Tag: tax return

computer security

What to do if your TFN is compromised

Posted on | by Allan Hall

Protecting Your Tax File Number: What to Do If It’s Compromised

Your Tax File Number (TFN) is an important piece of personal information, and if it becomes compromised, whether due to identity theft, a data breach or accidental exposure, the Australian Taxation Office (ATO) takes steps to protect you.

How TFNs are Typically Compromised

Compromised TFNs often result from scammers attempting, sometimes successfully, to submit fraudulent tax returns and claim refunds. Another common cause is clients clicking on phishing links, which allows scammers to access their information, leading either the client or us to contact the ATO to lock their accounts for security.

What the ATO Does when a TFN is Compromised

If the ATO identifies that your TFN may be at risk, they will:

  • Monitor your tax records for any unusual activity
  • Work with you to ensure your tax affairs remain secure
  • Restrict certain online services to prevent unauthorised access.

These measures help protect your identity but may also limit Allan Hall’s ability as your tax agent to access and manage your tax details.

New ATO Security Measures to Prevent Annual Account Locks

The ATO has recently introduced a new procedure to help with compromised TFNs avoid ongoing account locks.

To reduce the need for annual security holds, you should:

  • Contact the ATO and increase your MyID security strength to Strong – this may require adding additional identity information
  • Implement additional security measures such as a unique password and security questions
  • Nominate Allan Hall as your tax agent so we can continue accessing prefill data and lodging your return smoothly.

Once these security enhancements are in place and, as long as we as your tax agents are the ones accessing the prefill and lodging the return, the ATO has indicated that there should be no additional security steps required annually.

How You Can Assist Us

To ensure we can continue assisting you while keeping your TFN secure, you can:

  • Confirm our access via MyGov or a phone call to the ATO if needed
  • Provide relevant documents if verification is required
  • Stay vigilant and report any suspicious activity to the ATO and to Allan Hall.

Your security is our priority and we are here to help. If you have any concerns about your TFN or need assistance, please reach out to us.

CONTACT ALLAN HALL BUSINESS ADVISORS

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teaching financial responsibility

New requirements for CCS providers from 1 April

Posted on | by Allan Hall

What are the new STR requirements for CCS provider approval applicants starting 1 April 2025?

All new Child Care Subsidy (CCS) provider approval applicants will need to supply a statement of tax record (STR) to the Australian Government Department of Education.

Some existing providers may also be asked to provide an STR. The Department of Education will notify those existing providers who will require an STR.

The STR demonstrates your satisfactory engagement with the tax system and is required when applying to administer CCS.

To apply for an STR, use the ATO’s online services. After you submit your application, you’ll receive a receipt and your STR within 4 business days.

Important tips

  1. Check your registration: Make sure you have an Australian business number (ABN), tax file number (TFN) and goods and service tax (GST) registration if your income is above the relevant limits
  2. Review your tax lodgements: Ensure you’ve submitted at least 90% of your income tax returns, business activity statements (BAS), and fringe benefits tax (FBT) due in the past 4 years (or since your tax record started, if less than 4 years)
  3. Address outstanding debts: If you owe $10,000 or more (not including disputed debts), either pay them off or set up a payment plan.

Taking these steps will help you resolve any tax issues with us before applying for your STR.

Claim Family Tax Benefit (FTB) and Child Care Subsidy (CCS) by 31 May

Confirm your income by lodging a tax return (or advising that you do not need to) NO LATER THAN 30 JUNE if you wish to submit a claim and receive CCS. Failure to do so can impact receiving FTB supplements and top-ups, and reduce your CCS to zero.

CONTACT ALLAN HALL BUSINESS ADVISORS

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crypto

Investing in crypto – record keeping requirements

Posted on | by Allan Hall

Crypto asset records you should keep

You need to keep records of each of your crypto assets for each and every transaction (including coin swaps), to work out if you have made a capital gain or loss.

