In this post, we explain the processses regarding your quarterly BAS lodgements, the due dates, and how we would like to interact with you to get your BAS returns done, and keep you up to date with your regular lodgements.
Please watch the enclosed video and feel free to contact us regarding your obligations and how we can assist you.
Presented by Mr Stuart Smith, Director Fiscal Artisans
A review of the 2025 Australian Federal Budget
Key changes:
New tax cuts for individual taxpayers in 2027 and 2028
Increased Medicare levy low-income thresholds
Making student loans fairer
Energy bill relief
Expansion to Help to Buy scheme for first home buyers
Restricting Foreign Ownership of Housing
Support for the Hospitality Sector and Alcohol Producers
Banning non-compete clauses for low and middle income workers
Healthcare
Skills and Education
Instant asset write-off changes
Click on the video below:
As a creative artist, your focus is on making the best use of your talents and skills, and turning this into a viable, income-earning activity.
And sometimes, this means that your income and cash flow are ‘lumpy’, with periods of low or no income, followed by ‘the great years’. Years of effort, that result in a large cash payment in one year – and a large tax bill as a result.
For this reason, it’s important that you can understand the concept of Income Averaging. This tax treatment offers significant concessions, and knowing how to make the most of them can save you a lot of money.
It is ok if you are not familiar with this particular area of taxation, we’re here to help. This is a highly specialised field that only a select few have expertise in. Many accountants, unless they have a specific focus on creative industries, may not be aware of it. Moreover, if you typically handle your tax returns on your own, it is improbable that this benefit has come to your attention. This is why you need to utilise an accountant that understands and specialises in the creative industries (as Fiscal Artisans does!) to assist you in your accounting and taxation matters.
Here’s how it works: your Special Professional income from creative sources (such as writing, performing, or inventing) is isolated and taxed at a concessional or reduced rate based on a rolling 5-year average. This means you pay less tax in years where your income from these sources is significantly above average. In years where your income is below or in line with your average, you are taxed at normal marginal tax rates. Keep in mind that income from other sources is always taxed at normal rates, and income averaging may not benefit you in years where your income is below average. However, years of lower income will affect your rolling average, and reduce your tax rate in future periods when you earn above-average income.
To qualify for income averaging, you must be classified as a “Special Professional.” This encompasses authors, artists, composers, inventors, performers, production associates, and sportspersons. In some cases depending on the circumstances, you may be designated as such if you are in a “creative decision-making role” such as a director. Eligibility is assessed on a case-by-case basis, so it’s wise to seek advice from a knowledgeable tax professional to determine if you meet the criteria.
One of the reasons these jobs are included in income averaging is due to the inconsistent nature of income. For example, a composer may spend years developing a project before receiving any income, resulting in large peaks and troughs of income year to year. Income averaging helps to spread this income over the entire development process, resulting in lower overall tax payments.
In simple terms, Income Averaging allows you to smooth out your taxable income over a few years, minimising the impact of any one high-earning period. By doing so, you can reduce your overall tax liability and free up funds to invest back into your creative pursuits.
In the first 4 years, the benefit can be even greater! It is quite common for the first year of averaging to result in little or no tax needing to be paid – at least on the earnings up to $90,000 (assuming no other income has been earned on salary from areas like school teaching, waiting tables or other non-artistic employment)
Keep in mind that income averaging is an opt-in system, and once you opt-in, you remain in the system. You can start using income averaging once you’ve earned more than $2,500 from creative work, and it only considers the income generated from creative activities to calculate your average. Other income, such as non-creative activities or investments, is not included.
Ok, you say, so what sort of benefit can this provide?
Case Study 1
Brian Eno(1) is a successful composer, musician and recording artist. They have a stream of income coming from local and international royalties from Film and TV compositions, Gigs and CD sales annually, as well as investment and non-Artist income.
In 2021, they lodged their Income tax return without claiming Artist Averaging, as they had done in all prior years of their career.
