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Navigating SMSF Audits: Tips for a Successful Process

Self-managed superannuation funds (SMSFs) are an increasingly popular way for Australians to save for their retirement. However, with this popularity comes a greater need for compliance and regulation. 

SMSF audits are a crucial part of this regulation process, ensuring that the fund is operating in compliance with the law. Navigating SMSF audits can be a daunting process, but with the right preparation and knowledge, it can be a successful and stress-free experience. 

Below are some tips for a successful SMSF audit process.

Understand Your Responsibilities

The first step in navigating an SMSF audit is understanding your responsibilities as a trustee. The Australian Taxation Office (ATO) has strict guidelines for SMSFs, and it is the responsibility of the trustees to ensure that the fund is operating within these guidelines. 

Trustees must keep accurate records, have a documented investment strategy, and ensure that the fund is being managed in the best interests of its members. Penalties and fines may apply if these rules are not followed.

Engage an Experienced Auditor

Choosing the right auditor is crucial to a successful SMSF audit process. It is important to engage an auditor who is experienced in SMSF audits and understands the regulations and requirements of the ATO. 

An experienced auditor will be able to guide you through the process, provide advice on compliance, and ensure that the audit is completed efficiently and effectively.

Prepare Accurate and Complete Documentation

Accurate and complete documentation is essential to a successful SMSF audit process. Trustees must keep detailed records of all transactions, including investments, expenses, and contributions. 

These records must be accurate, complete, and up-to-date. It is also important to ensure that all documentation is stored securely and can be easily accessed if required.

Have a Clear Investment Strategy

Having a clear and well-documented investment strategy is a key requirement for SMSFs. The investment strategy should outline the fund’s investment objectives, risk profile, and asset allocation. 

It should also consider the diversification of investments and the liquidity of the fund. A clear and well-documented investment strategy will demonstrate that the fund is being managed in the best interests of its members and will assist in the audit process.

Be Prepared for Audit Questions

During an SMSF audit, the auditor will review the fund’s documentation and may ask questions about the fund’s operations and investments. Trustees should be prepared to answer these questions and provide supporting documentation if required. 

It is important to be open and transparent with the auditor and to provide accurate and complete information.

Take Action on Audit Findings

If the auditor identifies any issues or non-compliance during the audit, it is important to take action to address these findings. Trustees should work with their auditor to understand the issues and develop a plan to rectify any non-compliance. 

Taking action on audit findings will demonstrate a commitment to compliance and assist in future audits.

Stay Updated with Changes

The regulations and requirements surrounding SMSFs can change over time, and it is important for trustees to be updated with these changes to ensure ongoing compliance. The ATO regularly publishes updates and guidance on SMSF regulations, which can be accessed on their website. 

Trustees should also consider attending educational seminars and workshops to stay informed about changes and best practices in SMSF management. Staying updated with changes will help trustees to avoid penalties and fines and maintain the integrity of their SMSF.

Conclusion

The SMSF audit process can be a valuable opportunity for trustees to gain a better understanding of their fund’s operations and identify areas for improvement. 

By engaging an experienced auditor and preparing accurate documentation, trustees can ensure that their SMSF is compliant with the law and operating in the best interests of its members. 

It is important to view the audit process as a collaborative effort between trustees and auditors rather than a daunting task to be endured. By taking a proactive and positive approach, trustees can navigate the SMSF audit process with confidence and achieve a successful outcome.

Ensure compliance with expert SMSF auditors from SMB Accounting! We specialise in individual tax returns, small business accounting, and Xero accounting software-based accounting. 

With various small business accounting packages available, we are committed to providing you with the best accounting solutions that meet your needs. Contact us today to learn more!

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Get More Money Back: Tax Refund Maximisation

As an Australian, you want to get the most out of your tax return. It’s essential to claim every deduction you can to maximise your refund. 