For your crypto assets, you should keep:

  1. receipts when you buy, transfer or dispose of crypto assets
  2. a record of the date of each transaction
  3. a record of what the transaction is for and who the other party is (this can just be their crypto asset address)
  4. exchange records
  5. a record of the value of the crypto asset in Australian dollars at the time of each transaction
  6. records of agent, accountant and legal costs
  7. digital wallet records and keys
  8. a record of software costs that relate to managing your tax affairs.

You need to keep details for each crypto asset as they are separate CGT assets. Keeping good records is essential for meeting your tax obligations, and saves us time when we prepare your tax return.

Tips for protecting crypto asset records

Keeping good records is important as crypto can be volatile. These record-keeping tips may help safeguard you against loss of information, which could happen at any time. Keep these records during the period you hold or transact using crypto:

  1. Export your transaction history regularly (eg every 3 months) to protect you in case of loss of access to your account
  2. Before closing an account, export your complete transaction history
  3. Find a reputable Australian crypto tax calculator – there are free and low-cost services you can use to sync your exchange and wallet accounts
  4. Use a blockchain explorer or contact the crypto exchange’s customer service if you need to recreate lost records.

How long to keep records

Keep records for 5 years from the latter of:

  1. when you prepare or obtain the records
  2. when transactions or acts are complete
  3. the year that the CGT event happens.

You should keep records long enough to cover your amendment period (usually 2 or 4 years) for an assessment that uses information from the record.

Your records must be in:

  1. English or be translatable to English
  2. in writing, however they can be electronic/digital or paper.

CONTACT ALLAN HALL BUSINESS ADVISORS

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health insurance

Income thresholds are changing for the private health insurance rebate

Posted on | by Allan Hall

From 1 July, the income thresholds for private health insurance rebate purposes will increase.

Income thresholds

  • The private health insurance rebate is income tested
  • This means that if your income is higher than the relevant income threshold, you may not be eligible to receive a rebate
  • Your rebate entitlement depends on your family status on 30 June
  • Different thresholds apply depending on whether you have a single income or a family income.

When you lodge your tax return, we calculate your income for surcharge purposes and determine your rebate entitlement.

Your entitlement is also based on the age of the oldest person covered by the policy.

The income thresholds used to calculate the Medicare levy surcharge and private health insurance rebate have increased from 1 July 2024.

2024–25 Income thresholds
Family statusBase tierTier 1Tier 2Tier 3
Single$97,000 or less$97,001 – $113,000$113,001 – $151,000$151,001 or more
Family$194,000 or less$194,001 – $226,000$226,001 – $302,000$302,001 or more

Note: The family income threshold is increased by $1,500 for each Medicare levy surcharge dependent child after the first child

Family status on 30 June

Your family status on the last day of the income year (30 June) determines whether the single or family income thresholds apply to you. The information below provides guidance to when single or family thresholds apply.

Depending on your situation, your income may be tested against either the Single income thresholds or Family income thresholds.

Single income thresholds

If you are single on the last day of the income year and have no dependents, you are income tested against the single income thresholds.

This applies even if you had a spouse for the majority of the year, as long as you were single on the last day (30 June) of the income year.

If you separated from your spouse during the financial year and remain single with no dependents on 30 June, your rebate entitlement is calculated only on your own income.

Your entitlement to a private health insurance rebate is based on your income for surcharge purposes.

If you were single on 30 June, but had dependent children, you are considered a family and will be income tested using the family income thresholds.

Family income thresholds

If you had a spouse on the last day of the income year (30 June), your income will be tested against the family income thresholds. Your entitlement to a private health insurance rebate is assessed on your and your spouse’s combined income for surcharge purposes.

The family income thresholds also apply if:

  • you are a single parent with one or more dependents
  • you don’t have a spouse on the last day of the income year and you either maintain a dependent child or children or contribute in a substantial way to the maintenance of a dependent child.

If your spouse died in the income year and you were single on 30 June with no dependants, your and your spouse’s income is used for surcharge purposes to determine your entitlement under the family income thresholds.

If you have two or more children, the family income threshold is increased by $1,500 for every Medicare levy surcharge dependent child after the first child.

