Business Tax Tips

I have started my own business and wonder if I need to register for GST.

Businesses with an annual turnover of $75,000 or more are required to register for GST. If your business has a lower turnover you are not required to register but you may if you wish to. You will only be required to charge your customers GST if you are registered.

I have heard that the government gives rebates for the cost of fuel. How do I qualify for the rebate?

From 1 July 2008 most businesses will be able to claim fuel tax credits for running machinery, plant, equipment and heavy vehicles used in running their business. To be eligible to make a claim the business must be registered for GST and the claim is made on the Business Activity Statement that is required to be lodged. Fuel tax credits are not available where alternative fuels (e.g. LPG) are used.

I run a small business and have bought a new piece of equipment that was quite expensive. Am I entitled to claim the investment allowance that I heard about in the budget?

If you qualify as a small business entity and you committed to buy that piece of equipment between 13 December 2008 and 31 December 2009 you may be eligible. It should be used mainly in the running of a business in Australia and be first used or installed ready for use by 31 December 2010. In addition it must have cost at least $1,000. If you meet all of those conditions you will be able to claim 50% of the cost on your tax return in the year that it was first used or installed ready for use.

I am self employed and have paid personal superannuation contributions all year. What can I claim?

Provided you satisfy the eligibility criteria you will be able to claim a deduction for the contributions you have made to a complying superannuation fund or retirement savings account. To do so you must be fully self employed or no more than 10% of your assessable income (including Reportable Fringe Benefits) is from an employer. You must also have first notified your superannuation fund of your intention to make the claim and received a confirmation.

I have heard that self employed people can claim the superannuation co-contribution from the government. Am I eligible because I paid money into my super this year and I run my own business?

You may be eligible for the government co-contribution if more than 10% of your total assessable income is from running that business, eligible employment or a combination of the two. Investment income is not eligible income. If you claim any of your superannuation contributions as a tax deduction will not be eligible for the co-contribution.

I run a small business and in June pre-paid 12 months rent on the premises that I operate my business from. Can I claim the whole amount on my tax return even though most of the payment is for next year?

If your turnover is less than $2 million you will qualify as a Small Business Entity and will be able to claim certain eligible pre-paid expenses in the year they were paid. Some examples of prepaid expenses that can be claimed in the year they are paid are: rent, insurance and subscriptions to professional associations. Eligible expenses will be payments that are made for periods of 12 months or less and that the period of service ends in the next income year. Your pre-paid rent qualifies because the period it covers does not exceed 12 months and that period will end before the end of the next income year. The whole amount will be claimable on your tax return this year.

We are frequently adding more tips to our facebook page, so like our page to receive more tips.

Example of tips we post:

If your tax planning strategy has previously included income splitting with your children then you should beware as from 01/07/2011 children under the age of 18 no longer qualify for the low income tax offset on investment income. Therefore the amount you can distribute to them has decreased significantly. Furthermore every beneficiary of a trust MUST have a TFN

Did you know that you are not able to get insurance due to a pre existing illness such as diabetes and the likes, if your employer has at least 6 staff, then they can create a corporate sup plan for your superannuation contributions to go into which gives you automatic insurance cover including cover for the pre existing illness.