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Are you maximising your superannuation contributions? With the advent of the unused concessional contributions cap carry forward measure, Australians now possess a golden opportunity to fortify their retirement nest eggs.
So without further ado, let’s dive into to what it all means for you…
The concessional contributions cap signifies the maximum before-tax contributions allowable to your super each year without attracting additional taxes. As of 1 July 2021, this cap sits at $27,500, a step up from the previous financial years' $25,000. This figure escalates in alignment with the Average Weekly Ordinary Time Earnings (AWOTE), and is current for the 2022-23 tax year.
From 1 July 2018, a significant shift was initiated to address the quandaries faced by individuals with fluctuating incomes and to maximise the utility of unused caps for those with lower super balances. This alteration permits individuals with a Total Superannuation Balance (TSB) below $500,000 as of 30th June of the preceding financial year to carry forward any untapped concessional contributions cap from previous years.
Meeting the eligibility criteria empowers you to transport unused concessional cap amounts from up to five preceding financial years, commencing from 2018–19. These surplus amounts can be deployed to augment your contribution caps in forthcoming years, offering a valuable avenue to grow your retirement savings.
Unused cap amounts are automatically deployed upon surpassing the cap in any given year. Nonetheless, it's imperative to bear in mind that these residual cap amounts expire after five years. For instance, any surplus cap amount from 2018–19 would lapse by the conclusion of 2023–24.
Consider James, who has been falling short of his concessional contributions cap over several years, resulting in accrued untapped caps. In the fiscal year 2021-22, James finds himself in a position to make additional contributions. Here's how it unfolds for him:
• In 2020–21, James's TSB surpassed $500,000, rendering him unable to carry forward untapped cap amounts.
• However, in 2021–22, James's TSB dipped below $500,000, rendering him eligible to leverage the untapped cap amounts from preceding years.
By harnessing the carry forward measure, James can inject up to $94,500 into his super in the fiscal year 2021–22, substantially maximising his super contributions and fortifying his retirement.
While capitalising on the benefits of the unused concessional cap carry forward measure is undeniably advantageous, it's imperative to proceed with caution to sidestep potential pitfalls, particularly concerning any excess contributions.
Should you exceed your concessional contributions cap, the excess concessional contributions (ECC) become part of your assessable income. These excess contributions are then subject to taxation at your marginal tax rate, albeit with a 15% tax offset to account for the contributions tax already paid by your super fund. The implications of surpassing your cap extend beyond mere taxation and could impact your PAYG instalments, Medicare levy, Centrelink benefits, and child support obligations.
As we approach a real tax-milestone, we’re dedicated to equipping you with the knowledge and guidance needed to optimise your super contributions. Our approach is always about you, not only helping you maximise your tax position, but also assisting with navigating potential risks with absolute accuracy.
If you're keen on leveraging the unused concessional cap carry forward measure to secure your financial future, or, are looking for strategic advice on how to grow your superannuation for best results and ensure your compliance, reach out to the Attune team today.
You can call us anytime on 1300 866 113 or send us an email to start the conversation – let's collaborate to safeguard your retirement aspirations.
With businesses of all sizes looking to find additional methods of bolstering their bottom line and maximise tax savings, it’s important to stay on top of changes to legislation and ATO policies. With that in mind, we're diving into the reinstatement of the $20,000 instant asset write-off threshold and what it means for SMEs across the country.
Introduced by the Australian government in 2015, the $20,000 instant asset write-off has been somewhat of a lifeline for SMEs, allowing them to invest in their businesses and drive economic growth. Although the temporary full expensing rules, offering an immediate deduction for the full cost of assets acquired, ended on June 30, 2023, the government has taken steps to ensure continued support for SMEs.
The instant asset write-off threshold was set to revert to $1,000 from July 1, 2023. However, the government has introduced a Bill to Parliament to maintain the $20,000 threshold for small business entities for the 2024 income year. This move aims to provide stability and encourage business investment.
