Chartered Accountants & Tax Specialist
General update by IBBZ Accounting on latest tax news, business growth and technology tips.
What is 63-day rule
A person is allowed a deduction for the amount spent on employing people. Payment related to employment could be in the form of wage and salary or payment of leaves. Section EA 4 says payment must be made within 63 days after the end of the income year. Any payment not made within 63 days after the of the income year, becomes income of the person for tax purposes. It means deduction is not allowed for the unpaid portion.Continue reading
Each person has a different lifestyle. To maintain a good lifestyle lot of financial planners, go with $100k a year for a couple, means $50k for one person. However, this has been a very traditional approach this approach is suited for industrial age era not for modern time (information age)
Traditional approach is you work till 65, keep making small savings in your retirement funds. By the time you retire you should have about $500k in your investments. These investments will give you a yield of about 5%, so you will get about $25k a year. You will also be eligible for Super, may be one investment property so roughly you will get about $50k a year.Continue reading