Note: Dependent children’s income is not included when calculating family income. Medicare levy surcharge dependent child is different to dependent persons who may be covered by your private health insurance policy.

CONTACT ALLAN HALL BUSINESS ADVISORS

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calculator on AUD$

Using business money for private purposes

Posted on | by Allan Hall

2 steps to take

If you use money or assets from your company or trust for private purposes and don’t account for the transactions correctly, there can be tax consequences.

That’s why it’s important to get it right.

Business money and assets you take or use for private purposes can include:

  • salary and wages
  • director fees
  • fringe benefits, such as an employee using the company car
  • dividends paid by the company to you as a shareholder (that is, distribution of the company’s profits)
  • trust distributions if your business operates under a trust and pays you as a beneficiary
  • loans from a trust or company
  • ad hoc drawings or takings
  • allowances or reimbursements of expenses you receive from a trust or company.

If you’ve used business money or assets from a company or trust for private purposes, follow these steps to avoid unintended tax consequences:

  1. Keep accurate records of the transactions, and
  2. Account for the transactions in the company or trust tax return and your individual tax return, if applicable.

Remember, there are different reporting and record-keeping requirements for each type of transaction, so make sure you know how to keep accurate records to suit your circumstances.

You can also practise good record-keeping habits by regularly cross-checking your records against the original documents so you can fix mistakes earlier and monitor your business’s cash flow.

Taxpayers are ultimately responsible for keeping business records and what you claim in your tax returns, however Registered Tax or BAS Agents like Allan Hall on the Northern Beaches can help and advise on your tax.

CONTACT ALLAN HALL BUSINESS ADVISORS

car buying private or business

Car limit for depreciation

Posted on | by Allan Hall

Assets and exclusions

The maximum value for calculating depreciation on the business use of a car first used or leased in the 2023–24 income year has increased to $68,108.

There is a limit on the cost to work out the depreciation of passenger vehicles (except motorcycles or similar vehicles) designed to carry a load of less than one tonne and fewer than nine passengers.

The maximum value for calculating a claim is the car limit, irrespective of any amount paid for a trade-in in the year in which the car was first used or leased.

Income yearCar limitATO reference
2023–24$68,108The indexation factor is 1.052, calculated as 435.5 divided by 413.8
2022–23$64,741The indexation factor is 1.066, calculated as 413.8 divided by 388.1
2021–22$60,733The indexation factor is 1.027, calculated as 388.1 divided by 377.9
2020–21$59,136The indexation factor is 1.027, calculated as 377.9 divided by 368.1
2019–20$57,581No indexation – the indexation factor is 0.987 calculated as 368.1 divided by 373.0
For examples of how to apply the car limit visit the ATO website

How the yearly car limit is calculated

The car limit is indexed annually in line with movements in the motor vehicle purchase sub-group of the consumer price index.

The indexation factor is calculated by dividing the sum of the index numbers for the quarters in the year ending 31 March by the same numbers for the quarters in the year ending on the previous 31 March.

The car limit amount is then indexed by multiplying it by the indexation factor unless the indexation factor is one or less.

CONTACT ALLAN HALL BUSINESS ADVISORS

checklist

Superannuation health check

Posted on | by Allan Hall

Use this checklist to review the health of your super in 5 easy steps

Getting started

  • The best way to perform these checks is either on ATO online services through myGov or by contacting your super advisor directly
  • You need a myGov account linked to the ATO
  • Once you link your myGov account, you can also use the ATO app.

Check 1: Check your contact details

Check your contact details, tax file number (TFN) and bank account are up to date with the ATO and your super fund. This helps prevent lost super and assists us in matching any unclaimed super to you.

Log on to ATO online services through myGov. In the top menu, select My profile. From the drop-down options, select either:

  • Personal details to update your name, contact number, email and home address
  • Financial institution details to update your bank account and
    • under the Account heading, you will see Income Tax and Superannuation
    • select either Add or Update.
     

