Tax, And How To Make It Work For You

Tax, and How to Make it Work for You

With 3 months to go, this is the time to find out if the systems you have in place are working to your full advantage. It’s not the most riveting way to spend an afternoon, but organising your finances now will help avoid penalties later.

Paul Stacey, the tax counsel for the Institute of Chartered Accountants in Australia, says

“Those penalties start at 25 per cent of the unpaid tax but can be as high as 75 per cent.”

Looking at all your staff and checking if contractors are really employees will make a huge difference.

The building and construction sector are already annually reporting to the ATO all payments to contractors, but this could well be useful across many businesses.

Fringe Tax Benefits

Car claims can be a nightmare if they’re not dealt with properly. If you have employees who use a car for business purposes, you may decide a company car is warranted, or to reimburse the fuel expenses.

The Fringe Tax Benefits (FBT) system in relation to cars means that your employee can claim for mileage, maintenance and insurance.

Cents Per Mile

The way this is measured is for your employee to:

  1. Determine the distance travelled by the vehicle in question (yearly).
  2. Determine the % of the annual distance travelled for the employee’s private use.
  3. Multiply figures from 1 and 2 to create the annual distance travelled for private purposes.
  4. Estimate the cost per kilometre for a vehicle of the type used. This information can be obtained from the RACV, NRMA, or like motoring organisations
  5. Multiply the annual distance travelled for private purposes by the estimated cost per kilometre. The result is the value of the motor vehicle component of an employee’s remuneration.

Is my Company eligible?

In order to qualify, your company must have the following pre-requisits:

  • Minimum 50% of the vehicle’s total annual mileage must be for your trade/business.
  • The car must have been driven at least 10,000 kms during the year, mostly by employees.
  • A ‘car’ for these purposes can mean:
    • Motor cars, station wagons, panel vans and utilities (excluding panel vans and utilities designed to carry a load of >1 tonne)
    • All other goods-carrying vehicles designed to carry less than one tonne
    • All other passenger-carrying vehicles designed to carry fewer than nine occupants.

One thing is for sure, whether the Car Fringe Benefits relate to your business or not, arranging your tax affairs now will save a lot of hassle further down the line. Find more information on FBT from the Australian Taxation Office and how they affect you, click here.

Hannah Brankin is a passionated editor for car logbook – YourCarLog and often gives very useful advices about car related issues.

 

Why Financial I.Q Is Important In Relationships

The level of success between two people with the same amount of money is dependent on how well they can manage their finances. For years and centuries, this is something that has troubled several people. Experts say that in relationships, the major cause of breakups and disagreements revolves around the issue of money. There are couples that make lots of money only to spend it and lose it in a way that they cannot account. That is why financial I.Q. is very important in a relationship. One partner needs to be sane and keep everything in check for them to achieve financial freedom.

The Reality

This article will highlight some of the most effective tips in managing ones finances. This requires discipline, change of tact and having a mind that is more inclined to saving rather than to spending. A wise man once said that one should only spend what is left over after savings and not the vice versa. This is the mistake most people tend to make. They spend and save what is left. It is no wander we are currently living in a society that has no savings.

Why Financial I.Q. Matters?
The harsh economic times have made people more conscious of their finances. Some have opted to acquire credit facilities to cater for some of their most pressing needs. There being so many financiers and easy application procedures, it is necessary to think twice before making the application. This is what financial I.Q. entails. Things like the interest rate, repayment period and installment should be considered. The person making the application should be able to repay the advanced credit facility comfortably , remain stable and make a profit while doing the same. There are people that only advance credit because it is available and not because they need it. This kind of approach should be ignored when managing ones finances.

It is a sad fact that most relationships nowadays end up because of financial reasons. Many tend to overlook the importance of working together where financial matter is concerned. There has been a study which showed increasing rate of divorce due to financial reasons.  Some couple even go to court for settlements and splitting up of properties.

Money can be a stressful subject for some but when it is properly managed and earned, there shouldn’t be any problem.  The good news is that solution starts with changing your views and attitude about this financial matter. For couples, mutual agreement, teamwork and cooperation are your great spices to achieve financial freedom.

The writer, Sam Daniels, loves to blog about credits, loans and finance. For small business financing,visit his site.

