When Should a Private Individual Hire an Accountant?

As an individual, you may not ever think about hiring an accountant, assuming this type of professional only works for businesses and perhaps even the very rich. You may assume their services are also not necessary, as you may be able to file your own taxes and handle your own banking and investments yourself. However, note when it’s good to hire an accountant even as a private individual and even if you don’t consider yourself very wealthy. This can ensure that you protect your monies and your estate and also have the smallest tax bill possible at the end of the year.

1. If you get a substantial raise

Earning substantially more money than you did last year should mean a call to an accountant. You may be liable for more taxes at the end of the year because of your increased income and should therefore do what you can to reduce that tax bill now, before tax time. You may also want to protect your earnings through investments, trust funds for your heirs, and the like, and an accountant is the best professional to advise you on these matters.

2. If you’re ready to plan for your heirs

Writing a will usually means the services and advice of an attorney, but planning for your heirs should be done with an accountant. He or she can note if a trust fund is the best way to protect your assets from being taxed or if you need to spend down your assets and estate in order for your heirs to face a smaller tax bill after your passing. Estate planning should always be done carefully and with the advice of someone who knows not just probate and other such applicable concerns, but how to protect your monies overall.

3. If your tax bill suddenly changes

If you realize that your tax bill suddenly changes from one year to another, you may want to hire an accountant to find out why. You may not have included certain deductions as you should have or certain changes in your life may have resulted in a higher tax bill. In turn, you may want to do what you can to offset this bill for next year. This can mean contributing to charity, deducting certain expenses for business and work, and so on. Rather than simply accepting your higher bill, talk to an accountant to find out the best way to protect yourself each year, moving forward.

Different Types of Auto Extended Warranty

There are different aspects that you must evaluate when purchasing new or used vehicles. This will help you identify an automotive which matches your requirements without resulting in financial burdens. One of the most important elements to consider is the extended warranty. This is an aftermarket warranty coverage that remains active after the basic manufacturer’s warranty expires. The additional period can vary depending on factors such as the car model, your budget and the auto dealership. Extended warranty plans are favourable, because they can be tailored to suit specific needs. In addition, the coverage will protect you from potential costly repair costs if important components are damaged. Here are the main types of covers to choose from if you are thinking about getting an extended warranty.

Bumper to Bumper

The bumper to bumper coverage is a comprehensive warranty that provides the best protection for new vehicles. It is technically known as an exclusionary cover, but other terms such as luxury coverage or wrap plan are also used. This warranty will cover almost all the components of the vehicle, so it is fairly expensive to purchase. Moreover, it is not available for old used cars because of the risk involved. On the other hand, you should note that there are components that are not included in this policy. These will be listed in the documentation, so you should ensure that you know the details before accepting the warranty.

Stated Component

Stated component warranty is technically known as the inclusionary coverage. It is a good extended warranty plan that covers almost all the major components in the vehicle. The level of protection is not as excellent compared to the bumper to bumper, but you will get a plan for most used vehicles. If your vehicle does not qualify for the luxury choice, the stated component is a good alternative. The policy will provide an explicit list of all the components that are included in the cover. Most dealerships will allow you to choose the level of coverage you need by identifying the components you want listed in the warranty.

Powertrain Coverage

As implied, this extended warranty plan is designed to cover the vehicle’s powertrain. This includes the most critical auto modules like the engine and the transmission. You can also purchase an enhanced powertrain cover, which covers a few more components like the AC unit and the starter. This is a good choice for used vehicles which can be costly to repair in case of breakdown.

You should explore all your extended warranty options before settling.

5 Scenarios Where You Need to Seek Taxation Services for Your Business

Tax is an important revenue stream for the government and just like anywhere else in the world; your business will be required to fully comply with tax laws. Unfortunately, taxation law is too complex for every business owner to understand in whole. To ensure compliance, it’s therefore important to seek taxation services from tax accountants and consultants who understand the process inside out. As a business, taxation services will be greatly needed if you’re in the following circumstances.

When starting a business

If you’re starting a business, it is imperative that you seek appropriate financial advice on tax matters. For one, you will get to understand which business entity is most favorable in regards to tax policies. A tax accountant can also help you plan your business structure. They can help you allocate shareholding, establish financial policies that will save you money and also deal with the relevant filing for entity registration. In the course of your business, they can help manage your accounts to ensure you have a healthy cash flow system.

When moving your business to Australia

If you’re opening a business branch in Australia or transferring your business here from another country, understanding financial and taxation regulations is crucial. A taxation services firm can help you in several key areas such as business registration, business structure formation, valuation, Australian tax law, banking law and insurance law, among others. This financial framework can help mold your business within the right legal setting and with the edge of sound financial advice.

When filing tax returns

No matter what kind of business you’re operating, you should seek taxation services during tax season. Tax accountants can take over the laborious chore of balancing your books and filing your tax returns on your behalf. This ensures you adhere to the law and are not charged for late or nonexistent filling. Seeking the help of tax accountants also ensures you file the right amounts. As a perk, tax accountants can help you maximise your tax refunds so that you do not pay more tax than you ought to.

