2011 - IT Tax Tips 2011

8/6/2019 2011 - IT Tax Tips 2011

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All advice contained in this communication is o a general nature and should not be relied on as a reliable source or Tax advice. The IT Tax Tips contained in this document

were regarded as correct at the time o writing, changes to legislation or proposed legislation may alter these Tips. We recommend you contact the Australia Tax Oce, your proessional advisor or a registered Tax Agent or advice in respect o your personal or business situation.

Prepayment o IT services1 Depreciation2For Small Businesses turning over less than $2 million

a year prepayment o the ollowing years IT services is a

great way o tax eectively managing your uture IT costs

and having a complex area o your business eectively

outsourced to an expert.A prepayment is not apportioned but allowed in ull as a

deduction in the year in which it is incurred i all services

in respect o the prepayment are provided with 13

months o incurring the expenditure.

Your Computer Troubleshooter can provide prepayment

o IT services using either a Managed Services Contract

or a Block Time Services Agreement.

A Managed services Contract has a dened service

level and a monthly management component. This

allows your network to be proactively managed &serviced like an outsourced IT department.

A Block Time Services Agreement is an agreement

to provide a specic number o hours o services at an

agreed rate. This is a responsive contract where you

use your Computer Troubleshooter as your service

provider on a pay or service basis over the year.

Generally this must be expended within the 12 month

period.

Example -

A Small Business decides to contract Computer

Troubleshooters or it’s 2011/2012 IT outsourcing

contract or $500 a month. The $6,000 contract covering

12 months is signed and paid prior to end o June 2011.

The business can claim the $6,000 deduction in its

2010/11 tax return.

The depreciation rate on IT equipment is quite high

due to their low expected lie compared to many other

depreciable assets. For depreciating IT assets over $300,

the eective lie is 4 years and 3 years or laptop computers.

Small Businesses using the simplied depreciation rulesin many cases can claim an immediate deduction or a

depreciating IT asset costing less than $1,000.

The Federal Budget in May 2010 announced, that in

the 2012/13 tax year this instant write o or small

business will be increased to $5,000 which will save on

depreciation calculations and improve cash fow.

However in the meantime the existing rules apply, which

means while equipment may last beyond it’s depreciated

lie you may no longer have depreciation tax benets.

So i you upgraded your IT equipment you could beexperiencing the benets o the latest technology tax

efectively with a lower downtime risk and better

running costs.

Example -

A Small Business has a ully depreciated server which is

ve years old and expensive to maintain with a high risk

o ailure.

It replaces the Server with a new one purchased &installed or $3,000 & depreciates the equipment on an

ongoing basis.

Depreciating the $3,000 over the lie o the asset moves

some expenses rom cash to non-cash and reducing

business continuity risk.

2011 IT Tax TipsAs the end o the Financial Year 2010/11 approaches we are starting to think o ways o ensuring our business

is tax eective, so now is the time to start planning and implementing. The recent Federal Budget in May

2011 held ew new advantages or this fnancial year rom an IT perspective however many options remain.

Here are our 5 IT Tax Tips you might consider with advice rom your tax advisor:

For more inormation talk to your local

Computer Troubleshooters - Your Trusted IT Advisorcall 1300 28 28 78 and enter your postcode

www.computertroubleshooters.com.au

8/6/2019 2011 - IT Tax Tips 2011







Education Tax Reund3 Home Computer Services4I you have used Computer Troubleshooters or servicing

a computer that has been used or deriving income or

managing tax aairs a proportion o the amount may be

claimed as a deduction or tax purposes.

IT costs such as internet access, printer consumables

(toner & paper), depreciation, and computer security

subscriptions may be proportionally deductible in the

same circumstance.

Like all personal tax deductions you would need to

provide proo o the expense and veriy the proportion

o the cost that is deductible.

Example -

A home user who uses their home computer or managing

their tax & nancial afairs has previously veried with

their tax consultant that 30% o the costs associated with

the computer are tax deductible.

