Investment Property
Amogh Pradhan November 4, 2019 No Comments

Investment Property Expenses You Can Claim for Tax Deductions

If you’re worried that purchasing and maintaining your investment property will empty your coffers, then we have some good news for you: Tax Deductions! Here’s a list of investment property expenses that you can claim for tax deductions this financial year:

 

  • Advertising for tenants

 

To attract tenants to your investment property like moths to a flame, you’ll need to run some advertisements. You might consider this additional expense on your investment property to be a hassle, but this is a claimable expense if it is strictly advertising for tenants and your property is available for rent. These costs include: advertising with local real estate agencies, and posting advertisements in newspapers, local publications or online. However, advertising for the sale of an investment property is a capital expense and can only be taken into consideration as part of the cost based on the property on disposal.

 

  • Bank charges

 

The bank charges on your loan account (usually in the form of monthly fees) as well as any bank charges on a separate bank account that you have specifically set up for your investment property are tax deductible.

 

  • Borrowing expenses

 

Borrowing expenses are costs associated with the borrowing of money required to purchase an investment property. These include:

  • Lenders’ mortgage insurance
  • Title search fees
  • Registration of mortgage
  • Costs for preparing and filing mortgage documents
  • Mortgage broker fees
  • Valuation fees
  • Stamp duty on mortgage
  • Loan establishment fees
  • Establishment fees
  • Lenders mortgage fees.

Although not deductible upfront, these costs on your investment property are deductible over the shorter of either the period of the loan or five years. These expenses are claimed over a number of years – not all in the year incurred.

Remember that any insurance premiums and interest charges providing for loan payment on your death, are not considered borrowing expenses. Additionally, if the total borrowing expenses are less than $100, then the costs are fully deductible in the year in which they are incurred. Similarly, if the loan is repaid in less than five years, the remaining balance of these expenses are fully deductible in the income year in which the loan is finalised.

 

  • Council rates

 

Council rates are imposed on land owners of investment property to help fund the cost of community infrastructure and services to the local municipality. Councils generally offer a one-off annual payment or a payment plan of quarterly instalments, and all payments are tax deductible.

 

  • Gardening and lawn mowing

 

This investment property cost is deductible and includes dump fees, mower expenses, tree lopping, replacement garden tools, fertilisers, sprays and replacement plants.

 

  • Insurance

 

Insurances, such as landlord insurance or home insurance can be purchased to protect your investment property. Insurance cover is tax deductible and can protect you against circumstances including loss of rent, rent default, theft by a tenant, building damage and public liability claims. Mortgage insurance is not immediately claimable but is amortised or depreciated over time as part of borrowing expenses of the investment property.

 

  • Interest expenses

 

Interest charges on a loan – the ones directly related to your investment property – are tax deductible. Principal or capital repayments are not tax deductible. If you are calculating principal and interest on your loan, then you will need to locate the bank loan statements for each investment property to ascertain the interest paid for the income year.

 

  • Land tax

 

Land tax is levied on the land owners, is based on the value of land, and is equally deductible. Once you’ve completed a land tax registration form, you will be sent an assessment notice showing the land tax payable on the land you own. You will be liable for land tax if you own, or part-own, including vacant land, a holiday home, an investment property, a company title unit, or a retail, commercial or industrial unit.

 

  • Legal expenses

 

Legal expenses are generally incurred during the sale or purchase of an investment property. The legal costs for buying and selling a property are not tax deductible and are included in the capital gains tax calculation. This includes the costs of evicting a non-paying tenant and the costs of terminating a lease.

 

  • Pest control

 

If you pay for your investment property to be sprayed or fumigated by a professional pest controller, then you will generally be entitled to a tax deduction.

 

  • Property agent fees or commissions

 

A property agent charges fees for maintaining your investment property on your behalf. They list their monthly charges in the property agent’s summary. This includes year-end financial statement, tenant reference-check fees, leasing fees and monthly rental statement fees – which are all tax deductible. You will receive the net rental income after the property agent deducts their monthly fee.

