Tax Deductions – Making The Most Of Them

Taxation is a complicated and even boring topic for most people. However, knowing how taxation works can actually help you save you money at the end of the year. And you can do so in a perfectly legal manner through the aid of tax deductions.

Tax deduction is a sum of money allowed to be deducted from your taxable income at the end of the year. These deductions are allowed depending on the products and services availed by the person. Usually, allowable deductions are awarded to workers who incur additional costs to perform their jobs more effectively. These include clothing expenses, travel expenses and other lifestyle expenses. Donations and gifts are also deducted from the taxable incomes.

To further explain how allowable deductions work, consider a regular labourer. In the previous year, he was able to earn $10,000 dollars. However, he was forced to spend a fraction of his income for some work requirements. He had to spend $500 dollars to buy protective clothing. He is allowed to deduct this amount from his taxable income. Hence, only $9,500 will be considered when computing for the amount he needs to pay. If for example, the tax he has to pay is 10% of his taxable income, he will only have to pay $950 instead of the $1000 without deductions. He will be able to save a total $50 due to the deductions.

Moreover, here are some tips on how you can familiarize yourself with tax deductions and make the most of them. You will be surprised by how much you can save at the end of the year.

Keep Your Receipts

If you are like most people who throw away the receipts or slips of transactions, you may have to think again next time. In order to avail of allowable transactions, you will have to present proofs of transactions and purchases. However, if you have already lost your receipts, you can still avail of fixed rates for work-related costs. On the average, $300 of work-related expenses can be compensated alongside $150 worth of laundry services. Others may require detailed summaries of transactions so it is best to check the requirements imposed by the ATO. Workers are also encouraged to keep their notice of assessments for future reference.

Have a Tax Agent

Aside from using the spread sheet programs to keep track of your finances, you can also use the E-tax program. Through the internet, you will be able to keep track of your expenses and easily identify which if your expenses you can get deductions from. The program also features quick links to the ATO site for quick reference.

However, hiring a tax agent is still the prescribed move by financial advisers and analysts. It is true that it will you to have them manage your taxes but most people find them worth it. Unlike computer programs, these trained professionals can dig deeper into your expenditures and further analyse your possible claims.

To learn more about allowable deductions, visit the ATO site at www.ato.gov.au

How to Green Your Business

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At the turn of the century, almost every sector of society turned green. Industries began to rethink their ways and shifted to alternatives that will be less harmful to the environment. Carbon emissions is one of the biggest problems that green campaigns want to lessen if not totally omit. Manufacturers and plants were biggest contributors but did your know that small businesses also blow off a big chunk of these carbon emissions? In recent reports by Carbon Down (collaboration between the Victorian Employer’s Chamber of Commerce and Industry and the Victorian Government), studies show that smaller enterprises are responsible for approximately 1/3 of the carbon emissions in Victoria. This is a product of the accumulated emission of the small and medium enterprises.

Over the years, hundreds of campaigns have been launched by various institutions and organizations to lessen these emissions. One of the major points that they stress out is how the use of electricity can affect these numbers. Scientists and experts have come up with alternative sources of energy that even small businesses can afford and avail of. One amenable option is the GreenPower program that provides electricity from greener sources. As a small business owner, you need not set up a plant for alternative source of power. But you can do so much by incorporating green acts within your scope. In fact, a change in your company’s practices can go a long way in conserving electricity. You may choose to work together in a common area to make use of a few lighting units. You can also open windows to make use of the light and even skip the air conditioning unit.

A huge yet wise step for your business to take is to avail of Carbon Down’s Grow Me the Money Programs. It is a 12-step plan that involves greening your company – from energy consumption to marketing your products and services. Those who have availed of the program have performed key changes such as:

Reducing the need for air conditioning units by making use of windows and open spaces
Patronizing products and materials at a closer proximity to lessen the need for transportation
Recycling
Making use of energy-efficient gadgets and equipment
Holding tree-planting activities
Using water-saving fixtures
Using paper and paper products efficiently
Installing hot water timers for thermoses
Using energy-saving lighting

Aside from saving money, you can also turn your business into a medium of change. Another important aspect of being committed to going green is to also influence your customers to support these causes.

