Learn how to set up your TaxPlan by using the Entity Information line item fields and options
Tip: Once you've entered data into the Entity Information section, click the arrow ^ to hide that section to give you more screen space.
Base Scenario
Tax Rate for Tax Strategy Savings
- for a company the tax rate is 26% or 30% (27.5% in prior years or whatever the relevant percentages per year)
- for a trust or individual look at the marginal tax rate to apply to the tax strategies down the bottom and TaxPlan will show the tax savings
Example
If Dad was on a 47% marginal tax rate and if we had $1,000 worth of tax deductions for him (by way of a tax strategy) TaxPlan would show $470 or 47% of that as the tax saving.
NB: This just applies to the tax strategies. The average tax rate (the amount of tax saved and the average rate) is calculated at the bottom of the screen which is important because sometimes it's not 47% you save because if you go through tax rates, it's actually a lower or higher amount.
Tax Saving % or Company Dists.
If you make a distribution from a trust into a company and you’re going to be saving some tax, everybody likes to put different percentages.
Example
We’ve got a company with a 30% tax rate which could have gone to Dad at 47%, but it's going to a company so we can put in 17% and this applies if you make distributions down the bottom of the screen.
Medicare Levy Surcharge
Medicare Levy Surcharge is self-explanatory – just select ‘Yes/No’.
Foreign Resident
For Foreign Resident select ‘Yes/No’ to change the tax rates to foreign resident rates.
HELP and TSL
HELP and TSL relates to student loans. If you click ‘Yes’ there's just one amount for all those student loans calculated at the bottom.
Tax Averaging
This is for clients with primary production income or sportsperson income. Enter the basic taxable income for all prior years.
- to include Tax Averaging in the tax savings amount (showing your client the value created) click ‘Yes’
- if a client normally has Tax Averaging click ‘No’ as that's a normal part of what they do
Example
One year income might have been $,3000 but for another year, if there was nil income, just type in ‘-1’ (autocorrects to (1)) and that's the same as having zero, so you can put in all the amounts and these will display the tax savings from primary production income at the bottom of the screen.
Include Tax on Super Conts
To include Tax on Super Contributions click either ‘Yes/No’.
Example
If Dad made a deductible personal contribution to super, to include the tax say ‘Yes’. Then at the bottom it will show a 15% super contributions tax. If ‘No’ is selected, it won't show. That's important because we're recommending making a tax deduction by way of a super contribution. Yes, Dad might save tax at 47% but the super fund pays 15% so leave it as ‘Yes’ and the 15% payable to the super fund will show to give you the true family group amount of tax saved.
Reportable FBT and Reportable Super Contributions
Manually enter any Reportable Fringe Benefits, Reportable Employer Super Contributions (RESC) and Div293 Super Contributions (Total Super Contributions). They’re important because they are used to calculate any Medicare Levy Surcharge or Div 293 tax.
Learn more about how to record Reportable Employer Super Contributions.
Carried Forward Super Cont’s Used
Carried Forward Super Contributions Used is included in calculations for Div 293 tax or other areas of tax at the bottom of the screen.
Net Investment Loss
Enter the Net Investment Loss because that also effects Div 293 tax calculations.
Of course, any net rental property loss will be included in the information below this section. This line item is purely for Net Investment Loss from shares and other non-property investments.