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The Research and Development (R&D) tax incentive is a government program designed to encourage Australian businesses to invest in innovation. By providing tax offsets, the scheme supports companies that are undertaking eligible R&D activities aimed at generating new knowledge, improving products, or advancing technology.Â
The incentive is a key driver for fostering growth, enhancing competitiveness, and reducing financial risk for companies engaged in R&D, especially for those in technology, manufacturing, and science sectors. Both small and large businesses can benefit from this scheme. This tax incentive plays a vital role in helping businesses remain innovative and competitive.
Refundable Tax Offset: Small businesses (with less than $20 million turnover) can receive a refundable tax offset equal to their company tax rate plus an 18.5% premium.
Non-Refundable Tax Offset: For larger businesses, the non-refundable offset is based on R&D expenditure:
Smaller businesses benefit from the refundable offset, potentially receiving cash back, which can be reinvested in further innovation.Â
By reducing the cost of R&D activities, businesses can explore innovative projects with less financial risk.
The incentive promotes continuous investment in new technologies, processes, and products, helping businesses stay competitive in their industry.
These benefits encourage businesses across various sectors to invest in research and development, ensuring sustainable growth and advancement.
To qualify for the R&D tax incentive, your business must satisfy the following conditions:
The R&D activities must involve experimentation aimed at generating new knowledge, and they must meet the government’s criteria.
Each R&D activity must be registered with AusIndustry before lodging a claim.
Your eligible R&D expenses (notional deductions) must be more than $20,000 for the financial year. However, if you have contracted a registered Research Service Provider (RSP), you can claim for expenditure under $20,000.
Before claiming, you must register your R&D activities with AusIndustry. Registration is required annually.
Once registered, you can claim the R&D tax offset when filing your company’s tax return with the ATO. Make sure you maintain thorough documentation of all eligible activities and expenses.
Entities like individuals, corporate limited partnerships, exempt entities, or trusts (except public trading trusts) are not eligible.
The R&D tax incentive is a valuable opportunity for businesses to reduce the cost of innovation, providing tax offsets for eligible R&D activities. However, navigating the eligibility requirements, registration process, and ensuring compliance can be complex.Â
That’s where we at New Wave Accounting come in. We specialise in helping businesses maximise their R&D tax claims by ensuring every step is handled accurately and efficiently. With our expertise, you can focus on innovation while we manage the paperwork, ensuring you claim every benefit you’re entitled to.Â
Contact us to support your growth and take the stress out of the R&D tax process.
Running a small business comes with many responsibilities, and managing financial obligations is crucial to maintaining a healthy operation.Â
One of the most significant responsibilities for businesses in Australia is staying on top of tax obligations with the Australian Taxation Office (ATO). When left unmanaged, ATO debts can snowball, leading to penalties, interest charges, and potential cash flow issues that can hinder business growth.
These debts typically arise from unpaid taxes such as;
Many small businesses may encounter ATO debts due to cash flow challenges, late tax lodgements, or underestimating tax liabilities. This is where effective ATO debt management becomes essential. By proactively addressing these debts and understanding the available options, businesses can ensure they remain financially stable and avoid further complications.
Failing to manage ATO debt can have serious consequences for your business. While it may seem like a minor issue at first, leaving ATO debts unpaid can quickly escalate into a larger financial problem.Â
The ATO imposes penalties for late payments and lodgements, which can significantly increase the amount owed. Additionally, interest is charged on outstanding debts, increasing the financial burden over time.Â
ATO debt can severely affect your cash flow, limiting your ability to pay suppliers, staff, and other essential business expenses. Without proper cash flow management, businesses may struggle to operate smoothly, which can lead to operational issues and lost opportunities for growth.
If ATO debts remain unpaid for an extended period, the ATO can have the authority to take legal action against the business. This can include garnishing funds from your bank account, placing a charge on your property, or in extreme cases, winding up your company.
Unmanaged debts may negatively impact your business’s credit rating, potentially making it harder to secure loans or lines of credit in the future. This can withhold future expansion and limit growth opportunities, as creditors may view your business as a higher risk.
If your business is dealing with an outstanding tax bill, knowing how to pay off ATO debt is crucial for maintaining financial stability. While it may feel overwhelming, there are several strategies you can use to manage and pay it off efficiently.
Missing tax deadlines is one of the most common causes of ATO debt. Ensure you’re keeping up with GST, PAYG, and income tax lodgements by maintaining an organised bookkeeping system. Consistently meeting these deadlines can prevent unnecessary penalties and interest from accruing.
If your business is struggling to pay off ATO debt in one go, you may be able to request a payment plan. The ATO offers flexible options that allow you to spread out payments over time, easing the financial strain on your business. Applying early may help avoid additional penalties and interest.
