Is Financial Advice Tax Deductible?

As individuals and businesses navigate through the various tax laws and complex investment decisions, the question of whether financial advice is tax-deductible emerges as a crucial consideration. With this, it’s safe to say that the expertise offered by accountants stands as a superior option, not only for their proficiency in tax matters but also for […]

Taxation in 2024: A Guide to Organising Your Finances in the New Year


Taxation in 2024: A Guide to Organising Your Finances in the New Year A New Year calls for organization! As we embark on another journey around the sun, it’s time to turn our attention to a crucial aspect of our financial lives—organizing our taxes. In Australia, a well-organized tax strategy not only ensures compliance with […]

The Benefits of Choosing a Local Tax Accountant in the Bankstown Area.

Local Bankstown Accountant

In the fast-paced world of finance and taxation, the decision to choose a tax accountant can significantly impact the financial health of individuals and businesses alike. While the allure of big-name firms and online services might seem tempting, you may want to explore your options locally. In this article, we’ll explore the myriad benefits of […]

Ensuring Compliance with Australian Taxation Regulations

tax compliance australia

Navigating Australia’s complex tax system can be a daunting task for individuals and businesses alike. The Australian Taxation Office (ATO) has a set of stringent regulations and requirements that must be adhered to. This is where the expertise of accountants comes into play. Accountants play a crucial role in ensuring compliance with Australian taxation regulations, […]

Tax Tips To Maximise Your Property Tax Returns in Australia

Tax season can be a daunting time for many Australians, especially property owners. However, with a bit of knowledge and careful planning, you can make the most out of your property tax returns. In this blog post, we’ll explore some essential tax tips to help you maximize your property tax returns in Australia. One of […]

How to Lower Your Bills & Reduce Expenses in Australia


Living in Australia can be a wonderful experience, but it can also come with a high cost of living. From housing to utilities and daily expenses, managing your finances efficiently is essential. In this blog post, we’ll explore effective strategies to help you lower your bills and reduce expenses in Australia. The first step to […]

Is it Time Your Business Raised Its Prices?


The escalating costs of running a business are undeniable. If your company has been absorbing inflation from suppliers without evaluating your current pricing for products and services, now might be the opportune moment to contemplate implementing a price increase. As a business owner, you face an array of critical decisions daily, and one of the […]

Navigating Australian Tax Deadlines: Stay Ahead of Your Financial Obligations

Tax Time - Australia

Tax season is a time that can invoke mixed feelings for many individuals and businesses alike. In Australia, understanding and meeting tax deadlines is crucial to ensure compliance with the tax laws and avoid unnecessary penalties. Whether you’re a business owner, a sole trader, or an individual taxpayer, staying organized and informed about tax deadlines […]

Contributing to Your Own Super Fund Before 30 June: A Smart Financial Move

As the end of the financial year approaches, it’s crucial to consider opportunities that can enhance your financial well-being. One such opportunity in Australia is making contributions to your own superannuation fund before 30 June. Contributing to your super fund can offer several advantages, including potential tax benefits and securing a stronger retirement nest egg. […]

6 Achievable Strategies for Reducing Costs


Inflation, rising cost of living, interest rates; the news is full of headlineshighlighting the current economic climate and predicting what might be to come.With prices of food, fuel, energy, and most essentials increasing, manyhouseholds are watching spending much more closely, while looking for ways tocut costs. Even more so, minimising costs will be essential if […]

4 Questions to ask when choosing a Tax Accountant


Choosing a tax accountant can be a daunting task, but it is one of the most important decisions you will make when it comes to taxes. A good accountant can help you save money and time by finding legal deductions and credits, while a bad one can lead to costly mistakes and penalties. There are […]

5 ways to maximise your tax refund in 2023

tax refund, tips, return

Most people don’t think about tax time until the Easter bunny has hopped away others until the calendar has clicked over 1st of July and some only when the dreaded deadline looms. But that doesn’t have to be you. Why not make this year the year you lodge on time and receive your possible refund […]

Maximise Your Wealth with Planning

Are you looking for ways to maximise your wealth? With the right planning, you can create a successful financial future and achieve real economic stability. Planning ahead is the key to unlocking your financial potential, as it allows you to take charge of your finances and make decisions that will benefit your long-term goals. The […]