Other programs are also implemented by the Australian government to enable small businesses to go green. Some of these are Sustainability Victoria’s ResourceSmart Business and the Australian Government’s Small Business Support Line. Availing of these green programs will not harm you company’s incomes since the costs are deducted at the end of the year. You can rest assured that the costs of going green will not hurt the income of your business.

Your business is never too small to contribute to a big change.

Tax for Small Businesses

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Taxes can be such a hassle. Filling out forms is tedious enough. Compiling the paperwork and doing the computations is also very exhausting. But paying taxes is your way of giving back to the economy. And it is also another way of making sure that you get back what you deserve. That’s right. Filing you taxes accurately and religiously is the most effective way of getting a guaranteed refund.

There are a number of ways on how to get through you taxes. There are also important things to keep in mind. The most important consideration is the accuracy of details you submit. The information must true and accurate. It is an advantage if you are well-versed about taxation so that you do not understate or overstate your figures.

The main decision that you have to make is if you will be the one to file your taxes or if you will hire a tax agent. Both options have its ups and downs so it is best if you weigh your needs and current situations.

Doing it Yourself

If you are saving money and would prefer to learn about the processes yourself, just visit the website or personally go to the Australian Taxation Office. They provide comprehensive guides and how-tos for your easy facilitation. It is recommended that you check the rules and provisions every year since they are bound to change regularly.

Filing of taxes for full-time employees who receive a payment summary is bound to be easier. Being employed gives you access to paper works prepared by your employer. However, you may still need professional advice when preparing the list of your benefits and deductions. Some terms are too complicated and may cause wrong computations and statements. However, if you are confident about your abilities and judgement, then you can save money by filing your taxes yourself.

Getting an Agent

The main concern you will have when hiring an agent is the additional cost entailed. The cost would usually depend on the services the tax agent performs and how long it takes for him or her to accomplish it. One way to lessen the time (and hence, the total bill) is to compile your receipts and papers as soon as you get them. This will give the tax agent an easier time when she reviews your documents.

However, it may come as a relief that the payments made to tax agents are normally deductible from the taxable income. Other advantages of getting a tax agent include the high degree of accuracy above all. Second, you will be able to get the maximum allowable refund for your income and expenses. The services of tax agents also do not stop at the filing of the papers. They can (and should) also give insights and recommendations on how you can handle your finances better.

If you decide to get a tax agent, finding one should not be a hard task. You can visit www.cpaaustralia.com.au to find a list of credible and registered certified public accountants that you can hire to file your taxes.

Business Valuation

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How much is your business worth?

Business valuation is a process used by accountants or by specialist company valuers to determine the worth of the business. This tools are employed by companies who are about to sell their enterprise or those who are about to buy another business. These tools can be used for various business and legal purposes – whether you want to determine the value of your enterprise or another company’s enterprise. Let us assume that you would want to sell your business. Primarily, there are four ways to determine its worth – something you should consider before you finalize your transactions.

Looking ahead

When you are trying to sell your enterprise, it means that you are also selling the rights to any profits that the business may accumulate in the future. The capitalized future earnings method makes use of the values of the Net Profits and Return On Investment or ROI as its basis.

Essentially, this method determines the value of a business by dividing the Net Profits by the ROI. The value of the Net Profits can be derived from the profit-and-loss statements of your business from the past three years. The ROI, on the other hand, is the rate of return that your buyer may expect upon purchasing your business.

Looking at the present

Asset valuation is considered as the simplest way to determine how much a business is worth. It uses the values of your assets and your liabilities. Add all of your business assets such as cash, stock, plant and equipment, and receivables. Then add all your business liabilities such as bank debts or loan repayments, or simply any amount of money your business owes. Then, subtract the total value of the liabilities to the total value of the assets.

However, this method does not make use of the goodwill of a business. This goodwill is usually used for retail or those businesses that offer services. It is the difference between the true value of a business and the value of its net assets.

Look at your neighbours

The earnings multiple method is considered an easy method that depends on the values of other businesses that are similar to yours. By simply multiplying the earnings before interest and tax (EBIT) value by a selected number you may find the worth of your business. The selected number is called a multiple. This multiple depends and varies on the industry and growth potential of your business.

On the other hand, the method of comparable sales also relies on other similar businesses. By considering the prices of the sales of the businesses similar to yours, you can compare the value of your own business.

