The first month of 2017 is already over and, whilst many of us were still warming up to the year last week, there was still a lot of news and some important ATO updates. As we are committed to educating the Shuriken Community by keeping you up to date with relevant topics, we have them together in a short summary that’s perfect for you to digest over breakfast or lunch.
So, here are the most important headlines from January 2017:
Superannuation reform package
In the 2016 Federal Budget, the Turnbull Government decided to focus on superannuation through their Superannuation Reform Package. The aim is to foster fairness, sustainability, flexibility, and integrity in the retirement savings environment.
These changes will positively impact a lot of people – maybe you too! – but if you are a high income earner, you might lose out. However, if you want to take advantage of the current system, it is good to know you have until 1 July 2017 to do it.
If you want to learn more about how these changes affect you, we wrote an article on the topic.
Superannuation for the self-employed
If you are self-employed or a small business owner, you may have already started putting aside money for your super. However, the tendency is that many small business owners only save for super when they are in their 50s.
Often they see their business as a retirement asset, but the value of the business usually drops significantly when the owner stops working.
Tip: It helps to start paying into your super account early. The longer you contribute to super, the larger your retirement income will be when you stop working.
[ctt template=”9″ link=”ZdH6d” via=”no” ]The longer you contribute to super account, the larger your retirement income will be when you stop working. [/ctt]
Being self-employed, you may be able to claim a full tax deduction for contributions you make to your own super until you turn 75. You may also be eligible for the super co-contribution payment. Read more about the latest super updates here.
You may want to discuss retirement planning with your accountant or tax agent. Now is the time to act!
As a business owner, you know the drill of hiring new employees: lots of paperwork and a lot of wasted time. Well, the ATO have listened to these complaints and they have come up with a fillable TFN declaration form which is available on their website.
This update is welcome for all employers, as you no longer need to order the form and then wait for it to be mailed to you.
Tip: You can download the form from ato.gov.au/TFNdec or better yet you can ask your new employee to download the form and fill it in on the screen. Get the employee to sign the document, then send the original to the ATO within 14 days.
NOTE: Always keep a copy of the original files, especially this form.
Trumponomics might have an impact on our region
The new President of the US is unlikely to discuss the Trans-Pacific Partnership [Australia’s current Free Trade Agreement with the US (AUSFTA) has been in place since 2005]. The controversial immigration policies that are being put in place in the US are, again, unlikely to affect Australians.
However, what might be of interest is the plan to cut the US Federal company tax rate from 35% to boost competitiveness.
How does this affect Australia?
If the US drops the rate to 30%, Australia will officially become one of the most expensive countries in the region with which to do business. This means Australia might become globally uncompetitive which might affect all of us.
Unfortunately, the 2016-17 Federal Budget announcement to reduce the country’s company tax rate progressively to 25% for all businesses has stalled in Parliament. The general perception is that this law is a “free gift” for big companies at the expense of the more deserving elements of the community.
The US is Australia’s second largest two-way trading partner at around $69 billion and our third largest export market at $22 billion* (we import around $47 billion in US goods and services).
Australia’s trade relationship with China, however, swamps this volume with $150 billion in two-way trade of which almost $86 billion is in exports.
These trade statistics are important to remember when we look at the geopolitical landscape of the Asia-Pacific region and, in particular, the increasingly antagonistic relationship between the United States and China.
Australia is too small an economy to successfully survive on its domestic market alone. Strong regional alliances and competitiveness are critical.
Want to know more about how these updates affect you?
One of our dedicated specialists is ready to assist you with any questions you might have about the latest tax and accounting updates. Get in touch with us today: