Wood Accounting Blog

10 Things you need to know about Land Tax in NSW

noreply@blogger.com (Ben Wood) — Sun, 15 Jan 2012 08:32:00 +0000

10 things you need to know about Land Tax in NSW
Land Tax is one of those taxes that flies under the radar of many property holders. We have seen many property holders caught unaware of this tax resulting in a large multi-year bill. Here is a quick overview of things you need to know:
Land Tax is self assessment. You must be aware of this tax and register with your state revenue service. Pleading ignorance is not a excuse for not being registered.
Land Tax is NOT applicable to your personal home or "principle place of residence" UNLESS you rent it out for a period of time that crosses the 31 December date.
Land tax is payable on land even if it is not earning any income such as vacant land, hobby farm or a holiday home.
NSW Land Tax is levied on NSW land you hold at midnight every 31st December. Land Tax year 2012 is based on unimproved land value at 31 December 2011.
The Land Tax Threshold for 2012 is $396,000 in NSW.
Land tax in NSW is calculated at $100 + 1.6% of land value in excess of $396,000. Property with a land value of $500,000 would attract $1764 land tax in 2012. Calculator here
Land Tax is based on the most recent Notice of Valuation issued. Many NSW property owners would have just received a valuation letter valuing the land at 31/07/2011.
Land Tax is a state tax so you need to be aware of the limits and tax rates in each state in which you hold property that is not your principal residence. Each state is only concerned about land you hold in that state and each state treats land tax differently.
If you own land with other people we need to do some calculations as each individual has a land tax threshold. Your share of each land parcel is added together to give you a total land holding each year.
There are investment structures we can use to save you thousands of dollars in land tax. We recommend all property investors talk to us before buying property anywhere in Australia.
Further information can be found in the NSW Land Tax 2012 Information Booklet.

Wood Accounting specialises in assisting property investors in all states of Australia. Call us on 1300 098 852 to discuss your property tax issues.

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Business Tax Tips

noreply@blogger.com (Ben Wood) — Thu, 09 Jun 2011 05:45:00 +0000

note these are general tips for you to consider. Seek professional assurance that any action you take is within tax or any other law.

Everyone is talking about last minute tax deductions this time of year so we have tried to take a more whole of business approach to these tips. If you would like to discuss or explore any of these tips any further please contact us. 1300 098 852

Read this list a write a plan of action for yourself with a due date of 25th June.

Pay June super before 30 June to get a tax deduction. You can also prepay other expenses such as insurance. Contribute excess cash flow or profit to super and pay 15% tax instead of your marginal rate or 30% company tax rate.
Delay some June invoicing until July - This is just moving the issue to the next year but it gives you more time to plan a better solution
Review your director’s loan to ensure you do not owe the company money. If you do discuss with your accountant ASAP to discuss a Div7A loan agreement
Review your depreciation schedule and flag any assets that are no longer in use or sold.
Review your insurances If the business is you and you are not insured you are running a MASSIVE risk. You can insure against this.
Review and renew your CRITICAL business assets. Assets costing less than $1000 can be a 100% tax deduction. New computers, mobile phones and equipment can improve productivity. There is nothing worse than seeing business people using ancient equipment that is hampering their productivity.
Outsource the stuff that takes up your time. You only have so many hours per day. Outsource IT, bookkeeping etc to a contractor or part time employee. You can even get virtual assistants these days to look after your annoying tasks that detract from you doing your core work. Factor your hourly rate into how much time you spend doing things as well as the actual cost.
Structure - is your business structure right for your medium to long term goals? If you are building a business to sell or are running your business with others your structure is EXTREMELY IMPORTANT.
Ensure you are looking at regular profit and loss and balance sheet accounts for your business. DO NOT use the excuse that you do not understand them. Ask your accountant to explain them. Establish some Key Performance Indicators (KPIs) in consultation with your bean counter. That may sound like management speak but successful business people have their eye on 3- 6 KPIs on a regular basis. If you can get a profit and loss with a column for each month then that will be even better.
Review your software. List each software that you use in your business both income earning and admin software. Are they doing what you require? Move what you can to the cloud by 1st July. Advantages are no server required, no install. Best of breed at the moment are

Xero - online accounting, invoicing, live bank feeds
Paycycle - online payroll
Google Docs - online office documents and storage
Vend - online Point of Sale
others here

Staff reviews - this should be done at least every 6 months. Keeps staff engaged and ensures they feel their opinion is valued. Job descriptions, performance appraisals, employment contracts, plan training. www.businessballs.com . Hiring new staff is costly in terms of time and money so retaining staff is crucial. Consider your whole business capacity and if you have enough staff to service your current clients. If not growing your client base could be a disaster for everyone.
Review client base - Categorise your client base into 2 or 3 categories. This can be surprisingly therapeutic.