Almost all of these methods are used to validate the value of businesses. However, you should always remember that whatever method you may opt to choose, you should consult with experts such as business brokers, accountants, and business valuers. This way, you can fully understand the process of determining the value of your business and what it really means.

Going Mobile With Your Business

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Recent studies showed that more than half of the population of Australia has an access to the Internet; and half of these people create their connections through their mobile phones. Nowadays, a day without your mobile phone can feel like you have missed out on half of your life already. With your mobile phone, you can stay connected with anyone you want, any time you prefer, and anywhere in the world.

With sixty-three percent of the mobile phones out in the market having access to the Internet, there certainly is no reason not to master the changing tides especially for your business.

Mobile phones as virtual wallets

Having difficulties in remembering all the prices of a specific item? Don’t fret, for with your mobile phones, there would be no need to write down and list all prices of items from different stores.

Aside from using it for communication and transaction purposes, mobile phones can now be used for researching and canvassing prices of goods and services. Phones can now be used for storing and scanning the barcodes of the items you wish to purchase. You can now even purchase with your mobile phones. Telephone companies provide different means for storing money in accounts accessible by mobile phones.

Mobile phones for seamless interaction

Selling directly to the public via more than one distribution channel is csalled multi-channel retailing. Companies using this type of commerce offer various means of interaction with customers – inside their outlets, with mail order catalogues, through their websites, and even by making use of social media.

Establishment of various channels for customers is a strategy for increasing monthly revenues, improving publicity, gaining new customers, and enhancing customer-seller interaction. However, through your mobile phones, you can now progress your strategy from multi-channel retailing to omni-channel retailing.

This strategy focuses more on a seamless approach to customer experience. You can now use mobile devices, computers, televisions, and catalogues while ensuring consistency across all retail channels.

So what’s in it for you?

These facts boil down to one point: mobile phones are a key to customer satisfaction. Customers nowadays have developed a very keen eye in terms of purchasing products – they change their orders, their mind, and their expectations.

Take this to your full advantage, use different channels to help customers in making informed decisions. Show your products and services in as many channels as you can. This way, they can connect to your business whenever they want, wherever they want.

With mobile phones, you can ensure that customers shall be satisfied with their purchased products and services. By allowing them to access information about your business, they can decide ahead of time. All these shall save your time, energy, and resources. Who knows? Your customers might even be inside your competitor’s store while purchasing your goods.

Evaluate how mobile phones affect your customers’ lives. Discover how they use their phones. Find out how many mobile devices have access to your channels. Then provide them all their needs through these channels and guarantee their satisfaction.

Self Managed Super Funds

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Retirement plans provide benefits for companies or government institutions concerned with the longevity of investments for their future. Having one for the long run must ensure security on your funds. The Self-Managed Superannuation Fund is a type of pension plan that features a full control as to how your funds and assets will be invested or will operate. In setting up a SMSF, you must know your skills relevant to your needs and you must have reliable providers.

To start running a SMSF, you will have to decide first if: you’ll take charge yourself to the submission of pertinent documents, plan management, record-keeping and taxation registration; or outsource all or some of these to legal individuals or service providers. The next step here is to look for the appropriate SMSF provider. Indexes of providers can be found over the internet. Choose the one that suits you the most. But to find out if you have chosen the right provider, check out first how long they have been in the business. As an advice, you must be cautious on selecting the providers who’ve just been in existence for barely two years. You may want to check some background information of the operators if they are capable enough to handle you as a client and your superannuation fund.

Many of the online service providers give fund establishment services, ongoing administration and one-off transactions. Aside from these, some are even linked to various financial and adviser groups. In fact, you can even benefit from their financial products.

A complete package of services is also offered by some providers. This includes investment accounts, direct services for the requirements and lawful individuals like an auditor, a tax agent, a financial adviser and a relationship manager. However, this can be costly so you must be watchful on the signing of documents and other related business transactions. Usually, a flat fee or an hourly fee for administration services could be charged on your bank accounts or even on your assets.

The business expenditure for a SMSF with the aid of online providers is relatively cheap, though. If you are concerned whether to have online or face-to-face service providers, consider first your needs and the difficulty of your fund. But at many times, face-to-face consultations with extra credits are also made available by the online providers. You may also opt to hire an accountant provided that he/she is a SMSF expert.

