A self-managed superannuation fund (SMSF) gives you control and flexibility over making investments and preparing for retirement.
It’s essential to get your deductions and record keeping right for the SMSF audit process and the tax return, as strict laws govern SMSFs.
An SMSF must be set up as a trust and have a legal document called a trust deed. A super fund trust is set up for the sole purpose of providing retirement benefits to its beneficiaries. The trust deed governs how the fund is set up and how it will operate and must be used in conjunction with the superannuation laws.
There are many different investment strategies for SMSFs according to the fund’s trust deed and operations.
Common Tax Deductions
Deductible expenses for SMSFs vary according to the nature of investments and the trust deed; however, some general expenses apply to most funds.
Operating expenses include management and administration, audit, and ASIC annual fees.
Investment-related expenses include interest, investment advisory fees, costs of servicing and managing investments, property fees, and brokerage fees.
Tax-related expenses, such as preparing the SMSF annual return.
Legal expenses, including amending trust deeds.
SMSF statutory fees and levies.
Insurance premiums for death, total and permanent disability, terminal illness, and income protection.
The tax deductibility rules for SMSFs differ from those for individuals and businesses. Many people are used to claiming deductions for certain things in business or property investment and find they don’t apply to SMSF tax returns. We can help clarify what’s deductible and what’s not.
Expenses must relate to the super fund’s sole purpose being to provide its members’ retirement benefits. There may be some items you want to query with us for the audit and tax return to see if they meet the sole purpose test, such as investment training courses, collectibles and artwork, travel expenses, or personal computers.
SMSF Annual Return and Records
Once the formal audit of the SMSF has been completed, the annual return must be lodged with the ATO. The annual return is not only a tax return but also reports regulatory information and member contributions. You must keep all records relevant to the annual return.
Keep all transaction, tax, accounting, and financial reporting records for at least five years.
Keep all records relating to trustee meetings, minutes, investment strategies, and appointments or changes of trustees for at least ten years.
Make Your SMSF Management Easy
SMSF management can be time-consuming. We can help with researching and managing investments, checking trust deed compliance, setting investment strategies, keeping records, and conducting the audit.
Talk to us now and get ahead for your next annual SMSF return.
Are you claiming all the small business tax deductions that you are entitled to?
Common Tax Deductions for Small Business
There are many expenses common to most small businesses, and there are other expenses specific to the nature of each industry and the goods or services your business provides.
Operating expenses include accounting, administration, advertising and marketing, office premises, office running expenses, trading stock, legal fees, repairs and maintenance, insurance, and vehicle expenses.
Employment expenses include salary and wages, fringe benefits, superannuation, and training costs.
Other operating expenses may include things specific to your business, for example, point of sale systems, freight, professional membership fees, professional education, protective equipment, tools, or specialised software.
Capital expenses include machinery and equipment, vehicles, furniture, and computers. Depreciation for these assets may also be deductible if the expense was not claimed immediately.
Expenses must relate to running the business and providing the goods or services your business offers.
Some common expenses that are not deductible are fines and penalties, provisions for employee leave, donations to entities not registered as deductible gift recipients, and some entertainment. Super and PAYGW are tax deductible when they are paid on time – but not if paid late!
There may be some expenses you want to check with us, such as private usage of business vehicles or other equipment, prepaid expenses, bad debts, loss of stock, and borrowing expenses. We’ll make sure to include all the deductions you’re entitled to.
What’s on the ATO Radar for Business Tax Returns?
Businesses whose benchmarks fall significantly outside the ATO’s small business benchmarks.
Work-related travel expenses – travel fares, accommodation, meals. The travel should be directly related to income-producing activities; you need records to verify the travel claims.
Motor vehicle expenses – keep records for fuel, repairs and servicing, finance arrangements, insurance, and registration. Keep a logbook to record private travel.
Fringe benefits – have you reported all benefits provided to employees?
Superannuation – have you paid the superannuation guarantee on time to employees’ super funds? The ATO will examine your Single Touch Payroll records, including superannuation payments.
Instant asset write-off – the threshold remains at $20,000 this year, but there are rules about eligibility, so talk to us to see if the asset deduction claims apply to your business.
Maximise Your Business Deductions
Remember to keep all your business records for at least five years and payroll records for at least seven years. Companies must keep all records, including director meeting minutes, for at least seven years.
We’ll ensure you have time to plan for a tax bill, or if you are due a refund, you’ll get it within ten days of us lodging your tax return.
We’ll also check your business’s eligibility for concessions, offsets, incentives, and rebates and make sure your business is calculating taxable income correctly so you don’t pay more tax than you need to.
Contact us when you are ready. We’re here to help.
Your Accountant: The Mentor You Didn’t Know You Needed
Have you ever thought of your accountant as a mentor?
A business mentor can provide guidance and support, so you make the right decisions and stay focused on the end goal as a business owner. They can also help you move forward in your career by providing advice and feedback on the steps to take to reach success.
Why your accountant is the ideal mentor
Having someone who understands your business journey is incredibly important. You might see an accountant as someone who files your tax returns. But, in fact, we’re experienced business owners with access to a significant network of other business professionals.
An accountant can be the mentor you didn’t know you needed. No one knows your business better than us, so we’re perfectly placed to offer advice, guide your business journey and help you push your skills and capabilities as a business owner.
As a mentor, an accountant will:
Expand your knowledge as an entrepreneur – as business owners, we have the knowledge and experience to help you move your business forward. And we can work with you to expand your leadership skills, business thinking, and entrepreneurial ideas.
Be a shoulder to lean on – we’ll offer 1-2-1 mentoring sessions where we can listen to your unique worries and concerns as a business owner. Having someone on the same page to listen and empathise is vital for your business and mental health.
