MCA Accountants

16 hours ago

Asset Protection Tip: Separate ownership and operations - If you are looking to supercharge your asset protection strategies, consider operating your business under a license. One entity owns the goodwill, the assets, etc, and another entity does all the trading. This can protect those business assets in the case of the business going bad. ... See MoreSee Less

MCA Accountants

2 days ago

Tax Tip: Pay Tax To Get Tax Back - We occasionally get queries from contractors early in their business careers around how much tax they will get back. It's a tough one to answer, but it depends on how much tax you have paid Occasionally misunderstood is the concept that you can only get a tax refund if the amount of tax you paid during the year is more than what is due on your taxable income Where a contractor pays no tax during the year, it's really difficult (read: impossible) for them to have anything other than a payable come year end. Salary and wage earners commonly get refunds because they have had tax taken from every pay, and once they factor in deductions at year end they tax taken out during the year was too much If you're a contractor, you should ensure that you put a percent of your income aside each week to cover you for that end of year tax bill ... See MoreSee Less

MCA Accountants

5 days ago

Tax Tip: PAYG Instalments - When you earn non-wage income (investment income, contract income) the ATO like to get tax paid on this quarterly in advance - this is called PAYG Instalments The ATO base their instalments on the last year's tax return - which raises two potential issues: - In the first year of operation, the ATO will not ask for any instalments because the ATO have no figures to base it on - Given tax returns are often done months after the end of the year, changes in income levels can result in drastic alterations to the last instalment or two For example, Mr. A has contract income of $30,000 in year 1, $80,000 in years 2 and 3. Lets also assume Mr. A does his tax returns in February each year: - In year 1, Mr. A will not pay any tax (as the ATO aren't aware Mr. A has any contracting income yet - Mr. A need to be putting money aside - In year 2, the ATO will ask for the tax on the first year's $30,000 (say $3,000), and then ask for $1,500 in March, and again in June as pre-payments towards next year - in year 3, the ATO will ask for $750 in September and December, the difference between the tax on $80,000 (say $17,000) and $3000 - so approx $14,000. Then, in March and June they will ask for instalments of around $7,775 each For the first 18 months of business, Mr. A will pay no tax. Over the next 12 months he will pay $7,500, and then in the following 12 months he will need to pay around $29,500!! This comes as a shock to many contractors, investors, and business owners - and many are very under prepared. Don't let it happen to you - sit down with your accountant and go through the scenario so you can plan to put the right amount of money aside each week / month ... See MoreSee Less