A new way for tax office to target cash economy

The tax office has obtained or will obtain data identifying all motor vehicles sold, transferred or newly registered in the 2011/12 and 2012/13 income years where the transfer and/or market value is $10,000 or greater from the various state and territory motor vehicle registering bodies.

The data obtained will be matched against tax payer records to identify those participating in the cash economy, and/or those who may not be declaring all their income or deliberately avoiding their tax obligations. 

The tax office is already matching interest, wages, and dividend data declared by the taxpayers against data provided by employers, banks and share registries.

This measure is aiming at identifying those skimming some or all of their cash takings, running part of their business "of-the-books", or in other ways not reporting all their income. 

BY SURESH RAJANI

Suresh Rajani is the Business Leader at TAX FIRST (NSW) & TAX FIRST (SA) - accounting and business advisory firms located in Sydney and Adelaide.

 

 www.taxfirst.com.au

 

 

Changes to depreciation rules that every business should know about

A couple of changes have been introduced by the government effective 1 July 2012 and would affect the income years 2012/13 onwards. These changes only apply to you if you are a small business that has an aggregated turnover of less than $2 million. If you retail fuel, your non-fuel sales should be less than $2 million per year.

1. Increase in instant asset write off. You can now claim an immediate deduction (write-off) for most depreciating assets purchased that cost less than $6,500. Previously you could write-off an asset costing less than $1,000.
2. Accelerated deduction for motor vehicles. If you buy a motor vehicle for use in your business, you can now claim an immediate $5,000 deduction. The remainder of the cost goes to a depreciation pool to be depreciated at 15% for the first year and 30% for later years.

Some businesses have interpreted this to be an additional deduction to the already existing depreciating rules, that is surely NOT the case. You still get the same deductions over time, the newer rules are simply making more deductions to be claimed sooner.

 
BY SURESH RAJANI

Suresh Rajani is the Business Leader at TAX FIRST (NSW) & TAX FIRST (SA) - accounting and business advisory firms located in Sydney and Adelaide.

 

 www.taxfirst.com.au

 

 

How the superannuation system works

Most of us whether employed or self employed would become members of a superannuation fund in our working lives. What amazes me however is how so many of us still don't know how the superannuation system works . So here is a quick snap shot of how it works.

The superannuation system was designed to help people save money for their retirement. Money is contributed during your working life in order to provide you with a source of income once you retire. 

Most people are entitled to compulsory superannuation contributions from their employers that should be made to a superannuation fund of their choice at least once every three months. The amount of contribution is calculated as a percentage of your income, which is currently set as a minimum 9%. You or your employer can also choose to contribute additional funds to your superannuation account at any time. If you are self employed, you would be able to contribute for yourself and the contributions may be tax deductible when you lodge your tax return.

The superannuation fund invests the money you have in your account on your behalf to maximise the return for the associated risk profile that you specify. The superannuation fund will charge you fees to manage and grow your super balance.

Except under exceptional circumstances you do not have access to your super money until you retire or turn 65. When you retire, you can obtain the money from your superannuation fund in a lump sum or as an income stream.

BY SURESH RAJANI

Suresh Rajani is the Business Leader at TAX FIRST (NSW) & TAX FIRST (SA) - accounting and business advisory firms located in Sydney and Adelaide.

 

 www.taxfirst.com.au