Taxation

Small businesses can immediately deduct assets costing less than $20,000 purchased since 7.30pm 12 May 2015. The asset deduction is claimed in the income year in which the asset is first used or installed ready for use.

What’s changed?

The instant asset write-off threshold has increased to $20,000 (up from $1,000). This allows an immediate deduction for the business use portion of a depreciating asset that costs less than $20,000. This applies:

• to assets acquired after 7.30pm on 12 May 2015 until 30 June 2017
• on a per asset basis, so several assets each costing less than $20,000 would qualify
• to new and second hand assets

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What is Crowdfunding?

Crowdfunding uses the internet and/or social media to find supporters and raise funds for different types of projects and ventures. It is rapidly evolving and gaining momentum with platforms such as Kickstarter and IndieGoGo providing access to a worldwide audience.

In many cases it is used by individuals and groups to raise money in the form of donations for various causes. It is also often used to prove a business idea. If funding is successful the business moves from prototype to production, already has cashflow, gains publicity and has a core group of customers for the business to build on.

ATO Provisional Guidance

The question of course is what are the income tax consequences of money raised by crowdfunding? The answer, as with all things involving tax, isn’t necessarily straightforward. Read more →

Once you have decided to establish a business, there are a multitude of complex questions to be addressed such as business name, location, registrations and insurance. But one of the most important decisions to make is about business structures. Which business structure are you going to operate your business under? The problem is none are perfect and what works in one situation may not necessarily be appropriate in another. Business structures affect taxation, asset protection and when you sell your business, capital gains tax. Adding to the problem, moving from one structure to another is not necessarily easy either. Read more →

Many people are unaware that they are failing to maximise their tax deductions in relation to rental properties and therefore also failing to maximise their rental property returns.  If you have a rental property is always an opportune time to check one such deduction – Depreciation.
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With ongoing low interest rates it seems the hot property market won’t end any time soon. Hand in hand with that is also a boom in investment property ownership. The tax office has always shown a keen interest in investment properties but it has signalled it is specifically targeting this area in 2015 returns.

The emphasis is on making sure people aren’t over claiming deductions. In particular the ATO has said it is paying close attention to the following:

• Excessive deductions claimed for holiday homes
• Husbands and wives splitting rental income and deductions for jointly owned properties that is not supported
• Claims for repairs and maintenance shortly after the property was purchased
• Interest deductions claimed for the private proportion of loans

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