5 Benefits of Using a tax accountants

Are you finding it difficult to keep up with your tax obligations? Whether you are an individual or a business owner, managing your taxes can be daunting. The good news is that a professional tax agent in Sydney can help you stay compliant while maximizing your tax benefits.

There are many benefits of using a tax accountant and tax agents, they are qualified and experienced professionals regulated by the Tax Practitioners Board (TPB).

They offer a wide range of tax-related services to individuals and businesses, including tax planning, advice, and compliance. Using a tax agent can help reduce the stress and frustration associated with filing your taxes. Here are five benefits of using a professional tax agent.

  1. Expert Advice and Assistance: Tax agents are well-versed in the tax system and can provide you with expert advice and assistance on a range of tax-related matters. This can help you to file your tax return correctly and on time.
  2. Time-Saving: Preparing and filing your tax return can be time-consuming. A tax agent can help reduce the amount of time you spend on these tasks, freeing up time to focus on other areas of your business.
  3. Tax Credits and Deductions: A tax agent can help identify deductions and tax credits that you may be eligible for. This can help maximize your tax refund and reduce your tax liability.
  4. Tax Planning: A tax agent can help you plan your taxes, minimize your tax liability, and maximize your tax refund. This can help you save money and ensure that you are compliant with your tax obligations.
  5. Ongoing Support: A good tax agent will provide ongoing support throughout the year, not just during tax time. They can help you stay up-to-date with the latest tax legislation and provide advice on how to manage your taxes.

When choosing a tax agent in Sydney, it is important to consider their qualifications, experience, and fees. Tax agents are authorized to provide tax return preparation services, unlike tax return preparers who are not authorized to provide advice or assistance with tax-related matters.

To avoid common mistakes when filing your tax return, such as failing to report all your income, claiming incorrect deductions, and not keeping records, use a tax agent.

Maximizing your tax refund involves identifying all your eligible deductions and credits, keeping accurate records, and filing your tax return on time. A tax agent can help you achieve this and maximize your financial benefits.

In conclusion, using a professional tax agent in Sydney can save you time, reduce stress, and maximize your tax benefits. Contact a tax agent today to get started.

Superannuation remains a very tax effective investment vehicle, with a maximum tax rate within the fund of 15% when the relevant rules are complied with.

It may be hard to believe, particularly with all the discussions since the 2016 Budget announcements regarding changes to the system, however we know that in Australia it’s the most simplistic system anyone has in the world when it comes to retirement.

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So what’s all the noise about the changes then? There are some changes and it is important to be across them, but the above fundamentals still remain. The changes themselves can largely be categorised into two main themes – changes around contributions, and changes in retirement.

Contribution changes

The changes to contributions don’t take effect until 1 July 2017. From that time, there will be a reduction in the amount that can be contributed annually, and if you have (or are approaching) a total super balance of $1.6 million, an additional restriction on your non-concessional (or after tax) contributions apply. I’m finding it hard to believe that the government thinks that you can actually live off $150,000 for the next 20 years, because most tax payers will not retire on more than this, now they have caps for higher income earners and balances.

Changes from July 1, 2017.

From 1 July 2017, the annual limit for concessional contributions falls to $25,000. This limit applies for everyone eligible to make or receive these pre-tax contributions, which generally comprise Super Guarantee (SG) amounts from employers, amounts salary sacrificed to super and, if you are eligible, personal deductible contributions. If all you receive is the minimum SG required from your employer, then the reduction in annual limits (from $30,000 or $35,000 this year depending on your age) won’t have an impact on you. But if you also salary sacrifice, you may need to review your arrangements by 1 July 2017 to ensure you don’t inadvertently exceed the cap. Of course, the flip side is that if you aren’t maximising these contributions this year whilst the cap is higher, is there more you can do?

Non Concessional Contributions.

For non-concessional, or after tax contributions, from 1 July 2017 the annual cap will be reduced from its current $180,000 to a lower limit of $100,000. The three-year bring forward provision still applies, meaning you can do up to three years’ worth of contributions in one year (provided you were under 65 at the start of the year).

Limits that are reducing.

With that limit reducing from 1 July 2017, the question again arises as to what you can do this year? If you were under 65 on 1 July 2016, and you haven’t used the bring forward provision in the last 2 years, you actually have the ability to contribute up to $540,000 of after tax contributions this financial year and give your super a great kick before the limits reduce. Of course we know not everyone has the ability to contribute this much, but again it’s worth thinking about how much you can actually afford to do.

Changes in retirement.

Despite all the talk of the changes to super in retirement, there have been no changes to the rules around when you can actually access your super or, if it comes from an accumulation style fund, the way the payments are taxed to you. The existing rules continue to apply.

In essence, only two things have changed. First, if you have commenced drawing on your super through a ‘transition to retirement” (TTR) income stream, or look to commence one from 1 July 2017, from that date, earnings on the assets in your super fund that support that ‘transition to retirement”  will no longer be tax free. Rather, those earnings in the fund will be taxed at the standard 15% tax rate in super, rather than being tax free in the fund. Remember, there is no change to your personal tax on the amounts you receive from a ‘transition to retirement”.

Second, for pension paid in the “retirement phase”, which essentially refers to pensions payable to you after retirement or age 65 may increase to 67, there is a limit on how much you can actually start these pensions with. From 1 July 2017, that limit will be $1.6 million. Amounts above that need to stay in accumulation phase, with the earnings on those accumulation amounts continuing to be taxed within the fund at the rate of 15%.

If you don’t have, and don’t expect to ever be in receipt of superannuation accounts in excess of $1.6 million, these changes won’t impact you, other than if you run a ‘transition to retirement”.

Super is still a great option as tax deductible expense.

One of the major things that these recent super changes have shown is that it’s really important to understand what the changes mean for you. Superannuation, as a concept, remains unchanged. The Government estimates that no more than 4% of the population will be impacted by these changes.

Whether you are in that 4% or not, it’s always worth contacting AWTS just to see how you are placed in terms of your current plans, or if they should change.

Let our Superannuation Specialist help you retire on a healthy super balance later on life, avoid risking being a tax payer that retires on less than $150,000 for life, and speak to us today.

Please note that deductible contributions as an employee can only be classed as Salary sacrifice so you can deduct superannuation after tax superannuation contributions goes to a different pool of funds within your superannuation, which may not be taxed when you retire, all other contributions will be taxed unless you reach preservation age.

There is never a better time to plan your tax affairs than right now.