Dealing with ATO debt can be complex, especially when multiple tax obligations are involved. Consulting an experienced accountant who understands your industry and can provide tailored advice can make a significant difference while also avoiding future complications.
Consistent cash flow monitoring is essential for keeping ATO debt under control. By regularly reviewing your financial position, you can identify potential cash flow issues early and take action to ensure you meet your tax obligations on time.
If you’re juggling multiple financial obligations, it’s important to prioritise ATO debt to avoid further penalties. By focusing on resolving tax debts first, you can reduce the long-term impact on your business and protect your financial health.
Managing ATO debt can be challenging, especially for small businesses. Engaging a professional accountant provides several advantages.
Every industry has its own set of financial challenges, and generalised solutions may not work for everyone. A professional accountant can create strategies that are specific to your industry and provide tailored advice to suit your unique situation.
Experienced accountants are well-versed in ATO regulations and deadlines. By working with a professional, you can ensure that all your lodgements are completed on time, preventing further penalties or interest. They can also liaise with the ATO on your behalf, ensuring that any payment plans or arrangements are in your best interests.
Effective ATO debt management isn’t just about paying off what you owe—it’s also about ensuring your business has the cash flow needed to keep running smoothly. A professional accountant will help you create a plan that balances paying down your ATO debt while maintaining the cash flow necessary for day-to-day operations.
Handling ATO requirements can be time-consuming and stressful for business owners. Engaging a professional accountant allows you to focus on running your business while they handle the compliance side, ensuring everything is in order and reducing the risk of audits or additional scrutiny.
Accounting services can not only help you manage your current ATO debt but can also assist in setting up a long-term financial plan to avoid future debt. This ensures you have strategies in place for tax management, helping your business grow without financial setbacks.
Managing ATO debt doesn’t have to be overwhelming. With the right strategies, proactive planning, and professional support, you can regain control and ensure your business remains financially stable.Â
Addressing ATO debt early through payment plans, customised solutions, and regular financial reviews will prevent long-term issues and help your business grow without unnecessary financial strain.
If you’re looking for expert help with ATO debt management, New Wave Accounting offers tailored solutions to guide you through the process, allowing you to focus on what matters most—running your business successfully.
Contact New Wave Accounting today to get the expert guidance you need to manage your ATO debt with ease.
Bookkeeping and accounting are often confused because they both deal with financial data. However, understanding the difference between the two is crucial for business owners to ensure proper financial management.
Bookkeeping involves the systematic recording of financial transactions. The primary tasks in bookkeeping include:
Bookkeepers use tools and software such as Xero, QuickBooks, and MYOB to keep accurate records.
Accounting, on the other hand, involves interpreting, classifying, analysing, reporting, and summarising financial data. Accountants perform tasks such as:
Common tools and software used by accountants include Xero, QuickBooks, MYOB, and specialised accounting software like Sage and SAP.
Bookkeeping focuses on recording financial transactions. This includes entering data into ledgers, managing accounts receivable and payable, and ensuring that all transactions are documented accurately.Â
Accounting, however, involves interpreting, classifying, analysing, reporting, and summarising financial data. Accountants often use the information recorded by bookkeepers and use it to generate financial statements, conduct audits, and provide financial insights.
The main objective of bookkeeping is to maintain accurate and complete financial records. Bookkeepers ensure that every transaction is recorded correctly, which is essential for the smooth operation of any business. On the other hand, the objective of accounting is to provide insights into a business’s financial performance and position. Accountants may use the data from bookkeeping to analyse trends, create reports, and help management make informed decisions.
Bookkeepers typically need basic financial knowledge and attention to detail. They often receive on-the-job training and may hold certifications such as the Certificate IV in Bookkeeping in Australia.
Accountants usually require formal education, such as a bachelor’s degree in accounting or finance. They may also need to obtain professional certifications, such as a CPA (Certified Public Accountant) or CA (Chartered Accountant), which involve rigorous exams and ongoing professional development.
Both bookkeepers and accountants may be involved in reconciling accounts and ensuring that financial records are accurate. For example, both might review transaction entries for errors and discrepancies.Â
Bookkeepers may also assist in preparing preliminary financial reports, which accountants then review and finalise.
Bookkeepers and accountants often work closely together to ensure the financial health of a business. Bookkeepers provide the foundational data by recording transactions and maintaining accurate ledgers. Accountants use this data to perform higher-level analysis and prepare financial statements.Â
Regular communication between the two roles ensures that the financial information is accurate and up-to-date, enabling accountants to provide timely and relevant financial advice to management.
