Financial Planning & Tax Advice

Do you have a strategy for managing your finances? If not, you are similar to the majority of people. However, you shouldn't worry about starting too late because it's never too late to begin planning for your financial future. This is the first of a two-part blog article in which we will cover some fundamental aspects of financial planning and tax advice that will help you get started.

In addition, we will supply you with some resources that you may use to further your education on personal finance and investing. We have high hopes that this blog post will be of use to you, no matter how long you've been working on your personal finances or how recently you've begun doing so.

When it comes to managing your money, receiving assistance from a professional can help you save both time and money in the long run. When it comes to tax planning, this is something that is extremely important to keep in mind. Working with a financial planner and/or an accountant who is aware of the most recent alterations to the tax code can assist you in making the most of your deductions and retaining more of the money you have worked so hard to acquire.

Therefore, regardless of where you are in your professional life or how close you are getting to retirement, now is the time to start planning for your taxes. To get you started, here are a few pointers to consider.

Planning and Guidance with Taxes

After July 1, it is too late to start considering the taxes from the previous year. Because of this, we offer tax accounting services to individuals with high incomes as well as advise to small businesses so that your tax strategy can be implemented as quickly as feasible. As part of our all-encompassing approach to tax planning, we check to see that the structures of any businesses or trusts we establish are as tax-efficient as they can be. For this reason, for instance, we offer guidance on how to make the most of the tax advantages offered by asset acquisitions or leasing. In addition, we keep you informed of any changes in the law regarding taxes that may have an effect on the way you approach taxes in the future.

We are a small business tax specialist who is at ease resolving difficult tax issues that are beyond the capabilities of the majority of small accounting firms. For instance, a significant portion of our clientele consists of working athletes who bring in money from a variety of sources and may even call another country home. As a result, we have a great deal of experience in managing the complicated laws that pertain to income earned overseas, which allows us to keep our customers' tax costs to a minimum, prevent double taxation, and comply with all legal obligations.

If you are a client, your accountant will collaborate closely with your financial adviser to ensure that your wealth building goals and taxes plan are harmonised in a way that is both efficient and effective. For instance, we are certified experts in all areas, including investment, taxation, and administration, pertaining to self-managed superannuation plans. A self-managed superannuation fund (SMSF) accountant is also a member of our team. We are also able to offer guidance regarding the taxes of retirement savings that are held in funds that are not self-managed. Last but not least, we are able to assist you with asset gearing, depreciation allowances, estate planning, and trusts.

Tips to Improve Your Financial Situation and Advance

Getting Your Taxes Down

The vast majority of us are blissfully unaware of the total amount of tax that we are contributing. For instance, if you make $75,000 per year, your personal income tax bill comes to approximately $17,000. If you keep working for another 30 years, this will amount to $510,000 when calculated using the tax rates in effect today. In addition, this does not take into account any wage increases that occurred throughout the time period.

Therefore, what are some ways that you might lower your income tax? The most effective tactics will, of course, depend on your particular circumstances, but some ways to lower your income tax are salary sacrificing/packaging, maximising tax deductions by maintaining accurate records, putting the proper ownership structures in place before purchasing assets (such as joint ownership, a business, trust, or self-managed super fund), investing in tax-effective investment vehicles and asset classes, using debt in a tax-efficient manner, and taking out loans.

Moving Toward Retirement

It is becoming increasingly typical for workers over the age of 50 to gradually transition into retirement by cutting back on the number of hours they put in at work. If this describes you and you are 55 years old or older, you should consider whether or not a transition to retirement strategy will be beneficial for you.

Since this is a complicated method, let's separate it into two pieces for easier comprehension.

To begin, you draw a pension from your retirement account in order to compensate for the lower amount of money you are making from your job (remember, you have cut back on the number of hours you work).

