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Tax deductible expenses

Not all purchases made by a business will be tax deductible. Those that are must be related to the earning of income, but even then there are some exceptions.

Some costs have a private component, such as motor vehicle expenses, that must be apportioned between business and private use. Other costs may be totally related to a business, such as the registering of a patent or trademark, but are classed as a capital and therefore not tax deductible.

Some examples of expenses that could be claimed however, include employee salaries and super contributions, advertising, rent or leases, bank fees, interest on loans, freight and insurance, repairs, promotions and giveaways, depreciation of assests and the costs of a registered tax agent.

For more information on what expenses are tax deductible for your business and what records you should be keeping for these, please feel free to contact our office.

Posted on 10 August '11 by , under Business.

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Transition to retirement

The transition to retirement (TTR) strategy allows you to access some of your super while you continue to work.

You are able to use the TTR strategy if you are aged 55 to 60. You can use it to supplement your income if you reduce your work hours or boost your super and save on tax while you keep working full time.

  • Starting a TTR pension: To start your TTR pension, transfer some of your super to an account-based pension. You have to keep some money in your super account so that you can continue to receive your employer's compulsory contributions as well as any voluntary contributions you may be making.
  • Government benefits and TTR: The benefits you or your partner receive might be impacted if you choose to opt for this strategy. How and what exactly will change might become clearer upon discussing this with a Financial Information Service (FIS) officer.
  • Life insurance and TTR: In some cases, the life insurance cover you have with your super may stop or reduce if you start a TTR pension – check this before making any decisions or changes.

TTR can help ease your mind as you transition into retirement but it can be a bit complex. Before you choose whether you want to use TTR to reduce work hours or save on tax, or even if you want to use TTR altogether, you should figure out how this will impact all aspects of your finances.

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