On a total taxable income (after all deduction claims) of $219,830, they incurred a total tax liability of $67,399.81. After the tax instalments were paid through the year, they were left with a net tax liability of $12,236.30.
However, on review of their return, and implementing Artist Averaging on their Professional Income, the Total Tax payable was reduced to $21,746.80, resulting in a net benefit of $45,653 to the Artist.
This also subsequently reduced the amount of PAYG tax instalments that were needed for the following tax year.
Case Study 2
Mariah Carey(1) is a professional writer.
On their Tax year professional income of $91,500, and a net taxable income (after all deductions, and including non-business income) they paid tax on a Taxable income of $57,746.
Before using the Artist Averaging provisions, they are liable for tax totalling $9,460.65.
Artist Averaging was then applied to this return, and with the provisions for the first year of averaging, their total tax liability was reduced to $1,154.92 – a saving of $8,305.73 on the same taxable income.
It’s important to remember that you cannot opt-out of income averaging once your income normalises. Also, the concession only applies in “good” years – you will not be taxed more in years where you earn less than the rolling average.
I.e. if your income has been consistently around $80,000 p.a. but then drops in one year to under $40,000, you will pay the ‘standard’ tax you would normally pay on $40,000 for that year. Subsequently, if the following year jumps up to $120,000 (as the project you have been working on is completed and you are paid a lump sum on completion, or the unit sales happen in the following year) then Artist Averaging may reduce the tax payable on the amount ‘over’ $80,000, so your tax rate payable does not jump up significantly.
To show how this works over the years, let’s consider the following case study.
Freddy McQueen, the lead singer of a hard rock band called Mercury, has income over a 5 year period that has ebbed and flowed as CD sales, royalties, writing and recording over new material and concerts were undertaken.
His Net taxable income after all costs and deductions are as follows:
Year 1 – $50,000
Year 2 – $75,000
Year 3 – $120,000
Year 4 – $40,000
Year 5 – $130,000
The tax payable – with and without Artist Averaging over this period would look like this:
| 1 | 2 | 3 | 4 | 5 | |
| Taxable income | $50,000.00 | $75,000.00 | $120,000.00 | $40,000.00 | $130,000.00 |
| Tax on normal rates | $6,717.00 | $14,842.00 | $29,467.00 | $4,142.00 | $33,167.00 |
| Tax on averaging | $ – | $9,625.40 | $22,042.00 | $4,142.00 | $32,717.00 |
| Net Tax Benefit / Savings | $6,717.00 | $5,216.60 | $7,425.00 | $ – | $450.00 |
Income averaging is a specialised area of taxation that can be incredibly advantageous for those in creative professions. However, it’s crucial to enlist the help of a tax professional like Fiscal Artisans to determine eligibility and maximise benefits.
Talk to us for further information, and let’s see if Income Averaging applies to you.
We may even be able to look at your past tax returns and reclaim tax that you may have overpaid. Contact us for further information and a review of your past tax lodgements.
Stuart C Smith CPA
Director
Fiscal Artisans
We hope this update finds you well and in high spirits!
We’ve been working hard behind the scenes to make sure our clients are always on top of their financial game. With tax season approaching, it’s the perfect time to reflect on the goals we set at the beginning of the year and assess how we’ve progressed.
At Fiscal Artisans, we believe that our team members are our most valuable asset. That’s why we’re excited to introduce you to the people behind our financial services. They’re diverse, each bringing their unique skills, experiences, and personalities to the table. From our friendly customer service reps to our highly skilled accountants, every team member is dedicated to providing excellent service and helping our clients achieve their financial goals. We take pride in the fact that our team is not only highly competent but also warm and approachable. So the next time you call or visit our offices, you can feel confident that you’re in good hands with our team of Fiscal Artisans.