 

  • Repairs and maintenance

 

A repair on an investment property is generally tax deductible since renovations, improvements, replacements and extensions are treated differently and are generally deductible over more than one year.

Initial repair rule:

Repairs undertaken on your investment property within 12 months of the purchase will not be allowed as a deduction. These non-allowable deduction details should be kept as they will increase the cost base of the property on disposal and will be needed for capital gains calculations.

Repairs at the end of the tenancy:

Any painting or cleaning or other repairs to return the investment property to its initial condition before it was rented will be allowable, even if the property is reverted to private use as long as the expense is incurred in the year of income.

 

  • Stationery

 

Often overlooked tax deduction by investment property owners, keep a record of all your stationery and postage expenses for the year – don’t dispose of them.

 

  • Tax-related expenses

 

The cost of obtaining tax advice including tax preparation fees and accounting charges from a registered tax agent is tax deductible.

 

  • Telephone expenses

 

Telephone calls directly related to the operation of your investment property are tax deductible.

 

  • Water charges

 

Water rates are tax deductible if you, not your tenant, pay the water bill of your investment property.

WHAT CANNOT BE CLAIMED

Not all fees and costs that are associated with an investment property are able to be claimed as a tax deduction. You are not able to claim a tax deduction for any expenses that are:

  • related to the acquisition and disposal costs of the property
  • not incurred by you, the property owner, for example: any water or electricity charges that are incurred by your tenants
  • not related to the rental and income generation of the property, such as if you personally use your holiday home
  • costs such as the purchase cost, conveyancing costs, stamp duty on the property transfer and advertising for sale, which are related to the acquisition or disposal of the investment property
  • costs including the preparation of the investment property for new tenants (except for the first tenants)
  • inspecting the property for the duration or at the end of tenancy
  • undertaking repairs including the repairs done as a result of damage or wear and tear incurred while renting out the investment property
  • maintaining the property while it is rented or genuinely available for rent
  • collecting the rent
  • visiting your agent to discuss about your investment property

However, in relation to capital gains tax, you may be able to add these costs to the property’s cost base, or reduced cost base. On a side note, you can claim a deduction for the cost of hiring other parties/agents to carry out tasks on your behalf. For instance, appointing Real Estate Agents for managing your investment property through inspections, repairs, sale, etc.

On a keynote, a new regulation was introduced in July 2017, which states that travel expenses regarding your investment property can no longer be claimed. Additionally, if you are an excluded class of entity or have a business for the purpose of gaining or producing assessable income, you are exempt from the new rules.

Curious as to what this means? The ATO defines an ‘excluded class of entity’ as:

  • a corporate tax entity
  • a superannuation plan that is not a self-managed superannuation fund
  • a public unit trust
  • a managed investment trust
  • a unit trust or a partnership, members of which are entities of a type listed above

 

DON’T FORGET TO CLAIM DEPRECIATION

Around tax time, there are even more ways to help you pay off your investment – and one of those is by getting a property depreciation schedule that you can claim on tax.

What is property depreciation?

It’s a dollar amount that the ATO legitimately allows a taxpayer to claim on items that decline in value as they age. There are two types of allowances available under the Income Tax Assessment Act 1997: depreciation on plant and equipment (such as blinds, carpets and air conditioners) and depreciation on building allowance, which refers to construction costs of the building itself.

How does a depreciation schedule help me?

A depreciation schedule of your investment property will help you pay less tax now. But remember, if you claim the depreciation on a year by year basis when/if you sell the property, the cost base and the capital gain/loss is adjusted by the depreciation claimed. Speak to your accountant for a better understanding of capital gain/loss.

Is my investment property too old to claim property depreciation?

The most common misconception is that only new investment property can be depreciated and this is simply not true. If your residential property was built after July 1985, you’ll be able to claim both building allowance and plant and equipment. If construction on your investment property commenced prior to this date, you can only claim depreciation on plant and equipment but it may still be worthwhile. A Quantity Surveyor can advise you.

I bought my investment property three years ago. Can I still make a claim?