Second, in order to make up for the pension payments that are being deducted, your superannuation account will have additional money contributed to it through your wage. Because, in the grand scheme of things, this technique won't result in a change to your nett income position, you shouldn't expect it to result in a higher income. One advantage is the money you will save on taxes. When compared to your regular wage, contributions made through salary sacrifice that are put into your super fund as well as pension payments that are paid out of your super fund typically incur a lower tax rate. If you are utilising a strategy to transition into retirement, this means that you will pay a lower amount of tax on your income. But what happens to the money that was saved on taxes? (don't forget that your current position regarding your nett income has not changed from before). The money you save on taxes goes into your retirement savings account, which means you put more money towards your retirement and pay less to the government.

Reduce Capital Gains Tax (CGT)

When you make a profit off the sale of an asset, you are subject to CGT. If you have held onto the asset for fewer than 12 months, you will be responsible for paying tax on the entire profit.

If you have owned the asset for at least a year, the ATO will grant you a reduction, and you will only be responsible for paying tax on half of the gain.

Although it is not possible to completely avoid capital gains taxation (that is, it will always apply when you sell an asset for a profit), there are strategies that can be implemented to reduce (or, in some cases, eliminate) CGT after the asset has been sold. This is the case despite the fact that it is not possible to avoid CGT altogether.

In this situation, the most important thing to keep in mind is to make preparations for the consequences of the CGT well in advance. In a perfect world, this process would start well before the asset was even purchased, with an examination of the ownership structure to determine whether or not it was appropriate. There are many other ways that assets might be owned, including solely, jointly, as tenants in common, via a trust, firm, or self-managed superannuation fund (SMSF), and so on.

When it comes to capital gains tax, the repercussions of each structure are unique. If you make the incorrect decision here, it could mean that the majority of your profit is sent to the government in the form of taxes.

The Control and Supervision of Tax and Financial Advisors

You are required to be registered with the Tax Practitioners Board if you are a financial adviser who provides tax advice or advice on tax repercussions as part of the advice that you provide to clients in exchange for a fee or other form of payment (TPB).

A tax (financial) advice service is comprised of the following five fundamental components:

• A service similar to that of a tax agent, with the exception of making representations to the Commissioner of Taxation
• A service that is offered by an Australian Financial Services (AFS) licence or by a representative of an AFS licensee
• Typically, an AFS licensee or agent will be the one to provide a service that falls within the category of advise
• A service that is concerned with determining or advising about liabilities, obligations, or entitlements that emerge, or potentially develop, as a result of a taxes law
• A service that the customer can be fairly anticipated to rely upon for the purposes of their taxes.

Prerequisites And Conditions For Signing Up

In order to be qualified for registration as a tax (financial) counsellor, you are required to meet all of the following requirements:

• at least 18 years of age is required
• act like a decent and respectable human being
• have, or be able to maintain, professional liability insurance that satisfies TPB standards
• satisfy the requirements for qualifications and experience in the appropriate field. One of these conditions is that you must have been an Australian financial services (AFS) licensee or a representative of an AFS licensee in the ninety days prior to the submission of your application or that you must currently hold one of these positions.

How to Sign Up

In order to register, you will be required to submit an application in the form of an online submission and applicable supporting documentation.

The application price at this time is $560, and the whole amount is required to be paid in order to submit your application. In the event that your registration request is granted, it will be active for a period of at least three years beginning on the approval date. Start the process of registering as a tax (financial) adviser today.

Financial or Tax Consultant for Businesses or Partnerships

All AFS licensees and their agents who offer tax (financial) advice services for a fee or other kind of remuneration are required to register with the TPB in order to practise legally.

To be considered "representative" is to be:

A representative authorised to act on behalf of the licensee, who may be one of the following:

• one particular person
• a corporation (or a corporate authorised representative)
• a partnership
• a collection of individuals or corporations that are responsible for administering a trust as trustees
• a member of the licensee's staff or board of directors
• a member of staff or director of a body corporate that is affiliated with the licensee
• any individual other than the licensee who is operating on their behalf.

Other prerequisites for registration include having a sufficient number of people who are registered as tax agents or tax (financial) advisers to carry out supervision arrangements and provide tax (financial) advising services of a competent standard.