We are excited to introduce Kate Boden, our new VA extraordinaire! With her extensive experience in both administrative and customer service roles, we are certain that Kate will be an invaluable asset to our team. Her attention to detail, strong organisational skills, and ability to multitask will ensure our operations run smoothly and efficiently. Not only does Kate bring valuable skills to the table, but her positive attitude and friendly demeanour make her a pleasure to work with. We are thrilled to have her on board and can’t wait to see all she will accomplish in her new role. Welcome to the team, Kate!
To email Kate for any of your requirements from us, click below
G’day everyone! It’s great to have Manish Kalani back in Oz after a decade away. Manish is returning with his family and embarking on a new chapter, Down Under. For those who don’t know, Manish has been an integral part of Fiscal Artisans since the beginning, churning out the financial nitty-gritty that keeps our operation ticking. But it’s not just about crunching numbers for Manish – he’s excited to get acquainted with everyone and get to know everyone on a more personal level. So welcome back, Manish, and all the best for this exciting new phase in your Aussie adventure!
Are you looking to stay ahead of your taxes this year? Look no further than our Tax Planning sessions, held throughout April, May, and June. Our professional team of experts will guide you through the latest tax laws and regulations, providing you with the tools and knowledge needed to minimise your tax bill and maximise your returns. From individual tax planning to corporate tax strategies, our sessions cover it all. Don’t wait until the last minute; book your spot today and make tax season a breeze.
We will be contacting our business clients with a suggested date for our tax planning meeting, but you can also contact Kate at admin@fiscalartisans.com.au or 0400 338 501 to book an appointment. Or go to our appointment booking page for more information and to book in.
Are you interested in investing in property and expanding your financial portfolio? Look no further than our upcoming Property Investment Seminar! Hosted by industry experts and seasoned investors, our seminar will equip you with the knowledge and skills necessary to make informed decisions and achieve financial success. We believe that anyone can achieve financial freedom through property investment, and our warm and supportive community will be with you every step of the way. Don’t miss this opportunity to grow your wealth and build a brighter future. Join us at the Property Investment Seminar and take the first step towards securing your financial future.
For more information, please go to: Property Investment Seminar.
We are looking at recording the session for our interstate clients and will have the video available to watch in the forthcoming weeks.
Managing finances can be overwhelming in the current economic climate – but having the right team of professionals to help you create a plan and prioritize your objectives is invaluable.
With Fiscal Artisans’ team of experts, you can rest assured that your finances are being managed with utmost care and precision throughout every step of the process. We understand our clients come from different backgrounds – whether you are looking to establish investments or reduce your debt – we will work with you to create an effective action plan!
Be sure to reach out for help so we can provide you with comprehensive solutions for your financial well-being. Take the initiative now – pick up the phone and call us for an appointment: let us help you truly make a difference in these economically trying times.
The Australian Taxation Office has just released its revised methods for working-from-home deductions for the 2022–23 tax year. The main change this year is that the ATO is now more focused on making sure people are actually working from home, and not just claiming the deduction without any evidence to back it up. So if you’re planning on making a claim for working from home this year, make sure you follow these new guidelines to avoid being caught out!
From the 2022–23 income year, the methods available to calculate working-from-home deductions are the:
While the actual cost method remains unchanged, the revised fixed rate method has been updated to better reflect contemporary working-from-home arrangements, making it easier to calculate expenses and avoid time-consuming apportionment calculations.
The revised fixed rate method can also be used by businesses that operate some or all of their business from home to claim home-based business expenses.
If you plan to use the revised fixed rate method for your 2022–23 tax return, you need to have:
So this will mean that, for EVERY HOUR you want to claim work-from-home deductions using this method, you MUST have the time documented. While this may not be needed for your employer, it is necessary in order to be able to make a full and legitimate tax deduction at year-end.Your diary – paper or electronic – will become your best friend this year!
There are many apps that can be used for this, or even just a consistent notation on your diary of your start and finish times, recorded daily. But recorded it must be!
