Have you heard about the introduction of Single Touch Payroll (STP) which is being advertised as one of the biggest changes for small businesses since the introduction of GST?
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We all know that the ATO has the power to request information from third parties to verify information declared in our tax returns.
Some examples are where employers are required to submit their PAYG Summaries, banks are required to advise the ATO of interest earned in bank accounts, health insurers are required to confirm with the ATO the insurance covers and premiums paid for each taxpayer…
Now they have taken this to another level…
Remember in December 2018 when cryptocurrency was a hot topic, where everyone was trying to get in and have a share of the pie?
It is estimated that there are between 500,000 to one million Australians that have invested in cryptocurrency. Because of this, it has been on the ATO’s radar as it is seen to be used to move funds to the black economy, hide money offshore, and is sometimes linked with risks with unexplained wealth and undeclared taxable capital gains.
Recently the ATO announced that they are extending their data-matching program to include Cryptocurrencies.
How do they do that?
They require cryptocurrency designated service providers (DSPs) to provide reports to the ATO on an ongoing basis. The data includes the following:
- Details of cryptocurrency owners (including details of individuals’ social media accounts)
- Account and transaction details (including wallet addresses associated with accounts, their unique identifiers, types and amounts in transactions
How will that impact me?
If you have been declaring your cryptocurrency trading/investments in your tax returns – nothing will happen.
If you have been trading/investing in cryptocurrency, especially where you have sold/converted between different cryptocurrencies, you may be contacted by the ATO as you may have omitted declaring these in your tax return. You will be given opportunity to verify the information collected before any compliance action is undertaken.
What do I do now, if I have omitted transactions in my tax return?
You can voluntarily notify the ATO by amending your tax return to include the omitted transaction, the ATO will then prepare an amended assessment where you will be required to pay back the extra tax liability (or receive extra tax refund as a result). If you are having trouble preparing an amendment, Aston is here to help.
From time to time we get questions from clients where they ask if they should have private health insurance. While it is a very personal decision, sometimes it may make a difference to your tax position when it comes to preparing your tax return.
Let’s dive into some of the common questions asked!
In this article we go through some general reminders that SMSF trustees and members need to be aware of, and perhaps take action on before 30 June 2019.
We look at your contributions for the year, what a total superannuation balance (TSB) means, whether you can contribute to your superannuation account, what a work test is and how it affects you… and things to consider if you are turning 75.
Check your contributions
With only 6 weeks left of the 2019 financial year, it’s a good idea to review where your concessional contributions are up to.
The concessional cap for individuals for the 2019 financial year is $25,000. This cap applies per person so if you have more than one superannuation fund you should check all of them.
Concessional contributions are contributions that are considered ‘taxable’. Most commonly known as employer contributions, salary sacrificed contributions and contributions where you intend to claim a personal tax deduction.
If you have a salary sacrifice arrangement in place with your employer you should add up your total concessional contributions already paid to your superannuation fund from 1 July 2018 to present, to ensure you will not exceed your cap.
Amounts contributed over your annual cap are considered excess contributions and eventually will be taxed at your marginal tax rate plus interest.
Your Total Superannuation Balance (TSB)
Total Super Balance refers to the total amount an individual has in superannuation as at 30 June of the prior financial year ie currently for 30 June 2018.
The TSB is used to determine how often you need to report certain events to the ATO such as pension commencements and lump sums and most importantly whether you can make non concessional contributions (non-taxable contributions).
If you have a TSB of over $1.4m as at 30 June 2018 the amount you contribute to superannuation as non concessional contributions may be restricted. You will have noticed we have been requesting the 30 June balances of any other superannuation funds you have outside of your SMSF. This is due to the TSB applying not only to your SMSF balances, but all your superannuation balances. It is important you consider any other super funds you have before making non concessional contributions.
Am I allowed to contribute to superannuation ?
Apart from having to consider your TSB before contributing to superannuation you also need to consider your age. For individuals aged 65 and over at the time of contributing, you must meet a work test prior to making voluntary concessional or non concessional contributions.
So, what is this work test ?
Basically if you are aged 65-74 you must be working for a minimum of 40 hours in any 30 consecutive day period. By working, the ATO mean you must be gainfully employed where you receive remuneration for your efforts. ie not volunteering. Where you are employed and are paid per hours worked, the work test is usually quite easy to prove. For those that are self employed with varying hours of work, this can become more difficult to show you have done the necessary hours. We suggest keeping a timesheet or work diary to show the work test has been met.
If you are unsure whether you can meet the work test, check with us first! As a trustee you should not be accepting contributions from members 65 and over (even yourself!) if the work test has not been met.
Are you approaching 75 years of age?
If you are approaching 75 years of age you might be planning how to celebrate this occasion. And as much as we love a party, we’d hate for you to miss out on making your last contributions to superannuation.
For individuals turning 75 years old (that can meet the work test), contributions must be received no later than 28 days after the end of the month that individual turns 75 years old.
This may be the last opportunity to contribute to your superannuation fund. If you would like further information please contact us.
The Treasurer has delivered the Federal Budget 2019 last night (2 April 2019), he has provided some good news to individual taxpayers and small business owners.
It is worth noting that most of the announcements he made in relation to income tax are related to future income years, there are only two announcements that will take into effect immediately. In this article we go through the ones that are affecting the 2019 financial year only.