Your tax refund can be a significant source of cash flow, and by maximising it, you can increase your savings, pay off debts, or invest in your future. Here are some tips to help you get more money back on your tax return.

Claim Every Deduction You Can

Deductions are expenses you can claim on your tax return to reduce the income subject to taxes. The more deductions you claim, the lower your taxable income and the less tax you will have to pay.

It’s important to keep track of all your expenses throughout the year and ensure you have the necessary receipts and records to back up your claims. You should also be aware of all the deductions you may be eligible for, such as charitable donations, business expenses, education expenses, and medical expenses. 

Tax Deductions You Can Claim

You can claim many tax deductions on your tax return. Some of the most common deductions include work-related expenses, such as uniforms, tools, and travel expenses. You can also claim deductions for self-education expenses, charitable donations, and income protection insurance.

Prepaid Expenses

Prepaid expenses refer to expenses that you have paid in advance for goods or services that you will receive in the future. These expenses can be claimed as a tax deduction in the year they relate to. Examples of prepaid expenses that can be claimed include prepaid rent, interest on a loan, and insurance premiums.

Claiming Donations on Tax Return

If you have donated to a charity during the financial year, it can be claimed as a deduction on your tax return. However, it is crucial to confirm that the charity is registered with the Australian Charities and Not-for-profits Commission (ACNC) and that you have a receipt for the donation.

Claiming Investments That Make a Loss

Some investments may make a loss in a financial year, such as shares or property. If you have made a loss in these investments, it is possible to claim it as a deduction on your tax return. However, some specific rules and conditions apply, and it is advisable to seek professional advice before making any claims.

How to Ensure You’re Contending the Right Tax Deductions

It’s crucial to claim the correct tax deductions to get the most out of your refund. Seeking the guidance of an accountant is the optimal way to achieve this. They can assist you in recognising all the deductions you’re eligible for and guaranteeing you have the required documentation to support your claims.

When considering hiring an accountant, it’s important to exercise caution. Seek out an individual with relevant qualifications and ample experience. You can also inquire about recommendations from trusted friends or colleagues.

Final Thoughts

Claiming every deduction you can is key to maximising your tax refund. Keep track of all your expenses throughout the year and ensure you have the necessary records and receipts to back up your claims.

In addition, seek the advice of an accountant to identify all the deductions you are entitled to claim. By following these tips, you can get more money back on your tax return and improve your financial situation.

Are you in need of an experienced accountant to handle your tax returns? Look no further than SMB Accounting. Our team of experts has years of experience in tax preparation and can ensure that you receive the maximum return possible. Schedule an appointment with us today, and let us take the stress out of tax season.

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5 Notable Ways Accountants Can Improve Business Workflow

In today’s fast-paced and ever-changing business world, it has become increasingly important for businesses to streamline their workflows and processes to ensure efficiency and productivity. One key player in this process is the accountant. Accountants not only provide financial insights but can also contribute significantly to improving business workflow. If you need more information on their usefulness, we’ve got just the thing for you. Here are five notable ways accountants can improve business workflow.

1. Automating Accounting Processes

Manual accounting processes can be time-consuming, tedious, and prone to errors. Accountants can significantly improve business workflow by automating accounting processes. Automation can help reduce the time and effort required for data entry, reconciliation, and financial reporting. Accounting software such as Xero, MYOB, and Quickbooks can be used to automate bookkeeping tasks, including bank reconciliations, invoicing, and bill payments. This allows accountants to focus on higher-value tasks such as financial analysis and strategy development.

2. Providing Real-Time Financial Insights

Timely and accurate financial insights are critical for making informed business decisions. Accountants can provide real-time financial insights by setting up dashboards that display key performance indicators (KPIs) such as cash flow, revenue, and expenses. These dashboards can be accessed by business owners and managers, providing them with up-to-date financial information that can help them make informed decisions about the business.