Ideal clients - minimum fuss, pay on time, refer clients to you. Reward them
Ok clients - same as above but do not refer. Contact them to catch up and ask for referrals
Bad clients - everything is a drama, always pay late, question everything you do. Break up with these pests.

Budget for the next 2 years. not just income but expenses too. Use Excel and base forecasts on your latest profit and loss.
Business plan - This does not need to be 20 pages. Just use 2 pages and make notes under the heading, Marketing, Competition, Mission Statement, Finances, Business and product description. Templates for business plans are here. Planning to get out of your business needs to be done as far in advance as possible so include that too.
Disaster recovery plan. Take a minute and think about the worst situations in your business. Fire, dead computers or server, staff or customers stealing intellectual property, assets or money etc. Backup critical data, take it off site regularly, get insured, implement employment contracts, tighten cash handling or banking processes so two people are checking transactions.

Hope this helps you supercharge your business.

Google Places

noreply@blogger.com (Ben Wood) — Tue, 17 Aug 2010 23:02:00 +0000

Google has a business directory built into Google Maps. Make sure your business is represented and that you have CONTROL of the details on the web.

Hit this link and take ownership of the FREE advertising. This will raise your profile on Google searches and help customers find your business.

http://www.google.com/local/add/analyticsSplashPage?gl=US&hl=en-US

Be sure to add as much detail as possible such as trading hours and contact numbers.

ATO turns up the heat on the cash economy

noreply@blogger.com (Ben Wood) — Wed, 11 Aug 2010 21:53:00 +0000

Business owners beware. If you business or industry deals in a lot of cash the ATO are ramping up their compliance teams to check your figures (read audit).

As mentioned before on this blog ATO will use Small Business Benchmarks which they have developed to determine is a business is operating outside the normal range for their industry.

Your best option is to look at your industry benchmark and

determine if you are within the acceptable range. If not you need to move in that direction and or amend prior period tax and BAS returns to reflect the truth.

Further detail here

Business and Social Media

noreply@blogger.com (Ben Wood) — Mon, 09 Aug 2010 03:36:00 +0000

Want to know how social media such as blogs, Facebook, Twitter and LinkedIn can be used to promote your business.

Sutherland Shire Business Enterprise Centre is running a workshop to help get you started.

http://www.becsmallbiz.com.au/training/social-media-workshop.html

I must admit that I was skeptical at first but we have not looked back since introducing it into my business. While some businesses may not be suited to this kind of media almost all businesses will be able to use at least one of the social media streams for business.

Business Benchmarks

noreply@blogger.com (Ben Wood) — Thu, 08 Jul 2010 03:18:00 +0000

Business owners beware. The ATO has a new tool (weapon) that they are using to double check that business clients are preparing their GST and Income tax returns correctly.

ATO have developed benchmarks for over 100 industries by compiling information from prior year tax and BAS lodgements within each industy. If your figures fall outside of the benchmark that applies to you I would expect a "please explain" letter to arrive in the mail. Some benchmarking is more detailed than others but the ATO will certainly look at wages, rent and purchases of inputs as a percentage of the total turnover.

This will quickly expose businesses that take cash payments and do not declare that income. This effects GST revenue and income tax revenue. If you run a business that receives cash income and none of that gets banked how do you think the ATO will react to that?

If you run a business compare your figures to the benchmarks and take action to correct any mistakes or at least figure out a valid reason why your situation is different. Remember the onus is on YOU to prove you are doing everything right.

Education Tax Refund

noreply@blogger.com (Ben Wood) — Tue, 29 Jun 2010 22:19:00 +0000

Parents who receive Family Tax Benefit - Part A and have school age children should do a quick check to ensure that they have spent the allowable amount on eligible school related expenses by 30 June.

You may be eligible to get 50% back on eligible expenses up to $780 for primary kids and $1558 for secondary school kids.

This essentially translates to a half price laptop per kid.

Time is running out fast so act now.

Check here for more details.

Making investment decisions - have you done your research?

noreply@blogger.com (Ben Wood) — Mon, 07 Jun 2010 03:43:00 +0000

Are you considering a tax-effective investment? It's important you have all the facts to make an informed decision.