Remember To Shop Around For The Best Car Finance Deal

When purchasing a new car, before you choose a lender, you have to shop for the lowest rate. There are quite a few lenders, banks, credit unions, and on site lending institutions that you can choose from when you do buy a new car; for this reason, you have to assess each of them, in order to ensure you do find the best deal, and find the lowest interest rates possible, when the time comes for you to choose the lender for the new car that you are going to buy.

Never take the first rate you get –

Just like the purchase itself and choosing a new car, the loan process is the same. You have to shop around, in order to get the best rates. It is possible that the first quote you get is the lowest one, but you will only know this if you take the time to shop for lower interest rates. You should visit a few local banks, credit unions, compare the lenders on site at a dealership, and other private lines of credit, in order to know you have truly found the lowest rate. If you are lazy, you might be leaving a few percentage points out there, and greatly overpaying on the loan amount.

Go to credit unions –

A credit union is going to offer great interest rates. Especially if you have an account with them already, you can get a much lower interest rate through these institutions. Although the highest credit rating isn’t a must, like any other credit you apply for, the higher your credit score, the better. So, visit a few of these institutions, and compare the rates, to find the best deal, and the lowest interest on the purchase price of the car you choose to purchase.

Go to your bank –

Bank lenders are a little more picky, but if you have an account at a bank, and have a fairly stable history with them, along with a good credit rating, it is possible to get a lower interest rate on the loan. In addition to your bank, you should consider a few others, so that you can see what they have to offer as far as rates, and the amount they are willing to finance to you. As a buyer, it is up to you to find the best deals, so the more places you go, the more you are going to save.

Consider on site financing –

Especially if you are a young, first time buyer, or if you have a poor credit score, you might have to go through the dealership lender, where you buy the car, for your financing. You should visit a few dealerships, so that you can compare the price of the car, and the interest rate and terms; eventually, you will find one that is lower than the others, and has the car you want on the lot, for a reasonable price, but only when you do compare a few sites, before you decide where to buy.

Go Green –

It is possible that certain lenders, such as banks and credit unions, will offer you a lower interest rate (.5% approximately), if you buy an eco friendly car. So, if you choose a hybrid, or some other electric powered car, you might get some form of a discount in terms of the interest you will pay. It might not be the case with all lenders, or even most lenders, but if you are considering an environmentally friendly car, it is worth asking if there are any specials on the interest rates that lenders charge, when you choose to finance the car.

Use a current creditor –

Just like bundling policies for auto, home, life, and other insurance policies you need, your financing can also be done in a similar manner. If you have a few lines of credit open with banks, credit cards, or other lenders, you can always ask them for some kind of deal or discount, when you choose to finance the car purchase with them. Especially if you have a clean borrowing history with that lender or creditor, they might be willing to provide you some kind of deal or savings in terms of interest, if you do choose to take out one more line of credit, and finance your car purchase through them.

Ask for savings –

In many instances, it is worth asking for a lower interest rate. Especially if you have been approved by a few lenders, and have a rather good credit score and rating, it never hurts to ask. If you really want to go through a particular lender, asking if they will offer a few points lower on the interest rate is worth a try. You can also ask if you put down a larger down payment, whether or not they will offer you a better interest rate, or better financing terms. Many, if not most lenders, are going to be stern; but, if you are a customer that is trustworthy, and has a pristine credit rating and score, many might reconsider, and offer you some form of savings if you choose them, as opposed to the other lending institutions that you can go with, when you have to finance the purchase price of your new car.

There are many ways to save, and it is always possible to find an interest rate that is a little lower than the initial terms you heard, but you have to look for them and do the maths. Buyers must take the time to shop for savings, to look for the right lender, and to find the best possible terms on the financing they need, when purchasing a new car. Lenders will fight for your business, especially if you are a trustworthy customer (with great credit history). So, don’t settle on the first financing option you get; visit a few other lenders and institutions, and compare the terms that are being offered to you, to ensure you do get the best possible deal and terms when you finance the purchase. Just make sure that you sign the agreement with your eyes fully open. Check out a calculator like this one before you seal the deal!

William Kelly is a financial advisor from Sydney, australia.

