Lidgerwoods Accountants - December 2011 Newsletter

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may01.jpgMay 2012 Newsletter

Extraordinary growth in such a short time…

From the team here at Lidgerwoods Accountants, we'd like to thank you for your continuing support and ongoing patronage by using our accounting and tax services.  

No matter how big or small your taxation issues may be we always endeavour to attend to your needs promptly and with the utmost professionalism and accuracy.

We must be doing all the right things at the moment, as our client base has grown considerably since starting out only 18 months ago, far exceeding our own expectations as to where the business would be and the size of the client base we would be looking after.

kate.jpgDue to this amazing growth, we have promoted Kate Marcuzzi (previously our part-time administrative assistant) to now be here four days a week as our Client Services Manager.  We trust that many of you will meet Kate over time as the third point of contact at our office, and we also wish Kate all the best with her recently commenced Accounting qualifications.

Again, your feedback is always most welcome - so if you have anything you wish to say or want to voice your opinion/s, just drop us a line.

            MARC, SOPHIE & KATE - 'The Team' at Lidgerwoods Accountants

P.S. – Don’t forget about our website – with all our contacts and basic information about our firm at www.lidgerwoods.com.au


May 2012 Federal Budget Update - What will affect you?

Budgets are simply that – budgets, or estimates of what is proposed will change. We never like to advise clients of issues that may not eventuate, as our currently unpopular government may not get any of the announcements passed at Parliament, but the proposals cannot be ignored totally.

With the Federal Budget only released on Tuesday, we thought we might be able to highlight a few key areas that if introduced, will affect many of our clients – noting that not all items listed in this budget are mentioned, and not all items are relevant to all of our clients at Lidgerwoods.

BONUSES IN THIS BUDGET:

may02.jpgPrior year tax rate changes are in place still – small benefit to most taxpayers.

Tax-free threshold increases to $18,200, so single taxpayers now earning less than $20,542 will not have to pay any taxation in 2012/13 year – marginally up from the 2011/12 year.

Marginal increases in welfare and family tax benefit payments.

Full write-off from 1st July 2012 (2013 year) for business assets under $6500 (cars limited to $5000) in year of purchase.

Extensions to the exemptions from the current 2012 year flood levy tax (most of our clients will NOT be exempt from this tax due primarily to our client’s geographic locality).

Tax Loss Carry Back measures – but only applicable to Incorporated clients (those running their business directly in a Trading Company), and making profits in the past and paying company tax in the past or current year. If a loss is made in the future, a company may be able to refund some of the prior year company tax in the year of loss.

A $1,000 incentive is on the table for employers to employ older workers.

Schoolkid Bonuses – to replace the current Education Tax Offset system next year.  To pay $410 for each primary school child, and $820 for each high school child – starting 1st January 2013 and paid twice yearly in identical lump sums via Centrelink.

TAX TIME TIP – This is already passed at Parliament, thus  there is now absolutely no need to bring education tax receipts into us for your 2012 Tax Return – this payment replaces the old receipts taxation claim from prior years

NON-BONUSES IN THE FINE PRINT

Prior year budget incentives have been canned such as the drop in company tax rate, abolishing standard tax deductions to salary and wage clients, and the half tax rate proposal on interest received – all shelved from the prior year budget announcements.

Mature Worker Offset ($500 per year) ceases for those born after 1st July 1957 – will affect clients about to turn 55 soon and still working.

The increased superannuation concessional contributions cap for individuals over 50 with low member balances has been deferred. Starting 1st July 2012 all individuals will have a concessional contributions cap of $25,000 per year – irrespective of member age.

Reduced superannuation concessions for the very high income earners (greater than $300,000 of income).

Medical Expenses Offset limitations for high income earners (those over Medicare Surcharge thresholds of $84K for singles and $168K for couples).

Living Away From Home Allowances (LAFHA) reforms to now only being eligible for claims for a maximum of 12 months (does not affect stays of under 21 days).

Diesel will cost more along with many other costs due to the Carbon Tax.

OTHER KEY FEDERAL BUDGET ITEMS THAT MAY AFFECT US LOCALLY:

Defence Budget cuts – predominantly in key defence equipment cuts, but will there be ramifications for our local defence industry – one of the largest parts of the border economy?

Our other major economy is agriculture – and this budget gives nothing to our farming community.

Our huge backlog waiting list for dentistry services will hopefully ease – very good for those who cannot afford these medical costs in the past.

Carbon Tax – we should begin to see definite increases in some costs to all taxpayers

This budget hands down one of the single biggest injections into the Disabled Services and Aged Services industries ever seen – the government should be commended for such an outlay and we trust this ultimately assists in the service delivery to our elderly and disabled clients.

The Australian Taxation Office (ATO) has been approved a lot more funding to pursue debts owing, and to chase up GST & other non-compliance issues – be warned. This is despite cutting over 1000 jobs nationally at all offices including at the Albury Tax Office.

If you wish to discuss any of the 2012 Budget matters and how they may affect you personally, we encourage you to contact Lidgerwoods Accountants.


TAX PLANNING - to consider before 30th June 2012

may03.jpgOver the years we have developed a simple listing of the TEN most commonly used tax planning techniques that you may want to consider before the year end:

  1. Bring forward or prepay deductions;
  2. Consider deferring invoicing or sales generation to next year;
  3. Pay all employee superannuation contributions well before 30th June (IMPORTANT);
  4. Consider paying superannuation for business owners also before 30th June;
  5. Review business owners’ remuneration levels & ensuring all family members are in the same marginal tax rates.
  6. Review all current year capital gains tax transactions and consider disposing of any other capital gains assets presently in a loss situation to counter any capital gains before 30th June;
  7. Write off all bad debts and uncollectable customer receipts prior to year-end;
  8. Review work-in-progress, trading stock and inventory values at year-end;
  9. Consider scrapping any obsolete depreciable assets prior to year-end; and
  10. Review your business entity structure before year-end to ensure your future trading will be in a new structure for the entire financial year next year.

Tax planning and tax minimisation is legal and highly recommended by our practice.  If you wish to discuss any of the above strategies and how they might affect your business we encourage you to contact Lidgerwoods Accountants.

Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.



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