Some investments offer tax benefits such as reducing assessable income or increasing deductions, but end up being outside the law. You can check with the ATO to ensure promised tax benefits will be available. A good rule of thumb is to consider if you would still invest if the tax benefits were not there.

Find out as much as you can about an arrangement before investing. Make sure the arrangement has a prospectus or product disclosure statement and get independent advice about the promised tax benefits from a professional advisor. A person associated with the scheme is not independent.

Start by visiting www.ato.gov.au/investing and read the Investigate before investing fact sheet. It provides information about tax effective investing and how to detect potential tax avoidance schemes.

You can also check if the arrangement you're considering is covered by an ATO product ruling confirming the tax benefits, or if a Taxpayer alert has been issued warning about the arrangement.

Doing your research will help you avoid negative consequences including having to repay tax and incurring interest and penalties.

ATO is Dumping E-Record.

noreply@blogger.com (Ben Wood) — Fri, 09 Apr 2010 01:08:00 +0000

The ATO has announced that they are no longer going to support or update their free cashbook software E-record. See their announcement here.

As an Accountant for small business this is music to my ears and I assume to all Accountants across Australia. While this software works it is a complete nightmare for Accountants to use for end of year accounting. Reports are useless and restoring client files to our e-record never worked but I suppose you get what you pay for.

The good news is there are some great alternatives for micro businesses to use. Here are our favourites.

2 Great E-record Alternatives

1. Xero - This is the future of small to medium business accounting. It is web based so all you need is an internet connected device (PC, laptop, phone), and a web browser. It has internet banking level encryption so it is safe to use. It can be accessed from anywhere and is updated constantly so no need for software installations at all. To top it off you can get automatic bank feeds direct into Xero or upload your banking file manually. Your Accountant and bookkeeper can also log in and work on your file meaning no need for backups etc. Add on programs are available for all sorts of functions such as payroll or CRM.

2. Saasu - Very similar to Xero but has with invoicing and payroll all in one application. Also has stock and point of sale functionality for multiple sites. Saasu also has a free version with limitations but 1000 times better than E-record.

These web based services eliminate the need for software installations, upgrades and poor user interfaces. All you need is an internet connected device and a web browser.

In our opinion the current versions of MYOB and Quickbooks are old technology with limited capabilities. Don't board a sinking ship. Embrace this new technology and actually enjoy doing your bank reconciliations and accounting.

Call us to discuss the best solution to your situation.

Free Money from the ATO

noreply@blogger.com (Ben Wood) — Wed, 07 Apr 2010 03:54:00 +0000

For the last few years the Australian Government has run the Super Co-contribution scheme. In it's current form the government will match any personal contributions to super of up to $1000 per taxpayer. If your taxable income + FBT + 9% super is over $31,920 then a phase out percentage applies up until your taxable income is $61,920.

Effectively you get a 100% return on investment if you gross income is $29,284 or less this tax year. If your gross were to be $50,000 this year, and you put $1000 of your own money into super, the government would chip in $397.33. This is still a 39.73% return on investment. Much better than you would ever get in a bank.

Of course there is a catch. You can't touch the money until you are 55 or older. I see this as an advantage though. It allows compound interest to work it's magic and grow your investment.

Example: A 30 year old person knows they have about 25 years to retirement. Lets assume their earnings are half way up the phase out scale so the government contribute 50% of whatever they put into super up to $1000. Each year the person puts $1000 into super and the government tops it up with $500. A 50% return guaranteed each year. The result of this is as follows:

$25,000 Personal contributions
$12,500 Co-contibutions
$37,670 compound interest earned at 5%pa.
-$5650 tax on interest earned in fund at 15%

An annual investment of $1000 for 25 years ($25,000) has turned into $69519.50.

The lower your income the better so the best candidates are usually stay at home parents, part time workers, casual workers, students etc.

Pay Per Click Advertising

noreply@blogger.com (Ben Wood) — Tue, 06 Apr 2010 07:53:00 +0000

Business owners,

Here is a good article about the value of internet advertising as opposed to print advertising. It only covers the basics but can give you some knowledge take to the next level.

Please make sure to read the comments at the bottom regarding negative search terms.

Do not think that because the customers you currently see do not find you via the web then there is no use using PPC adds. If your web presence is not up to scratch then they probably go to your competitor who is. Take 10 minutes and search for your products or services via the web and see who comes up. You? Probably not. Take note of the Sponsored Links to the right of the search results. These are the ones businesses pay for.

Arm yourself with the knowledge then take action.

