• Revecorp Pty Ltd t/a Power2 ABN 27 090 740 579
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Power2 – Putting your interests first

Its all about Ownership, Licencing and Fees

(Prefer to skip the reading and go straight to the talking? Call us on 4957 7574 and ask for Derek or Leesa.)


Ownership, Licencing and Remuneration

When you meet with us at Power2 to make decisions about your financial future you should feel comfortable that we have done our best to remove any bias from the room.

Power2 is a locally owned business with our own Australian Financial Services Licence (AFSL). We have no one telling us what to sell or how to charge.

If, like many firms out there, we worked for someone else or our licence belonged to someone else it only stands to reason that they are also going to be considered during the decision-making process.

Having our own licence and owning our own business means we can provide you with the right advice and avoid the conflicts that come when we have to include another parties’ interests.


Sales vs Advice

Although things are improving it is very true that “old school” financial advice was, and in many cases still is, sales based.

Many advisers either work for, or act as, agents of financial product providers. These can be insurance companies, fund managers, banks and others. The problem here is that the adviser and their licensee or owner have a joint interest in selling products rather than the adviser and their client deciding on strategy.

This arrangement has been the cause of many of the financial disasters we see in the news every day.

Power2 is a locally owned firm with its own AFSL. The owners of the business work in the business and work for you. Because we are not selling a product for, or on behalf of someone else, we can work together towards the best solution for you and your family.


The benefits of our own licence (AFSL)

Product provider supported advisers may only utilise their Licensee’s Approved lists which many times are overloaded with their licensee’s products.

This limits the options for you and quite often increases your costs.

Power2 can select products that suit your strategy from whichever provider suits your needs. Be it managed funds, shares or property, Power2 can examine your goals and objectives and find the best alternative for you at the lowest cost.


Fees and advice

The easiest way to work out who your adviser is really working for is to look at who is paying them.

At Power2 we make sure you know exactly how much we are receiving and where the funds are coming from.

In the case of your investments and our advice Power2 makes sure that we agree on your annual fee upfront every year and then provide you with several options for payment. You can arrange payment direct with us as a flat fee or the funds can come from your investments overtime.

When Power2 provides life Insurance advice, we are not limited in the array of choices available and will take you through the options carefully. Once the right policy is found we then allow you to choose between paying upfront, which is quite often cheaper, or in this instance only, and at your request, accept payment from the provider.


Power2 – Putting your interests first

In summary, the only way we believe a Financial Adviser can truly be working for you and you alone is when the advice, wherever possible, has no financial connection to any other party.

At Power2 we do our best to maintain a transparent, one on one relationship with you by pursuing, wherever possible, three basic tenets; Self Ownership, Self Licencing & Transparent, Non-conflicted Remuneration.

If you would like to discuss the above or your financial needs, please contact our offices or call and speak with Derek or Leesa.


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Tax Facts

Tax Facts

We thought the following information on various tax issues would be useful to you. Personal circumstances always vary, so please ensure you contact us for specific advice.

(Now the Tax office loves to move their pages around so if you find a link that is not working, we apologise,  feel free to let us know and we will get it up and running again ASAP!)

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Tax FAQ

Tax FAQs

Some individuals don’t have to lodge a tax return it depends on your situation which can differ due to age, income and expenses. Your best option is to come in and have a chat with a Power2 Tax Consultant to get their view on whether or not you need to lodge a return.

At Power2 we lodge your return electronically within 24 hours of completion.

The ATO reports that most electronically submitted lodgments take around two weeks to process, however some lodgments require manual processing and may take up to a month to issue.

While you are welcome to contact Power2, the quickest and easiest way to check the progress of your tax is by using one of the ATO’s online search options.

If you are missing one or more of your Payment Summaries your best option is to contact that employer to see if you can get another one. In the case your employer cannot supply a group certificate speak to Power2 and we will assist.  By far the best solution is to always keep all payment summaries, even if you’ve only worked in a job for a couple of weeks.

In most cases, fees can be taken from your refund. – Once the refund is released by the tax office your payment is deducted and the balance is forwarded to your bank account.  Please be aware that there is an additional administration fee of $40 added to the fee from refund returns.

