and other details of entities who have applied for Visa Subclasses 406,410, 411, 415, 416, 417, 418, 419, 420, 421, 422, 423, 424, 426, 427, 428, 442, 457, 462, 570, 571, 572, 573, 574, 575, 576, 580 between 1 July 2008 and 31 March 2011.

This information is provided by the Department of Immigration & Citizenship.

Records relating to anyone who applied for and was granted visas under these subclasses will be matched against ATO data.

The Tax Office is hoping to identify cases of potential refund fraud aswell as other non-compliance with tax law regarding registrations, lodgement and payment obligations.

This program was announced in the Commonwealth Government Notices Gazette GN45.

If you operate your business through a company or a family trust, you are most likely an employee of your business (sole traders and partners are generally not employees).

Benefits that are paid to employees that are not wages are fringe benefits and may be subject to Fringe Benefits Tax (FBT).

Examples of a fringe benefit could be the business paying for a golf club membership, or paying for home loan repayments on a private home, or supplying a car for private use.

Entertainment is also a fringe benefit. It covers a variety of things and specifically captures the employee’s share of lunches and dinners at restaurants paid for by the business even if they are business lunches (light lunches on your business premises are generally not entertainment).

The employee’s entertainment cost is grossed up as if the amount paid for dinner was the net wage paid to the employee and the employee was at the top tax rate.

A meal cost (after claiming GST) will be treated as the net pay and grossed up by 2.0647 times. FBT is charged at the highest personal tax rate of 46.5% on this grossed up amount.

There are several methods that you can use to determine the cost of the employees meal.

Entertainment that is not subject to FBT is not tax deductible and you can’t claim the GST.

This can be difficult to understand so here is a simplified example to illustrate.

You operate the business through a company and it is registered for GST. You take a client to lunch at a restaurant to discuss business, and lunch costs you $110 including GST. Using the 50/50 method the split is deemed to be $55 for the client and $55 for you.

- For the client – your company cannot claim the GST credit and will not get a tax deduction for his $50 as the company doesn’t have to pay FBT.

- For you – your company can claim the GST credit of $5. The company will need to pay FBT = $50 x 2.0647 (gross up) x 46.5% = $48. This FBT is tax deductible and so is your portion of the lunch. Therefore, your company will get a tax deduction and save tax = lunch $50 x 30% = $15 and FBT $48 x 30% = $14.

The net tax result is that the lunch would cost the company extra tax = $48 – $15 – $14 – $5 = $14.

A $110 lunch would cost the company a total of $124 (plus a lot of accounting fees).

You can still take clients for lunch at a restaurant but it may not be worth the company paying for it. It may be better to meet at your business premises and have a light lunch and drinks there over the meeting.

There is also the provision that disregards minor fringe benefits under $300 that are infrequent and irregular. This would not apply to the above example as you cannot use it with the 50/50 method. It can be used with other methods if it was a benefit that happened once in a while. There is no substantial guidance on what is “infrequent and irregular”. In the words of the ATO “it is not considered appropriate to stipulate the number of times benefits that are identical or similar can be provided for the purposes of the infrequent and irregular criterion”

FBT is complex so this is general advice only. It is best to talk to an accountant about your own particular circumstances.

(This post first appeared last month on Bolin Accountants blog, titled “Business Lunches and Dinners.”  Many thanks to the wonderful @bolinaccountant for allowing us to reproduce it here for our readers. – Christie Lewis)

Each morning this week we’ve been taking a quick look at some of the data matching programs the Australian Taxation Office (ATO) is running. So far we have seen how the ATO uses information provided by the the banks and Centrelink.

Yes, the ATO keep an eye on Motor Registry records too.

Motor Vehicle Data Matching Program

The ATO will collect details of individuals or businesses that have sold, transferred or newly registered a motor vehicle valued at $10,000 or more. Information will be gathered for the period 1 July, 2010 to 30 June, 2011 (the 2011 financial year).