The home user has used Computer Troubleshootersduring the year and spent $300 in repairing the computer

and has a tax invoice & receipt.

The owner can include the $300 in their computer running

expenses & gain a $90 deduction or the costs (30%) in

their 2010/11 tax return.

The Federal Government’s education tax rebate or

primary and secondary students has continued or this

tax year with the amounts eligible indexed rom last year.

Eligible tax payers will be able to claim 50% or costs up

to $794 or primary school students (i.e. a rebate o up

to $397), and 50% or costs up to $1,588 or secondary

school students (i.e. a rebate o up to $794).

To be eligible, the taxpayer must receive Family Tax

Benet (‘FTB’) Part ‘A’ or the child receives certain

payments or allowances such as Youth Allowance,

ABSTUDY or Disability Support Pension

Computer equipment and computer running costs

(such as internet service provider ees, laptops, home

computers, printers, toner, and stationery) used by

students can be claimed. Home Computer Services arealso eligible. Make sure you keep receipts and tax invoices

or inclusion or the claim.

Example –

A amily receives Family Tax Benet Part ‘A” and have 2

children in school one in primary, the other in secondary.

They purchase a $2,000 home computer or use by the

children and pay $60 a month or ADSL. Total spending

o $2,720 on IT or the students is incurred beore end o June 2011.

In their 2010/11 tax return they claim $780 or the primary

student & $1,558 or the secondary student. This equates

to a rebate o $390 plus $779, so the rebate o $1,169 will

be included in their 2010/11 tax return.

As the end o the Financial Year 2010/11 approaches we are starting to think o ways o ensuring our business




2011 IT Tax Tips

8/6/2019 2011 - IT Tax Tips 2011


Get Tax Advice and

Make a Plan5Audit your Systems

At Computer Troubleshooters we always preer to manageyour IT systems rather than your IT problems.

Are you worried about uture problems? Then get us in to do anAudit so we can review your current situation and recommendcourses o action.

We oer Audits in 3 areas – System, Security and Disaster

Recovery.

Here are a ew questions you should ask yoursel beore youdecide i you need an expert IT Audit -

Are your IT systems older than 3 years?Has your network been built gradually over time?Do you think there is a better way to operate?

IT System and Network Audit

Review your current hardware and licencingReport on system perormanceRecommend actions to manage your network to protectand improve perormance

Do you wonder i your Network is secure?

Do you have multiple access points to your system?

Have you experienced any system slowdowns or outages?

Security Audit

Scan your network or current incursions or issuesPinpoint any exposure or risk rom hackers, viruses, spyware,spam and even employee sabotageRecommend alternatives to improve your network security

Do you have a daily backup routine?

Do you know what will happen to your business i your maindata hard drive were to ail?

Do you know how long your business would take to recoverrom a disaster that eected your IT systems and network?

Backup and Disaster Recovery Audit

Review your current backup routine and test your data canbe actually be recovered?Review your disaster recovery procedures to ensurebusiness continuity?Recommend improved methodology, technology, orroutines to enhance business disaster recovery.

JUST ASK US HOW?

Oten we wait until the end o the nancial year to think

about tax. This year why not be proactive and plan your

tax outcomes in advance.

Why not take advantage o tax incentives and ensure

your IT is up to speed

Talk to your tax advisor and your local Computer

Troubleshoooters to nd a tax eective IT plan or your

circumstances.

Example -

A Small Business turning over less than $2 million a year

decides to develop an IT plan, with its tax advisor they

determine to bring orward a planned $10,000 total

network upgrade and appoint Computer Troubleshooters

as their outsourced IT department or next year or $6,000.

The business is able to reduce the 2010/11 tax liability by

$6,000 by prepaying the managed services contract or

2011/12 and gaining depreciation benets rom the date

o installation.

Giving the business a nancial boost or the 2010/11

year, but also having upgraded the IT inrastructure

and outsourced the IT management they have reduced

business continuity uncertainty and improved eciency.

As the end o the Financial Year 2010/11 approaches we are starting to think o ways o ensuring our business






2011 IT Tax Tips




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