To update your contact details, bank account and TFN with your super fund, see their website or contact them directly.

Check 2: Check your super balance and employer contributions

It’s important to check your super balance each year to see how much you have and keep track of your employer contributions. You can do this anytime on ATO online services or through your super fund.

Your employer should pay your super at least every 3 months. They may choose to do it more frequently, such as your regular pay cycle. From 1 July 2022 to 30 June 2023, your employer should pay at least 10.5% of your salary into your super. From 1 July 2023 to 30 June 2024, the rate increases to 11%. If you’re under 18, you need to work more than 30 hours a week to be eligible for super.

Funds report account balances to us at certain times of the year. Balances shown in ATO online services may be different to your actual current balances.

Log on to ATO online services through myGov. From the top menu, select Super and then either:

  • Fund Details to see all your super accounts and balances (including those held in funds or with us) and the most recent date reported by your fund
  • Information then Employer contributions to see the total year-to-date employer contributions in a selected year – select Transactions to see each contribution separately.

For help calculating the amount of super your employer should be paying, use the ATO’s Estimate my super tool. If you do not receive super contributions or the amounts are incorrect:

  • contact your employer and request an update
  • report it.

Check 3: Check for lost and unclaimed super

You may have lost track of some of your super when you changed your name, address or job, for example. This is why it’s important to ensure your fund has your current details.

Lost super is when your fund has lost touch with you, or your account is inactive. This money is held by your fund. Unclaimed super is when your fund transfers lost super to the ATO.

All your super accounts including lost and ATO-held super are displayed on ATO online services.

Log on to ATO online services through myGov. From the top menu, select Super. Then select either:

  • Fund details to check for lost super – if you want to keep your super with the same fund, contact them directly to update your details
  • Manage and then Transfer super to transfer this lost super to an eligible super account – or ask your fund to complete the transfer for you
  • Manage and then Transfer super to transfer ATO-held super to an eligible super account
  • Manage then Withdraw ATO-held super to have your super paid directly to you if the amount is less than $200 or you are over 65.

Check 4: Check if you have multiple super accounts and consider consolidating

If you’ve had more than one job, you may have more than one super account. It’s important to know how many super accounts you have. Combing your super may reduce fees and make it easier to manage.

If you decide to consolidate your super, it’s important to choose the fund that’s right for you. You should check that it provides better value, and the insurance cover suits your needs, which may change throughout your life. To see which fund is the best option for you, visit MoneySmart. If you are unsure of what to do, contact your super fund or seek independent financial advice.

Log on to ATO online services through myGov. From the top menu, select Super then either:

  • Fund details to see all your super accounts and balances
  • Manage and then Transfer super to consolidate your accounts, then
    • select the fund you want to close (transfer)
    • select the fund you want your money transferred to from the accounts listed
    • confirm your selection and submit request.
     

Check 5: Check your nominated beneficiary

Take time to ensure you have a valid death beneficiary nomination in place in your super fund as this isn’t covered by your will. This means your loved ones will not be put through unnecessary difficulties to finalise your estate.

Most binding nominations expire every three years. Some super funds have an option where nominations do not expire and remain in place until they are revoked.

If you don’t nominate a beneficiary, your fund may not know who your benefit should be paid to. In these cases, they will follow the law. This usually means they pay it to one or more of your dependents or your legal personal representative.

To check or nominate your death beneficiary:

  • Refer to your super fund’s website or contact them to check if you already have a valid nomination in place
  • To update it, complete the form from your super fund, sign and date in the presence of two witnesses
  • If you are unsure, contact your super fund or seek independent financial or legal advice from a qualified advisor

Why you should review your super

Your super is one of the biggest assets you’ll accumulate in your lifetime.

However, many Australians think they don’t need to worry about their super until retirement. Some don’t think about it at all.

It’s never too early to think about your super and the earlier you get on top of it, the better. It’s a good idea to regularly review and manage your super. At the very least, make sure you:

  • are getting the super you are entitled to from your employer
  • know where it is.