Yes, you can. Your accountant can amend your previous tax returns up to two years back. However, it is important to note that your accountant may determine the tax savings after taking into account their fee for the amendment of the tax return may not be worthwhile.  Don’t worry, you won’t lose the deduction, as discussed above, it will count at the time of sale.

My investment property is renovated. Can I still claim?

Yes. The Australian Tax Office (ATO) will need to know how much you spent on renovations of your investment property. If the previous owner completed the renovations, you’re still entitled to claim depreciation. Where the cost of renovation is unknown, a quantity surveyor has been identified by the ATO as appropriately qualified to make that estimation. Note that if you did the renovation yourself, you can not claim for your time.

Shouldn’t my accountant prepare this report?

If your residential investment property was built after 1985, your accountant isn’t allowed to estimate the construction costs. The ATO has identified quantity surveyors as properly qualified to make the appropriate estimate of the construction costs, where those costs are unknown. Real estate agents, property managers and valuers aren’t allowed to make this estimate. Your report should be prepared only by a Qualified Quantity  Surveyor.  Be careful as recent legislation was passed stating that individuals or companies preparing tax depreciation schedules also have to be registered Tax Agents.  It is important to get a Qualified Quantity Surveyor to complete the report since a compromise on your tax depreciation schedule will not withstand an ATO audit.

A site inspection of your investment property is necessary to satisfy ATO requirements and also ensure that all depreciable items are noted and photographed. This guarantees that you won’t miss out on any deductions and the documentation can then be used as evidence in the event of an audit.

The best time to get a quantity surveyor to inspect your investment property is immediately after settlement and hopefully, just before the tenant has moved in. But if that’s just not possible, quantity surveyors can liaise directly with the tenant or property manager in order to cause minimal disruption.

 

 

Conclusion

This information is general in nature and does not take into account personal circumstances and situations. For a better understanding of the ins and outs of taxes on your investment property, we, at Lotus Smart, have a dedicated team of proactive, forward-thinking, result oriented members who have held roles in corporate accounting across Australia and overseas. With over 20 years of experience, we’ll ensure that you’re always getting the best guidance from the most professional company in the industry. Lotus Smart are expert Property Accountant in Melbourne, committed to providing high quality and professional services to our clients. Whether you are a property developer, structural engineering firms, architects or construction companies, Lotus Smart can help you!

For more information, contact us.

Tax Scams
Amogh Pradhan October 21, 2019 No Comments

4 Tax Scams To Watch Out For And How You Can Avoid Them

The end of the financial year – the high time to prepare your paperwork and file your taxes. However, taxes also bring along a full sweep of tax scams that can make your life harder. Fraudsters will unquestionably make their move and lay out their traps to scam you. Of course, no one wants to be a scapegoat, especially when it comes to taxes.

For this very reason, we have listed out four major tax scams that you should watch out for:

Identity theft

We can bet Sherlock’s deerstalker hat that you’ve watched a couple of detective flicks to know that identity theft is a commonplace thing. While identity theft may seem cool in movies, it can be discerning when you’re the victim, especially when it comes to tax scams. In essence, identity theft occurs when your identity or personal information is stolen or misused. In the case of taxes, this information can be something as simple as your Tax File Number (TFN). It can also include impersonating you, creating a false or new identity – in a way that can harm you.
So, how do these tax scams work? A majority of the scammers find your information by tricking you into giving it (we’ll discuss this later in the blog) or simply via a breach or a leak. They’ll effectively file this information to execute tax scams like claiming your tax return.

Fake emails

Oftentimes, you might get emails claiming that they can promptly speed up your taxation process with a quick click of a link. These emails may contain colorful, tantalizing tax return offers that require you to fill in your TFN and credit card details. As tempting as these too-good-to-be-true offers may be, they’re tax scams in disguise. One click of the link they send can plant malware into your computer and expose your data to scammers.
What’s more shocking is that these tax scams can lead to links that imitate the official website of the ATO. They might ask you to proceed by entering your private information, or by updating existing information such as licensure, TFN, AUSkey or other confidential information. This helps scammers steal your identity and successfully pull off tax scams.