It is expected that records relating to around 2.7 million individuals will be matched.

Generally, the acquired information will be compared to ATO data holdings to identify non-compliance with lodgement, payment and correct reporting obligations under tax law.

More specifically, the ATO uses motor vehicle data to identify taxpayers whose expenditure is in excess of their reported income. If you’re participating in the cash economy, Mr Taxman might just want to know how you can afford that car you’re driving.

It’s also a great way for them to identify businesses that sell vehicles and either do not report, or under-report those sales.

This data will be sourced from:

• New South Wales – Roads and Traffic Authority, NSW
• Queensland – Queensland Transport
• Victoria – Vic Roads
• Tasmania – Department of Infrastructure, Energy and Resources
• South Australia – Department for Transport, Energy and Infrastructure (Transport SA)
• Western Australia – Department for Planning and Infrastructure
• Northern Territory – Northern Territory Department of Planning and Infrastructure (Transport Division), and
• Australian Capital Territory – ACT Road Transport Authority, Road User Services, Urban Services

This program was announced in the Commonwealth Government Notices Gazette GN49.

Big Brother is watching! Each morning this week we’ll be taking a quick peek at some of the data matching programs the Australian Taxation Office (ATO) is running. If you missed it, yesterday we outlined the Debit and Credit Card Data Matching project which is expected to involve around a whopping 400,000 entities.

The Dependant Spouse Tax Offset has hit the headlines a few times since the Budget last year due to the number of changes underway. It is also one area the ATO have target for data matching.

Dependant Spouse Tax Offset Data Matching Project

The ATO will collect the names, addresses and other related information from the Deptartment of Human Services (Centrelink) of taxpayers:

• Eligible for Family Tax Benefit part B for the financial years 2009, 2010 and 2011.
• Who received parental leave pay for the 2011 financial year.

Records of approximately 1.3 million individuals will be matched against ATO data to identify non-compliance with tax obligations regarding the Dependant Spouse Tax Offset.

The obvious conncetion here is that if your spouse received these payments, you would not be eligible to claim the offset.

I expect quite a few self-preparers will get caught out in this one. Not becuase they were trying to defraud the ATO, but simply by not being aware of all the conditions surrounding this particular tax offset.

This program was anounced in the Commonwealth Government Notices Gazette GN45.

Last weekend I prepared a series of posts outlining some of the ATO Data Matching programs in the mix at the moment. Unfortunately, the blog database had to be restored and I lost most of that content. So this is take two! Let’s go again….

Each morning for the next seven days we will outline some of the details relating to one of the Tax Office’s current data matching programs.

Today we’ll be starting with a look at how the ATO is using data matching to catch out business owners pocketing cash and not reporting all of their income.

Credit and Debit Card Data Matching Program

The ATO will collect information about the debit and credit card sales of merchants accross various industries. The information currently being matched relates to the period 1 July 2010 to 30 June 2011 (the 2011 financial year).

It is expected that this will involve data for around 400,000 entities.

The objective is to identify non compliance with registration, reporting, lodgment and payment obligations under tax law.

In particular, the ATO is looking for those who are participating in the cash economy and potentially skimming some of their cash takings (or not reporting any at all).

The ATO have obtained data from the following banks:

• Commonwealth Bank of Australia
• St George Bank
• Westpac Banking Corporation
• Australia and New Zealand Banking Group Limited
• National Australia Bank Limited
• Bendigo and Adelaide Bank Limited
• Bank of Queensland Limited
• BWA Merchant Services Pty Ltd
• American Express Australia Ltd
• Diners Club Australia

Anyone who is running part of their business ‘off-the-books’ is encouraged to make a voluntary disclosure of any under-reported amounts.

This program was anounced in the Commonwealth Government Notices Gazette GN49.

Sometimes less information can be a lot more informative. This is usually the case when it comes to producing meaningful reports from your accounting software.