3. Implementing Effective Cash Flow Management

Cash flow is the lifeblood of any business. Effective cash flow management is essential for ensuring business stability and growth. Accountants can help improve business workflow by implementing effective cash flow management strategies. This includes monitoring cash flow, forecasting cash flow, and implementing cash flow improvement strategies. By doing so, accountants can help ensure that the business has enough cash to meet its obligations and invest in growth opportunities.

4. Providing Tax Planning and Compliance Services

Tax compliance can be a complex and time-consuming process. Accountants can help businesses improve their workflow by providing tax planning and compliance services. By staying up-to-date with tax laws and regulations, accountants can help businesses reduce their tax liabilities and avoid penalties. They can also provide advice on tax-efficient business structures and strategies that can help businesses save money on taxes.

5. Conducting Financial Analysis and Scenario Planning

Financial analysis and scenario planning can help businesses make informed decisions about their future. Accountants can use financial analysis and scenario planning to help businesses evaluate different scenarios and make informed decisions about their future. For example, they can help businesses evaluate the financial implications of expanding into new markets or launching new products. This can help businesses identify potential risks and opportunities and make informed decisions about their future.

Conclusion

All in all, accountants play a critical role in improving business workflow. By automating accounting processes, providing real-time financial insights, implementing effective cash flow management, providing tax planning and compliance services, and conducting financial analysis and scenario planning, accountants can help businesses streamline their processes and improve their efficiency and productivity. With the right support and guidance from their accountants, businesses can achieve their goals and succeed in today’s competitive business environment.

If you’re looking for a reliable business accountant, then you’ve come to the right place. SMB Accounting is fast becoming one of the leaders in Australia when it comes to providing accounting services. As an accounting firm serving Brisbane, Sunshine Coast, and Fraser Coast, we help clients by providing business advice, taxation, and XERO/MYOB/Quickbooks consulting. Whenever you need help managing your income tax returns or keeping your finances in check, SMB Accounting is the one to call. Contact us today to get started.

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Get Back on Track: What to Do When Your TFN is Lost

Losing your Tax File Number (TFN) can be frustrating and worrisome, especially if you need it for an important financial transaction or tax-related matters. 

Although it’s essential to keep your TFN safe and secure, sometimes accidents happen, and you may find yourself searching for that elusive number. 

But don’t worry—we’ve got you covered. In this blog post, we’ll discuss the steps to take when you’ve lost your TFN and how to avoid such situations.

Step 1: Stay Calm and Search Thoroughly

Before you jump to conclusions and assume that your TFN is gone forever, take a deep breath and retrace your steps. Have you checked all possible locations, such as email records, past tax returns, or your Australian Taxation Office (ATO) correspondence? Sometimes, a simple search can save you a lot of trouble.

Step 2: Contact Your Tax Agent or Accountant

If you’re still looking for your TFN after a thorough search, the next step is to contact your tax agent or accountant. They may have it on file and can provide the necessary information. Remember, your tax agent or accountant is there to help you, so don’t be afraid to reach out to them.

Step 3: Contact the Australian Taxation Office (ATO)

If you still need help finding your TFN and your tax agent or accountant can’t help, it’s time to reach out to the ATO. You can call them on 13 28 61, and they’ll assist you in retrieving your TFN. 

Be prepared to answer a series of questions to verify your identity, such as your name, address, date of birth, and other personal information. The ATO may also ask for details about your financial history and tax records.

Once you’ve successfully verified your identity, the ATO will provide you with your TFN via mail. If you receive it by mail, expect it to arrive within 10-14 business days. Please note that the ATO will never send your TFN via email or text message due to security reasons.

Step 4: Update Your Records

Now that you have your TFN ensure that you update your records accordingly. Store your TFN securely and inform relevant parties, such as your employer, financial institution, or tax agent, about your updated TFN. This will help prevent future issues or delays in processing your tax-related matters.