Bogus calls from the ATO

When it comes to tax scams, you might often get what you’re compelled to believe are ‘legitimate’ calls from the ATO. Through these bogus calls, you’re either persuaded or threatened to give your information or transfer money. You might get calls that will threaten to “arrest you for tax fraud unless you transfer money immediately”, or persuade you to “pay your tax debt pronto”.
Of course, they’re all tax scams. The ATO has distinctly highlighted some common scamming methods, and clearly stated that it doesn’t take up on the actions alleged by the bogus calls.

Phony tax agents

Another crucial thing to be cautious of is the involvement of ‘ghost tax preparers’ in these tax scams. These tax preparers usually set up shop during tax time, and advertise fast tax returns at supposedly unbelievably low prices. No doubt, it’s a blatant lie. These so-called tax preparers are generally not registered as licensed agencies under the Tax Practitioners Board (TPB), and thus, cannot “charge or receive a fee or other reward for providing tax agent, BAS or tax (financial) advice services.”
One of the ways they carry out tax scams is: they gather your classified information, collect their fees, and then disappear. They might also impersonate your real tax preparer by contacting you with an email address that’s similar to your actual agent’s. In the end, you might get tricked into giving out your information to them.
With tax scams shadowing this tax season, you can avoid them by considering the following measures:

1.  File early:
The earlier you sort your finances and file your taxes, the sooner you’ll get your tax refund. This way, you won’t have to rush until the end of the deadline to contact a tax agent. So in a sense, you’ll be able to avoid tax scams and stay ahead of the game.
2. Secure your network:
Don’t casually share your information with people over the internet – whether it be via email or cloud, ensure that your network is secure. Update your cybersecurity, and only open links and share files with trusted sources.
3. Calls from the ATO:
Before you respond to emails or calls from the ATO, verify if the source is real or not. Don’t forget to note the key things that the ATO has specified regarding their tax procedures, or ask your registered tax agent to look into it.

Conclusion

Doing your taxes can be bothersome, but if you don’t file them early with the help of a registered tax agent, you might be vulnerable to tax scams. Beware of what you share, and to whom.

This information is general in nature and does not take into account personal circumstances and situation.

As a Registered Tax Agent under the Tax Practitioners Board, we, at Lotus Smart, have a dedicated team of proactive, forward-thinking, result-oriented members who have held roles in corporate accounting across Australia and overseas. We provide expert accounting and taxation advice to both individuals and businesses. With over 20 years of experience, we’ll ensure that you’re always getting the best guidance from the most professional company in the industry.

For more information, contact us.

tax deductions
Amogh Pradhan July 23, 2019 No Comments

Tax Deductions You Can Claim This Financial Year

It’s that time of the year again! This is the season for dealing with a formidable foe – taxes! Doing your taxes might be stressful, however, despite being a constant itch, taxes have a bright side to them: Tax deductions.

Tax deductions include the amount permitted by the Australian Tax Office (ATO) to be subtracted from the income earned. The lower the net income, the lower the financial burden of tax payments. In a way, tax deductions avert the risk of overpaying taxes, and help you retain your revenue savings.

Although it’s quite a handy accounting tool, you can’t claim every item for tax deductions. The ATO has placed three golden rules of tax deductions:

  1. You must have spent the money yourself, and not reimbursed it.
  2. The expenses must be directly related to your earnings.
  3. You must have records to prove it.

Here are some of the tax deductions that you are entitled to claim this tax season:

Vehicle and travel expenses

If you are required to travel for work related purposes, that expense can also be considered a part of tax deductions. It could be fuel expenses of your car, or airfare, bus or taxi fares, even accommodation and meals too. Besides, if you want tax deductions of your travel expenses, try keeping track of them.

In fact, the ATO strongly recommends keeping a travel diary, along with records like tax invoices, boarding passes and tickets, to keep track of travel-related tax deductions. Hearing this, you might think of planning a weekend getaway to Barossa. Sadly, since it’s a form of personal expense, it can’t be claimed.

