General Tips

- General Tips on reducing your tax
- General Tips on running a successful business

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General Tip on reducing your tax

Salary Sacrifice

Salary sacrifice is an arrangement with your employer to deduct your take-home salary in return for other benefits. Your net package remains the same and it can ultimately result in you paying reduced taxes.

There are many things that you can salary sacrifice, some examples include:

• Superannuation
• Car
• Mobile phones
• Laptops/PCs
• Gym memberships
• Health insurance
• Life insurance

Most are subject to Fringe Benefits tax, except superannuation and minor benefits such as a mobile phone or computer.

Deductions

Deductions reduce assessable income and ultimately the tax paid on it. Your employment requirements will determine if, how many and how much you can claim. Some examples of the deductions include:

• Books and trade journals- These are expenses related to your trade.
• Child care expenses – These are available in rare cases where an individual is responsible for care of other, and also carries on some duties relating to the taxpayer's income
• Grooming expenses – This is only applicable if this is a required in their contractual agreements with their employers
• Home office – A proportion of home expenses may be deductible on items such as mortgage interest, rent, insurances, rates and bills.
• Occupational clothing – These are work-related expenses for compulsory uniforms and safety clothing costs.
• Phone - Part of the rental costs on home and mobile phones may be deductible if required for work. A log of all claimable calls must be kept
• Self education expenses – These are expenses for courses that are related and/or likely to increase your assessable income from your employer.
• Travel expenses – These are any travel expenses (including accommodation and meals) incurred due to your work situation. This does not include the costs of travel to and from work
• Tools of trade and equipment – Any expense incurred in purchasing, replacing, insuring and repairing tools of trade.

General Tips on running a successful business

• Learn as much as you can about the business, the industry, its competitors
• Do a SWOT analysis to see what the Strengths and Weaknesses will be and what your potential Opportunities and Threats could be
• Have a business plan that covers the business structure to identify where you are at now, where you want to be in several years and how to get there. It should highlight your mission/scope of business, define who your customers and suppliers will be and how you will market to them, forecast financials as well as processes and job function requirements. “If you fail to plan you plan to fail”
• Be prepared to work long hours for prolonged periods of time.
• Accept that starting a business always takes more time and more money than you anticipate.
• Have a value proposition for your business so that you can clearly define how you are different to others in the industry. Service, quality and customer satisfaction will be the keys to success.
• Build a network so that you have a solicitor, banker and insurance agent assisting you with your business needs.
• Run it yourself and engage the right people for the right skills.

Accounting and Bookkeeping

• Keep all receipts and records for taxation purposes.
• Accounts, ledgers, bank statements will need to be produced for accounting and taxation purposes.
• Summarise your income and expenditure records on a periodic basis in a profit and loss account. Transfer receipts for sales and purchases on a regular basis (daily/weekly/monthly) to your books/system.
• Use your summaries to create financial reports
• Keeping financial books will help you learn about your business, and will give you the power to make decisions.