Tips for Keeping Your TFN Safe

To avoid finding yourself in a lost TFN situation again, follow these tips for keeping your TFN safe and secure:

1. Store Your TFN Securely

Keep your TFN in a safe place, such as a locked filing cabinet or secure digital storage. Avoid carrying it around in your wallet or purse, as this increases the risk of losing or stealing it.

2. Be Cautious with Your TFN

Only provide your TFN to trusted parties and authorised individuals, such as your employer, financial institution, or registered tax agent. Never share your TFN on social media or with unknown individuals.

3. Monitor Your Accounts

Regularly check your tax and financial accounts for suspicious activity. If you notice discrepancies or unauthorised transactions, report them immediately to the ATO and your financial institution.

4. Be Vigilant Against Scams

Be aware of phishing and other fraudulent activities targeting your TFN and personal information. Remember, the ATO will never ask for your TFN or personal details via email or text. If you receive a suspicious message or call claiming to be from the ATO, report it immediately.

Conclusion

Losing your Tax File Number can be a stressful experience. But it’s important to remember that there are steps you can take to recover it and protect your personal and financial information. By following the steps outlined in this blog post, you’ll be well on your way to handling a lost TFN and getting your tax affairs back on track.

If you are looking for Sunshine Coast accountants or Fraser Coast, we can help you. SMB Accounting does individual tax returns, small business accounting with various small business accounting packages available, audits, and more. Contact us today or sign up for our newsletter to learn more!

 

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Tax Lodgment Tips for Small Businesses: Simplify Your Process

As a small business owner in Australia, tax time can be a daunting task. However, with proper planning and organisation, the tax lodgment process can be simplified, saving time and reducing stress. Here are some tax lodgment tips for small businesses to make the process more manageable.

  • Understand Your Tax Obligations

Knowing your tax obligations is the first step towards streamlining the tax lodgment process. Income tax, goods and services tax (GST), and payroll tax are just some of the potential taxes you may face as a business owner. Find out what kinds of taxes you must pay and when those payments must be made.

  • Keep Accurate Records

When it comes time to lodging your taxes, you’ll thank yourself for keeping meticulous records. Receipts, invoices, and bank statements are just some of the documentation you’ll need to document your yearly revenue and expenditures. With this information, you may determine your tax burden and avoid underpayment penalties.

  • Use Accounting Software

Using accounting software can make the tax lodgment process much easier and more efficient. Accounting software may help you keep track of your income and expenses, generate reports, and even file your taxes electronically. Consider investing in accounting software that is specifically designed for small businesses.

  • Separate Business and Personal Expenses

It’s crucial to maintain a ‘wall’ between your business and personal finances. This will facilitate the process of recording business expenditures and determining tax liability. Keep your business and personal finances separate by opening a business checking account and credit card.

  • Take Advantage of Tax Deductions

Small businesses are eligible for a range of tax deductions, which can help reduce your tax liability. Some common deductions include office expenses, travel expenses, and depreciation. Make sure you keep track of all your business expenses throughout the year, so you can claim the deductions you are entitled to.

  • Plan for Your Tax Payments

It is essential to plan for your tax payments throughout the year. This can help you avoid any surprises when tax season comes around. Consider setting up a budget for your tax payments and putting aside a portion of your income each month to cover your tax liabilities.

  • Get Professional Help

If you are having trouble with the process of lodgment your taxes, you might consider seeking assistance from a professional. Your tax duties, the maintenance of proper records, and the optimisation of your tax deductions are all areas in which a tax professional may assist you. They may also assist you in lodgment your taxes in a timely manner so that you do not incur any fines.

  • Stay Up to Date with Tax Laws

Tax codes and regulations are subject to regular revisions. Maintaining up-to-date knowledge of any developments that might have an effect on your company is essential. To maintain your level of knowledge on taxes, you might want to consider signing up for tax newsletters or attending tax seminars.

Conclusion

Tax lodgment can be a challenging process for small businesses, but with proper planning and organisation, it can be simplified. Understand your tax obligations, keep accurate records, use accounting software, separate business and personal expenses, take advantage of tax deductions, plan for your tax payments, get professional help if needed, and stay up to date with tax laws.

