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We welcome you to our July e-Bulletin.
         
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Tax deductions for property investors

A timely reminder to property investors about tax deductions and entitlements:

Depreciation: Expenditure on furniture, fittings and capital improvements can be claimed over several years. You may also be able to claim depreciation on construction costs of the building.

Principal place of residence: All Australians are entitled to claim a capital gains tax exemption on their PPR. If you don't live in the property, there are certain circumstances where you may still be able to access this exemption. Talk to you accountant for more.

Finance/loan: Once you have decided on your investment, make sure that your loan is set up correctly, so as to maximise your taxation entitlements.

Other deductions include:
- borrowing expenses (eg: stamp duty)
- cleaning costs
- land tax
- pest control costs
- maintenance (excluding improvements) ... and more.

           

MORE INFORMATION?

Phone Rob Del Busso or any member of our accounting team to discuss the tax situation of your property investment.

Phone 03 5144 4566
           

 

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Phase out of medical expenses tax offset

One of the budget measures affecting individuals is the phasing out of the medical expenses tax offset.

Those who claimed it in 2012-13 will be able to claim it for 2013-14, and those claiming it in 2013-14 will be able to claim it for 2014-15 (for all currently-qualifying expenses that meet the requisite threshold). In other words, if you haven't claimed in one year, you cannot claim it in the following year.

From 2015-16, these qualifying taxpayers can only claim for medical expenses relating to disability aids, attendant care or aged care.

Those who didn't claim the offset in 2012-13 cannot claim it for 2013-14 or later years unless the net medical expenses relate to disability aids, attendant care or aged care.

In all cases, the offset for these expenses may only be claimed until 2018-19.

        
CONFUSED? - need to know more?

Phone our accounting team to discuss your tax questions.

Phone 03 5144 4566

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Super up, tax down for over-55s

Boosting superannuation savings while cutting tax might sound too good to be true, but for the over 55's the Transition to Retirement pension is a legitimate strategy than can deliver extra benefits.

The TTR pension was originally introduced to assist people wanting to ease their way out of the workforce. You could work part time and top up your salary with income from your super.

But with a TTR pension you can also work full time, top up your super balance and draw a tax-free income. No wonder it is often referred to as the Magic Pudding strategy - like the cut­ and-come-again pudding in Norman Lindsay's children's story.

This is how it works. An individual who has reached preservation age (currently 55 years) and is under 65 salary sacrifices into their super fund at the same time as drawing income from it via a TTR pension. You may be asking, what's the point of doing that?

Tax concessions
By replacing salary income with pension income, and redirecting some of your salary to super, you effectively take advantage of low tax rates inside super

Read on for more information, including a table of how it works.

        
            Tracey de Nobile



MORE INFORMATION?

Phone SuperCentre for information and advice on all things Super.

Phone 03 5144 4566

 

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Insurance choices

Australians take out car insurance without a second thought, but are more reluctant when it comes to protecting their family and lifestyle. It's not surprising then, that we are seriously underinsured.

So, what are the different types of insurance that should be considered?

Life insurance - provides a lump sum to your family or nominated beneficiaries should you die.
Total and permanent disablement insurance (TPD) – provides a lump sum if you are permanently unable to work again.
Trauma insurance – provides a lump sum upon diagnosis of a critical illness such as cancer, stroke or heart attack
Income protection insurance – provides ongoing income (up to 85 per cent of your employment related income, including superannuation) if you can't work due to illness or injury.

It's not uncommon to underestimate the amount of money families require when insurance payouts become relevant.

Read more to find out if you are underinsured.


Jenny Martens


MORE INFORMATION?

Contact Jenny for more information about personal insurance options.

Phone 03 5144 5207.
          
            

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When outsourcing chores makes cents

It may not be too far-fetched to imagine the eccentric billionaire who launched Ikea, Ingvar Kamprad, with bleach bottle in one rubber-gloved hand and toilet brush in the other, scrubbing his porcelain throne on weekends.

Chances are the thrifty Swede prefers to do his own housework rather than outsource, especially given his well-published view that "waste is a mortal sin". The frugal flat-pack furniture king has been photographed doing his own supermarket shopping, flying economy, catching the bus and driving himself to work in a beat-up old Volvo.

But for the average householder who wants to enjoy their earnings and their leisure, it may be worth spending a little on household help to save a lot stress.

Ask those Australians who collectively pay $820 million a year to have homes cleaned, and most will say the outlay is a household budget necessity because they work long hours in demanding jobs that leave little time or energy for cleaning.

The price of domestic bliss could be worth paying if you know that when you get home it will be clean and tidy so you can spend quality time with the family, instead of bickering over chores. But the potential benefits of outsourcing are not limited to increased leisure.

To read more, click here.

 
           
Check out these sites, which facilitate bidding for errands, and some provide free public liability insurance and background checks:

- Airtasker
- Occasional Butler
- Sidekicker


MORE INFORMATION?
 
Phone Phillipsons to discuss whether outsourcing makes 'cents' for you.

Phone 03 5144 4566

  
               
           

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And finally, a word from the editor ...           

Tax time is off and running again – plenty to do for business owners, employees and investors alike. Make sure that you are aware of due dates for getting all of your compliance tasks done.  And there is no time like the present to get your records for last financial year together.

We look forward to working with our clients again this year.

Until next time ...

Cheers,

Kurt Best
General Manager

Phillipsons.com.au






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