Category: Newsletter

🎄 Aussies will collectively spend $25 billion this Christmas – that’s an average of $1325 per person

🎄 Over half of us will have a Christmas ham – it’s our most popular Christmas food

🎄 Unlike our US cousins, turkey is our least popular choice with around 30% of households enjoying it this Christmas

🎄 Our food bill will be approx. $122 per person

🎄 Our alcohol bill will be approx. $131 per person

🎄 60% of us, don’t set a budget to control our Christmas spending

🎄 Last year, 40% of our Christmas spend was made on our credit cards

🎄 In a survey conducted in January 2018, 2/3 of respondents regretted the amount of money they spent on Christmas

🎄 1 in 5 online purchases will be made on a mobile device with our phone being the most popular device

🎄 While considered a popular choice, almost ¼ of us will receive a gift card we don’t want

What’s better?

We look at the 2 different schools of thought on retirement savings

It’s reported Albert Einstein called compound interest “the eighth wonder of the world”. When it comes to your retirement, compound interest is the secret sauce that takes regular weekly savings and turns them into extraordinary sums of money.

But what’s better – saving small amounts over a long period? Or saving larger sums over a shorter timeframe?

Well, we’ve done the maths for you and here are the results. But first, the assumptions:

Assumption 1: The rate of return used is after deducting fees, tax and charges.

Assumption 2: All projections are expressed in 2019 dollars.

Assumption 3: Inflation has not been considered.

Assumption 4: The rate of return has been calculated at 10% per annum.
(Please note: 10% is a conservative return figure. Between 1900-2017, the All Ordinaries Index of the Australian Stock Exchange generated an average rate of return of 13.2% per annum.)

Strategy 1: Smaller amounts over longer time

If you start placing $100 each week into your super fund at age 25 and continue to do so until you are 65, with compound interest, your savings will have grown to $2,740,434. But importantly, you have only contributed $208,000. The difference has been generated by compound interest.

Strategy 2: Larger amounts over less time

If you place $200 each week into your super fund but begin when you are 45yo, you will have contributed the same amount of money. However, by 65 your savings will have grown to $658,120. That’s a significant difference when compared to the first strategy.

It’s never too early or too late

When you begin your career or start a family, it can be difficult to find any spare cash to contribute to your retirement savings. So the important message from these examples is doing something at any age will always be better than doing nothing.

At WPA, our focus is always on you!

• Where are you now?
• Where do you want to be?
• How do you get there?

For straight-forward, practical financial, accounting and taxation advice
contact our knowledgeable team at WPA and SVA by calling 02 8850 0388.

Tax Tips

For investment properties

If you own a residential investment property, you can’t claim travel expenses as a tax deduction unless you are in the business of letting rental properties. To be considered “in the business of letting rental properties”, you need to be a:

• Corporate tax entity (e.g. a company)
• Public unit trust
• Managed investment trust

If you have an investment property, talk to us and we will help you work out all your eligible deductions.

For small business

The ATO has identified 3 common mistakes small business owners make when lodging their tax return:

Mistake 1: Failing to report all of your income.

Mistake 2: Failing to have records to prove expense claims.

Mistake 3: Claiming private expenses as business expenses.

It’s always easier to lodge a correct tax return than trying to correct a mistake once it’s been submitted. So if you usually prepare your own tax return, save yourself the burden this year. Talk to us because we’ll make the whole process simple, efficient and accurate.

For Individuals

Take advantage of our 2019 Tax Return Checklist so you don’t forget a thing. Download it from our Home page by clicking on the clipboard located under the banner.

For straight-forward, practical accounting, taxation and financial advice
contact our knowledgeable team at SVA and WPA by calling 02 8850 0388

We look at the 2 different schools of thought on retirement savings

It’s reported Albert Einstein called compound interest “the eighth wonder of the world”. When it comes to your retirement, compound interest is the secret sauce that takes regular weekly savings and turns them into extraordinary sums of money.

But what’s better – saving small amounts over a long period? Or saving larger sums over a shorter timeframe?

Well, we’ve done the maths for you and here are the results. But first, the assumptions:

Assumption 1: The rate of return used is after deducting fees, tax and charges.

Assumption 2: All projections are expressed in 2019 dollars.

Assumption 3: Inflation has not been considered.

Assumption 4: The rate of return has been calculated at 10% per annum.
(Please note: 10% is a conservative return figure. Between 1900-2017, the All Ordinaries Index of the Australian Stock Exchange generated an average rate of return of 13.2% per annum.)