By following these tax lodgment tips, you can save time, reduce stress, and ensure that your small business is in compliance with all tax laws and regulations.

If you want to get the help of a well-trusted tax professional on Sunshine Coast and Fraser Coast, look no further than our expertise here at SMB Accounting. Our business does Individual tax returns, small business accounting with various small business accounting packages available, SMSF audits (self managed super funds) as well as a Xero accounting software based accounting business. Call us today and let us help you file your taxes with little to no hassle at all!

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5 Red Flags Your Organisation Is at Risk of Non-compliance

Compliance audits are essential to business operations, ensuring that your organisation is adhering to industry regulations, standards, and best practices. Non-compliance can result in severe consequences, including hefty fines, reputational damage, and potentially even legal action. 

In this blog post, we will explore five warning signs that your organisation is not audit-ready and what you can do to address these concerns and ensure your business remains compliant.

1. Lack of a Comprehensive Compliance Program

The first warning sign that your organisation is not audit-ready is the absence of a comprehensive compliance program. This program should outline the policies, procedures, and controls in place to ensure compliance with applicable laws and regulations. A comprehensive compliance program should cover areas such as data privacy, anti-money laundering, anti-bribery, and corruption, to name a few.

If your organisation does not have a robust compliance program, developing one as soon as possible is essential. This process should involve collaboration between different departments, such as legal, finance, human resources, and IT, to ensure that all compliance aspects are thoroughly addressed.

2. Inadequate Training and Education

Another warning sign of non-compliance is inadequate training and education for employees. This can manifest in a lack of understanding of relevant laws and regulations or a general lack of awareness of the organisation’s compliance policies and procedures.

To address this issue, ensure that all employees receive comprehensive training on applicable laws and regulations and the organisation’s policies and procedures. 

3. Ineffective Monitoring and Reporting

Effective monitoring and reporting are crucial aspects of a successful compliance program. If your organisation lacks appropriate processes and tools to monitor compliance, this can be a significant warning sign that you are not audit-ready.

Your organisation should have a system for regularly monitoring and reporting compliance-related activities. Regular reports should be generated and shared with key stakeholders, such as senior management and the board of directors, to ensure they know the organisation’s compliance status and can take appropriate action if necessary.

4. Insufficient Documentation

Documentation is another critical component of a strong compliance program, as it provides evidence that your organisation is adhering to relevant laws and regulations. If your organisation lacks proper documentation, such as policies, procedures, and records of compliance activities, this can be a warning sign that you are not audit-ready.

To address this issue, ensure that all compliance-related documentation is up-to-date, accurate, and easily accessible for audit purposes. This may involve implementing a centralised document management system or regularly reviewing and updating existing documentation to reflect current laws, regulations, and best practices.

5. Poor Communication and Collaboration

Finally, poor communication and collaboration between departments can significantly hinder your organisation’s compliance efforts. If departments are not effectively communicating and working together to address compliance concerns, this can result in gaps and inconsistencies that can put your organisation at risk during an audit.

To improve communication and collaboration, consider implementing a compliance committee or task force with representatives from various departments. This group can meet regularly to discuss compliance-related issues, share information and best practices, and ensure that the organisation’s compliance program is being consistently and effectively implemented across all areas.

Conclusion

By recognising these five warning signs and taking proactive steps to address them, you can ensure your organisation is better prepared for a compliance audit. Developing a comprehensive compliance program, providing adequate training and education, implementing effective monitoring and reporting processes, maintaining sufficient documentation, and fostering strong communication and collaboration are all essential components of a successful, audit-ready organisation. By prioritising compliance, you can minimise your organisation’s risks and protect your reputation, stakeholders, and bottom line.