Accurate bookkeeping is crucial for effective accounting. Without precise and thorough bookkeeping, accountants cannot perform their duties accurately. Inaccurate records can lead to:
Bookkeepers ensure that every financial transaction is recorded correctly, providing a solid foundation for all subsequent accounting activities.
Both bookkeeping and accounting are essential for the financial well-being of a business.
Together, these roles ensure that businesses have the information they need to make informed decisions, plan for the future, and remain compliant with financial regulations. By working in tandem, bookkeepers and accountants help businesses to maintain financial stability and achieve long-term success.
When deciding whether to hire a bookkeeper or an accountant, consider the specific needs of your business.Â
If your primary need is to maintain accurate daily financial records and manage transactions, a bookkeeper may be the right choice. However, if you require financial analysis, strategic planning, tax preparation, and compliance, an accountant would be more suitable.Â
Additionally, the size and complexity of your business can influence this decision. Small businesses with straightforward financial activities might manage with a bookkeeper, while larger businesses with more complex financial needs might benefit from the expertise of an accountant.
Hiring both a bookkeeper and an accountant can provide great benefits in the comprehensive financial management of your business.Â
A bookkeeper ensures that your financial records are accurate and up-to-date, handling the daily financial transactions and maintaining the ledgers. An accountant then uses this data to perform higher-level tasks such as financial analysis, tax planning, and strategic financial advice. This collaboration can lead to more informed decision-making, better financial planning, and improved overall financial health for your business.Â
By leveraging the strengths of both roles, you can ensure that your financial operations are efficient, compliant, and aligned with your business goals.
Not sure whether you need an accountant or bookkeeper? Or, not sure whether you need both? No worries.Â
New Wave Accountants can help with both bookkeeping services and accounting services to help your business grow. Our financial planning and business advising is built on the foundations of accurate record-keeping. To learn how we can use them for your business, reach out to us online or call our friendly team.Â
An SMSF is a private superannuation fund that you manage yourself. It gives you control over how your retirement savings are invested. Unlike other super funds, where investments are managed on your behalf, an SMSF requires you to make investment decisions for the benefit of your retirement.
Knowing the contribution limits for your SMSF is important. These limits dictate how much you can add to your super each year, which can impact your retirement savings strategy and tax liabilities. By staying within these limits, you can optimise your super contributions and avoid potential penalties.
Concessional contributions are those made from pre-tax income. Examples include employer contributions (such as Superannuation Guarantee) and salary sacrifice contributions.
Annual cap limit: There is an annual cap on concessional contributions. For the 2023-24 financial year, this cap is $27,500.
Tax treatment: Concessional contributions are taxed at a rate of 15% within the super fund. If you exceed the cap, excess contributions may be taxed at your marginal tax rate.
Non-concessional contributions are made from after-tax income. Examples include personal contributions where no tax deduction is claimed.
Annual cap limit: The annual cap for non-concessional contributions for the 2023-24 financial year is $110,000.
Tax treatment: Non-concessional contributions are not taxed within the super fund. However, exceeding the cap can result in additional tax penalties.
Concessional contributions are made from pre-tax income and include employer contributions and salary sacrifice. Non-concessional contributions are made from after-tax income and do not incur tax within the super fund.
Current cap amounts: For the 2023-24 financial year, the concessional cap is $27,500 and the non-concessional cap is $110,000 (refer to ATO and MoneySmart for updates).
Impact of exceeding the caps: Exceeding concessional caps results in additional tax at your marginal rate plus an excess concessional contributions charge. Exceeding non-concessional caps can lead to excess contributions tax, which can be costly.
The bring-forward rule allows you to make up to three years’ worth of non-concessional contributions in a single year, effectively raising your cap to $330,000.
Eligibility criteria: To use the bring-forward rule, you must be under 75 years of age at any time during the financial year.
How it affects contribution limits over three years: Using the bring-forward rule will bring forward your cap for the next two years, meaning you cannot make further non-concessional contributions during this period without exceeding the cap.
Your total superannuation balance is the total value of your super accounts at the end of each financial year. It impacts your ability to make non-concessional contributions. If your total super balance is $1.9 million or more, you cannot make additional non-concessional contributions.
Contribution rules for different age groups:
The work test requires that you must have worked at least 40 hours over a consecutive 30-day period in the financial year to make voluntary super contributions. The work test exemption allows recent retirees with a total superannuation balance below $300,000 to make contributions for 12 months after the end of the financial year in which they last met the work test.
Salary sacrifice allows you to contribute extra to your super from your pre-tax income, potentially reducing your taxable income and benefiting from the lower tax rate on concessional contributions. However, it reduces your take-home pay, and exceeding the concessional cap can result in additional taxes.