Strategies to Achieve Financial Happiness

Financial happiness is a state of contentment that comes from making smart money decisions. It involves having control of your finances and being able to meet all of your financial goals. Achieving financial happiness requires a commitment to follow responsible money management practices and set realistic goals. This article will discuss several strategies that can […]

Accountants: Your Financial Life Partner

Accountants are an essential part of the financial world, yet their importance is often overlooked. They provide vital knowledge and insights to individuals and businesses alike, helping them to effectively manage their finances. Accountants possess a wide range of skills; they can help with taxes, payrolls, financial planning and budgeting, as well as giving advice on […]

Bookkeeping for small business in Australia


There are a number of things to consider when it comes to bookkeeping for small businesses in Australia. The following article will outline some of the best practices for bookkeeping in Australia. With careful planning and execution, small business owners can ensure that their books are kept in good order and up to date. As […]

3 Factors To Consider When Choosing A Tax Accountant


It is tax season again. How to choose the best tax accountant for yourself? Below are the most important factors you should consider. 1. How complicated your return is? If on top of employment income you also have other investments such as rental properties, shares or cryptocurrencies, you will need to find a tax accountant […]

Optus data breach: Things you need to know


The recent Optus hack has shocked everyone. Optus users need to act quickly to protect themselves from becoming easy targets for future cyber-attacks. Please refer to this link from Accountant Daily on what information was leaked, and what could happen if your information is stolen: Optus hack puts all Australia on alert, accountants in front line You […]

What an accountant can do for your business


An accountant can help your business in a number of ways. They can help you keep track of your finances, prepare your taxes, and offer advice on financial matters. An accountant can also help you plan for the future of your business and make sure that you are making the most of your money. They […]

Tax Law Changes To Professionals; Claim Masks & Sanitizers During COVID; ATO Scam Alerts


Please find below tax updates and deduction tips for this week.  Important tax law changes to professionals: Professional firm profit allocation arrangements will need to be changed to be in compliance with the new ATO requirements. Read below link on how ATO is engaging with individual professional practitioners to assess and mitigate the risks of profit […]

2 big reasons you should have an offset account for your residential loan

residential loan offset account accountant bankstown

Loan offset account could help you to save up to tens of thousands of dollars on tax or interest. Below are the two main reasons. Reason 1: Offset account could help you to save $$$ on tax Firstly, what is an offset account? An offset account is linked to your residential loan account. It can […]

Starting Your Own Business: Tips and Tricks

starting own business tax accounting bankstown

If you’re thinking about starting your own business, you’re not alone. Every year, thousands of Australians take the plunge into entrepreneurship. But before you take the leap, there are a few things you should do to increase your chances of success. One of the most important is to hire an accountant. A good accountant can […]

Should I hire an accountant to help with the purchase of my small business?


When you take on the management of the business, you subsequently acquire staff, capital, assets, and property. Without the insight to wisely manage these functions, you may feel pressurized, burned out, and concerned. This is what business owners are afraid of, as they wish to be seen to uphold the reputation of the business within […]

Lodging your tax return for 2022


Tax time is never easy, but it can be made a little bit more manageable by getting your tax return done as early as possible. Here are some tips on when you can lodge your tax return for the year 2022.  When can you lodge your tax return for 2022? The Australian tax return is […]

Services we offer at Impact Taxation


Located in Bankstown, Impact Taxation offers a complete tax return service for all your taxation needs. The team of qualified and experienced accountants will help you claim all the deductions you are entitled to, ensuring you get the most from your tax return. We’ll help you get the most from your taxes, and make sure […]

Work-related expenses

tax return bankstown

To claim a deduction for a work-related expense: you must have spent the money yourself and weren’t reimbursed the expenses must directly relate to earning your income you must have a record to prove it (usually a receipt). If the expense was for both work and private purposes, you only claim a deduction for the work-related part. […]

Family trusts – concessions

A family trust for tax purposes is one whose trustee has made a valid family trust election (FTE). It is not sufficient to simply include the words ‘family trust’ in your trust’s name. A trustee only makes a valid FTE where they have satisfied the relevant tests, and made an election in writing in the approved form. […]

10 things you should consider before buying a property

Are you considering buying a property? Do you know you could miss opportunities to save thousands, or tens of thousands of dollars if you don’t plan well before the purchase?