Clothing, laundry & dry cleaning

ATO allows one to claim expenses for protective clothing, laundry and dry-cleaning should they use it directly for work related purposes. For example, a construction worker could claim for steel capped shoes, protective helmet or hi-vis vests.

However, going back to the golden rule – you must have spent it by yourself, spent directly related to your earnings and must have records to prove it. Although the ATO allows to claim expenses upto $300 without any receipts, it is advisable that you keep at least some records that may prove that you actually spent it.

Educating yourself

Learning never stops. You can undertake self education to either maintain or improve skills that directly relate to increase in your income. The ATO has a provision of tax deductions for self-education expenses, clarifying that, “Self-education expenses are the costs you incur to undertake a study course at a school, college, university or other recognised place of education.”

However, your work and the course you take must have a significant connection to be eligible for tax deductions. For instance, if you’re a chef, and you take extra cooking classes, this self-education expense falls under your tax deductions list.

Telephone and internet expenses

Oftentimes, you might use your own mobile phone or home internet for work related calls. What about the expense, then? Should you record it as an expense and claim its share of tax? The answer is yes – well, partially. You see, when an expense has both work-related and private uses, you can claim the ‘business half’ for tax deductions.

Take this example: Your mobile phone expense amounts to a total of $70, out of which 60% comes from work-related calls, and the remaining 40% from personal use. In this case, you can claim the 60% for tax deductions – given that you don’t forget to keep a proof of this expense!

Gift and donations

Donations are another expense that you can claim for tax deductions. However, the ATO specifies that the organization that you have donated to be registered with DGR (Deductible Gift Recipient).

What do you need to do? Check whether the organization that you donated to is registered for DGR. Note that the ATO has specified that you cannot claim on raffle tickets and fundraising dinners.

Home office expenses

Good news: You can claim your home running expenses for some tax deductions! Yes, you heard that right. If you work from home and have a separate room set up for working, you may be able to claim the home running expenses. However, keep in mind that you can only claim for the portion on the work related expenses.

Tools and equipment

Tools and equipment such as personal computers, electronic devices can be claimed as tax deductions for work purpose portions. It does not limit to electronic devices – if you use your own machinery or tools that you have to use for work purposes you may be able to claim those as well.

For example, nurses and doctors are eligible to claim the cost for purchase of stethoscope and blood pressure machine that they have bought by themselves to use for work related purposes.

Other deductions

Aside from the things we’ve mentioned, there are few other things that you can claim as tax deductions. These include: books, periodicals and digital information, union fees and subscriptions to associations, personal super contributions, income protection insurance, interest charged by the ATO, among others.

Tax agent fees

No matter how good you are with numbers, dealing with the legalities of tax deductions can be bothersome. The worst part is that if you can’t deal with this problem efficiently and quickly enough, you’ll be in a financial pinch. Thus, we highly recommend that you leave the knick knacks of taxing to capable agencies like Lotus Smart.

Now, you may already be counting numbers in your head regarding the fees, but worry not. The ATO also has a provision where you can claim tax deductions for the cost of managing tax affairs.

Conclusion

These expenses may seem inconsequential, but when they’re summed up, they total to a hefty amount. Now that is something you can’t ignore. To ensure that you save up as much as possible, you can claim tax deductions on a chunk of your expenses.

This information is general in nature and does not take into account personal circumstances and situation. For a better understanding of the ins and outs of taxes, we, at Lotus Smart, have a dedicated team of proactive, forward-thinking, result oriented members who have held roles in corporate accounting across Australia and overseas. At Lotus Smart, we provide expert accounting and taxation advice to both individuals and businesses. With over 20 years of experience, we’ll ensure that you’re always getting the best guidance from the most professional company in the industry.

For more information, contact us.

first time home buyer
Rajesh June 28, 2019 No Comments

Lotus Smart | 10 Important Things A First-Time Home Buyer Needs To Know

Buying a home is probably one of the biggest financial decisions you have to make. It isn’t like buying a loaf of bread, in which case, quality is synonymous with white, fluffy and fungus-free. If you’re planning to buy a home, especially as a first-time home buyer, you have to do your homework to recognize the standard of quality.

