Here are 5 more of our top ideas to help you minimise tax.

1. Control the timing of your tax deductible expenses

If you know in advance that you will have large tax deductible expenses, sometimes you can choose which financial year you purchase them in, depending on your expected levels of income.  You want to consider the timing of purchasing any items to minimise any potential tax liability.

For example, if you have a large tax deductible expense and your income for a particular year is going to push you into the next tax bracket, it may be best to purchase your item now.  This will lower your taxable income for this year and may even move you down into a lower tax bracket.  Alternatively, in a year that you take an extended holiday or unpaid leave and your income is lower, it may be more beneficial to delay the purchase until the next financial year.  This will help you reduce tax paid in the higher tax bracket and save you more money than if you purchase the item when your income is lower.

2. Investments

Depending on your individual finances or circumstances, making an investment can help you reduce tax. Before you decide to invest, speak to your accountant who can advise if an investment will suit you. Remember, the investment should benefit you now and into the future – there is no point saving a small amount of tax now if it is a poor investment and you end up losing your original capital in the long run.

There seems to be a big trend towards negatively geared property investments as a way of minimising tax. This could be a great strategy for you, but it really does depend on your personal circumstances. So never listen to a smart talking investment company representative; always seek independent professional advice.

There are also tax advantages to be gained by investing in your super fund, however this locks money away until you retire so this strategy may not be suitable for everyone. So the best thing to do before making any decisions is to get advice from a qualified accountant.

3. Adjust your finances to suit your circumstances

For example, couples who have funds invested in a short term account that earns interest may find it beneficial to invest it in the name of the lowest income earner, as they will pay a lower rate of tax on the interest income.

4. Don’t overlook the little expenses

Whether your expenses are for $2, $20 or $200, they all add up over a year.  Ensure you keep every one of your receipts to achieve the best possible tax outcome.

Remember, if you are not sure whether you can claim it, keep the receipt and ask your accountant for advice at tax time.

5. Selling Assets

If you plan to sell one of your assets which may be subject to capital gains tax, there are a number of things you should consider. For example, if you have owned the asset for longer than twelve months you may be entitled to a 50% capital gains discount. And, you may choose to sell the asset in a year you expect to earn lower income so your anticipated capital gain won’t have as big an impact on your tax liability.

If you are looking for a tax agent who works with their clients to ensure that they achieve the best taxable position possible, then speak to us today.  Our experienced team can guide you through the tax maze.

Nobody wants to pay more tax than necessary, especially when they are running a business and need every cent to reinvest in their business to help it grow.  With some careful planning you can easily reduce your tax bill, so here are our 5 top tax tips.

1. Keep good records

Knowing exactly how much you have generated in income and what your expenses are makes completing your tax returns far easier and less stressful.  There are some great systems available that will help you maintain your financial records in a clear and accurate way.  Alternatively, you can hire a bookkeeper for just a couple of hours a week to ensure that your numbers are accurate, thus making the process seamless.  At BSN & Co we offer a discounted bookkeeping service which makes preparation of financial statements and tax returns easier and more efficient.  Ask your accountant if they offer the same service.

2. Be charitable

Did you know that every donation over $2 you make to a registered charity is tax deductible?  After you make any donation retain the receipt then, at tax time, add up all your receipts and claim the total as a tax deduction.

3. Marketing advantages

Many small businesses put off doing marketing as they either don’t have the budget or don’t think they need it.  In today’s highly competitive world, marketing is essential if you want to persuade potential customers to choose your product or company over the hundreds of other competitors.  Not only will marketing improve your bottom line, every cent you spend is tax deductible, reducing your overall tax liability.

4. Watch your spending

Spending for spending sake is not a good idea.  While in some cases business purchases may reduce your tax bill, this can have an impact on your cash flow.  However, if you do need new office equipment, new systems or a car for business purposes, buying them before the end of the tax year would be advantageous.  Before undertaking any big purchases make sure you speak to your accountant.  There are some great ways to structure your purchases to maximise possible deductions, so make sure you seek advice first to obtain a benefit.

5. Tax effective business structures

Many people don’t give much consideration to their business structure; they simply register for an ABN and off they go.  This may be the right way to structure your business, however it’s always worth seeking professional advice.  Some business structures offer you far more in terms of protection of your assets as well as a tax advantage.  Some businesses that have high costs can receive a reimbursement of GST even if their business income is below the $75k threshhold where businesses are obliged to become registered.

Speak to one of the friendly and experienced staff members at BSN & Co today.  We can help you identify how you can minimise your tax liability.

