The MAX CAMmunicator September 2019

September 2019

Welcome to our September issue of the MAX CAMmunicator.

In this edition you will find:

• What should you do with your Tax Refund?
• Deduction Awareness
• Aliesha's Maternity Leave
• Password Protecting Online Accounts

*Discussions regarding superannuation contributions may be the provision of financial advice and may require the preparation of a Statement of Advice. 

Your accountant has delivered a refund to you, what should you do with it?

So, you have been to your accountant, they have prepared and lodged your income tax return and good news, you have a refund coming. Now what to do, what to do?


Immediate things that come to mind: holiday; deposit on a new car, boat, and the like; a big party; to name but a few. End of the day it is gone in a flash.


From the team at Maxwell and Cameron, we would suggest you consider the following –


1. Pay off bad debt
What do we mean by bad debt – credit cards; pay day loans; interest free cards; personal loans. Typically, the expenditure is private and the interest is not tax deductible. Hence the term, bad debt. Taking a chunk out of this type of debt can only be good for you at the end of the day.


2. Extra payment on your home loan
Making a lump sum payment off of your home loan can save you a lot of money over the life of your mortgage. 


3. Deposit into your home loan offset account
As the interest earnings from a home loan offset account save you dollar for dollar on the interest on your home loan, it is virtually the same as depositing the money directly into your home loan. If your home loan does not have a redraw facility, a home loan offset account can be a good way to keep access to your extra repayments in the case of an emergency without resulting in extra fees and charges.


4. Reinvest in your business
If you are in business you could reinvest the money. This could be anything from relieving a cashflow shortage; to paying off/reducing tax and GST debt; to reducing the level of the overdraft.


5. Superannuation contribution – tax deductible
From 1 July 2017 all individuals can make tax deductible superannuation contributions to their fund. 


6. Superannuation contribution – non deductible
Eligible individuals can make contributions which are not claimed as a tax deduction up to $100,000 a year. If you are under 65 you may be able to access the bring forward rules.

For lower income earners, If your total income is equal to or less than the lower threshold (see below) and you make personal contributions of $1,000 to your super account, you will receive the maximum co-contribution of $500.

If your total income is between the two thresholds (see below), your maximum entitlement will reduce progressively as your income rises. You will not receive any co-contribution if your income is equal to or greater than the higher threshold.

There are two co-contribution income thresholds:
• a lower threshold ($38,564 for 2019–20)
• a higher threshold ($53,564 for 2019–20).


7. Create a rainy day account
Whether it be an online account with internet access only or a term deposit, putting money away for unexpected emergencies is always a good thing.


8. Invest
Whether it be shares, managed funds, term deposits or one of the other investment vehicles, investing your refund so that it makes money can only be a plus. 


9. Education Fund for your kids, grandkids.
Starting an education fund for your children or grandchildren will be a great start for them in the years to come. This can take the form of the investment vehicles as mentioned in point 8 above.

At the end of the day, what you do with your refund is up to you. We hope we have given you food for thought with what to do with your refund.

If you have any questions, please do not hesitate to contact us and we will be only too happy to discuss your options with you. If it involves an investment decision, we can point you in the direction of a financial advisor.


Authored by Neil Malick                  

Deduction Awareness

As a tax accountant, it is all too common I hear the phrase 'Joe I work with or the stranger from the pub got a $10K refund on their tax return and has advised me what to claim'.


Don't get me wrong, sometimes advice from a mate is legitimately good advice. However, more often than not taking advice from someone who isn't registered to give that advice is not a good idea. You could end up making false or misleading statements on your tax return and this is not something the Tax Office is willing to let slide.


Over claiming deductions on your tax return is a risky practice, and the ATO is becoming increasingly sophisticated in its data matching capabilities. Excessive work related deductions are an easy target for the tax office and will more than likely lead to an audit and harsh penalties being applied. 


The golden rule when it comes to claiming deductions is to know there are no automatic entitlements – you need to have actually spent the money in order to claim a deduction. Even when you don't require up front evidence, you will still be required to substantiate your claim and how you calculated it.


As a taxpayer, it is important to understand your obligations and sometimes this can be quite daunting. 


This is where using a registered tax agent, like Maxwell & Cameron can give you peace of mind in knowing you are getting the right advice that is tailored to suit your personal situation.



Authored by Angela Ross

Babies Galore

In early October we will be saying farewell and good luck to Aliesha as she will be going on maternity leave to welcome her 3rd baby. Aliehsa's new daughter will add to our 8 kids under 10, 3 teenagers, 4 adult "kids" and 1 grandchild - we are lucky to have such a large Maxwell & Cameron family!!



Good luck Aliesha!

 Online Accounting file security measures

Many clients ask the question, "Is Cloud Accounting Safe and Secure?"


We have had many clients decline the option to update their current book keeping program to an online based cloud program out of fear of it not being secure.


The truth is, Cloud accounting can be a more reliable and secure way to keep your records safe.


Cloud accounting eliminates various issues that can arise on a desktop computer. Firstly, it provides an offsite back up of files (which can be handy in case your personal computer ever decides to crash unexpectedly) and keeps your hard drive storage clear. Data is also stored away from the main hard drive which secures it from local viruses that often attack a desktop computer without top security protection.



Our main advice for moving to an online accounting program would be to password protect your files and to regularly perform a backup of these files. If your main account somehow does manage to get hacked, having a secondary password provides you with more security.

Kind Regards

The Team

Maxwell & Cameron Pty Ltd

*Discussions regarding superannuation contributions may be the provision of financial advice and may require the preparation of a Statement of Advice.

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