Talking Concepts

June 2023

INTEREST RATES ​

Interest Rates that start from…

5.24% p/a Fixed Rate
6.03% p/a Comparison Rate

Based on our lender panel, ME Bank’s 3 Years Fixed Rate, provides the most competitive Interest Rate. Interest rates are correct as at 24/05/2023 and subject to change at anytime. The comparison rate is based on a loan amount of $250,000, over a 30 year term. WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees and other loan amounts might result in a different comparison rate. Terms, conditions, fees and charges apply and your full financial situation would need to be reviewed prior to acceptance of any offer or product.

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Dates to Remember

30 June 2023 – End of Financial year

01 July 2023 – SGC rate increases to 11%

14 July 2023 – STP EOFY finalisation declarations lodged for employers

14 July 2023 – PAYG payment summaries available to employees via their myGov

28 July 2023 – Superannuation Guarantee (SG) for 1 April to 30 June payment due date
* Please check your clearing house’s June superannuation processing cut off date if you’d like this as a tax deduction for the current financial year.

28 August 2023 – Building & Construction TPAR due


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FINANCIAL SERVICE PACKAGE

Our financial planning team are sending out the renewal packages for our Gold, Silver and Bronze Financial Service Packages.

Reminder to return your signed Authority to Proceed and pay your Interprac invoice so that your Package becomes effective from 1 July 2023.

If you did not receive a renewal package and you think you should have, please call Beth or Kelly on 9569 5676.

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2023 Relay for Life

The team at Concepts & Results raised $6,275 this year at the Casey Relay for Life. Great effort by the team, not only fundraising, but also having someone on the team walking on the track during the 18 hours of the event.

Staff Update

We are delighted to announce that Nadia has welcomed into the world her and her husband’s 3rd child, Carter Ryan Davison. A happy, healthy little boy who is loved by all including his big brother, Connor and big sister, Claire.  

Staff Update

The team at Concepts & Results are sad to see Shelley, who was apart of our Bookkeeping team leave so as to spend more time with her family. We wish her the best of luck for the future! 

Security & Compliance

Concepts & Results Group take security very seriously.

You may have noticed when you receive your tax returns “TFN recorded” replaces the Tax File Number.

When you received Australian Taxation Office correspondence such as your Notice of Assessment, the Tax File Numbers are blacked out.

This is so:

  • The TFN is not exposed in communication (email, post or portal).
  • TFNs are not stored in our document management system.
This also protects you if you have a security breach:
  • When you save the documents to your own computer or other locations the TFN is not exposed, protecting your TFN and identity.

If you store the email/documents in your email accounts, the TFN has been removed, removing the risk should emails be compromised.

If you need your TFN for any reason you will need to call our office and identify yourself with a series of security questions. We will then provide your TFN verbally.

Take advantage of EOFY opportunities

Federal Budget highlights for small businesses

Not sure how the recent Federal Budget affects your small business clients? We have collated six of the top takeaways for small businesses to bring you up to speed.

EOFY tax deductions for small businesses

Help your clients get the most out of the EOFY tax deductions. Familiarise yourself with the changes to the instant asset write-off and temporary full expensing schemes.

Investment tax Return

As property investors, maximising investment returns is always on your clients’ minds.

But we all know that considering the impact of their property on the planet is also important.

So if you want to be more conscious of your ecological footprint and boost your cash flow…

Building or retrofitting your home to be eco-friendly is an excellent option.

It won’t only help reduce resource consumption and waste production, but also gain tax savings by making environmentally conscious upgrades to your investment property.

To help navigate this topic, Duo Tax have created a guide that discusses four strategies you can use to benefit both the planet and your investment income.

Duo Tax prepare tax depreciation reports for investment properties on behalf of our clients. If you need to order a tax depreciation report, please contact our office as they provide a special price for clients of Concepts & Results.

Check out Guide here

8 retirement mistakes and how to avoid them

Retirement is a phase of life most of us look forward to. It’s a chance to pursue other interests, travel and maybe do some part-time work or volunteering.

Thanks to more than 30 years of compulsory superannuation, we are retiring with more savings than previous generations but that also brings its challenges. According to the government’s Retirement Income Review, the average age of retirement in Australia is around the ages of 62 to 65.i On average men and women can expect to live to 85 and 88 respectively. To make the most of your retirement your savings need to last. The best way to achieve that is to have a plan that will help you avoid some common and preventable retirement mistakes.

Mistakes people make
While it’s impossible to predict what financial challenges lie ahead, these eight common retirement mistakes remain the same:

1. Not knowing your living costs –
When you earn a regular income, you may be less focussed on keeping a track of your living costs. When the regular income stops at retirement, you can be unaware of whether your investment income and/ or pension payments will support your lifestyle costs. Know what your living costs are before you retire to help manage expectations.