When seeking to minimise tax credit

Lastly, taxation services can help streamline your business in regards to financial policies. Your tax accountant can help you formulate progressive structures on matters such as salary payments & superannuation, stamp duty, capital gains tax, land tax and other areas touching on your business interests. This will help you save money by maximising deductible expenses and channeling your money to more tax-friendly ventures.

As opposed to seeking taxation services on an ad hoc basis, the best policy is to retain the services of taxation accountants/consultants on a permanent basis. This way, your business will always be ahead of the curve on matters finance and tax. To get started, consult a taxation services firm like P. Stokes & Co (Aust) Pty Ltd and find out how they can add value to your business.  

3 Sensible Ways to Invest a Tax Refund

The life of a freelancer can be financially uncertain. Unlike people who have employers, you do not have a fixed income each month, and there is actually no guarantee of income at all. Some months you might find that you do better than expected whereas at other times it might seem like you can barely hold down your rent. And so receiving a tax refund at the end of the tax year can be a very nice surprise for a freelancer. Such a nice surprise that it can be tempting to splurge the money on an extravagant shopping spree.

In your head, you probably know that’s not the very best idea, so here are a few more sensible ways to play with a tax refund.

Pay Off a Credit Card 

When you have a difficult month of freelancing, it can be tempting, and perhaps necessary, to place some expenditure on a credit card. But that spending doesn’t just disappear. You have to pay it back sooner or later. And if you pay it back sooner, you will be spending less on your debts in the long run. Sure, that holiday in Thailand might seem like a great idea, but if you are holding on to credit card debt and going on holiday, that might not be great for your financial solvency.

Kickstart Your Pension  

People who hold down regular jobs are often encouraged to start a pension and their employers will sometimes make contributions towards that pension too. When you are a freelancer, nobody from HR is giving you this kind of advice and so it is all too easy to let long-term financial planning fall by the wayside. If you don’t have a retirement fund yet and your excuse is that you have nothing to invest, you have everything you need to get started with the sum from your tax refund.

Start a University Fund 

Being a freelancer can be tough, but being a freelancer and supporting a family is even harder. Children grow up fast, and to enter university, they will probably need a helping hand from Mum and Dad. Your tax refund could potentially be enough to fund your child’s higher education for a whole year, and what could be a better investment than money put towards the future achievements and success of your child?

Think long-term and your tax refunds could really help to improve your quality of life for years to come.

In Your Fifties? Still Haven’t Saved for Retirement? Five Reasons You Need a Financial Adviser

If you are in your fifties and are worried about having enough money for your retirement, it may be time to meet with a financial adviser. Even if you have never sat down to talk about your finances, you should think about contacting one of these professionals. Wonder why their help is so invaluable at this point? Take a look at these five reasons:

1. You can’t afford mistakes

When someone starts saving in their twenties or thirties, they have a lot of time to weather investment mistakes. They can watch their stocks or property investments rise and fall in value, and they can weather their mistakes in many cases.

In contrast, if you are 15 years or less from retirement, you can’t really afford to weather any investment mistakes. Instead, you need a financial adviser to guide you quickly into the most financially advantageous investments so you are prepared for retirement.

2. You need an assessment of your retirement finances

If you have been working, you likely have money built up in a superfund, and you need to figure out how much money you will have coming in after retirement. In some cases, if you don’t have enough projected money coming in, you may be able to remedy that by working more during your fifties. A financial adviser can help you understand where you are and how to react.

3. You are at the height of your earning potential

Most people are at the top of their career in their fifties. No, they may not see the quick growth and advancement they experienced in their thirties, but they are, in most cases, earning more than they will during any other decade.

Even if you have never talked to an adviser before, now is the right time to start, You are at the height of your success, and an independent financial adviser can help you figure out the best direction to go.

4. You have a lot of responsibilities

You are at the pinnacle of your career, but you also have your kids’ uni tuition and retirement savings both competing for your financial attention. Most people in their fifties have a lot to juggle financially, and an adviser can help you decide which items to prioritise.  

5. You are in the perfect spot to decide financial issues related to aging

Your fifties are also the perfect time to make some hard decisions about finances as you age. Now, while your faculties are fully intact but you are also old enough to grasp the weight of such decisions, you can make some financial decisions about aging. A financial adviser may be able to help you set up a power of attorney, a living will and other legalities related to aging and finances.

For more information, contact a business such as Maddern Financial Advisers.

Some Expenses That Can Deplete Your Retirement Savings

Although many people take care to save enough money for their retirement, they find that now they are older, they have to pay out for additional costs that they were not budgeting for. This can quickly eat away at the saved money and leave a person with barely enough – or in some cases, not enough – to get by in their latter years. This article examines some expenses that can cause you to lose some of your savings.