Power2 can prepare and lodge as many previous years returns as necessary. If you have several years tax returns to be done please let us know at the time of booking so we can allocate the correct amount of time for the returns.

If you leave it too late and miss the deadline then you may receive a fine or interest penalty charge from the ATO.  At Power2 we have lodgement extension facilities which can minimise these charges and, as a Power2 client, you will benefit from this with extended dates to get your tax return completed.

You cannot just claim $300. You must actually incur any expense before it is claimable. Whilst, in some instances, you may not need receipts for expenditure up to $300 you must have spent the money and it must be relevant to your employment.

You are able to claim expenditure incurred in replacing, ensuring and repairing tools of the trade that you use for earning your income. If the cost of any item is more than $300 then it will have to be depreciated (i.e. claimed over its effective life). The amount you can claim will depend on what records you have kept and to what extent you use it for income producing purposes.

Australian businesses with an annual turnover of $75,000 or more are required to register for GST. However, if your estimated turnover is less than $75,000 there might still be some benefits in registering. Power2 can assist you with your application.

The secret to minimising your tax bill is not leaving your questions until after the end of the financial year. Speaking to a Power2 consultant before the end of the financial year and planning the year to come is the most effective way of saving tax.

It isn’t necessary to complete a return before leaving Australia unless you will not be back before the due date for lodgement of your return (31 October). If you won’t be back until after that date contact the Australian Taxation Office or a registered tax agent such as Power2 to apply for an extension of time to lodge.

Generally, employers are required to supply a payment summary within 14 days of the end of the financial year – i.e. 14 July. If an employee ceases employment part-way through the year, one must be supplied within 14 days of receiving a written request from the former employee and the request must not be made any later than 21 days before the end of the financial year. If a former employee has been receiving reportable fringe benefits (RFB) and leaves before the end of March then the 14-day limit may need to be extended.

You must keep all the records, receipts and other documentation you have used to prepare your tax return. If you are claiming deductions, you must keep written evidence to verify your claims for those deductions.

If you are an individual, you must keep proper records relating to your tax affairs for at least five years from the date you lodged your tax return. If you are a small business, you must keep proper records relating to your tax affairs for at least five years from when the business record is prepared or the transaction is completed, whichever occurs later. If at the end of the five year period, you are involved in a dispute with the Commissioner (an audit, for example), the five year period is extended.

If you use information from your records in a later tax return, you may have to keep records for longer. So, if you carry forward a tax loss, you must keep the records until the end of any period of review for the income tax return in which the loss is fully deducted.

If you own an asset which will be subject to capital gains tax on disposal, you will need to keep records covering the entire period of ownership until 5 years after lodgement of the tax return recording the disposal of the asset.

You do not have to lodge a full tax return.  Power2 can complete the Refund of Franking Credits for Individuals form  at a substantial discount to the price of a normal return.

All income must be declared. This is because the tax office needs to determine what tax rate applies to your other earnings for the year. You may be entitled to an offset to ensure that no tax is payable for your benefit.

You can access the information required from Centrelink online services, Express plus mobile apps and at self-service terminals at Dept. Human Services Service Centres. We can also look up the required information for you.

There is no limit on the amount claimed each year, provided the expenses are necessarily incurred in earning your income. The expenditure must be work-related and you may need receipts to substantiate the expenditure. Power2 are happy to advise clients on appropriate record keeping that will enable them to maximise their allowable deductions.

If you owe tax and lodge your return late, any amount owing will be payable on 21 November this year and a general interest charge will be calculated from then until payment is made. The ATO may charge a penalty of $170 for every 28 days that the return is outstanding. Unless you use a registered tax agent, you have from 1 July until 31 October to lodge your return. If you need an extension of time either contact the ATO or Power2 for assistance on here.

Fees paid to a registered tax agent for the preparation of your return, amendments and generally handling your tax matters are all deductible. Registered tax agents are the only people legally able to receive payment for the preparation of tax returns.

Your return can be completed using the details from a copy of the PAYG Payment Summary, a letter from your employer detailing the information on the PAYG Payment Summary or by reviewing your pay slips for that period. If you are unable to obtain the payment summary details from an employer a Statutory Declaration may need to be completed. Call us to see if we can access this information for you.