Making contributions to your spouse’s super (spouse super contributions) can help boost their retirement savings and may entitle you to a tax offset of up to $540. This is particularly beneficial if your spouse has a low income or is not working.
If you are a low or middle-income earner and make personal (after-tax) contributions to your super, you may be eligible for a government co-contribution. The government will match your contributions up to a certain amount, helping to grow your super balance faster. Eligibility criteria include having a total income below a specified threshold and meeting work and age requirements.
If you exceed the concessional cap, the excess amount is included in your assessable income and taxed at your marginal tax rate. You may also have to pay an excess concessional contributions charge. Exceeding the non-concessional cap can result in paying additional tax, and the excess amount may need to be withdrawn from your super.
Penalties for exceeding contribution caps may include additional tax liabilities and charges, which can impact your retirement savings.
Keeping accurate records of your contributions ensures you do not exceed the caps and helps you track your superannuation balance. It is crucial for compliance and for making informed financial decisions.
Contributions should be reported to the ATO in your tax return and through your super fund’s reporting processes. Ensure that all contributions are accurately documented and declared to avoid potential penalties and to maintain compliance.
Understanding the contribution limits for your SMSF is essential to maximise your retirement savings and avoid potential penalties. We have covered the types of contributions, the annual caps, the bring-forward rule, factors affecting contribution limits, strategies for maximising contributions, and the importance of compliance and accurate record-keeping.
For personalised advice tailored to your financial situation, consider consulting a financial advisor. New Wave Accounting & Business Advisory offers expert services, including SMSF accounting, SMSF tax returns, and SMSF setup, to help you organise your superannuation strategy effectively.
Contact us online to learn more about SMSFs and how to maximise your opportunities.
A self-managed super fund (SMSF) is a superannuation fund that is established for a small group of individuals, with a maximum of six members. Each member of the fund is typically a trustee (or a director if the fund has a corporate trustee), which implies they are responsible for the management of the fund in accordance with Australian superannuation and taxation laws.
The basic structure of an SMSF allows members to pool their superannuation resources, which can then be invested across a range of asset classes such as shares, property, and fixed-income products. The key benefit of an SMSF is that the members are the fund’s trustees, giving them the legal authority and responsibility to decide how the fund is managed and how its assets are invested.
The most significant difference lies in the control and flexibility offered by SMSFs. Members can tailor their investment strategies to suit personal preferences and circumstances, which is not typically possible with other superannuation funds.
SMSFs are limited to six members (usually friends or family members). This contrasts with other super funds, which have no membership restrictions and are managed by professional fund managers.
SMSFs provide a broader range of investment options, including direct property, collectibles, and unlisted assets. In contrast, other superannuation funds usually offer a selection of predefined investment portfolios.
SMSF trustees are required to adhere to strict regulatory requirements, including fund audits, financial reporting, and compliance with superannuation and tax laws. This level of regulatory responsibility is generally managed by the fund administrators in other types of super funds.
The costs associated with running an SMSF can be significantly different from other super funds. While SMSFs offer the potential for cost savings for larger balances, they can be more expensive for smaller fund sizes due to fixed administrative and audit costs.
One of the primary benefits of SMSFs is the unparalleled level of control they offer over investment decisions. Members have the freedom to choose from a wide range of investment options, including shares, property, fixed interest, and even alternative assets like artwork or cryptocurrency.Â
This level of control enables members to actively respond to market changes, align investments with personal values (such as ethical investing), and diversify their portfolio in a way that might not be possible in other types of super funds.
SMSFs provide the flexibility to tailor investment strategies to specific retirement goals and financial situations. Whether it’s aiming for high growth, focusing on capital preservation, or generating steady income streams, SMSF members can shape their investment approach to suit their individual risk tolerance and stage of life.Â
This personalisation can be a key benefit for those who wish to take a hands-on approach to their retirement savings.
SMSFs offer significant tax advantages, making them an attractive option for retirement planning. Contributions to the fund are taxed at a concessional rate, typically lower than personal income tax rates. The fund’s investment income is also taxed at a concessional rate, and in the pension phase, it can be tax-free. This tax efficiency can result in substantial savings over the long term.
Members of SMSFs can employ various strategies to maximise their tax efficiency. These include timing the sale of assets to manage capital gains tax, using franking credits from Australian shares, and implementing pension strategies to optimise the tax-free status of income streams in retirement. However, it’s important to navigate these strategies within the legal framework and seek professional advice to ensure compliance with tax laws.
SMSFs offer significant advantages in estate planning. Members can set up binding death benefit nominations that provide certainty over how their superannuation benefits will be distributed upon their death. This aspect is particularly important for those with complex family situations or specific wishes regarding the distribution of their retirement savings.
