Single Member SMSF

Single member funds:

Did you know a fund can be set up with only one member?

The ATO allows for the creation of single member funds but it is important to remember the rules governing management of these funds.

In case you were not aware of the rules, they have been summarised for you below.

The first option for managing a single member fund is to choose a corporate trustee. In this case be sure that the member is one of the following

• the sole director of the trustee company
• one of only two directors, that is either of the following

* related to the other director
* not an employee of the other director.

The second option for managing a single member fund is to have two individuals acting as trustees. In this case one trustee will be the member and the other trustee will be either

• a person related to the member, or
• any other person who does not employ them.

It is important to remember that a trustee or director can’t be paid for their services as a trustee or director in relation to the fund.

Source: ATO

Changes to Super Co-contributions

The super co-contribution matching rates for eligible personal super contributions have been temporarily reduced as part of the 2009 Federal Budget.

If you make eligible personal super contributions to a complying super fund or retirement savings account and you meet all the eligibility requirements, the rate at which your contributions are matched and the maximum super co-contribution amount paid will be temporarily reduced.

The new super co-contribution matching rates will be:

• 100% ($1.00 for every $1.00) for the 2009-10, 2010-11 and 2011-12 financial years, with a maximum super co-contribution of $1,000.
• 125% ($1.25 for every $1.00) for the 2012-13 and 2013-14 financial years, with a maximum super co-contribution of $1,250.
• 150% ($1.50 for every $1.00) from 2014-15 onwards, with a maximum super co-contribution of $1,500.

The maximum super co-contribution paid reduces as your income increases, phasing out when you reach the higher income threshold.

The higher income threshold for the 2009-10 financial year is $61,920. The income thresholds are indexed annually in line with average weekly ordinary time earnings (AWOTE).

(Source: ATO)

Too late to lodge your tax return?

(Using our online tax return preparation service, ezTax, can prevent late lodegment problems)

It's never too late to lodge your tax return.

The ATO widely publicises the 31 October lodgement deadline and potential late lodgement penalties. However, the deadline is not so critical in some circumstances:

1. Where there is a refund due - the ATO will generally remit any late lodgement penalties
2. If the taxpayer self lodged the previous year and has registered with a tax agent by 31 October he/she will automatically be subject to the tax agents lodgment program and applicable deferred lodgment dates.
3. If the taxpayer lodged through a different tax agent the previous year he/she can register with a new tax agent any time after 31 October and the lodgement deferal dates applicable to the previous tax agent will carry over to the new tax agent.

PAYG Payment Summaries

(See also our post on Lost PAYG Payment Summaries)

If you have received payments during the year and have had income tax installments withheld from those payments, you should receive a PAYG payment summary from your payer (employer). The payment summary will show the total payments you received and total amounts withheld for the financial year. Payments may include income earned from part-time or casual jobs.

Examples:

• salary
• wages
• commissions
• bonuses.

The PAYG payment summary will include:

• your gross income from that payer
• total tax withheld, and
• your payer's Australian business number (ABN) or withholder payer number (WPN).
  

The PAYG payment summary will assist you in completing your tax return.

(Source: ATO)

Making Business Cards Work for You

A Few Tips on the Use of Business Cards:

Background ==> Derived from visiting cards, or calling cards, business Cards first appeared in china in the 15th century, then in Europe in the 17th century. the footmen of aristocrates and of royalty would deliver these cards to the servants of their prospective hosts to introduce the arrival of the card owner. The standard form visiting card in the 19th century in the United Kingdom was a plain card with nothing more than the bearer's name on it. Later visiting cards were developed to contain more contact details and eventually became the modern business cards we know today.

5 Tips for your own business cards ==> Having business cards handy is a must for any successful person. Being asked for your card by another is a compliment, abd bit gavubg a card on you can be embarrrassing for both parties; it implies your're serious about the other persons business.

Business card Strategy ==>

• Aim to hand out a certain number of business cards each day or wek (depending on your field of business of course).
• Consider putting a sticker with a current promotion on each card such as 10% off manicures or a special of the month
• Always hand out 2 cards - one for the requester, and one for them to pass on to a friend. Invest in new cards

Invest in new cards ==>

• If you haven't ordered new business cards in the past two years, there is a good chance your information and photo are out of date by now. If you still have a large quantity remaining, ask yourself why you haven't been handing them out!
• If you have a stock pile left over because you dislike the cards, consider getting them redesigned and reprinted. You need to be proud of your Card! With so many new printing techniques, and paper types, the creative options are limitless.
• Having a striking business card on thick card is often a conversation starter. Keep in mind many people like to write notes on your card, such as where they met you so leave some white space too!

Practice presenting your business card ==> Unless you're comfortable and confident when handing out your card, you won't do it. Besides, the words and actions that accompany your business card when you give it to someone can really cement a positive first impression.

Invest in a quality business card case ==> business card cases look professional and keep your cards looking great. There are so many unusual, classic and artistic choices available to choose from. I suggest investing in a few cases; a more professional, elegant case for formal business occasions and a flashy or fun holder for social situations.

Keep a few cards Everywhere ==> You should never be without business cards. Don't just keep your cards in one spot. Put a few in your wallet, glove box, brief case, partners wallet, desk drawer, secretaries desk, the pocket of your coat, your suitcase... anywhere and everywhere so you will always have one on hand!

Never leave home without your business cards! So, how well do you exchange business cards?

If you think it might be time to order more, or get a redesign, contact Tony Hitchen of Australian Printing & Promotions on 07 3805 5989 and mention My Tax Zone for a 10% discount! We find their printing prices competitive and the service very efficient.

==> http://www.australianprinting.com.au/

Changes to Non-commercial Business Losses

In the 2009 Budget, the government announced changes to the non-commercial losses rules. These changes will further restrict the deductibility of business losses incurred in relation to non-profitable business activities. The measure will ensure excess deductions from unprofitable business activities cannot be used to reduce salary, wage and other income of high income earners.

From 1 July 2009 deductions from unprofitable business activities cannot be used to reduce salary, wage and other income of high income earners by tightening the application of the non‑commercial losses rules. Taxpayers with an adjusted taxable income (see post on ATI) of over $250,000 will instead have excess deductions quarantined to the business activity. The existing rules will continue to apply to taxpayers with an adjusted taxable income of $250,000 or less.

Taxpayers will still have the ability to apply to the Commissioner of Taxation for relief from the rules if there are exceptional circumstances or because the nature of the activities means that they are temporarily carrying on an unprofitable business but the activities they are undertaking are nonetheless independently assessed as commercially viable.

Tax Office Computer Shutdown/Upgrade

The Tax Office’s computer systems will be unavailable from Friday, 22 January until Wednesday, 27 January 2010 while a new computer system is implemented.

In addition, the ATO will need to suspend some processing in the weeks leading up to the implementation. There will also be some processing delays in the weeks following the implementation as the new system gradually returns to full processing levels which could continue during February 2010.

Lodgements will be affected for large businesses due to lodge their income tax return on 15 January 2010 should lodge no later than 7 December 2009. This will increase the likelihood of these more complex returns being processed and a refund issuing prior to the suspension of processing.