Tips for a better tax return
Here are some helpful hints that you may need to know to get a better outcome:
Consult your Accountant before making a financial decision
Whether you are buying a car, a house, or starting a business, seek advice as to:
- risk management
- tax planning
- asset protection
- wealth creation
Consider whether any decision or transaction will carry a financial risk, such as financial exposure when buying an investment property at personal level, if you or your spouse are executives or directors of a company. You may put your own assets at risk. Ask your accountant to explain in plain English what the best structure would be in this case, to protect you against any possible liability.
Risk could be inherent to your activities, such as the services you provide making you liable such as a lawyer, or the environment you work in is risky.
You will have to consider:
- The different marginal tax rates for you and/or your partner and that payable by different structures.
- Whether the venture or the financial decision has tax advantages
- Or is it part of an overall strategy
- Is there an advantage in financing the purchase,
- What is the cost of purchase and/or maintaining the asset?
- What is the return on investment?
- What are the tax consequences when we sell?
Whether you are buying shares, or a laptop, evaluate whether the asset will be better in your name given your income level at present, if it is a tax deduction for you, if it is better owned or leased, or on Hire Purchase, the cost of maintenance, how long before you will have to replace it?
Are you considering stopping work for a while, having a baby or travelling?
What happens when circumstances change or if I change my profession or occupation?
Remember, not to be greedy, as a risky decision may be only a short term gain!
Look at the whole picture! We need to take a holistic approach, consider all angles!
A common question I get asked by mums is: can I have investments and assets in my kids names? Is my financial decision affecting my kids? Check with your accountant.
If you are worried about whether you, your business or your spouse are liable or what you do may jeopardize your future, your assets, your livelihood, consult your accountant on the different alternatives. Consider different scenarios in order to understand. Ask for alternative solutions.
Ask if by making the decision you will increase your assets, will you build your portfolio or what you own, at what cost? Is it permanent?
Don’t be afraid to ask questions. You are paying for the service. It is a tax deduction as well.