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Essential Information You Need to Know About Your TFN

A Tax File Number (TFN) is a government-issued number that serves as your unique identifier. This account is associated with your tax returns, benefit payments and superannuation funds. Scammers may perpetrate identity theft and fraud in your name if it is in the hands of the wrong people. It’s preferable if you keep it in a safe place.

To protect yourself, you should never share your TFN with anybody else. As we’ll explain below, in only a few specific cases, is there a need to reveal your TFN.

The Use of a Tax File Number

You need a Taxpayer Identification Number (TFN) as soon as you start working at any employment. Your employer can tax you at a higher rate if you have not provided them with the information they need. Before you start your new work, it’s a good idea to register for one so that you can offer your new employer your TFN on your first day. The Tax File Number Declaration form is used to notify your employer of your TFN. It asks questions about your residence status and other tax-related topics.

If you don’t mark the “Yes” box (to “Do you want to claim the tax-free threshold from the payer?”), you will wind up paying more taxes than you should since you’re entitled to a tax-free sum of $18,200 per year. Remember that you only need to claim this amount from one employer in a given year. If you claim it from many companies, you may end up with a tax bill since you may not have paid enough tax for the year.

There are a few additional circumstances in which you may need to provide your tax file number, such as claiming Family Tax Benefit and other Centrelink benefits. If you need to establish a new bank account or apply for an Australian Business Number, you will also require your TFN.

Application for a Tax File Number

You may apply for a Tax File Number on the myGov website or in person at a post office. Alternatively, you may ask your tax advisor to apply for a TFN for you.

If you apply on your own, there is no fee. You must provide a secure and proper postal address to ensure that the package is sent to you after completing the application.

They will send your tax file number to you within ten days of your application, but it may take around 28 days for the ATO to inform you of your application and for you to receive it.

Ways to Find Your TFN

People lose track of the original letter they received over time. Use your Superannuation statement to locate them. Check with your bank, contact your employer, or check your payslips to see your TFN. Finally, you may contact the ATO or look at the Notice of Assessment from the ATO to get that information.

Lost or Stolen Tax File Number 

Contact the ATO immediately if you suspect that your tax file number (TFN) has been stolen or disclosed to someone else. Don’t be a slacker, and don’t simply put things off because it might lead to financial ruin.

To request that you give your TFN through email is never an acceptable practice from a tax professional. They shouldn’t ask you to fax it to them or put down your number somewhere, either. It puts your privacy in danger.

Once your email or the other person’s has been compromised, your TFN can be used to defraud you.

Conclusion

A Tax File Number (TFN) is a one-of-a-kind identification number provided by the Australian government. All your tax-related details and benefit payments are connected to your TFN. Keep in mind its importance and safeguard it properly.  

If you need tax consultants or accountants to assist you in organising and completing your tax statements on time, work with SMB Accounting. We provide a comprehensive range of high-quality accounting services, so you won’t have to worry about the time-consuming process. Hurry and get in touch with us now!

 

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Doing Tax Returns: Answering Four Common Questions

Filing tax returns can be a rather confusing process. This is mainly due to a general lack of knowledge of this process. Now, this isn’t something that you should be ashamed of as it’s understandable not to know how to navigate this process. To help you out, we thought it would be useful to go through some common questions that people have on filing tax returns. If this is something that you’re interested in learning more about, read on as we answer the four most common questions about doing tax returns.

Why Do You Have to Do an Income Tax Return?

Your income tax returns are a means of declaring your income and expenses during the year. This gives you a pretty accurate estimate of what your tax returns will likely be once everything is filed. 

Do You Need to Do a Tax Return If You’ve Done Your Business Activity Statements?

The main thing you have to understand about this is that there are a slew of different taxes that you have to pay. Goods and Services Tax relates directly to your Business Activity Statement. Basically, this means that all you’re doing when you’re doing your Business Activity Statemen is working out the difference between the Goods and Services Tax that you’ve collected and the Goods and Services Tax that you’ve paid during the quarter.

Income Tax is separate from Goods and Services Tax as it is concerned with your income.  Now, if you’re not registered for Goods and Services Tax and do not file Business Activity Statements then any income you receive or expenses you pay can be included in your tax return in full.

What Do You Need to Include as Income?

While this question seems obvious, there’s more to it than you may think. Basically, anytime you are paid for a good or a service it’s best to record this for income tax purposes. With that being said, the amount you are paid will matter as it will dictate whether or not you need to pay tax for it. If you are an Australian resident taxpayer, the first $18,200 of income that you receive is tax-free. This is called the tax free threshold

What Can You Include as Expenses?