The ability to claim the cost of an asset up to $20,000 is a huge help to many when it comes to encouraging growth and well worth understanding fully, so let’s jump into the details …
For SMEs to access the $20,000 instant asset write-off, they must meet specific criteria:
• The entity must be conducting a business under general principles in the 2024 income year.
• Aggregated annual turnover should be less than $10 million, based on either current or previous year figures.
• The entity must opt to apply the simplified depreciation rules for the 2024 income year.
• The asset's cost must be less than $20,000.
• The asset must be first used or installed ready for use for a taxable purpose between July 1, 2023, and June 30, 2024.
It's crucial to note that SMEs must opt-in to the simplified depreciation rules to access the instant asset write-off. Failure to do so will result in ineligibility, regardless of meeting other conditions. You can read the ATO’s breakdown of these rules here.
The $20,000 threshold applies per asset, enabling SMEs to potentially deduct the full cost of multiple assets throughout the 2024 year, as long as each asset's cost remains below $20,000. Additionally, the threshold determines whether the full pool balance is written off for the 2024 income year, offering further opportunities for tax benefits.
Provisions preventing SMEs from re-entering the simplified depreciation regime for five years, if they opt-out, will remain suspended until June 30, 2024. This flexibility provides SMEs with more control over their depreciation strategies.
For details and help assessing your depreciation strategies, get in touch with the Attune Advisory team so we can help ensure you’re setting yourself up correctly.
Assets eligible for the instant asset write-off must fall within the scope of depreciation provisions. Expenditure on capital improvements to buildings, governed by capital works rules, does not qualify. Assets costing $20,000 or more can still be placed into the small business general pool and depreciated at 15% in the first income year and 30% each subsequent year.
Once again, before jumping into an asset purchase for your business, it’s worth discussing the details with the Attune team to ensure we can guide you to the most appropriate course of action when it comes to the tax treatment of the asset for your business.
The reinstatement of the $20,000 instant asset write-off threshold presents SMEs with valuable opportunities to invest in their businesses while enjoying tax benefits. At Attune Advisory, we're here to support you in navigating these changes and maximising your financial outcomes. Reach out to our team via email or call us on 1300 866 113 to explore how you can leverage these incentives to drive growth and success for your business.
We’re here to give you tailored advice that works for your business and financial strategies for success.
Today is World Purple Day. This global event, celebrated annually on March 26th, is dedicated to raising awareness about epilepsy, a neurological disorder affecting millions worldwide. At Attune Advisory, we embrace the spirit of Purple Day, advocating for increased understanding and support for those living with epilepsy in our community.
Purple Day originated in 2008, when Cassidy Megan, a young Canadian girl living with epilepsy, decided to raise awareness about the condition. She chose the colour purple to symbolise hope and solidarity, urging people worldwide to wear purple and host events to educate others about epilepsy. Since then, Purple Day has grown into an international movement, uniting individuals, organisations, and communities in support of epilepsy awareness.
Epilepsy is a complex neurological condition characterised by recurrent seizures, resulting from abnormal brain activity. It can manifest in various forms, affecting individuals of all ages and backgrounds. According to Epilepsy Australia, over 250,000 Australians are living with epilepsy, with approximately 3.4 million people nationwide experiencing seizures at some point in their lives.
Despite its prevalence, epilepsy remains widely misunderstood, leading to stigma, discrimination, and social isolation for those affected. By raising awareness and fostering a supportive environment, we can challenge misconceptions and empower individuals with epilepsy to lead fulfilling lives.
As advocates for epilepsy awareness, we encourage everyone to participate in Purple Day activities and show their support for the cause. Here are a few ways you can make a difference:
1. Wear Purple: Show your solidarity by wearing purple clothing or accessories throughout the day. Whether it's a purple shirt, tie, or ribbon, your choice of attire can spark conversations and raise awareness.