Small decisions you make today can have big impacts on your final super outcomes. For instance, missing out on some employer contributions today, could have a huge impact on your super balance in retirement due to the compounding effect of earnings. The same can happen if you have lost or unclaimed super.

Benefits of a super health check

A super health check consists of 5 simple and important things you can do to get on top of your super. It will help you:

  • manage your super
  • understand your entitlements
  • make better choices for when you retire.

You can check on your super at any time. However, we suggest you get into the habit of doing a health check each year when you prepare your tax return.

CONTACT ALLAN HALL SUPERANNUATION

Disclaimer: This article contains general advice only and has been prepared without taking into account particular objectives, financial circumstances and needs. The information provided is not a substitute for legal, tax and financial product advice. Before making any decision based on this information, you should assess its relevance to your individual circumstances. The information provided in this newsletter is objectively ascertainable and therefore does not constitute financial product advice.  If you require personal advice, please contact us to arrange an appointment with one of our licensed SMSF advisors. Source: ATO

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tax amnesty

Small business lodgement penalty amnesty

Posted on | by Allan Hall

Small Business – Lodgment Penalty Amnesty Program

On 9 May 2023 as part of the 2023-24 Budget, the government announced a lodgement penalty amnesty program for small businesses to encourage re-engagement with the tax system to get tax obligations up-to-date.

A lodgement penalty amnesty program is being provided for small businesses with aggregate turnover of less than $10 million to encourage them to re-engage with the tax system.

The amnesty will remit failure-to-lodge penalties for outstanding tax statements lodged in the period from 1 June 2023 to 31 December 2023 that were originally due during the period from 1 December 2019 to 28 February 2022.

If those returns are lodged between 1 June 2023 and 31 December 2023, any failure to lodge a penalty applying to the late lodgement will be automatically remitted. No action is required to request a remission.

To be eligible for the amnesty the small business must, at the time of lodgment, be an entity with an aggregated turnover of less than $10 million.

This does not apply to privately owned groups, or individuals controlling over $5 million of net wealth.

CONTACT ALLAN HALL BUSINESS ADVISORS

medicare

Medicare levy surcharge income threshold and rates 2023–24

Posted on | by Allan Hall

Medicare levy surcharge income threshold and rates 2023–24

Income thresholds for the Medicare levy surcharge are changing

The income thresholds for Medicare levy surcharge purposes will increase from 1 July 2023.

The government recently announced changes to the income thresholds for the Medicare Levy Surcharge (MLS), which will take effect from 1 July 2023. The MLS is a tax that is applied to individuals and families who do not have an appropriate level of private hospital cover, and earn above a certain income threshold.

So, what exactly are these changes to the MLS income thresholds?

From 1 July 2023, the income thresholds for MLS purposes will increase, which means that more people will be exempt from the tax. The income thresholds and MLS rates for the 2023-24 income year are outlined below.

MLS Income threshold and rates 2023–24

ThresholdBase tierTier 1Tier 2Tier 3
Single threshold$93,000 or less$93,001 – $108,000$108,001 – $144,000$144,001 or more
Family threshold$186,000 or less$186,001 – $216,000$216,001 – $288,000$288,001 or more
Medicare levy surcharge0%1%1.25%1.5%

It’s important to note that if you have dependent children, the family income threshold will be increased by $1,500 for each MLS dependent child after the first child. To work out which MLS rate applies to you, you can use the MLS income threshold table above once you have determined your income for MLS purposes.

It’s also worth noting that the MLS is separate from the Medicare Levy, which is a tax that is used to fund the public health system. The Medicare Levy is a flat rate of 2% of your taxable income, and it is paid by most Australian taxpayers.

Overall, these income thresholds play a significant role in determining the amount of tax an individual or family will be required to pay each financial year. It is important to stay informed about these thresholds to ensure that you are meeting your tax obligations and avoiding any penalties. If you have any questions or concerns about your tax obligations, it is recommended that you seek advice from a qualified tax professional.

CONTACT ALLAN HALL BUSINESS ADVISORS