2. Not looking at your super until just before retiring –
Investing too conservatively when you’re working could mean you don’t have enough super to fund your retirement. Review your super account regularly to ensure it is appropriate for each stage of your life.


3. Underestimating the impact of inflation –
Australia’s rate of inflation hovered below 3 per cent per year between June 2012 and early 2020. Since the onset of the global pandemic in March 2020, inflation has jumped to more than 7 per cent.ii The cost of living may require you to reassess your retirement planning.


4. Not understanding your
government entitlements –
If you’re age 66 or older, you may be eligible for a fullor part-Age Pension. However, if you are not eligible for the Age Pension, you may still be eligible for other entitlements including the Seniors Card, Pensioner Concession Card, income tax offsets or pensioner stamp duty exemption/concession.


5. Letting the noise affect your investment decisions –
Negative news headlines cancreate uncertainty during market volatility. History has shown, over the long run the market trends upwards. All this noise can make it difficult to stick your long-term strategy.

6. Trying to time the financial markets –
“We haven’t the faintest idea what the stock market is gonna do when it opens on Monday – we never have,” said legendary share investor Warren Buffett. Say you invested $10,000 in the ASX 200 index by trying to time the market and missed the 40 best days between October 2003 to October 2022, your investment would be worth $9,064, whereas if you remained fully invested it would be worth $46,099. Trying to time the markets is never a good idea.


7. Being asset rich and cash poor –
You may have built up a strong balance sheet of assets, but in retirement you need income. For many Australians, their family home could be their biggest asset. You may have other assets but are they generating enough income? This could include rent from an investment property, share dividends or managed fund distributions. If the income is insufficient, downsizing into a smaller home could free up enough money to live on.


8. Not consulting professionals –
Financial advisers, accountants and other financial professionals can help set you on the right path by navigating the complexities of superannuation, investments, constant rule changes and other factors that affect your retirement. A good retirement plan, implemented correctly, can set you up for life.

Start Planning
Whether it’s due to lack of time or awareness, too many people tend to make these same mistakes when entering retirement which can lead to unwanted financial surprises. A phase of life you have looked forward to for so long deserves careful planning. So please get in touch if you would like to review your retirement income needs.

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Mortgage vs Super

With interest rates on the rise and investment returns increasingly volatile, Australians with cash to spare may be wondering how to make the most of it. If you have a mortgage, should you make extra repayments or would you be better off in the long run boosting your super? The answer is, it depends. Your personal circumstances, interest rates, tax and the investment outlook all need to be taken into consideration. What to consider Some of the things you need to weigh up before committing your hard earned cash include:

• Your age and years to retirement
The closer you are to retirement and the smaller your mortgage, the more sense it makes to prioritise super. Younger people with a big mortgage, dependent children, and decades until they can access their super have more incentive to pay down housing debt, perhaps building up investments outside super they can access if necessary.

• Your mortgage interest rate
This will depend on whether you have a fixed or variable rate, but both are on the rise. As a guide, the average variable mortgage interest rate is currently around 4.5 per cent so any money directed to your mortgage earns an effective return of 4.5 per cent. When interest rates were at historic lows, you could earn better returns from super and other investments; but with interest rates rising, the pendulum is swinging back towards repaying the mortgage. The earlier in the term of your loan you make extra repayments, the bigger the savings over the life of the loan. The question then is the amount you can save on your mortgage compared to your potential earnings if you invest in super.

• Super fund returns
In the 10 years to 30 June 2022, super funds returned 8.1 per cent a year on average but fell 3.3 per cent in the final 12 months. In the short-term, financial markets can be volatile but the longer your investment horizon, the more time there is to ride out market fluctuations. As your money is locked away until you retire, the combination of time, compound interest and concessional tax rates make super an attractive investment for retirement savings.

• Tax
Super is a concessionally taxed retirement savings vehicle, with tax on investment earnings of 15 per cent compared with tax at your marginal rate on investments outside super. Contributions are taxed at 15 per cent going in, but this is likely to be less than your marginal tax rate if you salary sacrifice into super from your pre-tax income. You may even be able to claim a tax deduction for personal contributions you make up to your annual cap. Once you turn 60 and retire, income from super is generally tax free. By comparison, mortgage  interest payments are not tax-deductible.