Financial Education, School And You

Finally, young people in the UK will start to get some financial education as part of the national curriculum. Education secretary Michael Gove has announced that from 2014, secondary school students will learn ‘the skills and knowledge to manage their money well and make sound financial decisions’.

The classes will be in key stage 3 and key stage 4 and will include lessons on wages, tax, debt, credit and risk. They will also learn the basic mathematics needed to negotiate the financial world, for example calculating interest.

Experts’ view

A group of experts was asked what they thought should be taught.

Andy Thornton of the Citizenship Foundation charity, was keen to see the working of the wider economy included in lessons. He wanted children to learn how the public and the personal economies interact so that they will be able to act in the best interests of society as a whole.

Ben Miskell is a teacher in Sheffield and he said many of his pupils had to deal with poverty. He wanted teachers to be able to encourage students to use their local credit unions to keep them out of the hands of loan sharks.

A complex world

Justin Tomlinson, the MP for Swindon North, said the financial world was growing more complex. He wanted the lessons to turn out good consumers who would be able to compare, for example, the best phone deals, work out how to spot a good deal and even be able to negotiate with suppliers from a position of knowledge. Good financial education would produce more entrepreneurs he said.

Guy Rigden from the MyBnk financial education charity was concerned that the proposals didn’t go far enough. He wanted very basic information to be imparted at key stage 3. At key stage 4, he believed youngsters would be able to deal with more complex information about budgeting, banking and payment options. He was also keen to promote saving.

The personal is political

Pfeg is another financial education charity and its head, Tracey Bleakley, said young people were currently leaving school with little information to help them get by with money. She would like insurance, safe crisis lending and budgeting included in the classes. She is another expert who would like a political element – how the government spends our cash – put to students. Also on her mind is how the economic future of the country will affect the futures of young people who will have to live and work in a fast-changing environment.

Young entrepreneurs

Pete Pattison is a curriculum expert and says placing the classes in the citizenship arena is wrong. He would like to see it given a strictly personal focus – how to find the right bank account rather than how banks were involved in the financial crash. He is strongly against the introduction of any political element to this very personal area. He’d like only relevant information given to students, university fees being at the top of his list. Practical advice should be coupled with a knowledge of how our financial decisions impact on other people he says. A tangible and involving curriculum is key according to Pattison, who’d like to see students given a tenner and asked to set up their own business.

Reading and writing

From the industry, David Scholfield, Aviva’s head of corporate responsibility, calls for a financial thread running through the whole curriculum. He says that money and finance can play a part in everything from history to geography.

Personal finance is a complex area and no-one can escape it – we’re all offered PPI compensation or need to get a credit card online – it’s surely as essential as learning to read and write.

Cormac Reynolds is a blogger and writer and has written articles for a number of sites and financial blogs worldwide. This article is for www.americanexpress.com/sg/

How To Adjust To A Lower Salary

There are quite a few reasons why you may find yourself in a position that requires you to take a lower salary. In today’s economy, many people end up having to take a lower salary to continue doing the same work that they were previously paid more to do.

Since the economy has changed so much during the last few years, other people have decided to change their career track and have to restart at a lower level to eventually get where they want. And for other people, they realize they don’t want to spend their lives doing something they hate and take a lower salary in order to work at a job they truly love. This may involve working for a company they truly respect, or even striking out and starting their own company.

Whether your situation falls into one of the categories above or is the result of something else, you probably have questions about what changes you need to make in order to handle this transition. Since there is quite a bit to take into consideration, let’s look at some of the most important points:

Consider Your Housing Situation

Housing is most people’s biggest monthly expense. Depending on your specific change, moving may not be an option. If that’s the case, you’ll want to pay close attention to the rest of the points on this list. However, if you’re taking a pay cut because your new position requires moving to a different city, this is the perfect opportunity to secure a lower monthly rent or mortgage payment.

Eliminate Non-Essentials

While dealing with this change can be a little scary, it’s also the perfect situation to go over your budget with a fine-tooth comb. Once you start really digging into where your money goes each month, chances are you’ll find lots of things that are nice but not actually essential. What’s great about identifying expenses in this category is you can reduce your monthly budget requirements without having a drastic impact on your lifestyle.

