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Basics of SMSF investing

Posted on 21 January '21 by admin

Setting up an SMSF fund is the simplest step. Establishing a fund which delivers you consistent returns from your investments is much more difficult. 

Investing successfully involves determining precise goals and picking investments which will effectively achieve those goals. The advantage of SMSFs is that you can build a portfolio which reflects your short-term and long-term goals in response to changing market conditions.

In an SMSF fund, your investment options are:

Before you begin investing, consider what might be the best way to diversify your portfolio. How you portion your investments will depend on your funds, the market, and your goals. Regardless of what your plan is, diversification should be a priority. 

Choosing an SMSF as opposed to an industry or retail super fund provides you with more flexibility, but also with more responsibility. Researching before investing is key if you want the best out of your SMSF. 

Taxation of your unused leave when leaving a job

Posted on 21 January '21 by admin

When your job ends, whether there has been a termination of employment or redundancy you will receive a payment for unused leave. This payment will be taxed differently from your normal income. 

The taxation will vary depending on the reason why you left the job and any unused entitlements that have been accrued over your employment (long service leave or sick leave). 

Lump sum payments that you receive for unused annual leave or unused long service leave are taxed at a lower rate than other income. These lump sum payments will appear on your income statement or payment summary as either ‘lump sum A’ or ‘lump sum B’. 

These payments may also be taxed differently if you lost your job as a result of Covid-19.

Protecting yourself from super scams

Posted on 14 January '21 by admin

Superannuation is an attractive target for scammers as a significant volume of funds are placed into super funds by Australians. 

There are some straightforward steps you can take to protect yourself from super scams. 

Know the rules

Check your balance and contact details

Stop identity theft

Fuel tax credits for businesses

Posted on 14 January '21 by admin

The government provides fuel tax credits for businesses with a credit for the fuel tax (excise or customs) that is included in the price of fuel used in machinery, plant, equipment, heavy vehicles, and light vehicles travelling off public roads or on private roads.

Fuel tax credits a business receives depend on when the fuel was acquired, which fuel you used, and what it was used for. Since fuel credits change regularly, it is necessary to check rates each time the business activity statement (BAS) is filled out.

Eligibility

Finding your lost super

Posted on 7 January '21 by admin

Changing of name, address or job can mean that you lose track of some of your super. This means that there is money that belongs to you that is not currently in your super fund. Finding your super will collate your previous lost funds with your current account.

It is likely that your lost super is held by the ATO. Create an account on myGov and link it to the ATO and select ‘Super’. 

Once you have done this, you will be able to see the details of all of your past and current super accounts including any lost or forgotten ones. You will also be able to find funds which have been held by the ATO on your behalf. Further, you will be able to consolidate your super funds into a single fund. 

Once you have found your lost super, remember to conduct research about which fund is providing you with the best returns before you choose which fund to consolidate with. 

Lodging your business activity statement

Posted on 7 January '21 by admin

Businesses that are registered for GST are required to lodge a business activity statement (BAS). These assist in the reporting and payment of:

ATO will automatically send businesses who are registered for an ABN and GST a BAS when it is due for lodgement. 

Businesses are given various options to lodge their BAS:

Life insurance through your super

Posted on 17 December '20 by admin

Over 70% of Australians have life insurance through their super fund. This acts as a financial safety net through your super if something unexpected happens. 

There are 3 main types of life insurance that super funds usually provide:  

Pros of life insurance through super

Cons of life insurance through super 

What do tax audits involve?

Posted on 17 December '20 by admin

Tax audits are conducted when the ATO deems that a more extensive examination of an issue is necessary. These audits can be conducted on a fairly basic level or they can be much more in-depth and analytical.

In most cases, there will be a review which then leads to an audit, but this isn’t always necessary. A review may not be deemed necessary in cases where fraud or evasion is suspected or there is a high risk associated with the transaction. 

The ATO states that they will be transparent about the following aspects of an Audit:

Cooperating with the ATO’s requests is the ideal response. If there is a lack of cooperation, then the ATO can use their formal powers to access the information they are seeking:

Cooperation makes this process much easier for both parties as a lack of cooperation can not only create a bad image but can be easily overcome by the ATO’s powers.

Conditions to accessing your super

Posted on 10 December '20 by admin

You may find that accessing your super is the best way to meet your financial needs in a given situation, for example in the early stages of the pandemic. Individuals are able to legally access the funds in their super earlier but there are conditions of release. 

Common conditions of lease:

There are more conditions of release that allow individuals to access their super early:

How to reduce the tax you pay

Posted on 10 December '20 by admin

There are various potential ways you can reduce the tax you pay. You may be entitled to tax deductions, offsets or you may choose to opt for salary packaging. 

Tax deductions will reduce your taxable income amount. For example, potential tax deductions are work-related expenses, self-education expenses, charitable donations, the cost of managing your taxes. These deductions will reduce the amount of income on which tax is calculated.

Tax offsets apply after tax has been calculated, alternatively known as rebates. These will reduce the amount of tax payable. For example, some offsets you could claim are low/middle-income earners, taxpayers with an invalid relative, pensioners and senior Australians, the taxable portion of a superannuation income stream. 

Salary packaging allows you to ‘package’ your income into salary and benefits. There are many potential ways you can package your salary. For example, you could arrange to earn less salary in exchange for higher superannuation payments. By reducing your salary this way, you are reducing your taxable income. 

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