Working from home is becoming more common, so make sure you know what you can and can’t claim in order to get the best return on your investment. Contact Fiscal Artisans today for expert advice on how to maximise your deductions this financial year!
The Reserve Bank of Australia (RBA) has hiked the official cash rate by another 25 basis points to 2.60%. How will this rate hike impact your monthly mortgage repayments, and when will it happen?
At the beginning of May, the cash rate was just 0.10%. Today it increased for the sixth straight month to 2.60%.
It’s worth noting that the cash rate hasn’t been this high since July 2013, almost ten years ago.
The speed at which the increases have occurred has stressed many. And there are concerns about when it will stop. In reality, the Reserve Bank has probably been too slow, started acting too late, and may keep the rates going too long and then find themselves having to reduce rates sooner than planned.
The time to have started altering the cash rate was probably around July 2021, with small – 0.1 to 0.15% increases perhaps every 1 or 2 months – to cool the market before inflation took off. We don’t know whether there was economic or political pressure to avoid taking action, but we now have an overheated economy struggling to cope with the internal and external pressures evident daily in the news and the financial results personally, locally and globally.
We face further rate rises – perhaps taking the target cash rate to around 4% (a further 1.5% over the next few months) with maybe a pause for 3 – 4 months in 2023 before further ‘adjustments’ become necessary – that could go in either direction. The fact that this was a 25-point rise instead of another 50-point rise points to a possible easing by the RBA as they approach their desired ceiling. Inflation numbers will be key in the coming months – as will GDP and growth numbers. And the October Federal Budget could be a game changer. No pressure on the Treasurer at all!
RBA Governor Philip Lowe said that further increases were likely over the period ahead.
“The cash rate has been increased substantially in a short period of time. Reflecting this, the (RBA) board decided to increase the cash rate by 25 basis points this month as it assesses the outlook for inflation and economic growth in Australia,” said Governor Lowe.
Unless you’re on a fixed-rate mortgage, the banks will likely follow the RBA’s lead and increase the interest rate on your variable home loan soon.
Let’s say you’re an owner-occupier with a 25-year loan of $500,000, paying principal and interest.
This month’s 25 basis point increase means your monthly repayments could increase by almost $75 monthly. That’s an extra $685 on your mortgage compared to May 1.
If you have a $750,000 loan, repayments will likely increase by about $110 monthly, up $1030 from May 1.
Meanwhile, a $1 million loan will increase almost $150 a month, up $1,380 from May 1.
When the RBA hikes the official cash rate, your bank will usually announce its own interest rate hike (and have its own notice period) for variable rates in the following days.
Let’s run through a quick example.
Assuming your monthly mortgage repayments are made on the 20th day of each month.
Let’s also assume you receive a notice from your lender this Friday (October 7) of their own subsequent rate increase, with a 30-day notice period.
By the time October 20 arrives, you won’t be paying higher repayments, as the full 30 days notice would not have passed.
When that 30-day notice finishes on November 6, the daily interest rate you’re charged will increase to the new amount.
That means when your monthly repayment on November 20 rolls around, you’d be charged at the new, higher rate (but calculated only from November 6).
By the time December 20 arrives, the monthly repayment amount you’re charged will fully reflect the new rate.
Some options we can help you explore include refinancing (which could include increasing the length of your loan to decrease monthly repayments), debt consolidation, or building up a bit of a buffer in an offset account ahead of more rate hikes.
If you’re worried about how you’ll meet your repayments in the months ahead, give us a call today. We can work with our associates and look at getting you the best deals on the market – even with your existing bank!
To start that process – and get a clear picture as to what your numbers look like – grab our fact finder at Fiscal Artisans Fact Finder
It has become common knowledge that Optus has had its database breached.