Of course, it’s no easy task. As a first-time home buyer, you’re new to this game, and without sufficient research, you might regret your purchase. After all, it’s not about a couple of dollars – the risks associated with your investment is tantamount to losing your life savings. Don’t panic, hang on, take a step back and consider these important things we’ve listed for a first-time home buyer:

Think about why you want to buy a home

As a first-time home buyer, it’s important to know why you want to buy a home in the first place. Do you want to live in it, or will it be an investment property? This can help determine the kind of loan you apply for and home you buy, depending on your short and long-term plans. It also helps to determine the location to buy the property.

Know your budget

Let us lay this down real straight – money matters. You need to know your budget in order to determine which areas you can afford to buy a house. Don’t forget to consider several incidental costs such as stamp duty, registration fees, conveyancing fees, lender mortgage insurance and bank fees. Since you’re a first-time home buyer, we advise you to consult a finance broker or lender to get a more accurate estimate of associated costs. Cost isn’t the only thing either – you should also know how to obtain a pre-approval of your home loan.

Research potential properties 

As a first time home buyer, knowing the market is crucial. Do some research on the areas you are targeting, check out auction clearance rates and recent sales, as well as price trends in the area. While your budget dictates the areas you can afford, think about the availability of schools, shopping centre, public transport and other amenities. Your personal circumstances as a first-time home buyer matter a lot while buying a house to live in. For example, if your kids are about to go to university and you don’t have a car yet, you may want to live in a walking distance to university or close from public transport.

Think about your future

Just because your current situation allows you to get a certain amount of home loan doesn’t automatically guarantee that you will still be able to service it in five years’ time. As a first-time home buyer, it’s important to consider future prospects. Is there a possibility that your role at work will change? Are you considering going back to study and reducing your working hours? Does your health condition allow you to work as usual in the future? The last thing you want is to default a loan you took as a first-time home buyer.

Negotiate as much as you can

Whether you’re a first-time home buyer or a property investor, buying a home is one of the biggest financial transactions. Getting the best possible deal is crucial considering how you are spending thousands of dollars. Don’t worry, if you want to cut a splendid deal as a first-time home buyer, you can use an ace up your sleeve: negotiation. Negotiation is about understanding the market, finding out who can help you and sticking to a budget. For a first-time home buyer, if you negotiate well, you can enjoy saving not only on the purchase price but also on stamp duty and loan interest.

Don’t make a buying decision in a pressure

With a huge sum of money and a bucketload of risks involved, it’s only natural for you to be under tremendous  pressure. However, this doesn’t have to mean that you hastily buy the first property that’s up for sale. As a first-time home buyer, remain cool, calm and make an informed decision during your purchase process. Don’t worry if you’re unable to purchase one property because there will be many similar properties around the corner which will fit your criteria. So, beware of the fear of missing out – the excitement of an auction could make you panic and jump to a bad decision for a first-time home buyer.

Is the house structurally sound?

Buying a property is not just about the money you invest. This decision is attached with your emotions, and your lifetime savings as a first-time home buyer. So, ensure that before you sign any contract, the property you are buying is structurally sound. Does it have pests? Or leakage problems? Or does it have poor lighting? As a first-time home buyer, the last thing you want is a pest problem, or a crumbling ceiling.

Do you need to do any renovation?

Old or run-down properties are comparatively cheaper – that’s a given. If you’re planning to buy such a place as a first-time home buyer, make sure that you get the complete idea of renovation costs. This can mean anything from a new kitchen, new bathroom, heating and cooling and some cosmetic fixes. Being a first-time home buyer, you can get the property inspected by a qualified builder or trade persons, and get an estimate of the renovation costs in order to make the property liveable. Once it is purchased, make a note of whether you will have enough funds to renovate the property or not.

