Plan Your Investments to Help Save Tax

Most people only think about investing when they need to files their returns at the end of the financial year. But smart people know that it’s best to start early. It isn’t enough to start early, though – you need to have a solid plan of investment. While it helps that your final goal of investing in a mutual fund is to save tax, you need to make sure that the mutual fund also helps you in other ways. The first thing to do, no matter what your goal while investing, is to do your research thoroughly. Narrow down your search to those that help you save tax. Once you’ve got your options down to a manageable number, you start organising on some criteria.

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Your final goal of investing in a mutual fund is to save tax, you need to make sure that the mutual fund also helps you in other ways.

There are some things that you just can’t compromise on. One of those things is the fund’s performance. Look at the performance for a period of 3 to 5 years. Most funds have a lock-in period of three years, so that’s your minimum. Look at both calendar as well as annual returns, just in case. The next criterion you want to look at is the fund’s volatility. Make sure that funds with high risks come with high rewards. If the rewards aren’t what you think they should be, or if the risk itself isn’t to your liking – it’ll help you narrow down your list even more. Most funds do have a few ups and downs, though. And that can be a good thing, so long as you also have a good Sharpe ratio to go along with it. After volatility, check what the expenses of the funds are. You’ll be spending money from your returns on maintenance, so make sure that it’s low. There would be hardly any point in investing if a large chunk of your returns were being eaten up by maintenance costs. Also look at the company’s history.

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It’s worse if the problems arise out of managing client assets – check to ensure that all things are clear at that level too.

If there is turbulence in their history, or if there are likely to be disturbances in the future, you want to reconsider investing there. More the problems your company faces, the less likely it is to be reliable. It’s worse if the problems arise out of managing client assets – check to ensure that all things are clear at that level too. Once you’ve gone down the list on keeping in mind these factors, you’ll find it easier to pick a fund that’s more to your liking. Remember that planning your investment is important – and these are crucial steps to making wise investments. Remember that being thorough with these steps can help you with not just saving money, but also growing it.

Tips on Minimizing Your Business Tax

As a business owner, you don’t want to spend more tax than is necessary. It is also best to avail the services of the accountants, likeĀ Accountants Cherry Black, for consultations and proper tax filing. Yet, consider these top 10 tips from business tax accountants to help you get the best of tax deductions and refunds.

1. If possible, your taxable income should be deferred until the following financial year. The income receipt can be delayed by cash based businesses while invoicing can be deferred by non-cash operations.

2. Take advantage of a tax deduction by writing off old plant or stock before 30 June.

3. For year end expenses incurred but not yet actually paid by 30 June, claim an immediate deduction.

This includes employee salaries and wages earned but not paid by 30 June. In addition, staff bonuses also qualify for a tax deduction when it is a definite expense that the business has committed to.

Any maintenance and repairs are also tax deductible if billed and undertaken before the end of the tax year.

4. Instead of paying full income tax at 46.5%, split the income as company (30%) or lower taxed spouse (16.5% or 0%).

5. Physically write off the business’s bad debt before 30 June. This can only be done if you have proof that you have have genuinely attempted to recover the debt. Also, the debt has to have been shown as income before being written off.

6.Small Business Entity (SBE) concessions are available for businesses with a turnover of less that $2 million.

For example, prepaying expenses like interest, insurances, rent, subscriptions, rent and lease payments enables an immediate deduction.

7. Don’t get caught in the trap of spending money simply to qualify for tax deductions. Remember, you will only receive 30% back if you are a company held business.

8. Pay your employee superannuation contributions by 30 June in order to be eligible for the tax deduction of that financial year.

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9. Before the end of the financial year, repay any interest and principal on any loans borrowed from your company. If you don’t, the entire loan amount will be taxed at the much higher marginal rates. This may include using company assets like vehicles for private use.

10. Finally, in the event of a tough financial year, you can vary the PAYG instalment for the last quarter of the financial year.