How to get business finance

noreply@blogger.com (Ben Wood) — Thu, 11 Mar 2010 03:22:00 +0000

Just read this article on the Smart Company blog.

How to get cash from banks

A great article on the current finance situation for small business.

If you require assistance in obtaining finance contact us and we will put you in touch with our in-house finance broker.

Ben Wood

Director

02 9548 2828

Activity Statement Due

noreply@blogger.com (Ben Wood) — Mon, 01 Mar 2010 03:03:00 +0000

Please note that the December 09 quarterly BAS is due and payable by tomorrow March 2nd. Lodge now to avoid penalties.

Activity Statement Due

noreply@blogger.com (Ben Wood) — Mon, 01 Mar 2010 03:03:00 +0000

Please note that the December 09 quarterly BAS is due and payable by tomorrow March 2nd. Lodge now to avoid penalties.

Fake ATO Email Scam

noreply@blogger.com (Ben Wood) — Wed, 10 Feb 2010 00:56:00 +0000

The Australian Government is warning people to beware of an email, proporting to be for the ATO, which asks for your credit card details. The lure is that the ATO have a tax refund waiting for you and all you need to do is enter your details to get the money.

THIS IS A PHISHING SCAM. Please delete it ASAP.

In the last 48 hours we have had a number of clients contact us to say they have received this email.

"The Tax Office never sends emails asking people to provide personal information or credit card details. "

Read the Treasury Warning here

Do your friends a favour and share this post with them by copying the URL into an email or Facebook

Super is due Jan 28th

noreply@blogger.com (Ben Wood) — Tue, 12 Jan 2010 22:39:00 +0000

Employers

A quick reminder to business owners that Superannuation Guarantee (9% super) for employees is due by January 28th.

Super is payable on Ordinary Time Earnings within the quarter October to December inclusive. For further details see the ATO website

Employees

Make it your business to check that your employer has been paying your super each quarter. Unfortunately we often hear from clients who have not been paid for months or years. If you never check you will never know.

Set a reminder in your calendar for the first Monday of November, February, May and August to check your super balance.

Merry Christmas!

noreply@blogger.com (Ben Wood) — Tue, 22 Dec 2009 10:05:00 +0000

From myself and the staff here at Wood Accounting we wish you a Merry Christmas and a happy and successful New Year.

I would also like to take this opportunity to thank our loyal clients as well as all the new clients for their support this year.

Please note that our office will be closed from midday Dec 23rd until January 11th 2010. Please email us if there is anything urgent within this time.

Find Your Lost Superannuation

noreply@blogger.com (Ben Wood) — Thu, 12 Nov 2009 02:19:00 +0000

Had a few jobs over time? Not sure where all your super is? Can't be bothered to find it?

If you answered YES to any of these questions the ATO now makes it easy to find with SuperSeeker

Just punch in your Tax File Number, Date of Birth and a list of dormant super accounts will magically appear.

There is millions if not billions sitting in these unused accounts. Find yours now by clicking the link.

ATO Delayed Tax Return Processing

noreply@blogger.com (Ben Wood) — Thu, 12 Nov 2009 01:57:00 +0000

ATO has issued a warning stating that any tax returns lodged after December 7th 2009 will experience a delay in processing. This delay is due to the ATO shutting down some processes in order to upgrade their systems. Everything should be back online by Jan 27th 2010.

If you have not lodged your 2009 tax yet get it in ASAP to avoid delays.

Super is due by Oct 28th

noreply@blogger.com (Ben Wood) — Wed, 14 Oct 2009 23:32:00 +0000

Employers

A quick reminder to business owners that Superannuation Guarantee (9% super) for employees is due by October 28th.

Super is payable on Ordinary Time Earnings within the quarter July to September inclusive. For further details see the ATO website

Employees

Set a reminder in your calendar for the first Monday of November, February, May and August.

Do you need finance for a house, car or business?

noreply@blogger.com (Ben Wood) — Thu, 10 Sep 2009 22:14:00 +0000

This is a guest post from one of our professional business partners.

Michael Christie is a Finance Broker with over 20 years experience in the banking industry. Michael left a big city bank to form his own broking business and provide a personal, independent service to clients looking for the best deal. If you need any business or personal finance Michael will provide unbiased advice based on your situation.

Due to the Global Financial Crisis (GFC) all lending institutions have tightened their lending criteria. They have reduced the amount they will lend against a property (LVR), meaning as a borrower, you need to contribute more deposit to the purchase.