Succession planning within an SMSF can be tailored to ensure a smooth transfer of wealth and management responsibilities. SMSFs allow for greater flexibility in defining how benefits are paid to dependants, which can include lump-sum payments or ongoing income streams. Additionally, the structure of SMSFs can facilitate a more straightforward transfer of control in the event of a member’s incapacity or death.
Ideal candidates for an SMSF are individuals with a substantial super balance, as this can make the costs of running the SMSF more economical. They should also have a good understanding of financial and legal obligations, or be willing to seek professional advice from SMSF accountants when needed. A suitable member is typically someone who desires greater control over their retirement investments and is willing to actively manage and take responsibility for their superannuation.
While there’s no fixed minimum balance required to start an SMSF, it’s generally recommended to have a substantial amount to make the fund cost-effective. Potential trustees should conduct a cost-benefit analysis or look into SMSF setup services, considering ongoing costs against the potential advantages an SMSF can offer.
SMSF trustees need to be mindful of investment risks, including market volatility. The responsibility of diversification falls on the trustees, and a lack of diversification can lead to higher risk. It’s crucial to have a well-thought-out investment strategy that mitigates these risks and aligns with the members’ risk profiles.
Some Australians using SMSFs choose to diversify this by balancing both an SMSF and an Industry Super Fund, but the costs involved with managing both could outweigh the benefits.
Failure to comply with superannuation and tax laws can result in significant penalties and even the disqualification of trustees. Understanding and adhering to the legal requirements is paramount in avoiding these risks.
For those considering the benefits SMSFs, New Wave Accounting & Advisory offers comprehensive services to assist in the setup and management of your fund. Our team of experts combines financial planning and SMSF accounting to provide a holistic approach to super funds and retirement planning.
We recommend consulting with our team of in-house financial planners to ensure the feasibility of setting up a self-managed super fund and about how you can enjoy the benefits of SMSFs. They can guide you through the process, including establishing the trust, registering with regulatory bodies, and managing the rollover from existing funds. You can request a free call from a member of our team or contact us online to get started.
Find out more about our SMSF accountants and services to help you enjoy the benefits of using an SMSF, like SMSF setup and SMSF tax returns.
Managing your retirement funds effectively often raises a few questions. One of which is, can you have both a Self Managed Super Fund (SMSF) and an Industry Super Fund?
The answer is yes, you can have both an SMSF and an industry super fund, meaning could enjoy the benefits of both. But, operating both may involve additional costs that could outweigh the benefits.
Balancing your superannuation and deciding whether or not to have both an SMSF and an industry super fund can influence your financial stability in the future. For detailed advice tailored to your financial goals, we encourage you to contact us.
Superannuation, or “super” as it’s commonly referred to, is essentially a long-term savings plan designed to provide individuals with a source of income in their retirement years. It’s a scheme that supports employees throughout Australia to accumulate savings while they’re still working, which are then used to generate income to fund retirement.
There are a wide variety of superannuation fund types and each varies in their structure, degree of control, costs, and associated risks. Hence, the question of having one or both becomes pivotal in your retirement planning.
A key aspect of superannuation is that it’s compulsory. Employers are legally obligated to make contributions to their employees’ super accounts based on a percentage of an employee’s ordinary time earnings.Â
This percentage is regulated by the ATO and can change over time, adjusted with inflation and rising interest rates. The current superannuation guarantee rate, as of the latest change in July 2023 is 11% and is expected to rise to 12% by July 2025.
As well as the compulsory payments by employers, Australians can also choose to make voluntary contributions to boost their super savings.
An SMSF is a private superannuation fund that you manage yourself. It’s regulated by the ATO, and as a fund, it offers the highest level of control over your retirement savings.Â
With an SMSF, you’re the trustee, making all the investment decisions and bearing the responsibility of complying with the relevant laws. It’s a more hands-on approach that allows for a wider range of investment options.
According to the ATO, there were 603,432 SMSFs managed by Australians as of 2022.
On the other end of the spectrum are Industry Super Funds. These are funds originally established by industry bodies for their employees but are now typically open to anyone.Â
They’re managed by professionals, regulated by APRA, and are generally characterised by lower fees due to their not-for-profit nature. Industry Super Funds offer less control than SMSFs but provide simplicity, ease of management, and a hands-off approach to your retirement savings.
In Australia, there’s no legislation preventing you from operating both an SMSF and an industry super fund at the same time, meaning you can enjoy the benefits of both and diversify your savings. But, there can be additional costs associated with separate sets of fees.Â
Despite this, there are several scenarios where having both an SMSF and an industry super fund could be beneficial.