The last thing that you have to consider on selecting the provider is the scope of their SMSF service. If you opt to have a complete package agreement, it may depend on the benefits that the operators will give you. Evaluate then which online provider offers better services in terms of business and running payments, additional fees and other expenses that may come up which is not included in the package deal. Now if you want to be guaranteed, you can ask your financial adviser to separate the SMSF running costs and recommendations regarding non-super assets, if there are any.

Effective Tips For Small Business

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There are two important lessons that you can learn from the story of Forrest Gump. The first thing is that you should not let anyone tell you that you cannot do something. And second, you must learn to run!

Just like large firms, having a small business is no walk in the park . You will have to face difficulties especially during the earlier stages. The important thing is that you do not let these obstacles stop you and more importantly, you learn from them. In fact, even if you have been in the industry for years, you will still face hardships. This implies that will never stop learning. Here are a effective tips that will help you get through the bumps of having a small business.

Having a few staff means people must play dual roles that may include sales, bookkeeping, publicity and administration among others. They key is to compensate them properly so that you will not get caught in the trouble of having too much to do. However, ensure also that the payments that you are making will not hurt the firm.

You must also make the most of your time. Since you will be hiring people, you will be able to have more time to do other things. Manage your time well. Make sure that each day is productive.

Problems, again, are inevitable. And they may come in as small glitches or huge disasters. They key is to know when you need help. Call experts and analysts that can help you sort thing out.

Be observant. There are people who will try to take advantage of you and your business. Know who to transact with. And more importantly, know when you are being taken advantage of.

Be open to suggestions. As a business owner, you would want to do everything they way you find most effective. This should not always be the case. You can learn a lot from experts and even your inferior employees.

Check up on your business regularly. Consult an accountant to check on your finances. You can also seek the advice of a lawyer on the legalities of your business transactions. Prevention is always better that cure. Solving a problem at the start can do miracles in saving your business.

And lastly, make sure that you earn enough from your business. You may not earn as much during the first years but you must make sure that you actually earn. Even if you love your business very much and you are passionate about what you are doing, not earning enough is a sure way of shutting down. Even if you are not doing it for profit, you will still need enough earnings to provide the wages of your employees and to purchase your inputs. If the records show that you are not earning, then it is time to look for the problems of the firm. Address them immediately and if symptoms persist, you may want to overhaul or even rethink your business.

Funding Your Cash Flow With Loans

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Credit and Financing

Capital is the monetary requirements of a business firm to operate. So whether you are just setting up or already running your business, the source of capital is an important consideration.

Credit and owner’s equity are the conventional sources of financing among businesses. Since every firm starts out small, seldom do investors inject money to the enterprise. Additional and amenable options, however, become available as the business grows. It is important for a business to have a steady cash flow. Aside from the recurring operating expenses, other payments such as tax and other duties arise. Most of the time, the owner’s equity becomes inadequate to support the growing needs of the business. It is therefore important for the owner to be familiar with the terms, benefits and risks of credit.

Your Personal Credit Line

Using your personal line of credit is a convenient way of financing the business. You can use your credit card or borrow cash from your family and friends to suffice the expenses. However, with a growing business, these methods have immediate limitations. These methods are optimized for personal use and emergencies so in time, it becomes inadequate to support the growing needs of the enterprise.

It is important to consider certain points when using personally borrowed money or your credit card. Below are some questions you may ask to gauge the extent of your personal credit:

Until when can the cash support the enterprise? How much and how fast are you spending the money?
Will more cash be available?
What are the terms of repayment?
When are your friends and family expecting their money back? Do they have plans for this money?
What will happen if the debt is not repaid? What will you lose?

Business Loans

A business loan is an amenable option when starting your enterprise. You can also avail of business loans to expand the business. There are many institutions that offer loans depending on your business scale. It is important to familiarize with their terms so you can make the most of their offers. It is best to visit the banks and offices so you can discuss the options for your business.

It is also important to discuss these options with your financial advisers. Seek the opinions of your accountant and auditor when getting a loan. They know best if your business can repay the loan in time. Moreover, talk to your lawyer to verify the legal implications of getting a loan.