If the expense is tied to your income then you have to include it in your tax return. With that being said, expenses that are valued over thousands of dollars are subjected to specific rules set by the Australian Taxation Office (ATO). To add to this, there are also specific items that the ATO does not allow to be claimed as an expense. The tricky thing about this is that it changes each year so it’s best to keep up to date with their policies.

Conclusion

Hopefully, this article proves to be useful when it comes to helping you accomplish your tax returns. While this process can be rather tedious, the information that we’ve laid out here should help you navigate any issues you may have. If you have more specific questions that we didn’t get to cover here, it would be best to consult with professional tax consultants.

SMB Accounting has knowledgeable tax consultants who can help you get started with taking care of your tax refunds. We make sure that our clients use their tax refunds wisely, and we also offer other services such as accounting and business advice. Contact us today for a consultation!

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What Auditors Do and Don’t Do When Auditing Your Company

Why do such audits even exist in the first place? It happens because of problems on your end. Everything from questionable financial reports and the like can force third parties to audit your company to ensure you are not hiding anything. For instance, they will check whether what’s recorded in the balance sheets is actually what is being owned and what is owed, or whether the profits and losses recorded are accurate. Regardless, many companies decide to get their business audited for the sole purpose of catching any issues that they can solve to run their business better.

That being said, if you are here today looking to understand what exactly happens during an audit, we will share with you what auditors do and do not do when carrying out the task:

What Auditors Do

Generally, auditors will tell you the scope of the audit work that will occur in your company. However, additional procedures can be performed under the request by management or even the directors. Regardless, auditors will maintain as much independence as possible from the heads of the company, ensuring that all the tests and judgements are made without bias. Depending on the risks and controls they have identified, they will determine how extensive their audits will be and what kind of audit procedures will be carried out.

As for what kind of procedures they will carry out, there’s a few that they can do. For example, they can send formal written questions or ask informal oral questions to various individuals in the business. They can also examine accounting records or any other documents. Finally, they can obtain written confirmations from different sources, such as a debtor, to see if your record checks out.

What Auditors Do Not Do

While auditors will work to try and identify any flaws or issues in your business, there are just some things they simply won’t do. For example, auditors will not check the information given directly by members of the organisation, and they will not check every single figure in a financial report. Auditors are incredibly selective at what they want to check, and they will only check and see portions of different information.

Apart from what they won’t do, there are other things they also cannot do. For example, they cannot be there 24/7 to keep auditing your documents. The audits are carried out within a specific time frame and focus on different areas of the business. Once that time frame is up, they leave. Another thing they cannot do is predict the future of the business. They cannot judge what might happen in the future, so they cannot tell you what your business will look like in a few years or even months.

Conclusion

While getting audited is almost never fun, it is sometimes necessary. Some problems occur without getting noticed, leaving you with little to no chance to solve them until it is too late. As such, it is vital to reach out to professionals to assist you. Otherwise, you’re setting yourself up to waste a lot of your time and possibly even money running a business that isn’t controlling its finances and other aspects properly. That said, if you want to audit your company to ensure everything is performing smoothly, be sure to work with professionals. They can ensure that the audit is completed quickly and efficiently, allowing you to get the information needed without too much trouble to improve your business!

SMB Accounting is an accounting firm offering individual tax returns, SMSF audits, and a few other small business accounting services to help companies stay on top of their finances. If you are looking for an SMSF audit in Australia, get in touch with us today!

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Record Keeping Tips for Better Tax Refunds and Deductions

Tax deductions are very helpful resources at the end of the taxable year. To get the correct amount for claiming, it’s important to keep an accurate record of your books. Good record-keeping is important anyway to make sure you are abiding by the proper regulations.

If you don’t properly calculate your deductions, you essentially lose money. Statistics even show that Australians miss out on millions of unclaimed tax deductions every year. Throughout the audit process, you’ll rely heavily on the records you’ve kept to get what you’re entitled to.

Read on for some tips to better record-keeping in preparation for tax time.

Keep Your Receipts Throughout the Year

You should make it a habit to store your receipts safely throughout the year. This will give you the proper references for your claims, especially if the Australian Taxation Office (ATO) brings any of your claims into question. This will help prevent you from paying any more tax than you have to.