Strategy 1: Smaller amounts over longer time
If you start placing $100 each week into your super fund at age 25 and continue to do so until you are 65, with compound interest, your savings will have grown to $2,740,434. But importantly, you have only contributed $208,000. The difference has been generated by compound interest.

Strategy 2: Larger amounts over less time
If you place $200 each week into your super fund but begin when you are 45yo, you will have contributed the same amount of money. However, by 65 your savings will have grown to $658,120. That’s a significant difference when compared to the first strategy.

It’s never too early or too late
When you begin your career or start a family, it can be difficult to find any spare cash to contribute to your retirement savings. So the important message from these examples is doing something at any age will always be better than doing nothing.

At WPA, our focus is always on you!

• Where are you now?
• Where do you want to be?
• How do you get there?

For straight-forward, practical financial, accounting and taxation advice
contact our knowledgeable team at WPA and SVA by calling 02 8850 0388.

STP or Single Touch Payroll has gradually been rolled out over the past few years. From 1 July, all businesses with a payroll will need to be using STP software.

If your business has not yet adopted STP, you will need to provide all employees with a Payment Summary by 14 July. But this will be the last time you will need to do this. From July 1, all information on an employee’s income, tax and superannuation will be available on the individual’s MyGov account.

If this is the first year your business has adopted STP, you will need to advise your employees that they can access their Income Statement from their MyGov account from 31 July. As the employer, that gives you 31 days to mark their Income Statement as “Tax Ready”.

If you are an employer and you have not yet prepared for STP, you need to call us urgently on 02 8850 0388.

Everyone wants a tax refund so what you do in the next couple of weeks will affect the tax you will pay and any possibility of receiving a tax refund.

Here’s what you need to do to get tax time ready:

1. Collate all your income records. This includes the amount of money you received from your employer or sales (if you are self-employed), super or pension.
2. Ensure you have all your bank statements ready to show the interest income earned and the charges paid.
3. Collect all dividend and distribution records if you have shares.
4. Gather together all records of investments purchased or sold to calculate any capital gains or losses.
5. If you have investment properties, organise your rental income statements and any expenses incurred (including interest paid on the loan).
6. You will also need your private health insurance policy details.
7. If you earn income overseas or participate in the shared economy e.g. Uber or Airbnb, you will need to report any income earned throughout the past financial year.

Working out your deductions – this is where we can help you.

If you are self-employed or an employee, there may be a number of expenses you can claim as a tax deduction.

For owners of investment properties, you can claim expenses such as:

• Agent fees and charges
• Maintenance and repairs
• Insurance
• Rates and strata fees
• Pest control
• Advertising for new tenants etc.

Don’t forget to check your super contributions

If you won’t reach your concessional contributions cap of $25,000 (which includes your employer’s contributions and any salary sacrifice amounts), consider topping up the shortfall. Personal contributions can be claimed as a tax deduction.

But don’t wait until the last minute to make this payment as processing times can vary and may fall into next financial year.

If you earn less than $52,697, take advantage of the government’s co-contribution. It follows a sliding scale depending on your annual income, with the government contributing additional funds to your super policy if you qualify as a low income earner.

Insurance and your super account

From 1 July, your super fund is entitled to cancel your life insurance policy if you fail to make any contributions in the previous 16 months. If you wish to maintain your super insurance cover, you will need to ensure your account remains active. We can help you work out what to do so give us a call.

Whether it’s preparing your tax return and BAS or guiding you through your investment options, we are here to help you.

For straight-forward, practical accounting, taxation and financial advice
contact our knowledgeable team at SVA and WPA by calling 02 8850 0388.

The recent changes to the Instant Asset Write-off have complicated things for this financial year but for many clients, the changes will provide a great addition to their tax planning strategy. Here are the new rules:

1. Businesses with a turnover less than $50 million are now included in the Instant Asset Write-off rules.
2. Assets purchased and installed (or first used) from 7.30pm (AEDT) on 2 April 2019 – 30 June 2019 are included. These assets can be new or used.
3. A deduction of up to $30,000 for the business portion of each asset qualifies for the Instant Asset Write-off.
4. Businesses with a turnover under $10 million can also claim a deduction for each asset purchased and used (or installed) within various thresholds. This part is complicated so it’s best to call us for specific advice.