Fitting Your Home With Medical Equipment

When a person is in their 40s or 50s, getting around their own home is not something that they have to stop and think about; it is done naturally. However, as you get into your later years, stairs that were not a problem before can suddenly become very difficult to climb. In some cases, a set of stairs can isolate a person from the rest of their home. Many people will install equipment in their homes, for example, stair lifts, new showers and baths, that are easy to get in and out of and railings or ramps to access their home easier. These types of upgrades can be very expensive, and can take a considerable chunk out of any savings.

 Unable To Do It Yourself

This is also an area that many people do not think about when they are younger. Cleaning windows, cutting grass and gardening, and even cleaning your own home is so natural for people in their 40s and 50s that they fail to budget for a time when this type of work will need to be outsourced for a price. People who run their own gardening or cleaning businesses are there trying to make a profit, and this means that it can be expensive when you have to hire out three or four businesses to do work around and inside your home. Some of the work needed to be paid for is regular, and this can soon eat away at any savings.

Supporting Adult Children

In today’s age, it is common for a child to still be living with their parents in their 20s and 30s. Many children do attend further education but come out of college with no savings, high student debts and low prospects for finding a financially rewarding job. This can mean that they rely on their parents for things such as loans to help boost their incomes, advances to help with a marriage, or even for money to help put a down payment on a house of their own. This can rapidly decrease your own savings.

One of the best things a person can do it to take the time to understand their needs – and plan financially – for their later years. Contact a professional for aged care financial advice.

How To Identify The Best Business Insurance Companies

Your business may mean your life (for most entrepreneurs), so it is very important that you identify the best insurance companies so that you buy your business insurance from them. This article discusses some factors that will guide you in selecting the best insurance companies.

Check the Rating of that Company

Financial ratings are very good pointers to base on when judging the health of an insurance company. Ratings vary from “A” to “F”, with “A” indicating very sound financial health while “F” shows that the financial health of that company is not sound. You can visit the department of insurance website in your state so that you see which insurance companies have the highest ratings. Insure your business with one of those companies whose rating is high.

Follow Insurance Industry News

The news about different insurance companies can also give you clues as to which companies are performing well and which ones are struggling. You can take this search for news a notch higher by doing an internet search having search terms like “financial challenges” added to companies that you have interest in. If the search returns only positive information, then go ahead and buy business insurance (like liability insurance) from that company. If the search returns a lot of negative information, look for another company.

Follow the Stock Exchange

Stock prices normally give an indicator about the current and future health of listed companies. If the insurance company you are considering getting business insurance from has had its stock trending upwards for some time (such as a year) then that company is performing well and that is why investors are rushing to buy it shares. Avoid insurance companies whose stock is on a downward trend since such market sentiment indicates that the company is not performing well and that is why investors are pulling out their money.

Complaints Against the Company

Entities like the Better Business Bureau can be a good place for you to find out how many complaints have been registered against the company you are considering buying business insurance from. If complaints are very many (for instance dozens of complaints filed in less than a month), be wary of such a company. Only buy business insurance from a company whose record is untainted by multitudes of client complaints.

As you can see, there is a lot that you need to do before you buy insurance from a particular insurance company. Use the tips above as guidelines to help you sort through the huge array of insurance companies available in your area, and you will be able to pick the best.

Equipment Purchase Problems? What Are Your Options?

Business expansion can be a Catch-22 situation. How do you spend the money you don’t have, in order to get the money you need? It can be frustrating. You don’t have to tie up your cash when considering the purchase of that equipment; there are a number of different asset finance options available today. What should you consider?

Equipment Loans

One of the first ways to help align your repayments to suit business cash flow is to consider equipment loans. In this case, you will actually own the asset from the beginning, which might be more advantageous in your case. The asset will become the security for the loan and in many cases you won’t need to put a deposit down against the purchase. You can place the asset against your tax liability and consider it for depreciation on your books. When you take ownership of the equipment this way, your bank can register what is known as a “goods (or chattel) mortgage” for the asset. Some organisations may choose to trade in an old piece of equipment in order to reduce the finance costs.

Finance Lease

A finance lease means that the bank owns the asset and will lease it to you for a specified period. Usually, the asset will have residual value at the end of the lease agreement and this may give you an option to take ownership of it at that time. Optionally, you could take out a separate lease for the residual value at the end of the initial lease period, if needed. When a residual value is given to the asset it will reduce the size of the monthly payments.

Hire Purchase

Hire purchase is a different animal. Here, the bank will buy the equipment for you and will then hire it to you for a specified period. In this case, the interest portion of your repayment can be considered as tax-deductible. This option also allows you to use your cash for day-to-day activities, rather than tying it up in the asset.

Rent

Because certain items of equipment, especially in the technology field, can go “out of date” pretty quickly, you may choose simply to rent them instead of buying. These options are also usually tax-deductible and you simply return the equipment at the end of the agreed period.

Sale and Lease

If you already have certain items of equipment that are effectively tying up a lot of your cash, you should consider a sale and lease, or hire back agreement. Ask the bank to buy the equipment and either lease it or hire it back to you.

For more information, check out companies such as Oatram Finance & Leasing.