5 Simple ways to reduce your tax bill in 2016

This is one of the biggest goals for most individuals we speak to and rightfully so.  Who wants to pay more tax than necessary and how can you reduce your tax bill in 2016?  You work hard for your money so with a bit of careful planning you can significantly reduce your tax.

Have you ever wondered how your friends and family always seem to get a better tax refund than you or have a far smaller tax bill?  Well, check out these 5 simple ways to minimise your tax.

1. Keep good records

Make sure you keep all of your receipts, even if you are not sure you can claim them.  Keep a file and put all of your receipts in it every week.  Then, when it comes to tax time you can easily review all of the receipts with your tax agent and discard those you can’t claim.  Every year thousands of Australians miss out on claiming deductible expenses and end up paying more tax than they really need to.

2. Offset accounts

Offset mortgages are a great tool for saving on tax as well as saving you interest and minimising your mortgage repayments.  All money you hold in a savings account earns interest and this is taxable.  However, most people will find that they are better off keeping that money in an offset account, foregoing the potential interest they could earn and minimising the interest they pay on their mortgage.

3. Claim for everything you are entitled to

Claiming deductions is one of the best tools in reducing your overall tax payable.  If you have to spend money during the year and it’s work related, then keep the receipts.  Even if the items you bought are both for work and personal use, you can still claim an apportioned deduction.

You will be amazed at what it can all add up to over the course of a year.

4. Medicare levy surcharge

If you do not have private health insurance, as soon as your income exceeds $90,000 for singles or $180,000 for families you will be required to pay a minimum of 1% extra in the form of the Medicare Levy Surcharge.  This is on top of the compulsory 2% Medicare levy paid by most Australian taxpayers.

 So make sure you get all of the benefits of private health care for you and your family whilst saving on any levy surcharge.

5. Seek the advice of tax professionals

In most cases using a registered tax agent will not only save you a lot of time, but will also maximise your tax position.  This is why the ATO’s statistics show 70% of Australians use a tax agent’s services.

The tax laws are CONSTANTLY evolving, and if your tax agent isn’t up-to-date with the latest changes, then it’s a good bet that you will be paying more tax than you need to.  What’s more, since the ATO is using increasingly sophisticated data matching techniques, you could be subjected to a tax audit so it’s important to have an expert on your side.

If you are looking for a tax agent who works with their clients to ensure that they achieve the best taxable position possible, then speak to us today.  Our experienced team can guide you through the tax maze.

Most businesses appreciate how important it is to ensure that their tax preparations are accurate and correct and go out of their way to ensure that they are complying with this requirement.

However, due to some of the complexities of our tax system, it is easy to make a mistake and this can impact the accuracy of your tax return.  Today, we look at some of the most easiest and common business tax blunders we have seen small businesses make.

Check if this could be you!

Don’t worry if you have made an accidental blunder.  Here at BSN & Co we are highly experienced at working with you to correct your tax returns and ensure that all future lodgements are accurate and on time.  We will even liaise between you and the ATO to clear up any errors and get you back on the right track.

1. Underestimating the importance of good record keeping

When you run your own business sometimes things are so busy that keeping good records can be hard.  Receipts go missing, financial records are not always kept as up-to-date as they should be and payments and lodgements can easily be overlooked.  The key is to keep on top of your record keeping.  A couple of hours a week makes it manageable; leave it and it becomes a monster task that you dread.  So, either set aside a regular time each week to go through your records and keep them up to date or, alternatively, hire a bookkeeper to do this for you.  This ensures that your financials are kept up to date and are correctly recorded, freeing you up to attend to all your other tasks.  Here at BSN & Co we have our own bookkeeping team so we can assist you to maintain accurate records.  What’s more, by using our bookkeeping service you will save on your tax returns as we don’t need to waste time rechecking data accuracy.  So free up your time, keep accurate records and save money.  Call us today to find out more.

2. Ignoring your purchase receipts

Keep all of your purchase receipts as these are costs you can claim in your tax returns.  Not keeping them safe will not only cost you $$$ that you can’t claim in your tax returns, it will also be very difficult to calculate your annual business costs accurately.  This makes it much harder to assess where you are from one month to the next, plan and also evaluate your pricing to maintain a good profit margin.

By keeping an eye on your expenses and retaining all receipts you will save hours of time and stress when it comes to preparing your tax returns, not to mention the $$$ in tax you will save.  Speak to us today – we can help you create a system that makes monitoring and keeping track of your purchase receipts child’s play.