No, you cannot do that. A PAYG Payment Summary from a past year cannot be included with the current year tax return as the income on it was not earned in the current year. It can only be included in the return for the year to which it relates. You will need to submit an amendment to last year’s tax return. Power2 can assist you to lodge an amendment.

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4 popular deductions

Below are the four topics we get asked the most about at tax time by clients who are trying to increase their wealth and save on tax.

It is very important to get advice on the following before deciding they are right for you. In some cases they may not be suitable to your circumstances and may even leave you worse off if not approached with the proper level of understanding.

 


Private health

The Medicare Levy Surcharge (MLS) is a Federal Government initiative to encourage individuals to take out private hospital cover, and where possible, to use the private hospital system to reduce the demand on the public system.

The MLS is levied on Australian taxpayers who do not have private hospital cover and who earn above a certain income. Holding Private health cover may reduce your Medicare surcharge levy amount.

If you are considering Private Health cover or already hold some make sure you talk to your Power2 Tax Consultant about the potential tax savings.


Income protection

The main purpose of this type of insurance is to make sure you and your family are not financially disadvantaged due to your wage ceasing when you are injured or ill.

In most cases income protection pays a monthly benefit to help replace your lost income. The cost of cover varies depending on factors such as age, occupation, smoking status and existing medical conditions. There are also a number of options available relating to waiting periods and benefit periods which alter the cost.

In most cases income protection premiums are tax deductible and policy payments are assessable income.

A Power2 Financial Planner can help you to understand what insurance is right for you as well as the costs and benefits.


Negative gearing

Gearing simply means borrowing money to buy an asset such as Property or Shares. Negative gearing means that the interest you are paying on the loan (along with other expenses) exceeds the income from the investment.

Here is an example:

Your purchase a $440,000 investment property with a $400,000 loan
You make annual repayments of $33,925 of which $28,000 is interest in the first year (at 7%).
Other expenses for the year add up to $5,000
$430 per week in rent adds up to rental income for the year of $22,360.
So you have annual deductible expenses of $33,000 ($28,000 + $5,000) but income of only $22,360 (rent) which means there is a shortfall (a loss) of $10,640 for the year.

Depending on your other income the $10,640 loss incurred could lead to a refund of up to $5,000.

It is important to understand that even after any tax refund negative gearing still results in an annual loss. The investor is simply hoping that the growth in their assets value over time will be more than their annual loss in income.

If you would like to understand how negative gearing could affect your situation speak with a Power 2 Financial Planner.


Superannuation

Superannuation is a way to save for your retirement. The money comes from contributions made into your super fund by your employer and, ideally, topped up by your own money. Sometimes the government will also add to it through co-contributions and the low income super contribution.

For most people, super will be taxed at a lower rate than a similar investment outside super and making contributions can significantly reduce the amount of tax you pay.

Of all the different ways to increase your assets and reduce your tax burden we believe superannuation provides the most efficient vehicle.

In some cases you can also hold death, disability or income protection insurance through your super account at a cheaper price and more tax effectively than if you bought it outside of super.

There are many different strategies available related to superannuation that can significantly increase your assets and reduce your tax. Talk to a Power2 Financial Planner about the ones that suit you.

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Financial calculators

Calculators

Mortgages / Debt

  • Reverse Mortgage
  • Basic Loan Repayments
  • Extra Repayments
  • Lump Sum Repayments
  • How Long to Repay?
  • P&I / Interest Only
  • Split Loan
  • Complete Loan Comparison
  • How Much Can I Borrow?
  • What Can I Afford to Borrow?
  • Remaining Balance
  • Bi Monthly Calculator

Other

  • Millionaire Calculator
  • Income Tax Calculator
  • GST Calculator
  • Car Lease
  • Savings
  • Achieve My Savings Target
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Life Events that Require Financial planning

Life Events That Require Financial Planning

Even positive experiences might necessitate some professional help.

Sometimes, even the best events in life – a birth, new job or dream relocation – require a financial plan. They might necessitate the need for more insurance coverage, a new budget or guidance from a financial advisor.

