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Tax Return & Planning Services for Electricians

All new clients are eligible for a free non-obligation 30 min consultation.
Call us now and let us help you reduce your tax or make your business more cost-effective.

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For electricians we offer a 3-dimensional tax planning services:

Dimension 1:

We will have a look at your income and deductions to see whether you have minimized your taxes using the current business structure (individual, sole trader, company or family trust). Below are common items that are deductible for electricians:

  • Car and travel expenses – Motor vehicle travel to and from work if having multiple work locations (working at more than one site every day before returning home), or transporting bulky equipment, or need to pick up materials, attend training courses, visiting tax accountant, etc. – You need to make sure you understand the difference between different methods to claim maximum deductions for your car.
  • Overnight travel expenses visiting clients or attending different workplaces – includes airfares, meals and accommodation. (This can also form a part of the Travel Allowances under some business structures).
  • Clothing expenses – either compulsory work uniform branded with the employers logo, or protective clothes such as safety vests, steel-capped shoes, etc.
  • Protective equipment
  • Phone expenses
  • Self-education expenses
  • Tool and equipment expenses
  • Home office expense such as electricity, wear & tear of office furniture, phone & internet (if you do need to manage your business at home from time to time)
  • Overtime meal expenses (or Overtime Meal Allowance under some business structures)
  • Union and professional association fees for individuals as employees
  • Licences, registration and subscription fees related to the business.
  • FBT exempt expenses for some business structures (such as company) on expenses for employees including Directors

 

Dimension 2:

We will have a look to see whether the current structure is the best for you. Sometimes a different business structure could not only provide more tax benefits, but also give you more secure asset protection strategies.

If you are already running a business structure that allows you other tax planning strategies such as income splitting, exempt employee deductions, etc., we will look across your family group to help you to maximize after tax income for the whole family by reducing the family group tax to the minimum.

  • If we don’t believe that the current structure is the best for you, we will give you our recommendations, and help you to compare pros and cons on different structures.
  • We will help you with a cost / benefit analysis to show you the related benefit (tax saving amounts, asset protection advantages) on the structure we recommend. Once you decide, we will help you to set up the structure (company, family trust, etc.). Our documents have built-in features with best planning strategies on asset protection and succession planning.
  • If you are already running your business under an ideal structure, each year we will look across your family group to see which entity is the best to receive income (or loss wherever applicable) from the family group, so that you can minimize tax for the whole family.

 

Dimension 3:

This dimension is more focused to the future to help you to maximize family wealth: We will have a look at all your business and ownership structures for all entities and investments, help you to make plans to save taxes and reduce possible risks in future years.

  • If you have investments (such as rental properties or shares), we will have a look to see whether it is time to change current ownership structure to save tax in the future. For an example, on some situations moving investments to a family trust will not only saving tax for you and your family, but also provide another layer on asset protection. Please refer to our online video here to find more details: How Should You Own Your Assets And Investments
  • For your active business, you should also consider changing business structure for potential future benefits.
  • We will also help you with a forecast on your future wealth generated from your business or investments if they are kept in different business / ownership structures. This will include the wealth kept in your super fund (or SMSF) so that you can have a clear picture on when you can retire and how much will be your retirement income.

About

Impact Taxation and Financial Services Pty. Ltd. is a CPA Practice based in the Bankstown area. We are committed to customizing our services to meet your financial needs and help you achieve your visions and goals.

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    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!

    IMPORTANT INFORMATION
    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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