Welcome to JP Sear & Marsh

The merger of Varcoes and Sear & Marsh has gone very well.  We are settling in to our new offices in Kew and we look forward to your next visit. With this newsletter is a checklist for your 2010 Income Tax return.

ATO Busy

In 2010 – 2011 the ATO plans to:

  • Audit 26,000 small businesses
  • Contact 100,000 small business about their expense ratios
  • Verify 48,200 small business BASs
  • Review 17,500 small businesses for unpaid employee superannuation
  • Audit or review 10,800 self managed superannuation funds

Audit Protection Service

Provides for the payment of professional fees incurred as a result of you being selected for an audit, review or investigation by the ATO or other Government body. The cost of being properly represented in these matters can be quite considerable depending on the length of time involved. Audit Protection Service provides a fixed, cost effective solution to guard against these unbudgeted costs.

Individuals with complex affairs, all businesses and Self Managed Superannuation Funds should consider this insurance.

Click here to find out more or email admin@jpsm.com.au for more details.

Income Tax Assessments

There have been some delays in early ATO processing of income tax returns. The ATO has instituted further prudential checks on income tax returns, and there are delays when there is an interaction with another Government department, particularly Centrelink. They assure us however that their 14 day service standard for electronic lodgements will be met in most cases.

Fixed Fee Quotes

Over recent years we have increasingly been asked to provide business clients with more certainty in the fees we charge. We have been happy to provide this and now have a large number of business clients and super funds where they know in advance what their fees will be.

The main features of these agreements are:

  1. Fees are discussed with the client and agreed for the following 12 months.
  2. A written agreement is signed by both parties which spells out exactly what services are to be provided, the cost of these services, and the payment method.
  3. All agreements include unlimited phone calls and email correspondence.
  4. All agreements are reviewed annually.
  5. Any work done outside the agreed services is charged separately.

If you would like us to put together a quote for you please contact us and we will be happy to do so.

Financial Advice & Planning

JP Sear & Marsh are not licenced financial planners or advisors, however to provide a broader, more seamless service, we have an association with Catalyst Financial Group Pty Ltd. Catalyst are independent, strictly fee for service licenced financial advisors operating from the same building. An introduction can be arranged. Click here to find out more.

Help!  I’ve put too much into my super fund

For 2009-2010, 2010 -2011 and 2011- 2012 the maximum concessional (deductible) contribution for those under 50 is $25,000 and $50,000 for those 50 and over.  After 30 June 2012 the limit will be $25,000 unless you are over 50 with a superannuation balance of less than $500,000, in which case the limit will remain at $50,000.

Superannuation funds are required to report contributions to the ATO. This data is checked and matched to the individual’s details.

Example of the Trap: What happens if you change jobs during the year? You are 40. One employer contributes $15,000 to super for you and the other contributes $20,000. Your employers have done nothing wrong, but in aggregate you have received $35,000 into your super fund(s). In due course you (and not your super fund) will receive a tax bill for $3,150 (31.5% of the excess contributions [$35,000 - $25,000] $10,000). The super fund will have already paid 15% on the excess contributions, so in total 46.5% in tax will have been paid on the $10,000.

Action to be taken: Review any salary sacrifice arrangements you may have now. Monitor your employer(s) contributions throughout the year and take care with personal concessional contributions (if eligible).

If you have a self managed super fund, and know of a breach of these caps, please discuss it with us immediately.

Are you taxed as a couple?

Your spouse includes another person (whether of the same or opposite sex) who:

  • you were in a relationship with that was registered under a prescribed state or territory law
  • although not legally married to you, lived with you on a genuine domestic basis in a relationship as a couple.

Details of your spouse, however defined, must be included in your tax return.

Recent changes to the law to include same sex couples include changes to:

  • Medicare levy reduction or exemption
  • Medicare levy surcharge
  • dependant spouse rebate
  • senior Australians tax offset
  • pensioner tax offset
  • family tax Benefit
  • fringe benefits tax
  • education tax refund
  • spouse super contributions tax offset
  • relationship breakdown and transferring assets
  • main residence CGT exemption

This will impact some financially – for example, if a member of a couple has Private Hospital Insurance and their partner does not, then if their combined incomes (for the purposes of the Medicare Levy Surcharge) exceed $146,000 then both will be subject to the Medicare Levy Surcharge –  yes, even the partner with Hospital Insurance.

Foreign Income – Changes re foreign employment

Residents of Australia must generally include their income from all sources both in and out of Australia regardless of whether it has been taxed in another country. We have tax treaties with many countries to ensure that this income is not double taxed. Recent changes make most foreign employment income taxable In Australia, with a credit for foreign taxes paid.

  • If you are going overseas for work, please retain your payslips, and foreign tax returns
  • If you have any foreign assets or income please discuss them with us

Engagement Letters

When you next visit we will ask you to complete a Taxation Services Engagement letter. This details our mutual responsibilities under the new Tax Agents’ Services Act 2009, which came into effect on 1 March 2010. In particular you should know that we now have a specific duty to satisfy ourselves as to the reasonableness of the information and claims being made in your income tax returns.

Adjusted Taxable Incomes

From 1 July 2009 the Medicare Levy Surcharge, Family Tax Benefit,  Superannuation Contributions, Offsets & Rebates, HECS/HELP repayments, and other tax measures need to take into account your and your spouse’s  fringe benefits,  reportable superannuation contributions and investment losses (e.g. negative gearing) as well as taxable income before the relevant concession is allowed.

In many cases we will need details of the tax components of your spouse’s tax return and may need to delay lodging returns until both can be completed. This may be so even though you keep your finances quite separate.

Computer Help

We provide professional IT services at highly competitive rates to small and medium sized businesses all across Melbourne including:

  • Computer Trouble-Shooting
  • Virus/Spyware Elimination
  • Security/Backup Solutions
  • Software Training
  • Server Setup
  • Network Setup
  • Domain Name Setup
  • Paperless Office Setup

Click here to find out more.

Financial Information & References

We are often asked to provide information to finance companies, real estate agents etc. We do not provide information to third parties without first receiving your consent. We prefer to have your consent in writing.  Whilst we will provide information upon your request, we will not generally give an opinion on that information.

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