Don’t get me wrong, detailed reporting can provide tremendous insights for management. However, for many small businesses, too much detail results in too little information that’s genuinely useful.

Just because your accounting software comes with a seemingly endless Chart of Accounts, does not mean you should use every one of them.

There’s a fundamental convention in accounting known as ‘materiality’. Typically information is material if its ommission or misstatement could influence the decision of users. Materiality ensures that information is sufficiently precise without including unnecessary detail. Of course, what’s material for one business may be incidental to another.

Here are a few examples of counter-productive (and time consuming!) practices that have crossed my desk in recent weeks.

Example #1.

Separating duties within insurance policies and then posting them to their own accounts.

While it is important to claim the right amount of GST (there’s no GST on the duty portion), having these listed separately on the Profit & Loss is not helpful at all. Remember, the whole idea behind these reports is to provide relevant and meaningful information.

Whether financial data is material or not depends not just on its users but on its purpose. Presumably, the first purpose here is to accurately monitor details of income and expenses for the owner to access easily.

The business has no control over the duty portion and it simply forms a part of the insurance cost. Being over-zealous in this way has made it impossible for the business owner to simply see what their actual insurance expense is. In order to get to this figure, they would need to add the Insurance and the Stamp Duty accounts together again. They have spent more time in making the report less useful.

Dissecting the data in this way has made what should be simple-to-access information, far less accessible.

Example #2

Separating the cost of a postage stamp from the envelope it was sent in and allocating costs between postage and stationery.

This might be relevant information for your business. In our own business, postage often represents several thousands of dollars and I do track it independently from any other expenses.

However, for many small businesses, it may be more useful to simply include the occasional postage stamp with stationery/office supplies.

I was trawling through a 4 page client-provided P&L the other day when I couldn’t help notice that postage of $1.80 for the year (representing less than 0.002% of total expenses) had a whole account of it’s own. If you’re a typical small business with a 4 page Profit & Loss, you’d benefit by consolidating some of those insignificant accounts.  Ditch the information overload and embrace the KISS principle instead…. you’ll get a lot more out of it.

There are times when pinpoint accuracy should take a backseat to common sense.

Example #3

Separating the florist’s delivery fee from the actual cost of the flowers and tracking the costs between a Freight account and a Customer Gift account.

If sending floral tributes is an important part of your client service strategy and you have some control over delivery costs, this might be materially relevant to you.  For the average business who occasionally sends a gift to a customer (and has little option but to use the delivery service provided by the florist), tracking freight on gifts in a whole other account is a pointless exercise.

Although it may be technically accurate,  it fails to simply provide the relevant information  - in this case, the cost to the business for client gifts. To get this information, the user would have to add back the Freight expense to the Gift expense.  Including the delivery expense in the Gift account with the cost of the flowers paints a far more accurate and clear picture. Management could then see at a glance the real cost of sending customer gifts.

Keep it simple. Use your judgement and consider whether it is really “significant” or “material” to your business to split accounts a certain way. After all, you don’t want to make extra work for yourself (or for the person you’re paying by the hour to do it for you). Most importantly, you want to produce information that’s accurate, fast to find and meaningful for you.

Remember that all employee superannuation guarantee contributions for the December quarter should be paid into funds by 28 January, 2012.

Employee super contributions actually paid by this date will be eligible for a tax deduction. It is important to meet the 28 January deadline in order to qualify for a tax deduction and avoid having to pay the super guarantee charge.

The December quarter covers the periods of October, November and December, 2011. Please note that the super guarantee applies to all employees; including directors in receipt of a wage.

The Tax Office is focussing much of their compliance efforts on uncovering instances of employers not understanding and meeting their super obligations. Common mistakes identified by the ATO include:

• paying insufficient super contributions for eligible employees
• missing the quarterly cut-off dates
• not understanding that in some circumstances super should be paid for contractors
• not keeping accurate records
• not passing on an employee’s tax file number to their super fund
• not lodging a Superannuation guarantee charge statement if employees’ super is not paid into to the fund by the due date or is not the correct amount.