Looking for an experienced accountant in Caloundra? Look no further than SMB Accounting! Our team offers a range of services, including individual tax returns, small business accounting with various small business accounting packages available, SMSF audits, and more. Contact us today to learn more about how we can help you manage your finances and ensure compliance!

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How to Select the Right Tax Professional for Your Needs

Taxes can be complex and confusing, so many Australians ask tax agents for help. Tax agents are professionals who help individuals and businesses with their tax affairs. They can assist with preparing tax returns, advising on tax matters, and dealing with the Australian Taxation Office (ATO).

So, what do people want in a tax agent? Let’s explore some key factors people consider when choosing a tax professional.

  • Expertise and Experience

One of the most essential things Australians want in a tax agent is expertise and experience. Australians want to know that their tax agent is knowledgeable and experienced in tax law and regulations. They want to be confident that their tax agent can provide accurate advice and help them to maximise their deductions while ensuring compliance with the ATO.

An experienced tax agent will be able to provide valuable insights into tax planning strategies and help clients to make informed decisions about their tax affairs. They will be familiar with the latest tax laws and regulations and be able to guide how to navigate complex tax issues.

  • Clear Communication

Another essential factor that Australians want in a tax agent is clear communication. Taxes can be complicated, and clients want to understand what their tax agent tells them. A good tax consultant can explain complex tax issues in simple terms and answer clients’ questions.

Clear communication also means that tax agents should be transparent about their fees and other charges associated with their services. People want to know what they are paying for and what they can expect from their tax agent.

  • Efficiency and Reliability

Tax time can be stressful, and clients want to be able to rely on their tax agent to complete their tax returns accurately and on time. A good tax agent should be able to work efficiently and meet deadlines while still providing high-quality service.

Clients want to know that their tax agent will be there for them when they need them. They want a responsive tax agent who can answer questions or advise when needed.

  • Trust and Integrity

Trust and integrity are essential qualities people want in a tax advisor. Clients want to be able to trust their tax agent to act in their best interests and provide honest advice. They want a tax agent who is ethical and transparent in their dealings.

A good tax agent will adhere to a strict code of ethics and always act in their client’s best interests. They will be transparent about conflicts of interest and never compromise their integrity for financial gain.

  • Flexibility and Accessibility

Australians also want their tax agent to be flexible and accessible. They want a tax agent willing to work around their schedule and provide services that suit their needs. This could mean offering virtual appointments or meeting outside of regular business hours.

Clients also want a tax agent who is accessible and responsive. They want to reach their tax agent easily and get a prompt response to their queries.

Conclusion

If you are looking for a tax professional, it’s essential to consider these factors when making your decision. Look for a tax agent with a strong reputation for providing high-quality service and the expertise and experience to meet your needs. With the right tax advisor by your side, you can confidently and easily navigate the complexities of tax law.

At SMB Accounting, our services include individual tax returns, small business accounting using various small business accounting products, SMSF audits (self-managed super funds), and an accounting firm based on the Xero accounting software. In addition, we provide audits of trust accounts, nonprofit organisations, financial statements for specific reasons, special needs clients, and more. Get in touch with us today if you need a tax professional! 

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Why Your Tax Refund is Lower Than Expected

As an Australian taxpayer, there’s nothing more frustrating than expecting a decent tax return only to receive a much lower amount than anticipated. While many factors can affect the amount of your tax refund, several common reasons can explain why your Australian tax return is lower than expected. In this article, we’ll explore some of the most common reasons why your tax return is so low and what you can do to maximise your refund.

1. Low Taxable Income

One of the most apparent reasons why your tax return is low is because you have a low taxable income. Your taxable income is the amount you earn that is subject to taxation after accounting for deductions and offsets. If your income falls below the tax-free threshold, you won’t have to pay any income tax, but you also won’t receive a refund.

If your income exceeds the tax-free threshold, your tax refund will be calculated based on your marginal tax rate. The higher your income, the higher your marginal tax rate, and the more tax you’ll pay. So, if your income is low, you may not have paid enough tax throughout the year to receive a substantial refund.

