Five steps to wealth creation...............

1. Consider using a budget tracking tool

2. Think about your mortgage repayment plan

3. What about borrowing money to invest in property or shares?

4. Try to give extra to superannuation

 

5. Chat to an accountant about tax variation schemes

Age Pension – So many Rules…. Australia is obsessed with creating them

 

From 1 July 2017, the Age Pension age effectively increases to 65.5 years (from its current 65 years)until it reaches age 67 from July 2023. Your Age Pension age is the age at which you are eligible to apply for the Age Pension, and this will depend on your date of birth. Australian residents born on or after 1 July 1952 and before January 1954, will have an Age Pension age of 65.5 years. Anyone born before July 1952 has an Age Pension age of 65 years (although women before 1949, have a younger Age Pension.

AFL stars to pocket tax breaks after Australian Taxation Office ticks off image rights deal

AFL stars will pocket tax breaks on their football income under an image rights deal ticked off by the Australian Taxation Office.

Changes to the league’s player contract rules will allow players to divert up to 30 per cent of their club wages to a private company or trust.

Companies and trusts are subject to lower tax rates than the top personal income tax bracket of 49 cents in the $1.

A ranking system measuring on-field achievements including all-Australian selection, best and fairest results, Brownlow Medal placings, premierships and rising star nominations will be used to determine how much money a player can assign for the use of their image.

Fringe players can divert 5 per cent of their wages and middle-ranked players between 10 and 25 per cent.

Only first and second-year players, rookies and players on minimum salaries are ineligible.

Details of the arrangement sent to player agents by the AFL Players’ Association yesterday reveal a player earning $750,000-a-season will be permitted to direct $217,500 to a third-party image rights company where it will be subject to a lower tax rate.

A player earning $350,000 could allocate $52,500, paying full tax on $297,500.

 

The scheme starts this season.

Small Business voice concerns about proposed trust changes

The Labor Party’s proposed plan to tax distributions from family trusts will see fewer incentives for small businesses to go into operation, reducing job growth across the country, according to one small business owner.

Earlier this week, Labor announced that it was seeking to tax a minimum of 30 per cent on trust distributions to individuals.

Trusts were a valuable tool in attracting entrepreneurs to set up business because it gave them a chance to minimise their tax obligations, while providing asset protection and an avenue for business succession.

These are the entrepreneurs that are building businesses in the country and creating employment and there has to be some incentive to be taking on that risk.

t comes down to the fact that many small businesses don’t make profits for [many] years and when they do start making profits, they get a chance to stream the income through the family and minimise the tax and hopefully put some money away for super but they get hit by rules changes like this.

 

These changes that would negatively impact “genuine Australian small businesses”.

Here are the work expenses that you should be particularly careful with in the 2016-2017 financial year:

1.      Trips between home and work. Generally you can’t claim a deduction for these because they’re considered private travel

2.      Car expenses for transporting bulky tools or equipment, unless: (you need to use your bulky tools to do your job, your employer requires you to transport this equipment or there is no secure area to store the equipment at work.)

3.      Car expenses that have been salary sacrificed.

4.      Meal expenses for travel, unless you were required to work away from home overnight.

5.      Private travel, so if you take a work trip that includes personal travel you can only claim the work-related portion.

6.      Everyday clothes you bought to wear to work (eg, a suit or black pants), even if your employer requires you to wear them.

7.      A flat rate for cleaning eligible work clothes without being able to show how you calculated the cost.

8.      Higher education contributions charged through the HELP scheme.

9.      Self-education expenses when the study doesn’t have a direct connection to your current employment – your future or dream jobs don’t count.

10.  Private use of phone or internet expenses – only the work-related portion counts.

11.  Up-front deductions for tools and equipment that cost more than $300. However, you can spread your deduction claim over a number of years. That’s called depreciation.

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