If you have any questions or wish to speak with us about your obligations, please do not hesitate to contact our office on 1300 35 22 35.

Is debt ruling your life?

Student debts, credit cards and personal loans can be a source of unnecessary stress and prevent you from enjoying other things in life.

Clearing your debts doesn’t have to be hard work. With the right professional advice, it’s possible to get your finances on track sooner than you think. Which means you can get back to living the good life, guilt free.

Here are some tips to help you get out of debt.

Plan your budget

Achieving your goal of being debt free doesn’t have to be daunting; a good way to start is with a budget. Try to keep a diary for your expenses and your spending. This will enable you to track where your money is going and how much spare cash you can use to attack your debt.

Pay extra

Try paying more than the minimum off your debts. Whether it’s personal loans or credit cards, paying the minimum will hardly make a dent as you will only be paying off the interest.

Prioritise

Prioritise all your debts by the interest rate you are paying. Try to get the balance down on high interest debts first, as paying these off first will save you a bit more money. The money you save in interest, you can then use to pay off your lower priority debts. This will get you to your debt free goal that little bit faster.  

Consolidate

Consolidate all your higher interest debts into one lower interest debt. This could be in the form of a low interest rate credit card or a personal loan. This strategy will also reduce your interest repayments.

Ensure you have the right card

There is no need for anyone to be paying 20 per cent interest on their credit cards. Due to the increased level of competition in the credit card space, many lenders are offering much lower interest rates and deals.

When doing your research, make sure you read the fine print, as cards offering low or zero interest rates on balance transfers, do so for a limited time only whereas other cards might offer a low interest rate for the life of the transfer.

Become card free

Once you have selected a low interest rate card to transfer your balance, make sure you don’t use that card for any new purchases until you have paid off the full amount from the initial transfer. The best way to do that is the old fashioned way – cut your card up and throw it away!

Take the first step

If you’re having difficulties repaying your debt, take the first step and speak to your lender. If you’re open and honest about your financial difficulties with your lender, you will probably find they are open to review your repayments and look at other solutions to help you out.

Speak to a professional

If you feel that you are in over your head and struggling with your finances, don’t ignore the situation. It won’t go away! Seek professional advice and take control of the situation.

Contact our office today on 1300 352235 to book a completely free, no-obligation consultation with our financial planner.

The November edition of our Tax Update newsletter is now available for download from the main site.

This issue includes information on:

• Christmas Gifts
• Small Business Benchmarks
• Record-Keeping for Business
• ATO’s New Property Web Page
• Pacific Seasonal Workers’ Tax Rate Reduced

This particular newsletter is available for download exclusively for clients (a username and password is required).

If you are not a client and would like a copy of the November Tax Update – or you do not know your login details – simply email Christie (christie @ lewistaxation.com.au) and I will be more than happy to forward a copy on to you.

A new Bill has been introduced into parliament to establish a payroll tax rebate scheme which is intended to encourage the employment of people with disabilities (as opposed to the general dis-incentive payroll tax offers for employing people).

The Payroll Tax Rebate Scheme (Disability Employment) Bill 2011 will provide employers with a payroll tax rebate of up to $4,000 per eligible employee.

The $4,000 rebate will be paid in 2 equal instalments – $2,000 after 3 months of employment and a further $2,000 after 6 months of employment.

Eligible workers are new employees that have completed the Family and Community Services funded Transition to Work program and are working a minimum of 12 hours a week, on average.

More information on how to apply for this rebate will be available later in the year and so we’ll keep you updated.

Central Coast Accounting Firm seeks experienced office manager/ accountant.

Alas, our fabulous office manager/senior bookkeeper is leaving us shortly. Sharen is off to manage the expansion of her own successful family business. We’re thrilled for her, of course, but I did consider the possibility of chaining her to the desk in her office so she can’t ever leave (word of warning, Fair Work tends to frown on that kind of thing). 