Be Prepared for Some Hard Decisions

Although it’s often surprising how much you can eliminate from your monthly spending without much of a problem, if you’re dealing with a significant salary reduction, you might have to make some hard decisions. For example, if your kids are currently in private school, you may have to decide if that’s going to continue or if they’re going to need to transfer to a public school.

Another possibility is if you’re a two-car household, you may ultimately decide that the best financial decision is to have just one. While these decisions are never easy to make, being prepared to do so can prevent you from feeling completely overwhelmed when the time comes.

Adjusting to a lower salary is going to be a challenge. But as long as you follow the advice we’ve discussed and take a structured approach to this change, it’s something that you will be able to manage!

James Burlows if a freelance blogger and tax advisor who writes about income taxes budgeting and other finance related topics.

Short Term Finance: Emergency Financial Assistance

Financial support is very essential to live happy and smooth life. Today, a wide variety of short term and long financial plans are available all over the world. These plans are offered by well known banks and financial institutions. No doubt there are many occasions when people need financial assistance. When comes to finance solutions, there are several numbers of avenues from which you can draw funds. Short term finance and long term finance are two main types of financing solutions. Each has their own features and benefits.

Short Term Finance and Its Benefits

Today, the majority of people prefer the short term financing option due to its numerous benefits. With the help of monetary services, you can easily get hold funds for different essential purposes. This financing option is one of the best options that fulfill all the needs of the borrower without troubling more in the money lending process. Short term loans are also known as unsecured cash loans. These can be availed to fulfil the day to day and small expenses.

Without any hassle you can easily apply for short term finance and its limit goes up to $25000 and in some cases may arise. The repayment of this amount relies on the decided monthly instalments. As per your monetary condition and settlement capacity the money amount can be sanctioned. The maturity time period for short term finance is flexible. Normally it ranges from ninety to one hundred twenty days to one to three years. You can choose any options that will meet your purpose and need. For this kind of financial assistance you do not require collateral but you have a good credit score to approve the application. You have to show your payment track record and cash flow history during the loan applying process. In some cases, with poor credit history to allow banks to avail loan benefits but they expect a higher rate of interest. Keep in mind that short term financing provides a fixed amount of fund that you have to return within a particular time period.

Get Your Loans Fast

Really, small time investment assists in making money within a limited time period with minimal penalties and risks. It helps when you need financial assistance in emergency. The primary attraction of short term financing is its speedy nature. Most of lenders can offer eighty percent of the loan value ratio. This financing plans an essential role in modern economies. Therefore it assists the senior management to suit all business requirements by seeking a loan that can mature in 1year or less. It also assists you to overcome all debits.

Good short term financing sources provide you the versatility and flexibility to manage your financial tasks. Short term finance options are especially meant for those who need urgent cash for a less or short time period. You can avail this option according to your repayment capabilities. With good or bad credit history you can apply for it. There are certain terms and conditions that you must follow. The very first is that candidates must be 18 years of age or above. You should provide valid current employment details. Do not have any type of criminal record.

The writer, Sam Daniels, loves to blog about credits, loans and finance. He shares great insights about fast loans

Can Travel Insurance Cover Damages To Your Hotel

Traveling can be exciting, but you never know what problems may arise. Many people unexpectedly run into problems at their hotels. Accidents do occur when traveling and something could be damaged. You may want to seriously consider purchasing travel insurance before booking a hotel.

Here are some factors to keep in mind before purchasing travel insurance. You will want to compare different insurance carriers to determine what types of coverage they offer.

Travel Insurance May Cover Hotel Damage

You will likely be responsible for any damages that may occur while staying at hotel. The hotel will probably still seek restitution even if you aren’t responsible for the damages. The only exception will be if the damage was caused by their negligence.

Travel insurance can be used to cover any damage you are responsible for during your trip. You can smooth things over with the hotel by telling them that you are resolving the problem with your insurance provider. The insurance company will cover most types of damages, but you will need to understand the contract to be sure that you will be covered.

What Does Your Policy Say?

You will need to be familiar with your policy before you call your insurance company. Some types of damages may not be covered under your insurance policy.

Most travel insurance companies have exclusions for gross negligence. They will almost never cover intentional damages. They may also refuse to cover you if you were heavily intoxicated, held a party or violated the hotel’s policies.

What Will the Procedure Entail?