As a First Home Owner, the banks want you to show them that you can make the commitment to making the loan repayments, and they do this by looking at your savings. They want to see that you have saved at least 3% to 5% of the purchase price of the property. These funds need to have been in your account for at least 3 months. It is also worth noting that the First Home Owner's Grant (FHOG) is no longer considered savings by the lender.

As a mortgage broker, my role is to guide you through the maze of applying for finance and dealing with the banks. I have access to all the major lenders, both Bank and non-bank lenders, and I am able to show you which lender will provide you with the loan that is right for you.

I monitor their offerings daily, and am able to give you up to date information, to allow you make an informed decision.

I am able to assist with,

first home owners
property investors
debt consolidation and refinances
equipment finance
business finance
non-conforming borrowers
2^nd mortgages.

Call me, Michael Christie, on 0409 921 409 or mjcfinance@gmail.com

Or contact Ben Wood to discuss your needs.

Ben Wood

Director

02 9548 2828

Wood Accounting

Early Access to Super

noreply@blogger.com (Ben Wood) — Sun, 06 Sep 2009 23:49:00 +0000

It is ILLEGAL to access your super below the age of 55 except for very, very limited circumstances such as terminal illness or severe financial hardship.

If someone tells you that you can access your super early, run in the opposite direction. These scammers get your money out, take a large portion of it, then give you the remainder. It is illegal and you will not only lose most of your super but the ATO will penalise you for early access as well. If it sounds too good to be true then it probably is.

Read over ASIC's webpage here regarding access to super.

If you are suffering financial hardship speak to someone you trust. Do not got to a seminar about early access to your super. You will be held responsible for your actions by the authorities so do your homework. Ask your Accountant or call your superfund directly to ask if you are allowed to access your superannuation.

Ben Wood

Director

Wood Accounting

Does your business have a web presence? It should!

noreply@blogger.com (Ben Wood) — Wed, 26 Aug 2009 22:02:00 +0000

Have you ever put yourself in your customer's shoes and searched the web for your own services? If not, you should? This will be a reality check for most small businesses. To rub salt in the wound at least one of your competitors will be in the search results. Try a generic search (eg tax accountant) then try a location specific search (eg Sutherland tax accountant) and see the difference.

Most small and micro businesses are run by people over the age of 35 who have little or no understanding of how useful the Internet can be to market their business. They are generally too busy to think about the web and would give a blank stare if someone asked what their web marketing plan was. The problem is that their customers are also too busy to do anything but a quick google search for the product they are interested in. If your business does not appear in the search results, you may have missed that customer and many others.

Common replies from micro business owners when asked about their web presence were:

We are too small to use the web
Our clients don't search the web for our services
A website would cost us too much
Facebook etc is for kids
I don't use the Internet
We get all our customers by word of mouth referrals
We already spend a lot on advertising in the paper/Yellow Pages etc

These reactions have little or no focus on what the customer wants or needs. The focus of most of these answers is the ME ME ME.

Most business owners have trouble stepping back from the controls of their business and looking at it from the eyes of the customer. A basic marketing plan can achieve this buy identifying the target market and customer demographic. If your customers are below the age of 30 then they are likely to search the web for products and services. Some even do it from their phone.

Your Business Website

If you already have a business website then give it a health check. Get a couple of employees, family and some trusted young customers to go over the site with you. Start by getting each person to search for your site using general industry terms. Pick it to pieces. Is the layout right? Are contact details easy to find? Is there a map of your location? Is it easy to navigate?

If you don't have a site, get one. Even if it is basic. First you need to buy the domain name (search names here). Hire a professional web designer. Find a website you like the look and feel of and contact the design company. They are usually in the fine print at the bottom of the web page. Focus on making it look professional. Don't get the geek next door to do it in exchange for a pizza. This process may mean that you need to update your corporate identity, such as your logo etc, to bring it into the 21st century. This can be costly but is likely overdue.

Whatever you have today is your first draft. A website is NOT a digital flyer. You cannot set and forget like you do with paper advertising. The best solution these days is to use a content management system (CMS) which allows the owner of the site to change the text and basic layout in a similar format to a Word document. If your website does not change for an extended period of time then the search engines stop bothering to come back to re-index your site.

If you sell products that can be mailed, then you might like to look at setting up an online store. People can then order 24 hours a day and all you need to do is collate the order and send it out.

Don't be a follower in your industry. Be a leader.

Free listing sites

Web designers will tell you to register your business with these sites.