And this has personal relevance to me, as I am an Optus mobile subscriber, with my business (mobile) number and those of my entire family impacted by the breach. I received the ‘generic’ email from Optus on Saturday (12:51 am. Nice they got it out at a time when it was likely to be buried under a plethora of spam emails), so the awareness of the issue came more from the press reports than the ‘genuine communication’ to its customers.
The key issues we need to look at here are:
It APPEARS (as Optus has not been crystal clear yet with this information) that their basic database information has been ‘taken’.
This includes:
Full customer name
Date of birth
Phone numbers
Email addresses
Account addresses
They claim that payment details (Bank and credit card numbers?) and passwords have not been taken – just the identification data. But that is bad enough.
Access may also have been obtained to the I.D. document details provided for the ‘100-point check’ each account holder needs to provide.
This would also mean access to items like:
Driver’s licence – state, number and expiry date;
Medicare card number and details; (They have reported that details of at least 35,000 current and expired medicare cards were accessed)
Passport details;
Other items used for verification could be your electricity account details, rates notice, etc.
The danger here is that these details are potentially enough to create a fraudulent I.D. or to assume someone’s identity to do things like:
How did it happen?
While Optus has been claiming that it was a sophisticated attack, it seems the reality is that they left their backdoor unlocked and the lights on. The door might not have been wide open, but it was not far removed from that situation.
Many business systems are set up to ‘talk’ to each other using an interface or ‘API’ to do so.
To explain this, here is an explanation from The New Daily
In basic terms, APIs are ways for computers to pass code between each other (such as instructions). They are often used to enable services such as Google’s weather alerts, which make use of Bureau of Meteorology data.
They are supposed to be safe because companies usually have authentication rules attached to their APIs – but Optus allegedly did not.
“What we’ve seen is there was an API where you pass a phone number, and a phone number’s just … you just keep adding one, and you cover them all eventually,” Mr Hunt said.
“So why was there an API [without user] authentications? That could be a programming error.”
So the system that Optus was using did not have enough security built into it to stop a systematic ‘guessing’ of the key to access the data. It would be like if I could get hold of your ATM card and just keep guessing your PIN time after time without ever being locked out of the process. In time, with enough guesses, I will get access and can get all of your money. In this case, it only takes one correct ‘guess’, and access is obtained to potentially the whole database.
Data security is becoming increasingly important, and more attention needs to be given to this by everyone in business – even if you are a ‘business of one’ and freelancing or self-employed. Again, look at your contact details, the data you hold on your associates, customers, and finance arrangements and think about what data you need to hold – and how secure it is.
It is often considered that your database is one of your greatest assets in a business, and the reality is, that it is also potentially one of your greatest liabilities or risk factors, as you need to ensure you are ‘protecting’ your position and that of your customer base when you undertake your activities.
So, the potential danger here is that the data obtained won’t just impact activity with Optus. It can impact people in other areas.
I have been asked by a concerned client to check data on the Tax Agents portal, as it appears that some hackers are trying to change details with the ATO. This could result in tax refunds landing in the wrong bank accounts, GST or other tax claims being made incorrectly, or business entities being created to defraud the government, using false names obtained via a data hack to draw funds out from the ATO.
We will be doing random checks of client data on the ATO site to make sure nothing has changed (and if you are an Optus customer, don’t hesitate to get in touch with us, and I will check your ATO data to make sure it is all ok)
After spending over 4 hours on the Optus ‘chatbot’ trying to get some clarity on what has been taken – and running into the same brick wall as everyone else on finding out ‘exactly’ what was released, the action that I took was as follows: (and what I would suggest is done by anyone else who is a current Optus Mobile system user)
The need for security over a business’s data is significant, and everyone in business needs to look at this situation and identify the lessons relating to their own data.
As business owners, we hold a large amount of data on our clients – and also on our suppliers, financiers and associates. And, the more ‘automated’ we make things, the more data we hold to make that possible. E.G. ID numbers such as ACN, ABN, TFN, Director IDs, driver’s licences, bank accounts, addresses, date of birth, etc., are all recorded. If that data is hacked, it becomes easy for an identity to be duplicated or to change and divert the information.