Administration of Wealth

The process of setting your investment objectives and developing custom financial strategies that can assist you in achieving financial independence is referred to as wealth management. It is the co-constituent of sound financial management.

Wealth management seeks to use or create extra cash flow to expand your assets and, as a result, your wealth. Whereas money management focuses on ensuring that cash flow covers all of the basics of your living, wealth management seeks to do the opposite.

Creating your own personal wealth needs careful planning, the successful implementation and assessment of a strategy, as well as the continued counsel of a professional adviser who can provide you with direct access to all of the available investment options.

The management of wealth is an ongoing process even after retirement. Planning for one's retirement is, without a doubt, a primary concern while developing strategies for asset management. For instance, amassing sufficient wealth to ensure adequate income and financial stability during one's retirement years.

Our Method

We will walk you through the process of planning for wealth management, assist you in putting your strategies into action, and assist you in making the most of all chances.

Through the use of this wealth management approach, you will be guided through the establishment of both short-term and long-term financial objectives, as well as the selection and implementation of appropriate investment strategies.

Strategies are developed based on the principles of minimising risk, generating a large enough asset base to provide financial security, minimising tax liability, selecting the appropriate investment structures, and saving money on taxes. Personal insurance and generating a large enough asset base are also considered.

A well-structured salary, superannuation, investment portfolio, and debt load can all result in significant tax savings. In addition, the risk can be reduced by diversifying one's investments and keeping a close eye on how the portfolio is performing.

Australian Wealth Management's Importance

In contrast to the situation in other regions of the world, high nett worth individuals are not the only people who are eligible to get services related to wealth management in Australia (high net worth individuals). According to the RBA's definition, wealth management include not just different types of money management (such as superannuation and managed funds, but also life insurance), but also different types of financial counselling services.

Due to the Royal Commission into Misconduct in the Banking, Superannuation, and Financial Services Industry's ongoing investigation, the wealth management industry in Australia has been subjected to a significant amount of scrutiny as of late.

Even while not all companies in Australia that specialise in wealth management give the specific forms of financial planning and insurance advice that Commissioner Hayne singled out for their conduct, the entire industry was required to provide some explanation.

When it comes to problems in the industry, the billing and payment of commissions for persons after they have passed away, as well as the practise of charging fees even if no service was rendered, are only the tip of the iceberg.

What Elements Are Responsible For The Rapid Transformation Of Australia's Wealth Management Industry?

When it comes to wealth management, technology and how it's used don't simply effect how products and services are marketed; they also affect how they're provided to customers and consumed by them. The rules of wealth management are constantly being rewritten as the industry shifts towards mobile and digital delivery of cloud-based services, personalisation, and an increased emphasis on cyber security and compliance.

In addition, there has been a shift in generations, with baby boomers being replaced by tech-savvy millennials who are open to less face-to-face interaction. Despite this, these individuals are demanding greater transparency and accountability, and they are not afraid to shop around for a better deal.

Although there are already more than 25,000 active financial advisors, 583,000 SMSFs, and 249 APRA-regulated funds with more than four members, it is anticipated that the value of the wealth management business will exceed $4 trillion within the next ten years.

Despite the fact that it is the world's twelfth largest economy, Australia has a sizeable sector that is focused on financial services and asset management. Not to mention having the pension system that is the fourth largest in the world, which indicates that Australia surely holds its own when it comes to the management of wealth.

The provision of wealth management services in Australia is carried out by a diverse range of businesses, both local and international, with the intention of developing, maintaining, and enhancing the wealth of the clients of these businesses. The primary activities consist of financial planning, investment guidance and management, cash management solutions, margin lending, estate planning and wealth transfer, insurance, and a great deal of other services.

There are a large number of people in Australia who seek the guidance of wealth management businesses for some of the most significant life choices they will ever have to make. The wealth management industry in Australia has access to more information on us as individuals, as investors, or as part of a larger fund or syndicate than virtually anybody else. This is true whether we are investing on our own or as part of a larger group.