2. Incorrect Information on Your Tax Return

Another common reason for a low tax return is incorrect information on your tax return. If you make a mistake on your tax return, such as entering the wrong income or claiming deductions you’re not entitled to, the ATO will adjust your refund accordingly. Even a small error can have a significant impact on your refund, so it’s essential to double-check your tax return before submitting it.

3. Deductions and Offsets

Deductions and offsets are crucial to reducing your taxable income and maximising your tax return. Deductions are expenses you can claim as tax deductions, such as work-related or charitable donations. Offsets are amounts you can use to reduce the tax you owe, such as the low-income or senior Australians’ and pensioners’ tax offset.

If you didn’t claim all the deductions and offsets you were entitled to, your tax return could be lower than expected. It’s important to keep records of all your expenses and claim all relevant deductions and offsets to maximise your refund.

4. Late Tax Lodgement

If you lodged your tax return late, you may have missed out on some of the benefits of lodging early. The ATO processes early tax returns first, meaning early lodgers will likely receive their refunds sooner. Additionally, if you owe the ATO money, you may be charged interest and penalties for late lodgement, which can reduce your refund.

To avoid these issues, it’s essential to lodge your tax return as early as possible. If you cannot lodge your tax return on time, contact the ATO and arrange a payment plan to avoid penalties and interest charges.

5. Unpaid Debts

If you have any unpaid debts, such as a student loan or a tax debt from a previous year, the ATO may deduct the amount from your tax refund. This means that even if you’re entitled to a refund, you may not receive the full amount if you have outstanding debts.

To avoid this issue, it’s essential to keep track of any outstanding debts and pay them as soon as possible. If you cannot pay your debts, contacting the ATO and arranging a payment plan is important to avoid any deductions from your tax refund.

Maximising Your Australian Tax Return

While there are many reasons why your Australian tax return may be lower than expected, there are also many ways to maximise your refund. Additionally, by lodging your tax return early and paying any outstanding debts, you can avoid penalties and interest charges and receive your refund sooner. By taking these steps, you can maximise your Australian tax return and ensure you receive the full amount you’re entitled to.

SMB Accounting does Individual tax returns, small business accounting with various small business accounting packages available, SMSF audits (self-managed super funds) as well as a Xero accounting software-based accounting business. We are your trusted partner when it comes to tax returns and superannuation. If you need help with your tax return on the Sunshine Coast, get in touch with us today! Let us know how we can help.

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2023 FEDERAL BUDGET SUMMARY

In broad terms there is to be a surplus of $4.2bn however an underlying cash deficit of $13.9bn. Australia’s growth is estimated to slow to 3.25% in 22/23 to 1.5% in 23/24, with a recovery to 2.25% in 24/25

Inflation is expected to fall to 3.25% in the 23/24 year and further to between 2-3% in the 24/25 year

Here are some highlights from the budget.

Personal Tax

  • Stage 3 Tax Cuts – there were no tax rate changes for personal tax. The stage 3 tax cuts are still to be implemented from 1st July 2024 with the 32.5% tax rate being reduced to 30% for incomes between $45k to $200k, with the 37% tax bracket being totally removed
  • Medicare Levy (ML) Thresholds – the ML have been increased across all categories

 

Small Business

  • Instant Asset Write-off Threshold – this is set at $20k (up from $1k). This removes the Covid measure of unlimited amount for an asset write off being fully deductible. Assets greater than $20k can be deducted at 15% in the first year and 30% in subsequent years.
  • Small business Energy Incentive – businesses will be able to claim an additional 20% deduction on spending that supports electrification and more efficient use of energy.
  • Amall business lodgement penalty amnesty – Small businesses with aggregate turnover of less than $10m will be given an amnesty which will remit failure-to-lodge penalties for outstanding tax statements lodged in the period from 1 June 2023 to 31 December 2023 that were originally due between 1 December 2019 to 29 February 2022.
  • PAYG and GST instalment uplift factor – The GDP uplift factor will be set at 6% (rather than 12% as would otherwise apply under the statutory formula) for instalments with respect to the 2023-24 income year that fall due after the measure is legislated.