By having both an SMSF and an Industry Super Fund, you’re not putting all your eggs in one basket. Diversification can help spread the risk and potentially increase the chances of steady growth in your retirement savings.
If you hold certain assets in your SMSF that aren’t permitted in industry funds – like property or artwork – you might choose to maintain an SMSF for this purpose, while also benefiting from the simplicity and ease of an Industry Super Fund for the rest of your super.
You might want to maintain an Industry Super Fund because of certain insurance coverages that are less expensive or otherwise unattainable through an SMSF.
For those nearing retirement, having both funds can make it easier to transition from the accumulation phase to the pension phase. You can start drawing a pension from one fund while still contributing to the other.
Based on the most recent super fund statistics and data from the ATO, it’s clear that the superannuation landscape in Australia is diverse, with a considerable number of Australians holding accounts in more than one super fund.
Historically, many Australians ended up with multiple super accounts by default, as they changed jobs and their new employers contributed to different funds.Â
However, with increased awareness about the potential downside of multiple super accounts – such as duplicated fees and insurance premiums – there has been a concerted effort by both the government and individuals to consolidate super accounts.
Because of bodies like Moneysmart, the trend for the average Australian is now leaning towards maintaining a single super fund account. This simplifies the management of retirement savings and helps to keep a lid on fees and other costs. But, this isn’t to say that having multiple accounts, such as an SMSF and an Industry Super Fund, isn’t a beneficial move for certain individuals.Â
It all depends on personal circumstances, financial goals, and retirement planning strategies.
Despite the trend towards consolidation, some Australians still opt for multiple super funds. For example, they may choose to keep their Industry Super Fund while also operating an SMSF. The reasons for doing so often include:
So while the trend is leaning towards single super fund accounts, having multiple super accounts, including both an SMSF and an Industry Super Fund, could be a strategic choice for some Australians. Though, the decision should be based on individual financial circumstances, retirement goals, and personal preferences.
Operating multiple super funds, such as an SMSF and an Industry Super Fund, comes with its own set of implications. It’s critical to understand these before making the decision to maintain more than one account.
Managing multiple super funds means managing multiple sets of fees. These fees can include administration fees, investment fees, and insurance premiums, all of which can eat into your retirement savings over time. Moreover, SMSFs come with their own unique costs, such as auditing fees, ATO supervisory levies, and potential advice fees.
Whether or not it’s worth operating multiple super funds depends on your financial situation and goals. The Australian Securities & Investments Commission (ASIC)’s Moneysmart has a comprehensive Superannuation Calculator that can help you assess the impact of fees on your super balance.Â
But for tailored advice to your own situation, an accountant or financial advisor with experience setting up SMSFs and managing SMSFs can give you more specific insight.
Both SMSFs and Industry Super Funds have their unique advantages and disadvantages, and understanding these can help you make an informed decision about your super strategy.
Deciding between having one super fund or multiple, including both an SMSF and an Industry Super Fund, isn’t an easy choice. There are several factors to consider, and it’s often recommended to seek professional advice before making up your mind.
Our SMSF accountant team at New Wave Accountants & Business Advisory has extensive experience advising on these considerations and more. We believe that the decision should be made based on a comprehensive understanding of your personal circumstances, preferences, and financial goals.
Actively managing your super fund(s) is key to ensuring that you’re on track to meet your retirement goals. Whether you have one super fund or multiple, keeping track of your investment performance, fees, and insurance premiums can help you optimise your retirement savings.
At New Wave Accountants & Business Advisory, we offer a range of services tailored to help you effectively manage your super fund. From SMSF setup and compliance to strategic advice on your superannuation strategy, we’re here to provide the support you need.
If you have more questions or need further advice, don’t hesitate to reach out and contact us. Let us help you balance your superannuation strategy and secure your financial future.
At New Wave Accountants & Business Advisory, we offer a range of services tailored to help you effectively manage your super fund. From SMSF setup and compliance to strategic advice on your superannuation strategy, we’re here to provide the support you need.
If you have more questions or need further advice, don’t hesitate to reach out and contact us. Let us help you balance your superannuation strategy and secure your financial future.
Is online selling a hobby or a business? When you start asking yourself this question, there’s usually no straightforward answer. Many online businesses begin as hobbies, and at some time, you’ll be able to claim it’s either. An accountant can help you identify the distinctions between a commercial business and a hobby, so you know you’re filing the correct papers.
This questionnaire compiled by the Australian Taxation Office (ATO) helps you determine whether your online selling is more of a business than a hobby:
If you responded “yes” to most of these questions, you’re likely running a business, and your incomes are taxable.
You’ll almost certainly need to apply for an Australian Business Number (ABN). An ABN allows you to conduct your internet business like a company and is sometimes needed by law. Aside from that, you’ll need one to register for most Australian website names.
