Tips on how to maximise your tax return

Making sure you get the correct tax return advice when sorting out your income tax return for 2014 is really important, and you need to be planning this well in advance of the June deadline. Income tax accountants and tax agents can help you to plan ahead so that you get yourself in the best possible position in order to maximise your tax return.

If you run a business

There are a couple of tips to follow if you are a business owner that will maximise your tax return, and first of all you need to take time to review the structure of the business. Speak with your tax agents or accountants to see if the business structure you have at present, whether this is a sole trader or a partnership for example, is still the best one for your current situation, because now would be the time to think about changing. Once you have done this, ask your income tax accountant or agent to review any options you have regarding trusts and companies who can allocate funds to beneficiaries on lower tax brackets as this will help reduce tax payments.

Review any unpaid or bad debts so that they can be written off prior to the June 30 date and you can claim the tax deduction and carry out a full stock check so you can account for damaged or stolen stock which will also reduce taxable income. Paying off superannuation guarantee payments for your staff before the start of the new tax year, gives you the deduction for them now and not after June. Speak with your income tax accountant to see which assets less than $6,500 belonging to the business could be written off - if your business is eligible. Offsetting profits by stocking up on consumables such as stationery is also an option.

Personal tax returns

You could review with your income tax accountant or agent, a number of options to maximise your individual tax return. These can include prepaying your expenses before the start of the new financial year, delaying your income, but you would need to take advice on how you could legitimately do this, as well as a number of other possibilities. For instance, if you do give some of your income to charity, then you might be eligible to get a tax deduction in the current financial year, or you can review how you pay your superannuation.

There have been changes which could allow you to share the payment of your superannuation with your spouse but you need to get permission from the members’ fund before doing this. If you earn less than $46,920 in the current financial year and make an after tax contribution to your superannuation fund, the Australian Government offers up to a 50 cents in the dollar contribution, up to a capping of $500 so you could get some extra money free-of-charge. You might also be able to claim a tax rebate of up to $540 if you pay for your spouse’s contribution and if they earn less than $13,800 in the tax year.

If you are a higher earner, or if you own property that you rent out there are also a couple of things you can do to maximise your tax return. If you do earn a lot then you might want to consider avoiding the Medicare Levy surcharge by taking out private health care cover. If you own property that you let out as an investment, then make sure any repairs or maintenance are carried out in the current financial year reducing the amount of your assessable income.

This is also a good time to sit down with your income tax accountant or tax agent and have a review of all of your finances including insurance policies held, any salary sacrifice scheme you are part of, or if self-employed, making sure that you are claiming a 100% deduction for any superannuation contributions you make.

Again make sure that you do this in plenty of time before the June 30th deadline, and there are several reputable and experienced tax agents and income tax accountants in the Gold Coast, Cairns, Ipswich, Brisbane, Townsville and Bundaberg region who will be more than happy to advise you.

Whether yours is a business or an individual tax returns issue, The Income Tax Professionals are the go-to experts who can advise you on all tax matters and the guarantee is every legitimate deduction or rebate possible will be claimed.

Tips on decreasing your assessable income

Your assessable income is different from your taxable income, and it is important when organising your tax return in 2014, that you understand the difference between the two. Assessable income refers to your combined income from all the sources where you earn money, over the financial year, so it could be in the form of your wage, any income from properties you rent out, dividends from shares that you hold, or assets that you have sold. Your taxable income, on the other hand, is the income that will determine which tax bracket you come under and what your actual taxation liability will be. In plain language, the more income that you earn then the more tax you will owe the Australian Taxation Office (ATO), conversely the less income then less tax is paid. So income tax professionals will often advise you on ways to reduce your assessable income so that you only pay the taxes you own and reduce your taxation liability.

There are one or two ways in which a tax accountant will advise you on how to decrease assessable income and they are as follows:
• Defer income until the next financial year
• Take advantage of tax office deductions

Deferring income

This can be undertaken by what is known as a “salary sacrifice” scheme and what you are actually doing is to contribute more money from your wage into a superannuation scheme. This works by the employee choosing to nominate a certain amount of their pre-tax salary and arranging for it to be paid directly into their superannuation scheme. Tax agents in the Gold Coast and Brisbane region as well as income tax accountants in Cairns, Ipswich, Townsville and Bundaberg, are well qualified to advise on the best superannuation schemes to consider. What in fact you are doing is to sacrifice some of your salary putting it directly into your retirement funds. This means that your gross salary minus the amount you have sacrificed becomes, for taxation purposes, your new assessable income. Therefore you have reduced your assessable income but at the same time reducing the tax you will be required to pay and increased your personal wealth at one and the same time.

The other way in which you could defer some of your income is by delaying collecting of invoices for example. This means deferring income until after June 30th which you could do by also reviewing term deposit maturity dates. If you do get some of your income via property rentals then consider carrying out minor maintenance and repairs before the 30th June deadline or you can consider prepaying 12 months of expenses that are tax deductible so that you bring the deduction forward into the current tax year.

Tax deductions

This is where your income tax accountant or agent can really help and keep you up to speed with the number of deductions that the ATO make available each tax year. This will include items such as work related expenses or anything that will contribute to reducing the amount of your assessable income.

However, it is really important to note that if you are considering deferring income or other ways in which to reduce your assessable income, then you have to do this before the start of the new tax year, which is why it is important to get the best advice from taxation experts such as income tax accountants in and around the Gold Coast and Brisbane area.