A good way to organise this is in chronological order. This way, you can easily get a reference of your receipts from the date and time of the transaction. It also ensures that you can keep track of your expenses as you go along. You can also segregate your receipts under categories depending on the type of expense. 

Make sure you also keep a digital backup of your receipts for safety. In case of loss or damage, you can always refer to your digital files.

Record All of The Income You Receive During the Year

You also need to keep track of all the income you receive. This includes any salary or wages from your regular job. Beyond that, you also need to take note of investments, managed funds, allowances, dividends, and earnings from any rental properties or room letting. 

If you have a full-time job, your employer will be responsible for providing you with an annual statement with all of your yearly earnings. If you have a managed fund or real estate property, you should make sure you get that same summarised statement from your agent or fund. 

You should also note that any asset you acquire or dispose of should have a record with you. It is recommended by the ATO to keep these documents for five years from the day you are no longer required to produce any capital gains tax (CGT). 

Record All Your Tax Deductible Expenses

Finally, you need to make sure you have proof of any and all tax-deductible expenses. This comes down to receipt keeping again. If you’re not sure what applies, the following categories are considered eligible for a tax refund:

  • General expenses, including charity donations, private health cover, income protection costs, tax agent fees.
  • Work-related expenses such as license and certification fees, union fees, professional memberships, and gifts.
  • Expenses on education, like course fees, textbooks, travel costs, food and accommodation during school trips or lessons, and library fees.
  • Work-related purchases and travel expenses. This includes any equipment for your office, like furniture, organisers, computers, software, technical tools related to your field, and any electronics. Any purchase worth more than three hundred dollars will require a claim with their decline in value incorporated. For travel, this includes tolls, vehicle costs, parking, public transportation fares, flight expenses, and food and accommodations for work trips. Those that work from home can also make claims for internet, postage, and electricity on top of the previously mentioned items.
  • Newly acquired asset costs and expenses for rental properties and investments.
  • Recently disposed of or sold assets.
  • Expenses on protective clothing and uniforms.
  • Any expenses for disability and aged care.

Conclusion

If you can stay on top of the items mentioned above, you’ll have a much easier tax season. Calculating your income tax returns and deductibles can do wonders for your financial health in the long run. A good accountant should be able to help you get through these documents easily and calculate them properly. 

To prepare for the next tax season and make sure you have the right audit process, reach out to SMB Accounting. We provide individual tax returns and small business accounting. Contact us and we’ll connect you with an accountant from the Sunshine Coast ready to accomplish your accounting needs.

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3 Tips To Help You Save More Money During Tax Season

Taxes are nothing to be excited about, and for many people, it is nothing but a hassle. Plus, it is an activity where individuals lose money, so it isn’t something people look forward to. However, what is to be excited about is the many ways one can reduce the taxes one has to pay overall. In other words, there are many tactics to save money on taxes, and it all starts even before tax time arrives!

Today, we’re going to share various tips on how you can prepare yourself for tax time to maximise savings:

1. Don’t Forget To Donate

Every donation that’s over $2 is tax-deductible. As such, it is a great idea to give back to the community, and donating itself is a sensible way to spend your money. After all, not only do you better the organisation or group you contributed to, but you also build your reputation as a company that cares. 

That said, remember that when you do get your refund, know that you won’t see your donations come back immediately. It’ll come back slowly as a percentage, and the amount will come off your taxable income.

2. Claim Anything Job-related

Most of the things you purchase that are job-related can be claimed. For instance, an office chair, an office table, a new printer, and the like that are all used for work can be claimed. Even things that are partially used for personal and commercial use as a vehicle can also be claimed, but you just need to make sure that you properly calculate the amount to be deducted.

If you are unsure whether an item you purchase can be claimed, hold on to the receipt. You can reach out to an accountant to help you understand whether it is claimable.

3. Get Your Expenses in Before June

June is when tax time starts, and for any expenses that come after June, you’re going to have to wait a full year before you can claim on them. As such, if at all possible, get all the expenses in before June. 

Remember, the only way you’re going to get your expenses in before June is if you’ve put in the hard work of ensuring they do in the first place. If you find yourself falling behind or becoming a little too relaxed with your record-keeping and the like, then it is time to remind yourself to step up.

Conclusion

Tax is never easy, and many people easily get lost trying to stay on top of their taxes, let alone trying to claim from it. If you are facing the same issue, chances are you might run into tax issues that lead you to costly consequences and limit how much savings you can make. Following the tips above can help, but consider hiring an accountant if you still find yourself lost amidst tax seasons! Their expertise can help you stay on top of your taxes all year round, and when the time comes for tax time, they can ensure that you meet all your tax obligations and make the most out of your savings!