Managers are entrusted with the responsibility of making decisions that are unbiased and focused on the needs of the customer. Because of this, the Royal Commission into Misconduct in the Banking, Superannuation, and Financial Services Industry was deemed to be of the utmost importance, as well as the establishment of APRA, ASIC, and consumer protection laws in Australia.

The clients of wealth management companies in Australia are entrusted with a great deal of responsibility, but it is ultimately up to those clients to ensure that they carry out all of the necessary research in order to hire a professional manager who is aligned with their individual investment goals and objectives.

A Step-by-Step Guide to Tax Breaks in Australia

When filing your tax return, you have the legal right to make deduction claims for costs that you incurred while working. These are referred to as "work-related deductions." In order to be eligible to submit a claim for a deduction relating to your place of employment, you must satisfy all of the following requirements:

• you are need to have a record to demonstrate this
• it appears that you have used the money on your own
• it appears that you were not compensated for the costs incurred
• the expenditure ought to have some bearing on your work.

Only the portion of the cost that was attributable to your employment can be deducted from your income tax return, even if the price was incurred for both personal and professional reasons.

Expenses Relating to Vehicles and Travel

When it comes to the costs of travelling for work and using your vehicle, the requirement to keep records should be the first and foremost thing on your mind. When it comes to filing your taxes, you will find this to be of great assistance.

If you use your automobile for work, you have the legal right to submit a claim for reimbursement of the travel costs associated with your job that are directly tied to the business costs of using your car to perform your duties. You can make a claim for the car expenses using any one of a variety of different approaches. Learn more about these approaches by reading. If you want to make a claim through any of these methods, you have to be the owner of the car, and the record-keeping requirement is different for each method.

Because it is considered private travel, everyday commutes to and from one's place of employment are not eligible for reimbursement.

Even if any of the above apply, you are unable to deduct the expense of typical commutes between your home and place of employment because such travel is considered private:

• On your way to work, you perform errands such as picking up the mail on the way there
• You have to make your way back to the office for a parent-teacher conference or a security call
• You put in extra hours at the office, but there is no public transportation accessible to get you home.

Clothing and Laundry Costs Incurred Due to One's Employment

Do you need to dress formally when you go to work? Or maybe your employer requires you to wear a uniform with the corporate emblem prominently displayed on it. Maybe you work at a clothing store, in which case you are required to show up for work dressed in garments purchased from that store.

Regardless of the circumstances, you are required to adhere to the dress policy of your employer, and as a result, there may be an assumption that the Internal Revenue Service will treat you in the same manner when it comes to claiming tax deductions for your work apparel.

What apparel is refundable?

Only clothing that is specifically required for your job can be claimed as an expense. Take, for instance, a pair of chef's pants. You are not allowed to deduct the money spent on the purchase or laundering of garments that are not specifically required for your job. These consist of slacks of a dark colour and shirts with white collars.

You are, nevertheless, eligible to make a claim for the clothing and footwear that you wear to shield yourself from disease or damage. For instance, if you work outside, you can be entitled to compensation for sun protection.

Claim eligibility for uniform-specific clothes depends on whether or not the item bears your company's emblem or falls within the parameters of your employer's uniform policy.

Home-Based Worker Tax Deductions

If you carry out all or part of your work activities from home, then you may be eligible to claim a tax deduction for a portion of the expenses associated with maintaining a home office. You really ought to have a space in your house dedicated to serving as an office. If you are using a room that has a dual purpose (such as the dining room) or a room that is shared with others (such as the lounge room), you can only claim the expenses for the hours that you had exclusive use of the area. This is the case even though you are not required to have a room set aside specifically for your home office claim.

It is essential to maintain records for your home office, especially if your business involves taxes in any way. If you perform your job duties from the comfort of your own home, you may be eligible for reimbursement for business-related expenses such as the cost of a computer, a phone, or any other essential electronic equipment. You are also allowed to deduct the costs associated with running any electrical appliances.

As a general rule, you can deduct up to $300 worth of expenses related to home office equipment such as computers, while expenses related to things costing more than $300 can be deducted as a reduction in value. If you use your phone for work-related activities, you may be able to deduct some or all of the cost of your monthly phone bill.