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Smart Strategies For Tax Time 

As an accountant and Director of Dito+, it’s Stephen Fechner’s job to provide insights into end-of-year tax strategies for both individuals and business taxpayers.

“It’s not to late to achieve tax savings before 30 June comes around,” says Fechner. “It’s all about getting the right advice for your financial situation and understanding what you can do to minimise your tax liability.”

For Individual taxpayers who derive salary and wage income:

• Before 30 June, consider making super contributions. The government adds to your voluntary contributions into super by up to $500 per annum (an income test applies). This is a great way to boost your retirement nest egg. Contributions to super funds are also an effective way to minimise your overall tax bill.

• For taxpayers aged over 55 who are working, a Transition to Retirement pension strategy is a great way to maintain your income levels, save tax and increase your retirement savings.

For business owners:

• The first thing to ask yourself is whether you have planned sufficiently to minimise your tax bill this year. Many businesses fail to address simple techniques that can save, or at least defer, tax.

• Small businesses operating on a cash basis can claim a tax deduction for expenses physically paid prior to 30 June. There is an opportunity to pay bills before the due date to bring forward the tax deduction, and you can also consider pre-paying business expenses.

• For accruals-based businesses, ‘incurring’ expenses is the key to maximising your tax deduction. Changing stock valuation methods can also be another way to lower your tax bill.

• For primary producers, farm-management deposits are another good way to defer tax and put some funds away for any future financially challenging times.

“Completing your tax return is no longer a simple process and claiming deductions that are incorrect, or missing out on claiming deductions or tax offsets that you are entitled to can be costly,” Fechner adds. “The Australian Tax Office has made no secret that it is on an aggressive audit strategy, so consider using a registered tax agent to maximise your tax refund and ensure compliance.”

You can be assured of tax compliance by:

• Making sure you maximise the tax deductions you are entitled to claim for items such as travel, tools, mobile phones, uniforms, union fees, donations and income-protection insurance premiums.

• Ensuring all available tax offsets are claimed. Offsets are even more valuable than deductions and can be claimed for a variety of circumstances, including a financially dependent spouse, net family qualifying medical expenses over $2000, low income and education costs, to name just a few.

“At Dito+ our experienced team of tax professionals are ready to answer your end-of-year tax-planning questions. We also have a specialist in self-managed super fund compliance on board,” concludes Fechner. “We look forward to helping you achieve the best results at tax time.”

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• Please note: This information is of a general nature and should not replace professional advice relevant to your personal circumstances.

Avoid paying excess tax (as seen in The Leader, 25 May 2011)

With only five weeks to go until 30 June, right now is the time to develop and implement a tax-planning strategy to ensure that you don’t pay more tax than you need to.

“Timing is everything when it comes to your tax return – leaving everything until the very last minute can result in poor decisions that can actually reduce your cash flow and cost you,” says Jason Schiller, Dito + Chartered Accountant. “Tax planning is an important focus at Dito+, and it’s just one of the ways we can improve our clients financial position. By fully understanding your current business and personal circumstances, then reviewing your objectives, we can develop an effective tax strategy to help you to minimise this year’s tax bill, and future tax bills as well.”

There are two key factors your accountant will consider ahead of tax time – a business review and a cash-flow management check. The point here is to make sure your tax liability is minimised and falls at the most suitable time for you. This may be as simple as altering the timing of income and expenses to either before or after 30 June. Other options may include maximising superannuation contribution deductions and Farm Management Deposits, or if you need to purchase new equipment, now may be the time to do it in order to reap the tax benefits.

In any case, it is imperative that you maintain your cash-flow position. “There’s absolutely no point saving on tax if you’re going to create cash-flow problems as a result,” adds Jason. “A proactive accountant will assist you through the process of developing a well-planned strategy that takes cash flow and all other implications into consideration. The goal is to generate the very best result for you and your business.”

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Starting a small business? Then talk to an accountant.
(as seen in The Leader, 13 April 2011)  

If you’re planning to establish a small business, be sure to see an accountant before you sign on any dotted lines. 

“Many small-business owners set up shop then only call on the services of an accountant at tax time, but there is a lot an accountant can do for you during the establishment phase,” explains Amanda Fleet, Chartered Accountant at Dito+. 

For a start, Amanda says accountants can help you to choose the most appropriate structure for your business. “Having the right framework from the outset will save you a lot of worry, as will having an accountant work to assist you in identifying your goals and develop appropriate strategies for achieving them” she adds. 

Once your business is operational, accountants can:

• Work with you to anticipate change and plan for survival and growth.
• Help you stay abreast of changes to complex legislation, such as taxation and superannuation.
• Help you to keep improving your business through better financial management. 

According to Amanda, the best approach when starting out is to make continual use of a qualified external accountant, rather than employing someone on a full-time basis. “Not all small businesses can afford a full-time accountant, but it is possible to develop an ongoing relationship with an accountant who can maintain an independent view of your financial situation and advise you on the efficient day-to-day operation of your business” she says. 

 “If you want to establish a firm foundation for the future of your business, it’s definitely worth taking the time to have a chat with an accountant before taking your idea to the next level,” Amanda concludes. “Come and talk to one of our professionals to find out how we can help.” 

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Maximising your tax refund (as seen in The Leader, 2 March 2011)

Do you keep records and receipts of all your expenditure for taxation purposes?

“Keeping an accurate track of your expenses is vital, as it will enable your accountant to get the maximum tax return for you,” explains accountant Amanda Fleet, a member of the Dito+ team in Nuriootpa. “The better your records are, the better results we can achieve for you.”

Medical Expenses Tax Offset: If you have out of pocket costs of more than $2120 for medical expenses during the year for yourself, your spouse and dependents combined, you may be eligible for an offset of 20 cents for each dollar spent in excess of the $2120 threshold. Examples of medical expenses covered include payments to doctors, dentists, orthodontists, physiotherapists, chiropractors, and optometrists. As well as for surgery and hospital costs, some residential aged-care expenses and many more.

You will need to keep details of the medical expenses you claim, as well as any medicare and health insurance refunds that you or your family have received.

“Guidelines apply for the offset and it is phasing out over the next few years so ask your accountant for full details to see if you qualify.” 

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