Business Taxation Measures

  • Build-to-rent properties – For eligible new build-to-rent projects from 9 May 2023, the rate for the capital works tax deduction (depreciation) to 4% per year
  • FBT rules for electric vehicles – The Government confirmed that plug-in hybrid electric cars will not be eligible for the FBT exemption for electric cars from 1 April 2025

 

Superannuation

  • Super account balances above $3m – despite pushback from industry, the Government has confirmed its intention to apply an extra 15% tax on total superannuation balances above $3 million from 1 July 2025, including in relation to defined benefit schemes. No further details were released so it is expected the proposed changes will operate as previously announced (ie, unrealised gains will be subject to the extra 15% tax).
  • Payday super – employers will be required to pay their employees’ super guarantee at the same time as their salary and wages from 1 July 2026
  • Pension drawdowns: no reduction in minimum – the Budget did not announce a further extension to 2023-24 of the temporary 50% reduction in the minimum annual payment amounts for superannuation pensions and annuities.

 

Please feel free to share to any person you may think may benefit If you need any assistance, please get in contact with us at

 stephen@smbaccounting.com.au

 P 1300 854 159

 

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Reduce Your Tax Bill: Don’t Miss These Deductions

As an Australian taxpayer, you want to avoid paying more taxes than necessary. One way to minimise your tax bill is to take advantage of all the deductions available. So before talking with a tax consultant, here are some deductions you want to take advantage of.

1. Work-Related Expenses

Work-related expenses are expenses incurred while performing your job duties. If you have spent money on work-related expenses, you may be eligible to claim them as a deduction on your tax return. These expenses include uniforms, tools, equipment, and other items necessary for your job. 

However, not everything is eligible for a deduction, so reviewing the ATO guidelines before making a claim is important. Ensure you keep proper records of your expenses throughout the year, as you may need to provide evidence to support your claim.

2. Home Office Expenses

Some people in Australia are navigating the world of working from home due to the COVID-19 pandemic. If you work from home, you can ask for home office expenses as a deduction on your tax return. These expenses include electricity, internet, phone bills, and a portion of your rent or mortgage interest.

To be eligible for a home office expense deduction, you must establish a dedicated workspace in your home that is used exclusively for work purposes. You must also show that the expenses you claim are directly related to your work.

3. Charitable Donations

Donating to charities is a good way to give back to your community and support serious causes. It can also be a tax-deductible expense, which means you can cut your taxable income and potentially receive a refund from the government.

To declare a deduction for charitable donations, you must have donated to an eligible charity or organisation. You must keep records of your donations, such as receipts or bank statements, to support your claim.

4. Self-Education Expenses

If you are undertaking education or training related to your current job, you may claim self-education expenses as a rebate on your tax return. These expenses include course fees, textbooks, and travel expenses related to attending classes.

However, ensure that your education or training is directly related to your current employment and not to a new career or profession. Additionally, you cannot claim self-education expenses if your employer has already reimbursed you for these costs.

5. Travel Expenses

There are instances where you can claim travel expenses as a tax deduction. This includes travel for work-related purposes, such as attending conferences, meetings, or training courses. You can also claim travel expenses if you are required to travel between different work locations or if you need to travel to meet with clients or suppliers.

Final Thoughts

Taking advantage of all the deductions available is a great means to minimise your tax bill. By working with a tax consultant or accounting firm, you can ensure that you are claiming all the deductions you are entitled to and doing so correctly. So don’t miss out on these deductions—they can spare you a lot of money in the long run.

Get your finances in order with SMB Accounting’s expert services. Streamline your business operations and maximise profits with our tailored solutions. Contact our accounting firm in Sunshine Coast today!

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