50% Business Tax Break ends this MONTH!!

taxabull — Mon, 21 Dec 2009 01:59:57 +0000

Income tax can't be treated like a game - photo by Alan Cleaver

http://www.flickr.com/photos/alancleaver/ / CC BY 2.0

Don’t want to rush you…………..

But, if you want to take advantage of the ATO’s 50% business tax break, you only have SEVEN WORKING DAYS left..!!

If you buy a new eligible asset for your business by the 31 December 2009, you will be entitled to an immediate 50% tax deduction of the cost PLUS the normal depreciation deductions.

We covered this in detail as part of our Federal Budget 2009 review in our previous reincarnation as Austax.

If you won’t actually receive the car, computer, etc that you bought until AFTER 31 December 2009, don’t panic..!

The rules are that the PURCHASE needs to happen before 31 Dec 2009. You have until 31 Dec 2010 to receive, install and use the actual asset.

You may find that this is the case with motor vehicles purchases where the vehicle gets shipped to you months later.

So, the key is to have a legal contract / purchase agreement signed and paid for BEFORE 31 December 2009.

That way, you will still be entitled to the 50% tax break even if the asset is only installed or ready for use after the year-end.

So, don’t be a scrooge and buy your business a new set of wheels or a fan-dangled computer today…!

Go on… Your accountant will love you for it….

Cheers!

Taxabull Team

Is your employer taking out enough tax from your pay?

taxabull — Sat, 06 Jun 2009 20:59:00 +0000

This is a quick post for those of you who are employees…

Have you ever happily lodged a boring tax return with just your employment income, NO extra income, NO exciting tax deductions and then get hit with a MASSIVE TAX BILL?

WELL… READ ON, THIS MAY JUST BE THE REASON..!

As part of your payroll, tax is withheld by your employer every pay period. The total tax withheld for the year forms the amount of tax that shows up in your PAYG Payment Summary (aka Group Certificate).

Assuming that your only taxable income is from your job, you shouldn’t have to pay any additional tax when you lodge your income tax return.

This is because your employer has already taken tax out every week/fortnight/month/etc throughout the year.

HOWEVER..!

How do you know that the CORRECT amount of tax is being withheld from your pay?

This is what you do…

You simply cross-check the tax withheld on your payslip against the ATO PAYG Withholding Tax Tables.

The ATO provides these simple tax tables to employers to allow them to easily deduct the correct tax from their employees. However, mistakes do happen and it is worthwhile double-checking.

This is what you need to know beforehand (HINT: have your payslip handy!):

1. What is your pay cycle? ie Weekly, Fortnightly, Monthly

2. How much are you getting paid per pay cycle?

3. Do you have HECS/HELP or SFSS?

4. Do you have leave loading? (most likely not)

5. Are you claiming a tax-free threshold for this employer?

Once you have the above information, you can use the Tax Tables that your employer also use. Here’s the link to the ATO’s PAYG Withholding Tax Tables.

Or….

If you are really lazy or just not into numbers (we don’t blame you), then click on this link to the ATO’s PAYG Withheld Calculator.

You enter all the information, click on Calculate and voila..! The calculator shoots out the Tax Withheld amount which should match up with your payslip.

If it doesn’t match AND you answered all the calculator questions correctly, it’s time to talk to your employer’s HR or Finance team.

It could be a simple case of ticking the wrong box when you first filled in your TFN Declaration form.

Note: The rates changed in July 09. So, when you will get a different tax withheld amount when you run the calculator in July 09.

GOOD LUCK..!

RIGHTING TAX WRONGS, ONE AT A TIME…

From the Taxabull team.

The #1 provider of Australian tax news on twitter.

Taxabull » business

50% Business Tax Break ends this MONTH!!

Is your employer taking out enough tax from your pay?