We’ll go through some of the advantages of having an ABN for your business and when it could be helpful.
When you’re registered for GST, one obvious benefit is the opportunity to claim GST back on purchases made in Australia, including Amazon seller fees. And you need an ABN to register for GST. To maximise the advantages of claiming GST tax credits, apply for an ABN.
There are business costs that you may claim as tax deductions while setting up and managing your firm. To claim business expenditures when filing your next tax return, you must obtain an ABN. If you don’t have an ABN, you won’t be able to claim legal business deductions such as motor vehicle expenditures, travel expenses, operational expenses or any applicable capital expenses.
The Australian Domain Name Authority manages domain names that end in .com.au, .org.au and .au in Australia (auDA). Most often known as country code Top Level Domains (ccTLDs), these domains require an ABN before you can purchase them. On the other hand, other domains, such as .com and .org, do not require an ABN and can be acquired by just about anybody.
Selling online, more often than not, is a business. The ATO has begun to data match numerous online marketplaces against information in people’s tax returns in the past years to ensure all relevant revenue is disclosed.
New Wave Accounting is an accounting firm in the Gold Coast dedicated to helping small businesses keep their books and financial figures in check. Make sense of your business numbers by getting in touch with us today!
As a business owner, you need to be mindful of your spending to stay afloat and avoid debt. Creating and adhering to a budget is key to effective money management.
Budgeting helps you understand where your money is coming from, where it’s going, and how much you have to spare. It’s an effective tool for helping you reach your financial goals. Here are some of the major benefits of budgeting for your business.
Budgeting enables you to set financial goals and objectives for your business and to measure your progress in achieving them. It provides a benchmark for measuring your performance against your goals and helps you stay on track financially.
Budgeting helps you track your spending and identify areas where you may be overspending. It helps you identify ways to cut costs and maximise your resources.
Budgeting helps you make more informed decisions regarding the allocation of funds. Having a budget in place allows you to see how much you have to spend in each area and how it affects your overall financial picture. This makes it easier to decide where to allocate resources and make decisions that align with your financial goals.
Budgeting helps you improve cash flow by managing your income and expenses better. By tracking your spending and income, you can identify areas where you may be overspending and make adjustments to ensure that you are making the most of your resources.
Budgeting helps you monitor your progress towards your financial goals. By monitoring your spending and income, you can identify areas where you may fall behind and make adjustments to ensure that you meet your goals.
A well-constructed budget can help you track expenses, allocate resources, and plan for the future. Here are some steps to help you create an effective budget for your business.
Before you begin creating your budget, it is important to understand your current financial situation. Look at your balance sheet, income statement, and cash flow statements to get an idea of how much money you have coming in and going out. This will help you get a better understanding of your expenses and help you develop a realistic budget.
Once you understand your financial situation, it is time to set your goals. Think about what you want to achieve in terms of revenue, profits, and expenses. Setting goals gives you a clear direction for your budget and will help you focus your spending.
With all your goals in place, it is time to start tracking your expenses. Make sure you track all your expenses, both large and small. Tracking expenses will help you identify areas where you can cut costs and help you stay on track with your budget.
With all the information available, it is time to create a budget. When creating your budget, make sure you are setting realistic goals based on your financial situation. Also, take into account your goals when creating the budget.
Once you have created your budget, it is important to monitor it regularly. Make sure you are checking in on your budget at least once a month to make sure you are staying on track. This will help you identify areas where you can make changes and help you stay on track with your budget.
Budgeting is an important tool for any business owner to utilise. By creating and following a budget, business owners can ensure that their business is operating financially responsibly and can avoid overspending. Additionally, budgeting can help business owners track their progress and performance over time.
Creating a budget for your business can be a lot of effort, but by working with a business accountant, you can make it easier! New Wave Accounting provides accountants in the Gold Coast area for businesses that need one. We make sure to handle the nitty gritty details of finances and accounting so you can focus on growing your business. Contact us at New Wave Accounting to learn more about our services.
You only have a few weeks left to file your taxes for 2022. Ensure you have your income and deduction records to get the most money back from the Australian Taxation Office (ATO). Here are the key focus areas the ATO will be looking at:
The records you need to keep for your expenses usually come in the form of a receipt from the supplier. Your receipt must include the supplier’s name, the amount of the expense you are claiming, the date of the receipt or document, the date the expense was paid, and what the purchase was for, such as if you are claiming a work-related expense.
If you cannot provide documentation for a cash payment to a supplier, you will not be able to claim a deduction. However, the ATO may still allow the deduction if the evidence shows that the individual spent the money and is entitled to claim the deduction. This evidence could be a bank or credit card statement that shows the payment was made, to whom, and for how much.