2. Spread the Word: Share information about Purple Day and epilepsy on social media platforms using the hashtag #PurpleDay. By educating your friends, family, and followers, you can amplify the message and reach a broader audience.
3. Host Events: Organise Purple Day events in your community, such as fundraisers, awareness walks, or educational seminars. By bringing people together, you can foster a sense of unity and support for individuals with epilepsy.
4. Donate: Consider making a donation to reputable epilepsy organisations that provide vital support services, research funding, and advocacy efforts. Every contribution helps advance the cause and improve the lives of those affected by epilepsy.
At Attune Advisory, we recognise the importance of supporting our community members living with epilepsy and strive to raise awareness, promote inclusivity, and advocate for the rights of individuals with epilepsy.
Together, let's paint the world purple and stand in solidarity with individuals living with epilepsy. By spreading awareness and fostering compassion, we can create a more inclusive and supportive community for all.
Let's make a difference this Purple Day and beyond. Together, we can create a world where everyone feels understood, accepted, and valued.
As a business owner in Australia, understanding what expenses are tax deductible can significantly impact your bottom line. One area often surrounded by questions is advertising expenses – what and when are they deductible?
Let’s take a look …
Advertising expenses incurred to promote your business are generally tax deductible. This includes various costs associated with marketing campaigns, promotional materials, and engaging advertising agencies or designers. The fundamental criterion for claiming these expenses is that the advertising activities aim to generate income for your business.
For instance, if your business invests $5,000 in designing a new marketing campaign, the full amount is deductible in the year the expenses were incurred. Similarly, costs for promotional materials such as brochures, banners, or giveaways, as well as fees paid to advertising agencies, are all eligible for deduction.
Understanding which advertising expenses are claimable is crucial. Here's a comprehensive list:
• Marketing/promotional materials
• Print/digital advertising
• Radio/TV commercials
• Website development/updates
• Direct mail campaigns
• Sponsorships/endorsements
• Trade show/exhibition costs
• Advertising agency/consultant fees
• Research/market testing
• Signage/billboards
• Business/product naming
They key to making these claims completely valid, is to ensure they represent legitimate advertising activities aimed at promoting your business, product, or service.
It's essential to distinguish between business-related advertising and personal expenses. The Australian Taxation Office (ATO) only permits deductions for costs directly contributing to business growth and revenue generation. Therefore, expenses associated with personal messages or non-business-related activities are not deductible.
For example, placing an ad in a newspaper to congratulate a family member or printing business cards solely with your name without company information wouldn't qualify for deduction. The ATO scrutinises advertising expenses to ensure they genuinely serve business interests.
In today's digital age, businesses increasingly rely on online platforms for advertising. The good news is that expenses related to digital and social media marketing are fully tax deductible in Australia. Whether it's website development, online advertising fees, or social media management costs, these expenses can be claimed as long as they contribute to promoting your business and attracting customers.
Similarly, costs associated with maintaining a social media presence, hiring social media managers, running paid ads, or collaborating with influencers are deductible. As long as these activities support marketing and sales efforts, they're eligible for deduction.
As tax time approaches, it's essential to gather all receipts and invoices for advertising-related expenses incurred throughout the financial year. These documents will help calculate your total marketing costs, which can then be deducted from your taxable income.
Your tax accountant at Attune Advisory will assist in accurately claiming these expenses when filing your tax return. Remember, even the fees paid to your accountant for their services are deductible.
Investing in advertising is not just crucial for business growth but thankfully also offers tax benefits for Australian businesses. By understanding what advertising expenses are deductible and ensuring compliance with ATO regulations, you can maximise your tax savings while effectively promoting your business.
If you have questions or need assistance with claiming advertising costs for your business, our team of professional tax agents at Attune Advisory is here to help. Contact us at 1800 367 487 to speak with an expert today. We're committed to helping you thrive financially – partner with us for expert advice and tailored solutions to your tax needs.