SMB Accounting offers various small business accounting packages and other services such as audits and tax returns to help small companies maintain their financial well-being. If you are looking for accountants at Sunshine Coast to help you with tax returns, work with us today!

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Company Director? New Director ID required!

All company directors will now be required to apply for a director identification number (DIN) by 30 November 2022. The main purpose of DIN is to trace or identify the director’s history or director’s relationship across different companies. This legislation will help the regulators investigate for any unlawful activity, particularly the phoenix activities, to promote good conduct and improve the integrity of corporate data.

Starting November 1,2021, directors can now apply for DINs using the newly formed Australian Business Registry Services (ABRS). All the directors must apply for themselves because they need to verify their own identity. It is required that the director must set up first a myGovID before starting the application and usual identity documents must be provided such as driver’s license, passports, birth certificates and Medicare cards.

What is a DIN?

A Director Identification Number is a unique identifier you need to apply for once and will keep forever even when changing company.

When to apply?

The dates that directors will need to apply for DIN will vary depending on when they become a director.

Corporation Act 2001 (Corporation Act)

Date of becoming a director Date DIN Application to be made
On or before 31 October 2021 By 30 November 2022
1 November 2021 to 4 April 2022 Within 28 days of appointment
On or after 5 April 2022 Before appointment

 

Directors of the Indigenous corporation which are governed by the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (the CATSI Act) have separate obligations to apply and have a further 12 months to obtain DIN.

Date of becoming a director Date DIN Application to be made
On or before 31 October 2021 By 30 November 2023
From 1 November 2022 Before Appointment

 

Failure to Apply for a DIN?

Under the new legislation, there will be both civil and criminal penalties for non-compliance, using multiple Director Identification Number for one person, and or uses false information or misrepresentation in their application.

 

How can we assist you?

If you have any questions regarding the new legislation discussed and how will this impact you or your business, please contact our firm SMB Accounting.

 

 

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4 Tips to Help You Discover and Hire the Right Accountant

Many companies believe that they are alright without hiring an accountant by their side, that they can manage their finances without the help of a professional. While this is possible for small companies, the larger the company gets, the more they realise that staying on top of finances while managing other business functions is increasingly challenging. In fact, this balancing of activities can pull down productivity and work quality, leading to more errors everywhere and including accounting. As such, working with an accountant on the get-go is vital to ensure the company’s flow of cash is kept in check, ensuring each dollar is used to its fullest potential. 

That being said, if you are interested in hiring an accountant for your business, you’re in luck. Today, we’re going to share a few tips to help you discover and hire the best accountant to help you manage your finances:

1. Understand What You Need

The first thing you must always do to pick the right accountant for your business is to know what you need. Do you need bookkeeping services? Are you looking for a short-term or a long-term partner? What other services do you need from an accountant? By answering these types of questions, you create a list of requirements to make sure the accountant you work with meets your expectations. This is because different accountants offer different services and even has a different specialisation. 

2. Take Advantage of Referrals

Never underestimate the power of referrals. If other business owners who are similar to you have found success with the accountants they’ve worked with, their tips and pieces of advice can be invaluable to you in your search for accountants. You may be referred to individual accountants or even the business that employes them. Of course, you can up your research by checking online reviews, checking their social media, and even taking a peek into an accountant’s or accounting firm’s website. This will help you quickly discover potential accountants that will help you meet your goals.

3. Know What to Ask

When you finally find an accountant you like and talk to them, you should be asking plenty of questions. For example, ask about their qualifications, what the fees are, what accessibility they offer, and what time frame they work to complete their activities. If you are reaching out to a firm, you can also ask who will work with you. These questions will help you identify what exactly you can expect out of them and whether or not those expectations are what you’re looking for.

4. Interview Several Candidates

You might be tempted to stop looking for accountants on your first decent accountant to work with. However, this is a no-go. It is far better for you to spend the time interviewing several candidates to find the best one, not an “okay” one. The best accountant will make a difference, and that difference is that they can help your company stay on top of finances and use it to maximise growth!

Conclusion

It will take some time for you to find the perfect accountant to work with to help you stay on top of your finances, but don’t take any shortcuts. If you do, you only run the risk of working with an accountant that will barely meet your needs and expectations, putting you in danger of financial trouble. As such, take your time. You might not find one today, you might not find one tomorrow, but you will eventually discover the accountant or accounting firm that offers exactly what you need, ensuring that your business’ future is as bright as it can be!