Here are 6 positive events that should inspire you to do some financial planning:


 

1. You retire.
Retirement is considered the pivotal financial moment in a person’s life. If you haven’t already worked with a financial planner to figure out your plans and budget, then now is the time. In fact, at Power2 we urge even clients in their 20s and 30s to start planning for this major life transition, to make sure they’re saving enough along the way, during their peak earning years. It’s also a good time to reflect on what you want out of the final third of life.


 

2. The opportunity to buy a Holiday Home / Rental Property.
Beach houses and holiday homes are a great annual escape from everyday life. Then, the landlord offers a sweet insider price you can’t refuse. Likewise a rental property can seem like a great idea, tax deductions and an investment you can visit and touch. While they can be a great investment for some, rentals and holiday houses, especially ones that require rental income to finance – can be a complicated long-term commitment. A Power2 financial planner, not a real estate agent, is the adviser to help you objectively consider this decision.


 

3. You got a pay rise.
Pay raises are typically small and incremental if they come at all, so getting a big raise is cause for celebration. They also mean it’s time to do some planning to determine how much you should be saving for the future. It might be time to consider bumping up your retirement savings through strategies such as Salary Sacrifice.


 

4. You just got an inheritance.
Baby boomers stand to inherit significant wealth in the coming years, and receiving lump sums also carries with it financial responsibility. It can raise questions about spending habits, charitable contributions, tax payments and a slew of other concerns. You might want to get help from a Power2 Financial professional as you figure out how to handle the money.


 

5. Wedding bells are ringing.
Marriage is often the start of a long journey with many major shared life events like children, travel, loans, business and eventually retirement. A good financial planner will take that journey with you, scouting ahead to be sure you take advantage of every opportunity and avoid life’s traps.


 

6. You’re expecting a new arrival in the family.
When the baby arrives, life inevitably gets more complicated. It could be worth it to fit in some financial planning alongside baby naming or stroller shopping. You might want to start planning around future debts such as housing, cars and schooling as well as take out additional life insurance policies.

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Accounting and financial software

Accounting Software

At Power2 we’ve been offering accounting services to businesses in Mackay over many years. Our expert team of accountants work with clients across a diverse range of industries and organisations using many offline and online accounting software packages and systems. The main software packages we use include:


Xero

For many businesses we recommend using Xero.

Designed from the ground up with business owners in mind, Xero is an easy to use online accounting system that gives you access to your financial information anytime and anywhere, whether it be at your desk, on your tablet, or on your phone.

As a Xero Silver Partner and Certified Advisor we can introduce you to Xero. Our in-house Xero Certified Trainers can have you up and running in no time.

Click here for more on Xero including videos and examples.


BankLink

When you’re running your own business, it’s important to keep your mind on the job. You don’t want to waste time crunching the numbers and completing your bookwork when you could be spending that time on your business.

BankLink automates and simplifies your accounting by virtually eliminating manual data entry and the collection of receipts and bank statements. You’ll no longer have to spend hours doing your books with software that is often complex and expensive to use.

BankLink makes it easy for you (and us) to stay up to date with your financial information so you can make well-informed business decisions.

Click here to find out more about Banklink software.


MYOB

Power2 is a supporter of MYOB software. We have MYOB trained staff members who are happy to explain the benefits of MYOB and examine if it is the right software for you.

MYOB is a tried, trusted and well known name both to business owners and accountants alike, in fact they have over 1.2 Million businesses using their software right now.

It provides a real time view of your finances which helps you boost profitability and make better decisions.

MYOB takes care of much of the book keeping for you, letting you focus on what is important to you.

It helps you stay up to date with your ATO compliance obligations and enables you to work with us online.

Click here to find out more about MYOB software and which MYOB is right for you.


Reckon (QuickBooks)

Power2 has many clients using the ever popular QuickBooks software, and our experienced staff are happy to work with you to be sure this software is fulfilling all your business needs.

Reckon is a leading provider of software solutions, providing business solutions for accountants and bookkeepers; and accounting solutions for small to medium businesses.

We know that every business is different, and Reckon agrees. They attempt to provide clients with a choice of software solutions to meet individual needs. Whether it is mobility, reporting, simplicity or integration that drives your decision, no matter how big or small your business is, Reckon has a solution to meet your business goals.

Please click here to find out more about Reckon accounting software.

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Investing

Investing

Benjamin Franklin was right on the money when he said: “An investment in knowledge always pays the best interest”.