There are countless sites where you can add your business information so that you come up in Internet searches. The main cost is the time and effort used to find and set up these sites. Set aside the time to do it. The more sites that link to your site the better, in terms of Search Engine Optimisation (SEO). This is another subject altogether but linking forms part of that strategy.

If cost and effort are too much of a barrier to create your own website then at the very least get your business details on the free listing sites. Search for your industry and competitors on these sites as well as doing a normal Google search

True Local

Yellow.com.au - Free Listing

Google Maps - Business Centre

Hotfrog.com.au

Bigroo.com

Local Business Guide.com.au

In fact it is probably easier to link direct to the Google search for Free Business Listings Australia

There are also industry specific directories for restaurants, bars and others. Personally I use eatability.com.au as it has user reviews of places.

Measurable

The beauty of digital marketing is that it is measurable. Print marketing, be it flyers, newspapers or Yellow Pages, is much harder to measure with any accuracy.

Google Analytics is leading the way for reporting and analysing your website visitors and usage. At a basic level you can look at where people are coming to your site from, how long they stay, the landing page, the exit page, pages per visit, etc. You can dig much deeper than this to see things such as the users operating system , their screen resolution, etc. You can even set it up to email you reports as often as you like and you can tailor these reports to your needs. THIS IS ALL FREE.

As you become more experienced you can use these reports to tweak your website to improve whatever variable you want.

The web is a wonderful place for business. Embrace it before someone else does.

Ben is Director of Wood Accounting who specialise in business advice for Australian businesses. Call Ben today to discuss your situation.

Should you fix your home loan?

noreply@blogger.com (Ben Wood) — Sat, 22 Aug 2009 23:16:00 +0000

There is no simple answer to this question. The answer depends on your personal situation. You need to plan for the future and stress test your ability to repay your loan in situations such as loss of income or maternity leave.

Scott Page, The Barefoot Investor, has written a good article outlining the for and against of fixing your mortgage rate. The best bit of advice that Scott gives is to stay on a variable rate but pay what you would be paying if you fixed your loan. Due to fixed rates currently being about 2% higher than variable rates this means you will create a buffer and pay down your loan faster. If times get tough at the top of the next rate cycle you can draw down the excess loan repayments you have already made.

The biggest problem with fixed rates is that the banks have already factored in the future increases so you are unlikely to win. We have seen many clients in the last 18 months who regret locking in their loan at 8% or more. When rates dropped theirs did not and they have paid the price.

Subscribe to Scott's Blog. Knowledge is power. Don't follow the crowd. Make your own, informed decisions.

This is not financial advice. Please consider your own personal situation and talk to an independent professional before making any big decisions.

Ben Wood

Director

Wood Accounting

02 9548 2828

Private Health Insurance and Medicare Levy Surcharge

noreply@blogger.com (Ben Wood) — Mon, 03 Aug 2009 12:09:00 +0000

Medicare Levy (1.5%)

Resident Australian taxpayers are subject to the Medicare levy at a rate of 1.5% of their taxable income each tax year. Some taxpayers may be exempt in limited circumstances, such as low income or military service. This levy is used to fund the "free" public health services available in Australia.

Medicare Levy Surcharge (1%)

If the following points apply to you, for the tax year ending June 2010, then you need to have private hospital cover in order to avoid paying the Medicare levy surcharge:

Individuals with zero dependants and a taxable income in excess of $73,000
Couples with zero or one dependant and a combined taxable income of $146,000.
Families have a threshold of $146,000 which increases by $1,500 for each child beyond the first child.

Income thresholds for the tax year ended June 2009 were $70,000 and $140,000 respectively.

If you start or stop being covered by private hospital cover during a tax year, and you exceed these thresholds, you will be charged the surcharge for the number of days NOT covered.

Your circumstances may change during the year, such as entering or leaving a marriage or de facto relationship. In this case both thresholds may apply to different periods during the tax year.

Another point to consider when looking at private health insurance is the Lifetime Health Cover (LHC) initiative introduced by the Government. To avoid paying LHC loading (tax), you must obtain private hospital cover before the 1st July that follows your 31st birthday. For each year beyond this you will pay an extra 2%, up to a maximum of 70%, on top of the regular premium.

From a government perspective we are essentially pre paying our lifetime health care via these levies and surcharges whilst we are fit and healthy.

For further details or to discuss your specific circumstances, please contact us at Wood Accounting on 02 9548 2828. You can read more at www.privatehealth.gov.au and www.ato.gov.au

Ben Wood

Director