We believe in passing on knowledge.
Thinking about turning your passion into a paying gig? These steps will help you avoid some common mistakes as you set out to earn an income from your favorite pastime.
Do you have what it takes?
Unless you've run a business before, it's easy to get carried away with the idea of how perfect it will be to get paid for doing what you love. Reality check: the stress of needing to earn an income from your hobby can quickly take all the pleasure out of it.
Running a successful business isn't all hobby indulgence. Unless you can afford to hire someone to take care of the bookkeeping, marketing and sales, expect to spend a lot of hours on necessary tasks completely unrelated to your true passion.
Before you start investing in your hobby-to-business idea, take this online quiz to see if running a business is right for you.
Are you concerned about paying your terminal tax bill on 7 April?
Are you concerned about paying your terminal tax bill on 7 April?We understand how terminal tax can sometimes put pressure on your cash flow. And, if you add into the mix that looming provisional tax payment due on 7 May (the final installment for the 2019 year), it can add up to a few sleepless nights, right?
If this describes your situation, stop losing sleep and pick up the phone to us. Let's look at the issue squarely, run the numbers on your options and take prompt action before your tax bill escalates.
Attention: If you are planning on buying or selling property, “bright-line” might catch up with you…….
25/02/2019 by Paul Martin
Like most property owners you have probably heard about the bright-line test but not necessarily understood how and when it could apply. We have been noticing an increase in queries from clients about how this property rule applies to their own situation.
Put simply, bright-line says people who sell a house in New Zealand within a specified number of years of buying it, must pay income tax on any gains, unless it's their main home or another exception applies. Originally this period was two years and since 29 March 2018 this has increased to five years.
The bright-line rule is a clearly defined rule that leaves no room for interpretation. You can think of it as someone drawing a line in the sand. It's clear when you cross that line.
To help you understand and navigate this relatively new area of property tax rules, below are a range of questions and answers as provided by the IRD.
Sound like silly questions? Not any more!
New anti-money laundering legislation is now in place and Chartered Accountants (along with lawyers, banks, real estate agents and other professionals) must meet stringent new rules to verify clients are who they say they are (including fellow company directors, trustees and beneficiaries who are not even our clients), as well as having to hold proof of source of funds for investments and more.
There is too much detail to go into via a short article. This is just to let you know what the new legislation is about and why we might ask for further information when completing future transactions.
For any questions on this new legslation, please contact us and we will happy to discuss it with you.
According to Google, which offers employees a course on mindfulness meditation, and Lululemon, a company that keeps a Director of Mindfulness on staff, the answer is a resounding yes.
Mindfulness, as American scientist Jon Kabat-Zinn defines it, is simply "paying attention in a sustained and particular way – on purpose, in the present moment and non-judgmentally."
Research has shown that practicing mindful meditation can lead to reduced stress, lowered blood pressure, increased brain activity, and improved immune response. It's also been shown to have measurable value for companies when their leaders and employees practice mindfulness, too.
Jo was having a good giggle watching Shortland Street last week. She called me to come and watch the 'tax man' making his debut on our nations' longest running soap, chasing down beloved Dr Drew McCaskill for probable (intentional) tax evasion.
While the one liners such as Drew referring to his tax audit as "….. jumping through pedantic Government hoops so drones like Gerry can justify their jobs" will never be as famous as Dr Ropata's "We're not in Guantemala now", as Chartered Accountants we have found the tax man episodes highly entertaining.
Drama aside though, there are some very useful lessons highlighted by the scriptwriters' take on tax matters, including the importance of record keeping and taking proper professional advice from a qualified Chartered Accountant.
Here is Jo's commentary on Dr Drew McCaskill's IRD audit woes:
Most businesses will give to employees, clients and often charities at Christmas time. From morning teas to elaborate Christmas functions, from cards and calendars to hampers and the latest gadgets, Christmas is a season of giving.
When it comes to claiming tax deductions this Christmas season, there are very specific rules that apply. We have put together this simple guide about tax on Christmas entertainment and gifts to help you through the festive season.
1. Entertainment
There are rules that apply to tax deductions for Christmas parties, year-end functions and other client/customer or employee entertainment expenses. Some entertainment expenses are fully deductible, while some are not. Here are some quick tips to help you:
From April 2019, you must follow new filing procedures for your IR345s and IR348s. Instead of completing these monthly, you will be required to file these every payday in line with your normal employee pay cycles. Yes, that means if for example, you pay your employees weekly, you will soon need to file with the IRD weekly. Please note, the payment date remains the same.
In preparation for this change, we strongly recommend that you look at using payroll software which will automatically file this information for you each pay cycle. Personally, I use and recommend Smart Payroll. The charges are modest compared to the convenience, accuracy and ease of use this cloud based system provides. You may know of alternative systems which do something similar.
We also use Smart Payroll to process payroll for quite a number of clients. For them, the transition to payday filing will happen seamlessly.
In preparation for this pending change, we are happy to assist you with a review of your payroll system and processes. Please contact us to find out how we can help take away your payroll pain and make your life easier.
New Zealanders are jumping onboard the Airbnb craze, turning their spare space and holiday homes into income generating assets. Particularly this year, we have noticed an increase in clients utilising this latest example of the sharing economy in action. While the benefits sell themselves, you may develop a tax headache if you haven't considered your overall tax position and approach. A little extra income on the side can turn into an unexpected tax bill.
What is Airbnb?
Put simply, Airbnb connects people online wanting to rent their property (entire property or a set space within a property), with people who are looking for accommodation. Hosts and travellers from over 190 countries worldwide participate in this online global marketplace.
Can my dog be claimed as a security expense and other curly home office questions…..
11/08/2018 by Paul Martin
It didn't stop at the dog - the same (ex) client tried to convince us that his daughter's pony was required to entertain his clients' children. Other clients have asked to claim other day to day household items - the pot plant at the front door, Sky television, the weekly cleaner and even a new outfit for an important meeting.
Unfortunately for these clients, none of these items were able to be claimed as home office expenses. The rules are very clear regarding what you can and can't claim. However, making a home office claim if you conduct some or all of your business from home is still an effective and legitimate way to reduce your tax liability.