SMB Accounting offers various accounting services, including tax returns, audits, and more, to help companies manage their financial needs effectively and efficiently. If you are looking for excellent accountants in Australia, contact us today!

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4 Important Tax Deductions That You Have to Know About

While we often take it for granted, taxes are incredibly important. This is why you’ll want to invest an ample amount of time to make sure that you get everything right. Failing to be thorough when it comes to taxes will surely lead to you losing a significant chunk of money.

When it comes to doing taxes, one of the most important things that you’ll want to focus on is deductions. Through deductions, you’ll be able to minimize the amount that you have to pay in taxes. The tricky thing about this is that people tend to either forget or are completely unaware of the deductions that they are eligible for. This is why we thought it would be useful to put together a brief refresher on this subject. If this is something that you’re interested in knowing more about, read on for a list of four important tax deductions that you have to know about!

Tax Agent Fees

Many of you may not know this but the fees that you pay to a tax agent or a tax consultant are actually tax-deductible. This means that if you made use of their services while preparing and lodging your tax returns last year, then you are able to cite it as a deductible. And while this won’t completely offset the costs of the services, this is another incentive to make use of professional services when filing for your taxes.

Union Fees

If you’re part of a union, you’ll be glad to know that your union fees are tax-deductible as well. To add to this, members of groups that are related to your profession that charge a fee for membership are also granted a tax deduction on the fees that they have to pay.

Work-Related Car Expenses

For those of you who have to drive around in your personal vehicle in order to perform your duties at work, we’d like to remind you that all car-related expenses can be a tax deduction. This includes but is not limited to fuel, maintenance repair fees, and other costs attached to using and maintaining a car. Now, there are two methods for calculating this deduction. You can either keep a 12-week logbook or you can make use of the cents per kilometre method. The cents per kilometre method derives the deduction from the total kilometres travelled in your car while you are doing work that generates income.

Home Office Expenses

Lastly, it’s important to note that your home office expenses are also tax-deductible. And while this may not be relevant to some of you, people who spend a considerable amount of time working from home will surely benefit from this. You can claim the cost of using your personal computer for work as well as any equipment or tools that you need for your job. If you work to spend all of your work hours at home, you can also claim the occupancy cost of your home office space as a tax deduction.

Conclusion

We hope this article proves to be useful when it comes to helping you with your taxes. While this may seem like a lot to take in, be sure to keep all of this information in mind as it will surely make a difference when it comes to doing your taxes. Feel free to refer back to this article whenever you have any questions about tax deductions.

SMB Accounting has knowledgeable tax consultants who can help you get started with taking care of your tax refunds. We make sure that our clients use their tax refunds wisely, and we also offer other services such as accounting and business advice. Contact us today for a consultation!

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Audited Financial Reports: When Does Your Company Need It?

All business owners can agree that their company’s finances are one of the most important operations that help keep their business running. With that being said, dealing with finances can be incredibly challenging but still necessary to ensure you provide an accurate record of your financial health—that’s where an audited financial report comes in. 

An audit is used to obtain an independent opinion on the financial report of a company or organisation. This information will boost the credibility of the information provided and improve confidence for intended users of the financial reports. Besides that, an audit will have to be presented per accepted accounting principles, and because of this, working with an experienced accountant is a must. 

In addition to boosting your credibility and user confidence, audits also promote consistency and objectivity in financial reports, presenting your company as true and fair. To that end, when are audits required?

When are Audited Financial Reports Required?

When You Have a Charity or Non-Profit Organisation…

For charities and non-profit organisations with revenue under the review or audit thresholds don’t need to submit the Annual Information Statement. Note that you’re not required to provide financial statements to the ACNC. However, it is highly recommended that you consider your constitutional requirements, which may require reporting obligations to members. 

When You Have a Large Company…

When your company evolves to a large proprietorship, your business must be audited under the Corporations Act. To know if your company falls under a large proprietary company is if, at the end of the financial year, your company meets the following criteria:

  • You have a consolidated revenue of &50 million or more;
  • You have consolidated gross assets of $25 million or more;
  • You have 100 or more employees;

When You Have a Small Company…

Usually, small proprietary companies aren’t required to prepare a financial report. However, if the ASIC or shareholders require a report, then you must comply. But seeing as this is a case-by-case basis, you must work with a credibly accountant to ensure that your finances are on track and if you’ll be requiring a financial audit. 