This is how we operate in terms of Fiscal Artisans with our data.
We suggest that all business operators look at their systems and determine if changes need to be made to increase their security over the data they hold.
We are happy to assist and advise around your data management, and we can assist you with associates who can provide you with the services needed to improve your data security.
Meanwhile, please check your own systems and make sure that they are as secure as possible.
After all, you wouldn’t leave your front door open or leave the keys in your car would you?
Treat your data with the same level of security.
Enjoy your weekend – and check your data security!
For more information, or to discuss your own data situation, please email me at stuart.smith@fiscalartisans.com.au or call me on 0409788399.
Stuart Smith CPA
Director
Fiscal Artisans.
Book your home loan health check today
With interest rates on the rise, there has never been a better time to review your home loan.
Our team of brokers can look at the options available on the market, and compare the options to your current situation.
We can look at your rate, term, repayments, and equity, giving your loan a full check-up to make sure it’s still right for you and your current needs.
Then, if they can add value to what you already have, they will talk you through:
This can also be the start of your plans to look at your financial plans, whether that be an investment property, holiday home, renovations, debt consolidation or minimisation, or helping your children get into their first place.
Click here (Home Loan Fact Finder) to download the fact finder, then send it to us at info@fiscalartisans.com.au.
We will review the information and pass it to our finance associates to analyse. They will then get in touch with your to arrange a time to talk with you and discuss your alternatives and look at the best options on the market for your home loan options.
Find out how you can pay down your home loan faster, use your equity to reduce your tax liabilities and increase your wealth portfolio and set up your future plans.
Take advantage of this opportunity, and give your home loan a spring clean!
Australians have until 20 September 2022 to seek priority allocation of an .au direct domain name that matches their existing domain name.
Anyone with an Australian presence (including businesses, organisations and individuals) can now register a new domain name category, known as .au direct. These shorter, simpler domain names will end in simply ‘.au’ (e.g. mybusiness.au) and complement existing namespaces such as ‘com.au’, ‘net.au’, ‘org.au’, ‘asn.au’, ‘id.au’, ‘gov.au’ and ‘edu.au’.
Existing domain name licence holders have been provided priority to register the .au direct equivalent of their domain names until 20 September 2022, after which domain names that have not been allocated will become available to the general public.
This new option for domain names creates opportunities for businesses, organisations and individuals. However, it could also provide another opportunity for cybercriminals by facilitating fraudulent activity like business email compromise. For example, by registering yourbusiness.au where you have already registered yourbusiness.com.au to impersonate your business.
The ACSC recommends that all Australian businesses, organisations and individuals consider taking advantage of the priority allocation process to register the .au direct equivalents of their existing domain names. In cases where conflicts occur, such as when different organisations own similar domain names (e.g. mybusiness.com.au and mybusiness.net.au), priority allocation will help determine who can register their .au direct equivalent. Until 20 September 2022, registrants of .au domain names licensed before the launch of .au direct have priority to apply for the matching .au direct domain name.
After this date, it may be possible for ‘cyber-squatters’ to register ‘your’ domain name and seek to impersonate your website or use it for various fraudulent activities, or simply ‘squat’ on your name and potentially look to sell your own site back to you.
Businesses, organisations and individuals who have registered a domain name outside of Australia can also consider registering an .au direct domain name. For example, a business that currently holds mybusiness.com should consider registering mybusiness.au. This will prevent cybercriminals from registering these domain names and using them for attempted financial fraud.
You can reserve your .au direct domain name by visiting an auDA accredited registrar.
If your business or organisation is a victim of business email compromise or other fraudulent activity, please report the incident to the ACSC through ReportCyber or contact 1300 CYBER1 for support. auDA also has a complaints process available you can access through their website.
