Keeping a close eye on your finances, being disciplined about the amount of money you draw down and the amount you put aside to cover expenses, superannuation and tax obligations is a challenge. That’s especially true when as a contractor, your income can ebb and flow… and then there’s the challenges of keeping your records in order.
Recently, we heard that the Commonwealth Bank ‘lost’ almost 20 million account records from 2000-2016. Last year, the personal financial information of almost 50,000 Australians and 5,000 federal public servants – among them employees of the Department of Finance, the Australian Electoral Commission and the National Disability Insurance Agency – was leaked online by an undisclosed company.
Have you ever considered the power behind your logo and its capacity to build your business…
Your logo is much more than a clever piece of type or an attractive visual. When well thought out and designed, it is the visual representation of your brand. It communicates and reinforces your business’ core values and principles and it provides a vital connection between your business and your customers.
The Federal budget has been announced with positive changes for income tax rates and superannuation that will see low and middle income tax offsets introduced and tax brackets rise.
Income Tax Changes
Income tax changes will be phased in over seven years as follows:
Stage 1: 1 July 2018 to 30 June 2022
A new non-refundable Low and Middle Income Tax Offset (LMITO) will provide tax relief of up to $530 for taxpayers earning up to $90,000, in addition to the existing Low Income Tax Offset (LITO).
The upper threshold of the 32.5% tax bracket will increase from $87,000 to $90,000.
Stage 2: 1 July 2022 to 30 June 2024
The LITO will increase from $445 to $645, raising the upper threshold of the 19% tax bracket from $37,000 to $41,000
The upper threshold of the 32.5 % tax bracket will increase from $90,000 to $120,000.
Stage 3: From 1 July 2024
The 32.5% tax bracket will rise to $200,000
The 37% tax bracket removed completely. Taxpayers on taxable incomes exceeding $200,000 will pay top marginal tax rate of 45% (excluding the 2% Medicare Levy).
Several changes have been made to superannuation legislation. If you have a self managed superannuation fund (SMSF) you may be pleased to know the maximum number of fund members you can have will increase from four to six. This means families can now pool their wealth and invest in opportunities otherwise inaccessible.
Additionally, audits for SMSF’s with a good compliance record, as defined by the ATO, will only be required every three years instead of annually, reducing regulatory requirements and compliance costs.
Other important changes include the ability for individuals who work for multiple employers to exclude earnings from the superannuation guarantee regime once their contributions have exceeded the $25,000 concessional contribution cap; the government will introduce measures aimed at improving the integrity of the personal contribution deduction process; and measures to limit the unnecessary inadvertent erosion of member superannuation balances, including a 3% annual cap on passive fees on low balance accounts; a ban on exit fees; changes to insurance arrangements for low balance accounts and members under 25 as well as accounts that have been inactive for 13 months; and the requirement for low balances of inactive superannuation accounts to be transferred to the ATO.
For more information about how these income tax and superannuation changes will impact your wealth management, contact Ayers.
“We like to give people the freedom to work where they want, safe in the knowledge that they have the drive and expertise to perform excellently, whether they [are] at their desk or in their kitchen. Yours truly has never worked out of an office, and never will.” – Richard Branson, Founder and CEO of Virgin
Attracting high quality, ‘informed’ contractors and employees is increasingly challenging for businesses and it’s causing them to rethink their recruiting strategies, according to international job site Glassdoor.1
‘Informed’ candidates are well-researched about the business they are applying to, engaged and ready to ask relevant questions when in an interview.
And the good news is… if your business has an annual turnover of $10 million or less, you should have less tax to pay on your 2017 return.
That’s because the Australian Taxation Office lowered the company tax rate to 27.5% for the 2016–17 income year for businesses with a turnover of less than $10 million that have operated for all or part of the year.
Businesses should begin preparing now for a volatile future according to an insightful report published by Bain and Company in the US.
The report predicts that a “collision” of automation, an ageing population and a widening gap between the rich and poor, will “trigger economic disruption far greater than we have experienced over the past 60 years”.