The Income Tax Professionals have been providing taxation services in Australia for over 35 years and delivers personal attentive service if you need to speak to an expert about your taxation issues.

Tips on buying used cars from private sellers

Buying a used car from a private seller can be a somewhat daunting prospect particularly if you don’t know the individual selling the car, and you are not confident enough in your own mechanical skills to know you are getting a quality second hand vehicle. There are however, a few hints and tips to bear in mind when it comes to purchasing a used car, and it is all about doing the groundwork first.

Find out about the vehicle

If it looks too good to be true, then it probably is, so just take some time to find out more about the car. This can include getting a history check carried out to make sure that the car hasn’t been stolen, or still has outstanding commercial finance or car loans on the vehicle. There are consumer organisations who can advise on how to get this information and you may be want to consider getting an independent report on the car as well.

Check out the value of the car

It is worth checking with auto trade magazines or online sites to see if they can advise on the comparative worth of the vehicle, given its age, and condition. Having that price is going to be invaluable when it comes to negotiating price with a private seller or even to judge whether they are offering it at reasonable cost.

For newer cars ask about warranty

Even though you are dealing with a private seller, if the car is new enough there may be factory or dealership warranty remaining that passes to you upon purchase.

Inspect the vehicle

If you are not mechanically minded, then take along someone who is, or ask your local garage to view the car. Make sure that the vehicle is roadworthy and that any relevant registration documentation or information is up to date, and if the car has had a regular service history this should have been recorded. So ask to see these records.

Check that you are dealing with a private seller

Sometimes untrustworthy dealers pose as private sellers if they want to avoid paying tax on car sales, but there are a few clues to watch out for that give them away. If you think you are buying from a private individual, when you call them to ask about the car it should be really the only car they are selling. However if they are a dealer posing as a private individual selling his own car, which does happen, then the giveaway is that they cannot remember which car you are referring to and may ask “Which car are you asking about?” when you call up. Also if there a few cars parked up in the same area with a private “for sale” sign on and you notice that they have the same phone number, then chances are it is a dealer using their mobile number.

Know your rights as a buyer

Unlike dealers, it is very unlikely a private seller will give refunds or a time out clause, but you need to check out your rights as a consumer of second hand products before buying. If you have followed all the hints and tips given above but the car just doesn’t feel right, then walk away and don’t be pressured into parting with your hard-earned cash.

Dealing with private sellers can be a longer process than working with dealerships so it is worth doing your homework, and also reviewing the possibility of car loans and commercial finance deals in Perth as you may be able to buy a new model.

If you are looking to purchase a car, speak to a car loan expert at Finance48 which specialises in fast and affordable car loans, and have the flexibility to cater solutions to your budget.

Pros and cons of different car finance options

Saving up for a new or used car can take a long time and when you need a reliable form of transport for work and family use, then it is often better to consider car finance schemes. Perth and Melbourne based finance companies offer a number of ways in which to pay for the cost of your car, but it is important that you review which method is going to be best for you. There are pros and cons to each of the four main ways that are normally offered with car payment schemes which are as follows:

• Personal loans,
• Car manufacturers’ deals,
• Car dealer finance packages, and
• Home loans redraw option.

Personal loans

There are a number of personal loans advertised with banks, building societies, and finance organisations. Personal loans can be used to pay for a number of items from cars to holidays or furniture. There are usually two types of loans, secured and unsecured, and on the positive side secured personal loans usually offer cheaper interest rates than the unsecured ones. However, if you don’t keep up with the repayments with a secured loan, your car can be repossessed, this type of loan is only available for new cars or reasonably new, and the insurance premiums higher than those for unsecured loans.

The pros for the unsecured loan is that as the car isn’t the security linked with the money you have borrowed, it is unlikely to get repossessed if you don’t make the payments and you can get an unsecured loan on a used car. The negative for this type of loan is that you would be paying a higher interest rate than that of secured loans.

Car manufacturers’ deals

Often a very tempting offer as this type of car finance option is often advertised as 0% finance, but it is really important that you read the full terms and conditions, especially the small print that details if you will be subject to what are known as “balloon” or lump sum payments. The pros for car manufacturers’ deals is the low or nought percent interest, so if you have the money you might want to invest it and save on the interest whilst taking the manufacturers’ deal. On the negative side, you need to check if the repayments at this level of interest rate apply to part of the loan. In some cases it could be 0% for 3 years and then you could find yourself having to stump up a lump sum which could be for around 50-70% of the cost of the car.

Car dealer finance packages

Many drivers favour this type of car finance option and the interest rates are around the same level as those of personal loans. Car finance is a very convenient method of taking out a loan which is a plus for a lot of borrowers. On the down side, you do need to check out how much the company will charge for fees or commission charges as well as any unnecessary insurance options that come with the package.

Home loans redraw option

This last method is usually a cheaper way of paying for a car than taking out a personal loan providing you pay the redraw back over the same time period, and the interest rate is low. However, you have to ensure that there is enough equity in your property plus that you have a redraw option or overdraft linked to your mortgage. The other negative to this option is that the longer it takes you to pay then obviously the more interest accumulates. So before deciding which route to take check out the options available and speak with your local car finance and home loans specialist in the Perth and Melbourne area and you could soon be driving the car of your dreams!

To discuss which finance options best suits your budget, you can seek out a professional at Westminster National.