• Personal sense of security
For many people there is an enormous sense of relief and security that comes with having a home fully paid for and being debt-free heading into retirement. As mortgage interest payments are not tax deductible for the family home (as opposed to investment properties), younger borrowers are often encouraged to pay off their mortgage as quickly as possible. But for those close to retirement, it may make sense to put extra savings into super and use their super to repay any outstanding mortgage debt after they retire. These days,  more people are entering retirement with mortgage debt. So whatever your age, your decision will also depend on the size of your outstanding home loan and your super balance. If your mortgage is a major burden, or you have other outstanding debts, then debt repayment is likely a priority. All things considered As you can see, working out how to get the most out of your savings is rarely simple and the calculations will be different for everyone. The best course of action will ultimately depend on your personal and financial goals. Buying a home and saving for retirement are both long-term financial commitments that require regular review. If you would like to discuss your overall investment strategy, give us a call. 

RBA announces May cash rate decision

– The Adviser

Mortgagor rate relief ruined as the Reserve Bank lifts rates for the 11th time in a year. 

After deciding to pause the cash rate at 3.60 per cent last month to gauge the effect of 10 consecutive hikes, the Reserve Bank of Australia (RBA) has moved to once again raise the cash rate by 25 bps to 3.85 per cent.

Last month, the RBA revealed that a hike during the May meeting was still a possibility pending further information on inflation, monthly readings on the labour market, household spending and business conditions, and further developments in the global economy and financial markets.

The recently released March quarter consumer price index (CPI) figures published by the Australian Bureau of Statistics (ABS) revealed that inflation had dropped from its 33-year record high of 7.8 per cent to 7 per cent.

However, this is still well above the central bank’s target 2–3 per cent range. As such, the RBA has decided to lift rates once again to help bring down inflation.

Interest rates too high?

With interest rates inflating, now is a good time to make sure your bank isn’t taking advantage of you. It’s always worth chatting to our mortgage broking team at Results Home Loans to find out all the options available for your mortgage.

Lenders are also offering refinance cash backs up to $4,000, so there’s no need to worry about the costs, only the potential savings!

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Here are some quick tips to ensure a seamless process when signing your loan documents:

Holding yourself accountable to achieve success

It can be both empowering and a little uncomfortable to think that we are responsible
for our successes – and failures. Being willing to accept the consequences of our
actions, choices or behaviours is not always easy.

Click here for full article

Setting good record keeping habits for the new year

As the new financial year is fast approaching, now is a great time to get into the habit of good record keeping.

There are benefits when you understand what records you need to keep and implement good record keeping habits. These can include reduced costs and a more streamlined process when providing your information to our office for preparation of your financial statements and tax returns.

At C&R we are nearly 100% paperless, so we would prefer you to provide us with your information in electronic format. You can email, upload to a document share software such as Dropbox, SharePoint, Google Drive or drop off a USB.

Is it Tax Deductible?

Everyone wants to pay less tax, right? To do that you need to know what you can claim… and what you can’t.

It’s not about cheating the system, or creative accounting. It’s all about claiming what you’re entitled to. That’s why we’ve developed the “Is it Tax Deductible?” checklist designed for the individual taxpayer

BUILD A LINE OF EPOAS AND EXECUTORS

Abbott & Mourly Lawyers advise that you should provide a successor EPOA and Executor in case, when the time comes, the person or persons you appointed cannot or might not want to take up the role you have endowed upon them. It does not hurt to have a second successor EPOA and Executor. Safety, certainty, and security are paramount. If something happens, we want to make sure your family are looked after quickly.

Your Business “Game Plan”

  • You need to ACT NOW to ensure that your business doesn’t lose revenues and profits in these difficult financial times.
  • Any reduction in your business profits means that your business value will DECREASE.
  • You can take immediate steps RIGHT NOW to ensure this doesn’t happen.
Download Game Plan

2023 ATO Focus Areas

Among other things, the ATO will be focusing on record keeping, work-related expenses, rental property income and deductions, as well as capital gains from crypto assets, property and shares.

Rental Expenses – Reminder, recent changes to tax laws mean that non-deductible rental expenses include depreciation on second-hand assets and travel expenses related to residential rental properties.

Working from home (WFH) expenditure – Taxpayers will now need to apply either the reduced fixed rate method (67 cents per hour) or the actual expense method. It is expected WFH deductions may reduce for most individuals and documentation requirements may increase as individuals will have needed to keep a diary or roster of days when they worked from home. The ATO will not accept general estimates of WFH hours.

Visit us

Want to discuss the above face to face? Come visit our specialised team members to find out more.

612 Warrigal Road, East Malvern PO Box 61, Holmesglen, Vic 3148

Call us

Have any questions? Further discussions on the above can be may be held over a telephone appointment.

(03) 9569 5676

Contact us

For any and all queries regarding the above, you may contact Concepts & Reuslts by emailing us

concepts@cr.com.au