Now, we’re a small team and so often each wear multiple hats. With the news that our current super-star is leaving us, I’m afraid I’ll be wearing so many hats I won’t be able to hold my head up.

So now the search is on for a multi-skilled candidate who can replace an irreplaceable team member (no pressure!) and support me in different administrative and business development tasks.

What I need right now more than anything is:

• someone who can assist in the preparation of BAS and quarterly reports (minimally, be able to take it to a stage where it just needs review and perhaps adjusting entries);
• someone who can liaise with clients, handle routine requests, follow through and follow up to ensure all client needs are being met, be proactive in developing relationships;
• someone who can manage and instruct the front office staff (delegate tasks, ensure database is maintained, monitor jobflow, implement/update procedures, generally watch over the day-to-day stuff);
• someone who can assist in the preparation of proposals/engagements and other client communications, including marketing materials and newsletter content.

In essence, I need someone who can see what needs to be done and does it.

I don’t expect to find a new and improved hybrid of Sharen and myself who can leap tall buildings in a single bound as they fly in to work on the first day. I do expect a confident all-rounder who can hit the ground running.

It is essential this individual is

• familiar with the accounting environment,
• proficient in fundamental accounts preparation (even better if you’re an experienced accountant who can prepare  business tax returns and financial statements to review stage),
• able to connect with people, and
• know their way around Office software (bonus if you’re already trained in Handisoft).

I need someone who can produce quality output with minimal supervision.

I anticipate the successful applicant would have a proven track record that demonstrates the above. 

Although I am primarily seeking a replacement for Sharen, I’m open to the possibility of an intermediate or senior accountant with a hands-on approach to clients and projects.

If we can get excited about you, and you’re excited to work with us, that’s a great first step… the rest are details to be worked later based on the skill set and expectations brought to the table. 

 If this sounds like a position that may interest you, look us up online (we have the blog, website, Facebook , Twitter, etc). Get an idea for yourself on who we are, what we are about and whether or not you see yourself as a fit.

Send a resume by all means, but only with a compelling reason to open it. Let’s face it, what I really want to  know is who you are, what you can do for us, and why we should hire you.

Your time is just as valuable as mine so if you have your own ‘hope-for’s’ or ‘must-haves’ feel free to share them also.  

We can be quite flexible when it comes to hours and working arrangements for the right person.

The question is, are you the person I’m looking for? 

Feel free to send any expressions of interest, questions or applications to christie@lewistaxation.com.au. You might want to check out one of my earlier posts titled Job Applications – What NOT to do for a couple of quick tips.

Exciting news this week with the much-anticipated self-managed super fund (SMSF) draft ruling from the ATO, SMSFR 2011/D1. 

Many people are probably aware by now that you can borrow and purchase properties within a SMSF (we’ll post more on this in coming weeks). What hasn’t always been clear are some of the issues surrounding capital improvements of the property within the fund. The draft views expressed by the ATO confirm the opinion our associates at the 2020 Group have always supported. In fact, the ruling provides quite a few positives for limited recourse borrowings in respect to real property, making the solution even more attractive than ever.

Principal of the 2020 Group, Nic Ellis, is continually striving to find new and unique strategies to create wealth for clients. After the release of the ATO’s ruling, Nic had this to say:

“The ATO have confirmed the 2020 Group’s opinion that SMSF’s can renovate investment properties. We’ve been the only firm who has stood by this concept.”

What does this mean for you? According to Nic, you can add value to your investment property by renovating or adding extentions. Best of all, all of this can be funded directly from the SMSF with no out of pocket costs to you. I’ll let Nic tell you more about it himself in the video below….

If the idea of investing in property through a SMSF has peaked your interest, or you’d like to know more, give the team of experts at 2020 Financial Solutions a call on 1800 46 2020. Their integrated service includes all advice, structures, legal work and Conveyancing needed to complete the deal. They’ll even project manage the entire process for you!