As the new financial year approaches, it’s time for medical professionals to reassess their financial operations. Keeping your practice healthy from a financial perspective is just as important as providing high-quality care for your patients.
For medical professionals, staying on top of tax compliance can be a complex task. That’s why Boa & Co. Chartered Accountants is here to help you navigate through the intricacies of tax obligations, allowing you to focus on your patients. Let’s explore what’s new in tax compliance for 2024 and how you can ensure your practice runs smoothly and efficiently.
Understanding Tax Compliance in 2024
Tax compliance refers to following the legal requirements to report income, claim deductions, and manage your business records in accordance with the Australian Taxation Office (ATO) guidelines. For medical professionals, who may have a mix of income sources (consultations, surgeries, or even running their own clinics), tax compliance is crucial for avoiding penalties and optimising financial outcomes.
With the changing tax laws and requirements, here are some essential updates and areas where medical professionals should focus in 2024.
Key Areas of Focus for Tax Compliance
1. Business Income Tax
Income tax rates for businesses remain one of the largest liabilities for medical practices. Whether you operate as a sole trader, a partnership, or through a company, understanding the specific income tax rules is crucial.
For medical professionals earning substantial income, changes in tax brackets can impact your overall tax liability. You may want to take advantage of deductions and offsets to reduce taxable income.
2. Goods and Services Tax (GST)
For those who run clinics or medical facilities, GST is particularly relevant. While many medical services are GST-exempt, certain services, like cosmetic procedures, may be taxable. Keeping up-to-date records and understanding which services attract GST can save you from potential penalties.
3. Capital Gains Tax (CGT)
If you’ve sold or plan to sell any medical equipment, real estate, or other investments, capital gains tax applies. For 2024, it’s essential to understand your CGT liabilities, especially if you’re considering selling assets. Strategies like timing the sale of assets or offsetting gains with losses can help minimise tax impact.
4. Fringe Benefits Tax (FBT)
For those offering benefits to staff (e.g., private health insurance or providing cars), Fringe Benefits Tax (FBT) remains an important area of focus. The ATO has introduced stricter guidelines around FBT compliance, especially for high-income earners. Ensuring you accurately report these benefits can prevent unexpected liabilities.
Record-Keeping for Medical Professionals
Good record-keeping is the foundation of tax compliance. The ATO mandates that businesses must keep records of:
- Income and expenses: This includes all receipts, invoices, and financial statements that show the income generated and the expenses incurred in running your practice.
- Work-related deductions: Keep accurate records of professional development expenses, medical supplies, or any other deductible business expenses.
- Superannuation records: Ensure your super payments for employees are up-to-date, and remember that employer super contributions are now required to be paid more frequently under the 2024 superannuation reforms.
Tip: In 2024, cloud accounting systems are highly recommended by the ATO for medical professionals to simplify bookkeeping and compliance. Using software can automate the tax filing process and prevent common record-keeping errors.
Important 2024 Tax Updates for Medical Professionals
1. Temporary Full Expensing Extended
If you’re planning to purchase new medical equipment, take advantage of the temporary full expensing scheme, which has been extended. This allows for the immediate write-off of assets used in your business, reducing your taxable income for the year.
2. Superannuation Guarantee Increases
The superannuation guarantee rate has risen to 11% in 2024. Medical professionals employing staff must ensure they are meeting this requirement. Failure to pay the correct amount can lead to significant penalties.
3. Small Business Tax Concessions
If your medical practice qualifies as a small business (with a turnover below $50 million), you may be eligible for various small business tax concessions. These include simplified depreciation, immediate deductions for certain pre-paid expenses, and other benefits that can reduce your tax burden.
The Importance of Tailored Advice
No two medical practices are exactly alike, and tax strategies that work for one practice may not be ideal for another. At Boa & Co., our team specialises in tax compliance for healthcare professionals, helping you to:
- Optimise deductions related to medical equipment, training, and other business expenses.
- Minimise capital gains tax on the sale of assets.
- Ensure compliance with superannuation and payroll taxes.
Whether you need help with tax planning, financial structuring, or staying compliant with ATO regulations, we’re here to offer personalised guidance.
Let Boa & Co. Help You Maximise Tax Efficiency
At Boa & Co., we understand that your focus is on providing excellent care to your patients. Let us handle the financial side, ensuring that your practice runs smoothly and stays compliant with all tax regulations. Contact us today to schedule a consultation with one of our expert tax accountants.
Call 1300 952 286, email us at service@boanco.com.au, or visit www.boanco.com.au to learn more about our tailored tax services for medical professionals.