You should immediately notify the hotel about any damages that arise. Trying to postpone the problem will only cause your insurance carrier to become suspicious and be less likely to side with you. One of the hotel managers will look at the damage and estimate how much it will cost to fix.

You will need to file a claim with your insurance company with the information the hotel provides. The hotel will not be able to file a claim through your insurance company on your behalf.

The insurance company will need to investigate the problem before they pay your claim. They will almost always speak with the hotel before filling your claim. They will ask questions about your behavior to determine how responsible you are for any damages that arose.

Most insurance companies will pay the claim within one to two weeks. However, they may need longer to make a decision if there is any speculation that your conduct falls under the exclusions spelled out in the policy agreement.

Should You Purchase Travel Insurance in Case of Hotel Damages?

You never know what may happen on your trip. Your hotel room could be damaged due to factors outside your control. You will want to have a travel insurance policy on hand if you think that there is even a modest possibility that something could happen to your property.

About the Author: Kalen is a frequent business traveler who stayed at the Sleep Inn Hotel & Suites in Oak Grove Kentucky during a BNI retreat this past January.

Credit Crunch Got You Worried? 5 Crucial Tips For Small Business Owners

The recent global financial crisis has hit everyone pretty hard. Small business owners in particular have had a tough time due to the credit crunch. Here are 5 crucial tips for small business owners on how to manage finances effectively and cut expenses during the recession.

Avoid bulk purchases. Buy only what you need.

One of the biggest mistakes a small business owner can make is to buy supplies in bulk. In theory, buying in bulk is supposed to help you save money thanks to bulk pricing. However, it only makes sense for large companies who actually need these supplies in bulk. What is a small business going to do with ten thousand pens? Buy items and supplies as and when they are needed. It also makes sure that your businesses’ cash reserve does not get depleted unnecessarily.

Use business credit cards sparingly.

During times of recession, it is very tempting to keep your cash reserve and charge everything on your business credit card. However, that is the exact opposite of what you, as a small business owner, need to be doing. Use your business credit cards as sparingly as possible. Wherever possible, pay using cash, debit cards or cheques. Not only will it help you prevent racking up a massive credit card bill, it also makes you more determined to cut unnecessary expenses.

Rope in a few interns.

Hiring during times of financial crisis is a very tricky affair. Sure there will be many people looking for jobs, but they are not willing to take a hit on salaries to work for a small company. In addition, with the uncertainty of the marketplace, it defies common sense to hire new employees during a credit crunch. If the worst should happen and employees need to be laid off, can your small business take the extra burden of severance packages? A much more practical solution is to hire interns. They may be able to provide the same quality as experienced individuals, but make up for it with eagerness and willingness to learn; a much safer bet in the long run.

Do not hesitate to ask for discounts.

As a small business owner, you have undoubtedly built relationships in the industry, especially with your suppliers. However, these relationships do not mean much if you cannot rely upon them during harsh economic times. Go right ahead and ask for discounts; in tough economic times, you wouldn’t be the first small business owner to ask for discounts. Your suppliers will be aware of where you are coming from and there is no harm in asking for a discount. After all, what is there to lose? If you catch a break, your vendors may pass on any savings they come across onto you.

Re-evaluate your insurance needs.

Every business, no matter how big or small, has various kinds of insurance. Never let any insurance policy lapse, especially during time of recession when you need it the most. However, also keep an eye out for insurance quotes from companies that will offer you the same amount of coverage for a lower premium. For example, if you run a small business, like a florist or pizza parlour that depends upon a fleet of vehicles, switching insurance providers and making lower monthly payments can really add up.

Follow these 5 important tips and your small business should make it through these harsh economic times unscathed.

This is a guest post by Jonathan Mayer. He provides useful financial tips during these tough economic times. He has been suggesting people to switch to low cost auto insurance quotes through the website AutoInsuranceCenter.com and helps them save some money.

Most Essential Advice or Tips for Newly Starting Vending Business

If you are looking for a good business alternative, vending machines are worth considering. It may not be as profitable in the beginning like other businesses but once you gain enough experience and knowledge, it can become a steady source of profit. It’s important to note that the beginning is the hardest, just like in most enterprises. However, you should not worry, because here are few essential tips to get started in the vending business.

