Wednesday 27 May 2015

The Budget and Small Business


Joe runs a business in the agricultural sector as a sole trader. He is considering expanding his business and is wondering how the recent budget announcements will impact him.

Under announced measures, any small business with turnover below $2 million will be able to claim an immediate deduction for each asset with a cost of less than $20,000 which is acquired from 12 May 2015 until 30 June 2017. Therefore, Joe decides to buy a tractor for $18,000 and a slasher for $15,000 giving an immediate deduction of $33,000.

Joe is also looking at putting in new lane ways and a new dam. From 1 July 2016 all primary producers will be eligible for an immediate deduction for capital expenditure on fencing and water facilities. Further, fodder storage assets will be depreciable over three years. As a result, Joe decides to delay construction until the 2016/17 income tax year which may bring a more favourable tax outcome.

As Joe is an unincorporated small business he will also be eligible for a 5% discount on his business income tax payable up to a maximum of $1,000 per income year from the 2015/16 tax year onwards.

Please note the above budget initiatives have not been passed through Parliament at time of writting this article and are therefore subject to change.

If you have questions please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 for an initial consultation.

We service clients in WoodendGisborne and Macedon Ranges areas within Victoria Australia.

Tuesday 5 May 2015

Maximising your Superannuation contributions

Megan owns a large property on Mt Macedon and is considering downsizing to a smaller property. By downsizing she will have excess cash and is considering contributing to her Superannuation Fund. Megan is employed on a part time basis and earns $65,000 per annum.

If Megan is 64
She can contribute the following:
  • Up to $35,000 as a concessional contribution i.e. before tax as a salary sacrifice (this cap includes any Super Guarantee contributions)
  • Up to $180,000 non-concessional contribution i.e. after tax. As she is under 65 Megan can access the three year bring forward rule. The bring forward rule allows you to contribute three years of non-concessional contributions in one year i.e. $540,000. However if she contributes the $540,000 she is unable to make non-concessional contributions for the next two years.
If Megan is 65
She can contribute the following provided she meets the work test:
  • Up to $35,000 as a concessional contribution (as above)
  • Up to $180,000 non-concessional contribution.
In order to meet the work test she must work 40 hours in a 30 day period during that year.

Note: For those aged 49 or younger on 1 July 2014 the concessional contribution limit is $30,000 per annum.

If you have questions please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 for an initial consultation.

We service clients in WoodendGisborne and Macedon Ranges areas within Victoria Australia.