Why Do You Need a Financial Audit?

  • Companies, organisations, or charities seeking to obtain a grant, investment, or external funding may have to undertake an audit. This is because this may be part of qualifying criteria that will satisfy the provisions of the grant;

  • Some lenders may ask companies to provide audited financial reports if your business would qualify for a loan or satisfy loan requirements.

  • In some cases, businesses would like to change ownership or sell their company; because of this, a buyer may require a financial report to see the true value of your business.

  • Some companies and organisations may need an audit specified for the constitution, rules or other documents. Because of this, you’ll need to work with a credible accountant and auditor to create a financial report. 

The Bottom Line: Audited Financial Reports are a Crucial Part of Any Organisation or Company

Seeing as audited financial reports are a huge requirement for some organisations, to stay compliant, you must work with a trusted accountant and auditor to ensure that your financial reports stay accurate. Otherwise, you may be dealing with a plethora of financial-related issues that may impact your company. 

How Can We Help You?

There’s no denying that financial audits or reports can be incredibly overwhelming for some businesses. Thankfully, SMB Accounting has a team of highly skilled accountants who are equipped for this job.

Our accounting firm offers various financial services like individual tax returns, accounting for small businesses, self-managed super fund audits and more. If you’re looking for a reliable accountant in Caloundra to help you run your business, reach out to us today!

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Taxing Wisely: 5 Tips to Use Your Tax Refund

Paying taxes is an activity that any law-abiding citizen must do. By paying taxes, there are times when you get a tax refund. As the name suggests, a tax refund is an excess of taxes that are given back to the taxpayer.

Most people would agree that a tax refund is a lifesaver. This is because an annual tax refund gives you many options on what to do with it, such as paying back debts or simply saving them for future use. In other words, a tax refund has a significant effect on your finances.

How exactly do you use your tax refunds wisely? This article lists down some ways that you can do this. Read on below to learn more.

#1 – Super Contribution Top-up

According to the Australian Securities and Investments Commission (ASIC), the average single person who retires at 65 with a “modest” lifestyle will need approximately $300,000 today to retire. On the other hand, those who want a “comfortable” lifestyle in retirement will need roughly $544,000.

For most people, those are massive numbers. If you add to your super very early on, it gives your savings a lot of time to grow. Simply get in touch with a superannuation advisor, and they will tell you how to transfer your tax refund into your super fund. It may seem like a small thing now, but your future self will thank you once you retire.

#2 – Term Deposit for Your Children

If you have children, your tax refunds can be used for their benefit. Tax refunds are like a long-term investment that you can use for your children’s big-ticket expenses, such as their education or their first car.

While not everyone has term deposits on their plans, it pays to set aside some funds for your children—especially considering the rising living costs in the country.

#3 – Buy Work-Related Equipment

Buying work-related equipment such as computers is no easy task. If you don’t have enough money, chances are you’ll be stuck with a subpar piece of equipment that hinders your job performance.

Work-related items that cost more than $300 must be depreciated over the “life” of the item. If you buy them by the end of a financial year, then the benefits on your subsequent tax will be small.

On the other hand, your depreciation calculation will cover more time if you buy them between July to August. In other words, it’s a bigger deduction on your next tax return.

#4 – Pay Off Debts or Loans

If you have credit card debts or personal loans that you’re paying off for a long time, then it’s recommended that you use your tax refunds to pay for them.

It’s a good idea to do so because your interest repayments will go down as soon as you lower your outstanding balance. Aside from that, you can now use the money for yourself instead of it going to your lender.

#5 – Put It in a Mortgage Offset Account

If you have a mortgage, chances are your mortgage provider is offering a mortgage offset option. A mortgage offset account is like a savings account, but it works a little differently. Your offset balance is deducted from your outstanding mortgage loan balance to calculate the interest component of your mortgage payments.

Because of this, you end up paying less interest for your mortgage, which leaves you with more money. You can pay off your mortgage quicker while your offset account balance is ready to be used in case of an emergency.

Conclusion

Tax refunds are money that comes back to you, so you must use them wisely. You can use them to pay debts or save them for later if a financial emergency occurs, as well as keep them as deposits for your children. In the end, you’ll be glad you have done so, because you will be able to get out of a bad spot quicker.

SMB Accounting has knowledgeable tax consultants who can help you get started with taking care of your tax refunds. We make sure that our clients use their tax refunds wisely, and we also offer other services such as accounting and business advice. Contact us today for a consultation!

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