To claim work-related expenses, you must have spent the money yourself and not been reimbursed, the expense must be directly related to earning your income, and you must have a record to prove it. To claim work-related expenses, you must have spent the money yourself and not been reimbursed, the expense must be directly related to earning your income, and you must have a record to prove it.
You can only claim expenses that are related to work. For example, if you work from home three days a week and travel to work two days a week, you can only calculate your phone bill for the calls you made for work.
You need to calculate your capital gain or loss whenever you dispose of a crypto-asset, NFT (non-fungible token), shares or property. The capital gain or loss is the difference between what you paid for the asset and what you sold it for.
Remember, you can’t offset your capital losses against your income and wages. The ATO takes its data collection process very seriously, so any unfair deductions or claims can be penalised heavily.
Keep track of all the income you receive from your rental properties, including insurance payouts, retained rental bond money, and even short-term rentals. As all your rental property deductions are entered manually, avoiding complications or discrepancies is important. If you need help, seek a professional to avoid delays or problems with your refund.
This is just a small list of deductions that are common for individuals in Australia. We have written about different tax deductions for individuals before; if you want to read more about what you can claim as a business owner or a high-income earner, you can read them here.
If you still have questions about your tax refund and other individual income tax deductions, plenty of tax accountants and specialists around the country can help you.New Wave Accounting provides end-to-end accounting and bookkeeping services. We are tax accountants on the Gold Coast, working for various industries and creating tailored solutions for every client. We understand how individuals and businesses need reliable accounting and bookkeeping services, and so we’re here to help. Call us at (07) 55041999 to schedule an appointment today!
Beauty industry companies are becoming more and more popular due to their fast-growing market. It’s quite a diverse industry that’s actually a combination of a couple of different market segments, including cosmetology, aesthetic medicine, and hairdressing. But that doesn’t mean that the beauty industry doesn’t need proper accounting and bookkeeping services. In fact, they need it as much as any other business.
If a business owner runs a beauty industry company, then they actually have to maintain not only the accounting and bookkeeping, but also complex accounting, especially when it comes to taxation. Let’s look at how accounting principles work for beauty industry companies.
Beauty Industry companies, just like any other company, need to maintain certain documentation. These records will differ in number depending on the company’s size, the nature of the business, and the number of taxation issues a business owner is facing.
For example, if a business owner is doing small-scale business, such as a hairdresser, they will need to maintain records of the following:
Cash Register Receipts
These records should include cash register receipts, bank deposit amounts, and checks used to pay for expenses.
Bank Deposit Slips –
The slips must be kept for one year after the end of the year in which the deposit was made. The slips must be kept for one year after the end of the year in which the deposit was made.
Inventory Records –
These records should include what is in inventory, receipts, and sales of products and services.
Check Register –
This record should include information on checks written and payments made.
Credit Card Register –
Any credit card transactions must be recorded in a register.
Credit Card Receipts –
For credit card purchases, receipts are required so that records are accurate and may be audited.
Tax Records –
Tax records for beauty industry companies include sales tax and payroll tax records.
Beauty industry companies are taxed the same as any other company. They are taxed on their revenue and must fill out a business activity statement (BAS) each year.
Depending on a business owner’s income levels (both for themselves and for the employees), they will have to complete a tax return.
It is essential for business owners to be aware of their obligations and responsibilities so that they don’t do anything illegal.
Organising the accounting and bookkeeping for a beauty industry company requires not only keeping the records, but also performing the accounting itself. When it comes to accounting, it is always a good idea to use a software. An accounting software will not only make the process of bookkeeping and accounting easier, but it will also prevent mistakes and keep records in an organised manner.
Organising the bookkeeping is also essential. Whether a business owner is running a small-scale or a large-scale company, they need to properly organise their bookkeeping. Organising the bookkeeping means being able to quickly spot any issues. It’s always best to use a software which is meant for bookkeeping organisations. For example, Xero is a software that enables business owners to organise their bookkeeping while providing them with the ability to properly monitor the financial health of their businesses.
The key to any successful business is understanding how it needs to be managed. The accounting and bookkeeping is no different. Running a business is a huge responsibility, but it can be accomplished. Accounting and bookkeeping are the cornerstones of running a successful business, and so, business owners need to understand how to do it properly.
New Wave Accounting provides end-to-end accounting and bookkeeping services to help you reach your goals. Whether you’re in the beauty industry, eCommerce, medical, or even financial, our Gold Coast accountants will work with you to help you grow your business. Get in touch with us today to book a consultation with us.
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At the end of the day, and by the end of this book, you will have an understanding of how and why you should invest in minimising your tax and making the most of your business.
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