Imposing an Overdraft

Overdrafts are a form of financing that allows business to make purchases using their accounts even if the available balance is not enough. Overdrafts are a form of short-term funding that businesses can take advantage of. However, it is important to always review the terms and status to avoid incurring unnecessary expenses.

When deciding on external financing, it is important to have a long-term plan. This will give you an idea of how you can repay the loans you will avail. It will also ensure you that the loan will go to the business and not your personal needs. .

Transitions in One’s Own Business: How to Go About It

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Unlike employees, a change in business venture for entrepreneurs is not as easy once you lose passion for the one you are handling now. For employees, especially the job jumpers and those relatively new to an industry, it’s as easy as printing out a resume again and broadcasting it to every nook and cranny possible. But if you own a business and find that you have lost heart in it, what do you do?

I came across a blog entry where an entrepreneur shared how she tackled this very situation. See, every once in a while, even if you have a business that has already been established, there comes the very rare time when you undergo what one calls in the personal change industry as transition. This blogger shares she was already seven years into her current field when, after having completed a qualification for another mutually exclusive industry, she discovered she would rather be playing in the new one rather than the old.

In a way, for people like this blogger, the change is exciting. It is like letting a toddler loose in a toy store or a sweet-toothed kid escape in a candy shop. Much joy lies ahead but on the other hand, as the handful of entrepreneurs who underwent transition would admit, there is this longing of not letting go of the current business. Thus, there lies the dilemma.

In business, if one is capable enough to thrive in more than one industry, it is beneficial to venture into a totally new market in order to spread the risk should external negative factors befall one venture. Unfortunately, not all business owners have the capacity to handle personally two mutually exclusive endeavors and in the end, one or both businesses suffer. In the case of our blogger, what she did was to leave her first business but without merging its best practices, resources and connections first with the excitement and passion her second business interest gave. She left her first business because she admitted to herself that she has lost her passion for it.

Indeed, to succeed with one’s own business, one has to be honest enough with one’s self assessments to be able to bring forth 100% focus and passion towards its growth and flourish. Admittedly, some entrepreneurs discover their real passions a little later than hoped but once one gets to the cross-roads of decisions, one has to honestly analyze one’s self so that the next step, whether leading left or right, will prove to be correct and wise. After all, changing a business one owns is not as easy as printing a resume and finding a new venture.

Use fear to build your Confidence

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Fear is a natural human instinct, even the bravest and most experienced feel fear, and the only difference is how well it is handled. Fear can even be used as a catalyst to do something great, as a stimulant to want to be better.

I have come to witnessed someone spoke in court with the excellent confidence that one glance of him would make someone think his gift is in-born. But the truth is, he was just like anyone of us, he started as a terribly speaker, he trembles in front every time he speaks. His fear overwhelms him when he stands and speaks. But instead of succumbing to the paralyzing effect of fear, he rather did the opposite. He used fear to stimulate him to become better. He went out of his way and learned the required techniques of public speaking. He desired to be better, and so he became way better than he was. He grabbed every opportunity to test his newfound confidence and skill, and then fear gradually become lesser until he was able to conquer it.

He might have stumbled and made a few mistakes as he learned but all the while he makes his leaning greater; he never wavered. He conquered his fear by fear and so succeeded.

We have a tendency to procrastinate towards conquering fear. But fear stays as fear when we do nothing about it. We have to make an active stand on overcoming our worst fears. Fear keeps us from being the best that we are designed to be. So to help you with overcoming fears, it might help you to repeat some Positive Words and Affirmations:

Speak Positive Words

I will conquer my fear
I will not be deterred by fear in any way
I will not procrastinate, I will do it now
I will improve my skills, I will become better
I will seek people’s council and wisdom
I will make mistakes my stepping stone towards progress
I will exhaust all possible ways to improve myself
I will never be conquered by failure
I will succeed at all cost
I will experience growth and progress along the way

Speak forth Affirmations

I am successful in everything I do
I am as brave as any of the great heroes
I am as skilled as the greatest artists
I am poised for all the great possibilities
I am loved
I am secure
I will live to be a blessing for others

You get to choose your own affairs, you choose your fate. Success do not happen by accident, it is always by choice. Therefore, when fear grips you, choose to be confident instead. When you feel like giving up, choose to strive harder instead. Choose to become better than dwindle in frustrations. Choose to be confident.