3. Not paying your employees’ superannuation

Paying superannuation contributions for all your employees at a rate of 9.5% is a legal requirement.  We have seen companies put off making these payments to try to improve their business cashflow, however this is not advisable.  If you are struggling with your cashflow, speak to us today and identify what you can do about it.  Withholding superannuation is a very short term answer but it can land you in big trouble with the ATO.  In recent months they have been far more aggressive in enforcing the need to pay superannuation, forcing companies into liquidation or holding directors personally liable, which can lead to them being declared bankrupt.

If you’re in a muddle with your superannuation requirements speak to us today.  We can meet with you to gain an understanding of what is going on with your business and work with you to correct any issues.  Where necessary we can deal with the ATO on your behalf to come up with a workable solution for both you and them.

Managing your financial and taxation requirements is far easier when you have a reliable accountant on your side, so why not call us today for an obligation free meeting?  We can review your current business situation and identify a plan to help you get to where you want to be.

10 simple ways to minimise business debt

Poor cash flow can lead to business debt as you build up creditors without recouping money from your debtors.  Add to this a couple of bad debts and your business finances can quickly take a turn for the worse.  This is why it’s so important to stay on top of your cash flow and take action to improve it.  Check out our 10 simple steps to minimising your business debt.

1. Check out potential clients before you work for them

Do they have payment-related court judgments against them?  Talk to members of business associations, your friends, business partners, suppliers and peers.  Many businesses work within a small network of other businesses, so late payers are likely to be easily identified.

If you do decide to work for clients with a poor payment record, at least you’ll be aware of it and can take steps to prevent it becoming a problem for you.  For example, you might insist on partial or full payment before you begin work and only take on small jobs at first until you build up experience with them.

2. Define short payment terms

If you’ve completed your work in a matter of days, why wait six weeks for payment?  Make your terms clear from the start in contracts with your clients and on your invoices.  14 days is common and even 7 days is unlikely to be a problem for most clients.  You could always add a discount incentive if they pay on time.

3. Keep track of your debtors

You can’t chase debtors if you don’t know who they are and how much they owe!  If your accounts are currently kept on scraps of paper or on an old spreadsheet then it’s time to upgrade.  Get some good accounting software installed and make sure you keep it updated so you’ll be able to tell at a glance who owes you money and how much.

4. Send prompt reminders

It can help to send reminders to late payers as soon as invoices become due.  Start by sending an email.  If there’s no response within 2 business days, follow up by phone.  The best way to deal with a late payer is to prevent them becoming one in the first place.  Be proactive about this.  Good accounting software will let you set up automated reminders that will take a lot of the effort out of the payment chasing process.

5. Payment is your right

As a business owner, it’s your right to receive payment for the work you do.  As long as you’ve fulfilled the agreed contract you have the right to be paid on the agreed terms.

The client can’t change the payment terms without your approval, so don’t feel shy, embarrassed or presumptuous when asking for your money.  It’s your money and you have the right to be paid.

6. Record all communications

You should do this anyway, but make sure you note the time and date of all phone calls with clients and what was discussed.  Keep copies of emails, letters, text messages and any other form of communication.  This will help you resolve disputes later if any occur and will also be useful if you have to go to court.  At that point, the more information you can provide, the more likely it is that the court will make a fair judgment.

7. Don’t get personal

Don’t be rude.  Be polite but firm.  State the actions you’re planning to take clearly and without anger.  If necessary, wait a day between drafting an email or letter and sending it.  You will get better results by leaving emotion out of your communications.

8. Ask for help

Don’t be afraid to seek help.  A debt collection agency will be able to advise and assist you in collecting your outstanding debts.  It will cost you a certain percentage of the debt, but it will be money well spent.

9. Take the legal route

When dealing with a persistent late payer, you may need to consider lodging a claim with the Magistrates Court which can assist you to recover the debt.  This may mean spending time away from your business to attend hearings, but it will be worth it to reach a satisfactory outcome.

10. Follow the recommended process

You will make things much worse by attempting to take matters into your own hands.  Threats, intimidation and other negative behaviour will only make the situation worse for you, so stay calm and follow the process.

Dealing with debtors is part of running a small business. Obviously it’s not a fun part, but it’s necessary if you want your business to grow.  So don’t let your debtors become a problem. By taking note of the steps above it will make it easier to collect money owed to you.  If you want help and guidance with setting up your invoicing and debt collection processes, speak to the team at BSN & Co today.  We can help you identify a process that will work for your business and maximise your chances of success.