Making the most of the new Instant Asset Write-off changes can form part of a clever tax minimisation strategy – but only if it’s well thought out and funded. So talk to us first.

For straight-forward, practical accounting, taxation and financial advice
contact our knowledgeable team at SVA and WPA by calling 02 8850 0388.

We are so excited for our client and friend, Jen Harwood. Earlier this month, in front of almost 1000 people, she won the 2019 Australian Small Business Champion Award for New Business.

A single mum and highly accomplished business woman, Jen decided there had to be a better way to brush and style her daughter’s long hair.

Many parents will relate to the tears, arguments and stress of brushing their kids’ hair each day. But rather than persevere, Jen decided she would find a way to eliminate it from their daily routine. Called the Happy Hair Brush, it has now solved the problem for many, many parents. Learn more about it here.

We are so proud of Jen’s achievement that we wanted to share it with you. If you or your business has an achievement to share, please let us know.

We all have those big bills that seem to come around quickly, like our energy bills, car rego and insurance, private school fees etc.

For many of us, it doesn’t matter how well we think we’re going, there will always be those bills that seem harder to budget for.

So here’s a great savings tip to eliminate bill shock. All it takes are 3 easy steps!

Step 1
Work out how much you need to put aside each pay period to cover the annual cost of each large bill.

Step 2
Add 5-10% to cover price increases.

Step 3
Each pay, put this money aside in a separate bank account. Ideally look for one that earns better interest than your everyday account. Treat this account as untouchable and avoid temptations like using it to pay for weekends away or extra holiday spending money. Then, when those big bills come in, you’ll have enough savings to comfortably cover them.

If you find accessing these savings too tempting, check with each service provider to see if you can make regular advance payments. Then, when your bill arrives, the final amount payable will be greatly reduced because you have made those pre-payments.

Self-employed?
If you’re self-employed, try paying yourself a regular amount each week, fortnight or month. Consider this as your wage and follow the same steps as above.

For straight-forward, practical accounting, taxation and financial advice
contact our knowledgeable team at SVA and WPA by calling 02 8850 0388.

The end of financial year is only a few months away and as specialist SME accountants, we have begun discussing tax planning strategies with our clients.

The ATO is also getting busy, recently releasing their latest industry benchmark data. This data is extremely useful for any small business owner as it allows you to gauge the strength of your business.

The data compares the financial results of over 1.5 million small Australian businesses and lets you evaluate how your business is going compared to others in your industry.

If your business is operating below these benchmarks, we can discuss ways you could improve the performance of your business.

Not all industries are included yet but every year, the ATO increases the number of industries in its benchmark data. So far they have developed benchmarks for over 100 industries including:

• Accommodation & food
• Architectural services
• Automotive electrical services
• Building & construction trades
• Education, training, recreation & support services
• Health care & personal services
• Machinery & equipment maintenance/repair
• Manufacturing
• Retail
• Transport, postal & warehousing
• Veterinary services

To see the ATO’s industry benchmarks click here. For specific advice on how your business can achieve and exceed these benchmarks, contact us to arrange an appointment.

For straight-forward, practical accounting, taxation and financial advice
contact our knowledgeable team at SVA and WPA by calling 02 8850 0388.

Since 1 July 2018, the ‘Contributing the proceeds of downsizing into superannuation” reform came into effect. In essence, it means if you have sold or are selling your home after that date AND meet the eligibility requirements, you may be able to contribute up to $300,000 into your superannuation fund from the proceeds of the sale.

The ATO has now released guidelines on the eligibility to make this type of superannuation contribution.

Could you be eligible for making a downsizer super contribution?

To meet the eligibility requirements, you must:

• Be 65 years or older
• Have exchanged the sale of property contract on or after 1 July 2018
• Be selling an eligible Australian dwelling that you (or your spouse) have owned for at least 10 years which qualifies for a full or partial capital gains tax exemption as your main residence
• Submit the approved form to note that this is a downsizer contribution either before or at the time of making the contribution
• Make the contribution within 90 days of receiving the funds from the sale
• Not made a downsizer contribution in the past

It’s important to note that downsizer contributions are not tax deductible. They will also be considered when determining your eligibility for the age pension.

If you are considering downsizing your home or have recently done so, contact us for more specific advice based on your situation.

For straight-forward, practical accounting, taxation and financial advice
contact our knowledgeable team at SVA and WPA by calling 02 8850 0388