When a loan is paid out early, it can sometimes trigger a penalty interest charge. There are circumstances where this charge can be tax deductible, but also many instances where this is not the case. A new tax ruling teases out the likely outcomes.
This new income year is the first where an amount of concessional super contributions can be carried forward, but you need to closely follow the limits. SMSFs also must be wary of boosted ATO audit activity on the back of an increase in errors due to event-based reporting.
We also look at which trading structures may best suit your new business, with regard to not only tax outcomes but funding, remuneration and liability.
To claim a GST credit, a business is generally required to hold a valid tax invoice. However there can arise certain circumstances where an alternative document can be used.
There have been changes made to the director penalty regime, which may mean tighter diligence is needed to stay out of trouble. We also run over the ATO’s system of tax rulings and determinations, and what these can mean for your tax outcomes.
The essentials of the super downsizer scheme are also covered, and an ATO-sourced “living expenses tool” has been made available that may help put your tax records in better shape.
With Tax Time 2019 just around the corner, we run over the sort of substantiation that the ATO expects for work-related deductions that taxpayers claim. We also look at Taxable Payments Annual Reports, and the new industries that these cover starting this year.
Also this month we cover the ATO¹s compliance actions that it is subjecting trusts to, and the status of making personal deductions for car parking expenses.
Working from home, while always an option, has become more viable as technology has developed to enhance connectivity. The ATO is fully on-board with regard to work-related deductions for working from home, but of course has set certain parameters for making claims.
Business success can pivot on the quality of staff, so ensuring they are knowledgeable and efficient through further training can be a worthwhile effort. There could also be a tax deduction for the business.
We also look at deductions for certain interest expenses, claims for donations, and where smaller employers stand with regard to singe touch payroll.
This year¹s federal budget has a few sweeteners, which was to be expected with the next federal election only about a month away and the Coalition Government trying to make up ground in the polls. The welcome news is the forecast return to surplus for the 2019-20 fiscal year.
Also note that proposed changes to Division 7A will be deferred from 1 July 2019 to 1 July 2020, and that there are some useful changes to superannuation that will benefit older pre-retirees.
Start-up businesses are generally not for faint-hearted investors, but there are tax incentives that can help. We look at two early stage business investment options. Also, a perennial topic of interest for tax is the ability to claim vehicle deductions, so we run over the basics to keep in mind.
In this issue we also examine how travel expense claims can be helped along if a taxpayer can also work in the word “itinerant”. And the ATO has also issued a warning on SMSFs and “personal services income”.
A business facing the prospect of effectively dealing with losses could find their task a little easier with a more relaxed version of the “same business” test put in place by the ATO. We also warn about the new rules that can deny a deduction for some business payments if certain reporting obligations are unmet.
Also dusted off is the (now restricted) place for claims of travel expenses in relation to rental properties, and a reminder of the at-times forgotten role that valuations can play with regard to tax and property.