Decide on the Product and the Location

The object that you are selling through your vending machines is critical. Therefore, you must thoroughly study which product is in demand in the locations where you plan to put your machines. If you want to put a machine in a business center, beverages are a good choice. There are other choices such as hygiene products or candies, just make sure that you sell them in the right places.

Renting or Buying Machines

There are two ways to acquire vending machines. Either you rent them, or you buy them. If your capital allows you to purchase several machines, it’s better to go for the second option. After all, the price range between rented and purchased machines is not too wide.Of course, renting machines is cheaper. There is no golden rule on which option is better.It all depends on your capacity as a new business owner.

If you want a more affordable option, you can buy used vending machines. The main consideration if you’re going to take this option is the functionality of the machines. Just make sure that the seller of the machines is reputable. They must guarantee that the machines work well. Their payment terms must be flexible as well.

Another important thing to consider when buying used machines is the currency. Make sure that the machines you are going to purchase works well with the currencies used at present. Otherwise, the machines might turn the customers away. Before you knew it, you might be out of business.

Be Persistent

Now that you have taken care of the first two important considerations, you must be ready for rejection. Most business establishments might turn you down when you ask permission to put the machines in their place. To increase your chances of getting approval or bagging business partnerships, it’s advisable to speak with the owner of the establishment. You must build business relationships.In addition, of course, you must make them an offer.

The best offer that you can give is profit. In exchange of their approval to put your machines in their enterprise, you must give them a percentage of your earnings. There are no strict rules on how much their share will be. It depends on your contract.

Shortcut

If you are bold enough, you can buy vending machines that are already selling well in their current locations. Aside from the machine, you will also be given information about how the business is going. This is a great bonus because you are already acquiring a stepping-stone from where you can jumpstart your vending business.

Author Bio:

Victor McNamara works at Vending World. Vending World is a leading distributor of used vending machines. They have been selling vending machines since 1968 and can fill almost all of your general vending machine needs

How Does The IRS Help Victims Of Ponzi Investment Schemes?

Help for Victims of a Ponzi Investment Scheme

If you were taken advantage of by a person running a Ponzi Scheme, the IRS can help you, not only in finding relief from your tax burden, but also by assigning a court appointed receiver to make sure that you get some of your money back.

To understand the process, it is important to understand exactly what a Ponzi Scheme is and how the recovery process works.

What is a Ponzi Investment Scheme?

A Ponzi Scheme is a scam where someone promises high returns for your money, usually double-digit returns on a monthly or quarterly basis, but never actually invests the money into anything. Instead, the people who do get paid are actually done so with other investors’ money.

For example, if Joe was to present Vicky with a real estate plan that he promises will return 50% in two months, Vicky may feel that it is an opportunity she cannot pass up. She gives Joe $2,000. Two months later, Joe tells Vicky that she can have her $3,000, or she can re-invest and turn it into $4,500. Vicky is excited that this is working and may actually decide to give Joe more money. In the meantime, she’s also telling other people about it.

After four months, Vicky pulls out some of her money, but it’s not actually from investment gains. It is from the money of the friends she brought into the scheme. There is no investment.

Eventually, the scheme blows up when too many people want actual cash and not enough new investors are being brought in.

How the Receiver Process Works

The court-appointed receiver is usually an attorney who specializes in this kind of work. He or she will have the very hard job of first attempting to get whatever actual money the scam artist didn’t spend on himself, and then the next step is to go to the people who were pulling out profits and asking them to give some of their “gains” back.

The reason this next step is so crucial is because everyone involved was conned, but not everyone took a loss. Some of the early investors end up making out very well because they are receiving payments, or they pulled out their entire investment early. These people will be lucky to end up with what they started with. It’s a hard job that is extremely important.

Additional assistance the IRS offers is that of tax relief for the losses incurred. This is referred to as a casualty loss. Under the Internal Revenue Code, relief from taxes and a leniency on tax penalties owed can be offered as a result to ease the burden.

Peter Wendt is a writer & researcher living in Austin, Texas. Wendt has a background in law and truly enjoys writing on the subject. If you have become a victim of a Ponzi investment scheme, Wendt recommends finding an experienced lawyer to discuss your investment fraud litigation matter.