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Small to medium employers who intend to claim the “cash flow boost payment” (minimum of $10,000 and a maximum of $50,000) announced in the second round of stimulus hoping to receive an injection of cash should beware. The “payment” is not actually a payment, rather it is a credit that will be offset against of the liabilities that appear on the BAS and any debits in a taxpayer’s RBA.
Read MoreMany financial decisions we make regarding our personal finances can involve a certain level of risk.
However, the level of risk that we are willing (tolerance) and able (capacity) to take, can vary from one person to the next.
This is normal, and is often due the differences that exist in our: 1. financial situation, goals and objectives, 2. desire to align our investment values with our personal values, 3. expected investment performance, time horizon, and tolerance/capacity for risk, and 4. understanding of investment fundamentals (risk/return, asset classes, and diversification).
Given this, when it comes to investing, an important initial step is to determine our investment risk profile. This is relevant regardless of our investment structure (super or non-super), or investment time horizon.
Our investment risk profile defines our chosen asset allocation. This is the weightings held within our investment portfolio with respect to the different types of asset classes:
Have you been directed by your company to work from home to limit the spread of the coronavirus? If so, you may be able to claim a deduction for the additional running costs you incur. The costs you could claim include work-related portion of any heating, cooling, lighting for the area you’re working from, work-related phone and internet, and work-related decline in value of a computer and associated office equipment. To claim these expenses, you must keep specific records ranging from diary entries to receipts.
With the majority of Australia now under lockdown to slow the COVID-19 pandemic, many employers are either encouraging their employees to work from home or have now instituted mandatory work from home policies. While working from home has its benefits, there may be extra expenses too, ranging from printing costs, the need for more internet data and perhaps even additional equipment.
A series of administrative measures to assist businesses experiencing financial difficulty as a result of the coronavirus (COVID-19) pandemic has been announced by the ATO. These include deferring the payment date and amounts due on BASs, income tax assessments, FBT assessments, and excise by up to 4 months. Businesses will also be allowed to change payment and reporting cycles for GST and vary PAYG instalment amounts. Any interest or penalties applied to tax liabilities incurred after 23 January 2020 may be remitted.
ATO has recently announced that it will implement a series of administrative measures to assist taxpayers experiencing financial difficulty as a result of the coronavirus (COVID-19) pandemic. The measures that will apply is similar to those for taxpayers affected by the bushfires. However, one important point of difference is that while the bushfire measures applied automatically to particular geographical areas, assistance for those impacted by COVID-19 will not be automatically implemented.
Anyone that has had a bad experience after navigating the maze of bureaucracy that is the Tax Office may be reminded of an old Latin phase “quis custodiet ipsos custodes” which loosely translates into “who watches the watchers?”. The answer to that is no-one until 2015, when the Inspector-General of Taxation’s functions were expanded to include those of the Taxation Ombudsman, becoming the Inspector-General of Taxation and Taxation Ombudsman (IGTO) in the process. Although community awareness of the Ombudsman function is still growing, taxpayers do now have an independent complaints investigation service to turn to.
Do you know who to turn to when you have a complaint about the way you’ve been treated by the Tax Office? Whether you’re an individual or business, the Inspector-General of Taxation and Taxation Ombudsman (IGTO) should be your first port of call. The department has two distinct, yet intertwined functions.
Over the past two weeks the Government has announced two economic stimulus packages to cushion the economic impact of the Coronavirus.
A total of $189 billion is being injected into the economy by all arms of Government in order to keep Australians in work and businesses in business.
This includes $17.6 billion for the Government’s first economic stimulus package, $90 billion from the RBA and $15 billion from the Government to deliver easier access to finance, and $66.1 billion in yesterday’s economic support package.
There are some important superannuation measures that you should be aware of:
An amnesty is now on for employers in relation to unpaid employee super entitlements from 1 July 1992 to 1 January 2018. There are certain conditions which have to be met for employers to qualify. The amnesty will allow employers to self-correct super guarantee underpayments without incurring additional penalties that would normally apply. During the amnesty period, employers can also claim a tax deduction for payments of SG charge or contributions. The amnesty will end on 7 September 2020 at which time the ATO is set to take a tougher stance on SG underpayments. The super guarantee amnesty Bill has finally received Royal Assent which means that the amnesty for employers to come forward to declare any super guarantee (SG) shortfalls will run from 24 May 2018 to 7 September 2020. Under the super guarantee amnesty, employers can self-correct SG underpayments with reduced penalties, and the employer can also claim a tax deduction for payments of SG charge or contributions made during the amnesty period.
Read MoreEnsuring your affairs are in order before your passing is an integral part of estate planning. Given this, it’s vital to understand that your super death benefit isn’t necessarily distributed via your will. For example, your super death benefit may be paid to your legal personal representative (the executor or administrator of your estate) when: 1. You elect your legal personal representative through a super death benefit nomination. 2. The trustee of your super fund, under certain circumstances, uses their discretion to pay it to your legal personal representative. 3. You have not made a super death benefit nomination, and the trust deed for your super fund stipulates that in the event you have made no nomination, benefits are to be paid to your legal personal representative. Whether you wish your super death benefit to be paid to your estate, directly to your dependants, or as a blend of both, it’s important that your super death benefit nomination is valid, up-to-date, and reflects your wishes.
Read MoreIn terms of funding our lifestyle expenses and accumulating wealth, one of the biggest resources is our capacity to earn an income. Although, this income-earning capacity can sometimes be taken for granted. When we are feeling fit and healthy, we may think we are less likely to experience an unexpected financially adverse event, than others. For example, being unable to work for a period due to a sickness or injury: In our working life, we have a 60% chance of being disabled for 1 month, and a 33% chance of being disabled for more than 3 months*. Coupled with this, if we are off work for: ‘20 days, the chance of ever getting back to work is 70%. 45 days, the chance of ever getting back to work is 50%. 70 days, the chance of ever getting back to work is 35%’^. Importantly, this ‘optimism bias’ can affect whether or not we put in place a safety net, for example, insurance, to protect us from such an event. As it stands, 33% of Australian workers have income protection insurance.
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