Guide the important elements of your business – we’ll help you manage and improve your business strategy, planning, and decision-making skills. We’ll also provide the management information systems you need to guide your finances and planning.
Keep your finances on track – we’ll show you how to maximise profits, reduce costs, and make better financial decisions. We’ll also help you plan your own personal wealth and tax strategies so that you can achieve your own entrepreneurial goals and lifestyle.
Introduce you to a broader business network – we work with hundreds of other business owners across various industries. This means we can link you up with other entrepreneurs and founders so you can connect with a network of like-minded individuals. This can be vital when brainstorming and benchmarking or if you need to talk to someone who understands the specific pain points you’re experiencing.
Having someone to guide your business journey can be invaluable. A business owner must grow and evolve along with their business. Regular mentoring catch-ups are ideal for progress, offloading your concerns, and looking for new inspiration.
If you want to grow as an entrepreneur, please come and talk to us about our mentoring services and how we can guide your business future.
Although tax returns for individuals are not due just yet, the financial year’s end is near. Get ahead now by preparing all the documents required for your tax return so you can get your tax done quickly and get any refund due to you in your bank!
Income
The Australian Taxation Office (ATO) automatically receives information from your employers about the salary and wages that you have been paid for the financial year.
You need to also declare all income (even if it’s just a small amount) from other sources on your tax return. You’ll also need documents such as statements, invoices, and reports to show all earnings.
Wages, salaries, allowances, or bonuses from all employers.
Pensions, annuities, or other government payments.
Investment income, including interest earned and dividends received.
Business and hobby income, if you have a side business as well as a job.
Foreign income.
Crowdfunding income.
Sharing economy income such as Uber or Airbnb.
Income from overseas sources.
Income such as hobbies, prize money, compensation, or insurance payments may be tax-free but check with us.
Work-Related Expenses
Employees are entitled to claim work-related expenses as a tax deduction. To claim a deduction, you must have spent the money out of your own funds and not have been reimbursed by your employer. The expenses must relate to your earnings as an employee. Ensure you have invoices and receipts as proof of payment for work-related expenses.
Expenses you may be able to claim
Vehicle and travel expenses – use a travel diary to record details of trips taken for your employment.
Clothing, laundry, and dry-cleaning expenses – occupation-specific clothing, uniforms, and protective gear can be claimed.
Self-education expenses – some education expenses that relate to your current employment are claimable.
Tools and equipment – if you buy gear to help you in your job, this may be claimable. Small tools of the trade, protective items, professional references, and laptops are some examples of equipment you may be able to claim.
Superannuation contributions you have made are separate from your employer’s contributions.
Occupation and industry-specific requirements – check the ATO fact sheets for your industry.
Working from home – new rules apply this year, making claiming expenses for working from home more accessible. Check the ATO information for details.
Register now for us to prepare for your tax return, and we’ll make tax time easy for you – and get any refund that is be due to you.
Trying to get a perfect work/life balance can be a cause of stress in itself. If you are feeling the strain of building your business and maintaining your life, the good news is that stress and a productive existence can go hand in hand. Be mindful and you can find the balance that’s best for you.
How much stress is good for you?
The Yerkes-Dodson law shows that an individual’s performance increases with stress (arousal) until cortisol levels get too high. Then performance decreases again just as sharply. The secret is to stop your stress levels from sending you down the other side of the bell curve. How much is too much varies for everyone, but understanding and managing your stress levels allows you to use them for good.
How to manage your stress
Take Control – Feeling in control can decrease stress from harmful levels by presenting the stress causes as surmountable challenges. Get a handle on your project, tasks, or day by breaking them down into achievable goals and choosing what to prioritise.
Get positive – Your perception of your stress is important. Rather than leading to panic and inertia, calmly recognise the first quickening of your heart rate as something powerful, making you more alert and capable.
Connect – Social support reduces stress, so good relationships within a team and the wider office environment make everyone more resilient to stress.
Exercise – A good workout reduces bad stress and is good for the brain, heart, and lungs.
Sleep – Poor sleep is bad for stress levels and health, so be disciplined about getting a good night’s rest. Being exhausted will increase susceptibility to further stress and damage productivity.
If work stress is getting too much, talk to us.
We can help manage systems, technology, payroll, or other financial and administrative management. We can help with your business worries so you can get back on track.
When you run a small business, the amount of work can ebb and flow. Unexpectedly busy periods can create too much work and stress for a small team or one-person business. But if a surge is seasonal or unreliable, you don’t necessarily want to commit to taking on another employee. One solution is to use outsourcing to give you some flexibility during busy periods.
What could you outsource?
Several types of jobs can be ideal for outsourcing:
Tasks you dread, usually procrastinate, or that cause you massive stress
Tasks where you or your business have low expertise
Those tasks which don’t require the contractor or freelancer to access your systems or deal with your clients.
For example, outsourcing your social media management could work well if you aren’t managing your digital marketing. Or it might be branding, HR, or customer service. And if you need help with your payroll or accounts, we’re only a phone call away.
If you can take stressful tasks off your plate or reduce your workload at peak times, you can increase your revenue and productivity without overcommitting to payroll.
Who could do the work for you?
We’re here to support you with your accounting and payroll requirements. You could consider a local or an offshore provider for other types of work. Plenty of platforms and organisations will help you, but do shop around as the quality varies enormously.
The advantages of a local provider are that they’ll be in the same time zone, with no language barrier, and operating under the same regulations. International providers, on the other hand, can be considerably cheaper.
Need help getting started?
Are you considering outsourcing and wondering how much to spend or where to start? Or do you need help with accounts and payroll? Get in touch. We’d love to help.
