Using Software to Keep Track of Personal Expenses
Personal budgeting used to involve setting money aside in different envelopes and recording expenses with pen and paper. Now, thanks to modern technology, keeping track of personal expenses is a much easier task.
Excel spreadsheet
Since Microsoft first introduced Excel, people have been using it for a range of accounting tasks, including managing personal expenses. The basic principle involved is to list your income and expenses in the spreadsheet and then compare how much you earned with how much you spent each month and adjust your budget accordingly. Excel is somewhat limited in what you can do and if you want a more sophisticated means of tracking your expenses, there are lots of software applications and budgeting websites that practically do everything for you.
How to Make Sure Your Business is Tax Compliant
One thing you don’t want to do as a business is get offside with the Tax Department, so make sure that your business is always in complying with those tax laws relating to you. The following are a few simple tips that will help ensure that your business is always tax compliant.
Do Some Research
To ensure that your business is tax compliant it is important to do some research, because tax regulations can change quite regularly and it is your responsibility to keep up with the latest developments. The best place to research is the Australian Tax Office website, because this will give you at least a basic understanding of what is expected of your business in order for it to be considered tax compliant.
Making the Most of a Small Income
It can be hard to get by on a small income, but the following simple tips can help you make the most of even the smallest amount of money.
Budget Well
If you don’t have a lot of money coming in it is crucial that you do a good job with your budgeting, otherwise you will find yourself in financial trouble before you know it. The best way to budget is to keep track of absolutely any money coming in or out, as well as to make it very clear how much you can afford to spend at any point in time. Whether you use a notebook or free software to keep track of your budget, create a clear budget and stick to it, because on a small income there is a fine line between keeping your head above water and being in serious financial strife.
Building an Ethical Super Portfolio
If you’re like most people, your biggest asset is your superannuation. Like most people too, you probably believe you have a good sense of ethics when it comes to issues involving environmental and social responsibility.
Well there is now a growing sector of the population who believe that you can have an influence on these important issues, not just in small personal ways, but also by deciding how the funds in your SMSF or your commercial super fund are invested.
What is ethical investment?
Ethical investment is choosing to invest your super in companies whose activities you believe will benefit the common good and make a positive difference. It is also, obviously, about investing in those which provide a competitive return on your investment.
Funds offering ethical choices
Many mainstream super funds now offer some ethical investment choices to their members, so if you are not fully committed to the concept of ethical investing, you can still make a contribution by investing in some of these companies.
If you’re committed to 100% ethical investment however, your best bet would be to go to one of the funds providing only ethical investment choices, such as Australian Ethical Super, or to change your SMSF portfolio to purely ethical investments.
Do they fit with your ethics?
Deciding whether the activities of the companies in a fund’s portfolio align with your own values involves examining those values. For example, asking yourself what your views are on uranium mining or mining in general, unsustainable timber harvesting, genetically modified food, child labour and so on.
You can then examine the fund’s web site or product disclosure statement to see what criteria they use when selecting their ethical investments.
The answer is not always clear cut either. Large corporations such as BHP cause environmental damage on the one hand, but give vast amounts of money to community groups on the other. Your sense of ethics will dictate which is the priority for you.
The bottom line is competitiveness
While you may wish to invest ethically, at the end of the day, this is your retirement fund you are talking about, so the bottom line is that an ethical investment must also be a sound investment.
As well as checking a super fund’s social and environmental philosophy, you also need to check their fees vs performance (low fees are no use if their investments under-perform) and their diversification (you need a healthy spread of income-type investments, stocks, shares and property).
Ethical investments may soon be more profitable
Ethical investment is not just about feeling good. It is also beginning to make good business sense as well.
Finding Tax Incentives for Your Super
Superannuation funds offer some significant tax benefits to their members. If your money is in a managed super fund, your fund managers should already be aware of those deductions which apply to commercial funds and be implementing them on your behalf.
However, if you have a self-managed super fund (SMSF), you may be eligible for many more tax incentives than those available to commercial super funds. For this reason, you would be well advised to seek advice from a tax accountant with specialist knowledge of SMSFs, in order to identify and take advantage of everything you are entitled to.
Best Tax Management Software for Businesses
Businesses looking to ditch the old school ledger books and notepads, or replace ageing accounting software, have quite a few excellent options. The latest in accounting software packages are filled with features that let businesses create detailed reports, view purchase histories, track monies owed, and, of course, fill in tax returns.
Besides helping business owners handle money efficiency, good accounting software should also have an intuitive, well-designed interface, and a lot of support available. If you’re in the market for new accounting software that will help you take care of your taxes painlessly, you can’t go wrong with any of the following selections.
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Working Through a Tax Audit
Even for trustworthy taxpayers, nothing is quite as stressful as a tax audit. While most people hope to glide under the radar of the taxman forever, the truth is that being targeted for a tax audit isn’t as unlikely as you’d think. Every year, the Tax Office writes to tens of thousands of people regarding their business or personal tax returns, asking them to review their claims, and conducts thousands of audits.
But being chosen for an audit doesn’t spell the end for you. First of all, many calls from the taxman are to simply clear up small discrepancies on your tax return. Of course, if the review reveals something just isn’t right, then you’ll have to brace yourself for the audit. The following tips will help you understand, prepare for, and work through a tax audit and come out unscathed.
The Dangers of DIY Tax Returns
More than ever, Australians are trying to complete their personal tax returns without the help of a professional accountant. While there is plenty of information available online and on the ATO website to help, is it really worth the risk? The following are just some of the reasons why do-it-yourself tax returns are a little bit dangerous, and why hiring a tax return accountant may just be worth the investment.
It takes a lot of time
If you haven’t done it before, filling out your own tax form takes a long time. Even if you have done it before, if your return is even just a little bit complex then it will take you time to go through the forms and fill them in correctly. Plus, you may have to search online or call the ATO to get information on how to fill the forms out properly, what you need to claim, what can be deducted, what can’t and so forth. While you may start to learn the ropes over time, accountants have already done this background work and will be able to help you out quickly and efficiently.
What Work Expenses Can You Claim on Tax?
General tax deductions are deductions that apply to a broad segment of the tax-lodging public, and more often than not are claimed as a result of work-related expenses. These types of deductions are available to everyone, no matter their occupation. In general, work-related deductions are for items used for work or business purposes, and you can make claims of up to $300 without written proof (anything more than that will require a receipt). The following are some of the most common work-related general tax deductions you can make on your personal tax return.
Electronics can be claimed on your tax return
Calculators and electronic organisers, such as smartphones, PDAs, tablets and so forth, are fully deductible if the cost is $300 or less. If the cost exceeded this price when you bought it, then the item will need to be depreciated. Plus, you can tack on the cost of keeping the unit working, such as repairs, batteries and so on. Diaries, log books, and other stationery that essentially provides the same function are also deductible. Talk to your tax agent about how to make sure everything gets included on your return.
Paying Off a Tax Debt
If you have managed to accumulate a tax debt, it is vital that you do whatever you can to deal with it, because otherwise you risk having your situation quickly go from bad to worse. The following are a few important things to consider when it comes to paying off a tax debt.
Look into the debt first
Mistakes do happen, so if you have just received a massive and unexpected tax bill, don’t pay a cent until you have had your accountants check it out for you. Take any correspondence you received with the bill to your accountant and they should be able to tell you what it all means and give you some tax advice. You may still have to pay the bill, but if there has been some sort of error, you may well save yourself a bit of money just by questioning it.