Below are a few key considerations:

1. How should you set up your loan structure? If you don’t have a loan offset account for a rental property, after you make extra payments directly to the loan account, you can only claim interest deduction on the remaining balance of the loan. For tax purposes, this deductible balance can’t be changed even if you redraw the overpaid amount later. A good loan structure could also help you to stabilize interest rate and speed up loan repayment by combining a standard variable loan (with an offset account) and a fix rates account.

2. Timing of renovation. You might want to do a renovation right after you have bought the rental property. But do you know for any genuine repair & maintenance included in the renovation, you can claim an outright deduction against the rental income when the property is available for rental? If the work is done before the date when the property is available for rental, you can only claim the deduction against future capital gain when the property is sold. Depend on when you are going to sell, it could take years or up to decades before you can claim the deduction.

3. How should you split ownership? You might want to share the property ownership with a family member. For tax purposes, the percentage of ownership is based on the legal title, regardless of who is paying more on the mortgage. If the property will give you a tax profit, you might want to allocate more
ownership to the low-income earner to utilize the lower marginal tax rate. If it is giving you a tax loss, you might want to allocate more ownership to the high-income earner to utilize the loss. The goal is for the family to pay minimum tax together.

4. Should you use a family trust to purchase the property? There are many pros and cons related to a family trust. The advantages include tax savings on rental profit or capital gain, asset protection and succession planning on family wealth. However, family trust can’t distribute losses. All losses are trapped in the trust to be used to offset future trust profit. Therefore, you can’t utilize any rental loss in a trust to offset other income such as salary & wages. Family trusts also attract high accounting fees on initial setup and annual fees on financial statements and tax returns. State governments also charge much higher land tax on family trusts.

5. Will the income level change in future years for different owners? You might want to forecast the possible income for different owners to understand total tax payment / savings related to the property. This could also impact on your decision making on point 3 and 4 above.

6. Understand when you can treat your property as main residence to receive an exemption on capital gains tax. When eligible, even if you have received rental income, you could still treat your rental property as main residence and receive the exemption. To be eligible, you will need to treat it as your main residence at the beginning. Please check out this ATO link: Treating former home as main residence.

7. Decide whether you need to purchase a depreciation report. Most taxpayers don’t know that the depreciation on the building will need to be added back to calculate capital gains tax when the property is sold. When the property is held for more than 12 months, after applying the capital gains tax discount of 50%, it will effectively cut the tax rate by half at the time of sales. This makes depreciation deductions desirable for high income earners. However, for low-income earners it might not be ideal to claim depreciation as a rental deduction since they could be paying more on capital gains tax in the future. It could get more complicated if the property is under joint ownership between high and low income earners.

8. You might want to consider Centrelink payments for future or existing owners. Most Centrelink payments are income and asset tested. Before attaching a rental property to a family member who is receiving, or plan to receive government benefits, you might want to check the testing thresholds first to see if the Centrelink payment will be impacted. This is also applicable when you are making distributions from a family trust to different family members.

9. Have you considered using your SMSF (selfmanaged super fund) to make the purchase of a rental property? There are a lot of tax saving opportunities with a SMSF since the income tax rate is only 15%. And the capital gains tax rate is effectively only 10% after factoring in the 1/3 discount. The major downside with a SMSF is normally you can’t get the money out until you retire or on compassionate grounds (SMSF does have more flexibilities compared to normal retail super fund. But the choices are still very limited). It could be expensive to set up and operate a SMSF too. There are also strict legal requirements on the trustees. Penalties on incompliance could be severe. Tax law around SMSF is very complicated too. You will need to find a good tax accountant specialized in SMSF to help you to understand the structure, also do a cost-benefit analysis before setting it up.

10. Consider internal ownership changes. For your existing rental properties, you can also consider whether you should transfer the ownership between family members, or between different business structures (this is not applicable for SMSF). You might want to do this when the income level changes with family members, or rental property changes between tax profit and loss. Before the change, you need to consider the cost of transfer including capital gains tax, stamp duty, conveyancer fees, etc. Again, a cost-benefit analysis is a must before the change.

Last but not the least, did you combine all the above strategies and compare your choices? If you haven’t yet, how would you know that you have picked the best strategy to minimize your taxes? We can help you to factor in all considerations, compare different scenarios, also present you with a Property Prepurchase Report with all our findings to help you to make a decision. Contact us today to book in a consultation with an experienced tax accountant!

This is general advice only and does not consider your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek advice from your financial adviser and seek tax advice from your accountant.

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