At Power2, we have the knowledge needed to invest your money responsibly. You can retain complete control, using us as your ongoing sounding board for investment ideas, or ask us to manage your investments for you.

So, whether you want to purchase a rental property, buy some shares, or just find out what investment options would be best for your circumstances, talk to Power2 about an investment strategy that’s right for you today and for the long term.

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retirement

Four Retirement Tips

Can I afford to retire? At what age can I retire? How much do I need to retire

Now I’m retired how long will my money last?

 

Pondering the above questions are enough to make many of us feel anxious and unprepared. Retirement is a large change and like all significant milestones it requires planning and preparation for it to be a success.

Remember that after retirement Australians will spend on average around another 30 years living on the funds they have saved during their working life.

At Power2 we will help you to manage your finances and expectations on your way to retirement and, just as importantly, out the other side into your new life.

There are some common, yet avoidable mistakes that prevent many people from retiring ‘on time’. But with our help, you can steer clear of the mistakes that could derail your retirement.


Retirement planning tip one: Get Advice

Salary sacrifice – Contribution caps – Transition to retirement income streams – Centrelink Aged Pension – concessional contributions – Self managed super funds – Property – Shares…. The list goes on and on.

None of us have all the answers. We take our car to a mechanic and visit a Doctor if we are unwell. When it comes to planning for retirement we all need a professional who will look at our individual situation and then find the path to retirement that is best for us.


Retirement planning tip two: Understand what you can afford

How much income do you need to maintain your current lifestyle in retirement?’

This is a question most of us get wrong. If we guess too high it seems as though retirement is not an option. If we estimate too little (and this is more likely the case) things could get tough later on; forcing us to make drastic, unwanted decisions when we are less equipped to deal with them.

Keep in mind that, early on retirees spend more on travel, entertainment and eating out. In their later years, health care cost can escalate.


Retirement Planning tip three: Start Saving Now

Albert Einstein said, “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it”.

For example:

To have $1 million at age 65, a 25-year-old needs to save $345 per month for 20 years then never save another cent, assuming the investments earn 8% per year over those 40 years. A 45-year-old would need to save $1,698 per month for the next 20 years to reach the same goal.

While other factors may effect the above outcome it is still very clear that the sooner you start saving the better your chance of reaching your retirement goals.

There are many ways to save for retirement. Your Power2 Financial Planner can help you save far more efficiently and tax effectively, helping you reach you goal sooner.


Retirement Planning tip four: Keep your eye on the ball

One certainty in life is change.

Jobs change, children are born or leave home, housing and share markets rise and fall. Even when things are relatively stable in the physical world your own personal expectations and goals may change over time.

It is important that your retirement savings plan is continually updated so that it matches not just your current needs and objectives but also your future goals.

By meeting regularly with a Power2 Financial Planner you can be comforted with the knowledge that you are still on track and working towards a happy and successful retirement.

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Superannuation savings

What Is Superannuation

Superannuation is a way to save for your retirement. The money comes from contributions made into your super fund by

your employer and, ideally, topped up by your own money. Sometimes the government will add to it through co-contributions and the low income super contribution.

Your employer must pay 9.5% of your salary into a super fund. This is called the Super Guarantee and it’s the law. The Super Guarantee will gradually increase to 12% in coming years.

Over the course of your working life, these contributions from your employer add up, or ‘accumulate’. Your super money is also invested by your super fund so it grows over time.

When you retire, you will have money to live off – a nest egg. Super is a lifetime investment that has many benefits.


How can Power2 help?

Just like you go to a mechanic to get your car tuned up, Power2 can do the same with your Super. It is important to check how your Super is doing every now and then to make sure you are on track to achieve your retirement goals.

Power2’s up to date knowledge in this area can also help you to make the most of any possible tax savings, government bonuses and cheaper personal insurance that may be on offer.


Save for your retirement

Start saving for your retirement early. The longer you have to save, the more

chance your savings have to grow. Power2 can help you to determine what you will need in order to retire with an income to suit your lifestyle. You can read more about Retirement Planning here.

Understanding how super works can bring great benefits whether you are just starting out, are close to retirement or have already retired.

For more information contact Power2 or request an appointment for your Super Tune Up here.

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