Think about ongoing costs

After moving into a new house, mortgage is not only cost you have to manage. For a first-time home buyer, there are a lot of ongoing costs you’ll have to manage on top of your repayment. These costs can be Home and Content Insurance, Strata/Body corporate fees, Interest and Bank Fees, Council Rate and other utilities fees such as water electricity and gas. So, as a first-time home buyer, you’ll need to be mentally prepared and have a good plan to accommodate these costs without bearing any financial pressure.

Get professional help

With so many things to consider, getting professional help is highly recommended, especially for a first-time home buyer. There are many experts in the industry, and it is in your best interest to use them for tasks such as property checks, pest checks and any other legal queries. Being a first-time home buyer, doing it alone can prove costly. Avoid nasty surprises down the track by getting the right people to do the appropriate checks for you from the beginning.

If you’re uncertain about how to proceed, we, at Lotus Smart, can help you through the entire process. Lotus Smart is a team of Chartered Accountants committed to delivering high-quality professional services. We are proactive, forward-thinking, result oriented and we work closely with our clients to achieve their financial goals. Our associate Lotus Finance (CRN 432565) can guide first-time home buyers like you through the complex process of acquiring a mortgage. Due to our solid relationship with more than 25 lenders, we can boastfully say that we can easily provide you with information of all the alternatives available to you when it comes to choosing loan.

Disclaimer: This article is generic in nature. All finance and investment decisions should be considered wisely and based on your personal and financial circumstances. Seek proper advice before committing to any course of investment action. This is not deemed as advice.

Lotus Smart and its related employees and contractors accepts no liability or responsibility to any person for any loss which may be incurred or suffered as a result of acting on or refraining from acting as a result of anything contained in this publication

Tips to keep your cashflow strong

Tracking your cash flow and knowing what goes in and out of your pocket can help you better assess the overall situation of your business. At the end of the day, you want to minimize your expenses that and increase your profits. However, this is not always the case as there are numerous factors that affect the business. Keeping your cash flow strong is one of the steps for good financial health. Below are some of the tips for improving the cash flow of your business.

1) Always create a budget – Business owners should thoroughly check the inflows and outflows of the cash in the business. They need to actively include the sales cycle, creditors, debtors, discounts provided by the customer etc. Lotus Smart Accounting can help you create a budget plan for your business to get you ready in any unforeseen circumstances.

2) Reduce overheads – Does your staffs go on overtime a lot? Do you have a lot of expenses? Reducing overheads can improve your cash flow, so think carefully about what you are spending the most. Don’t just consider overtimes, look at your expenses such as power and water bills.

3) Have a Plan B – Always have a Plan B just like the greatest generals of our history.  No matter how much planning you do, there are unexpected events can suddenly come in wreaking your strategies. During these times, businesses need to have a contingent source of cash to keep the operation running.

Lotus Smart Accountants are professional Accountants based in Clayton. We can help you create a tailored cashflow strategy for your business and we can give you a month to month recommendation. For more information, call us at Lotus Smart Accountants, your success is our priority.

Call us at 03 9561 9922or visit our website at www.lotussmart.com.au.

3 Signs that you need to hire an Accountant for your business.

If you are a business owner, you are aware of the amount of stress that you must deal with every day. These can be from meeting client’s expectations to paying your bills. Running a small can be both difficult and rewarding. Getting help from small business Accountants like Lotus Smart can do a lot more than just crunching numbers.

Here are some valuable service that as small business Accountant can offer:

1) They can help you assess risk and how you can minimize it – When you are starting a new business, you will be exposed to a lot of risk like financial & compliance. Lotus Smart Accountants in Melbourne can help you decide what your business structure should be or advice you whether you should register for GST and payroll taxes.  Furthermore, our team can also advise you on the right lenders if you need to raise startup capital.

2) Small business accountants can help you control your finances – Accountants can help you assess your business cash flow.  Lotus Smart Accountants can help you look at your financial reports and give you professional advice where you can reduce the cost of running your business. In addition, we can also help you invest any extra profit that you have earned.

3) They can help your business expand – Small business accountants can help you grow your business into an enterprise. Lotus Smart Accountants can help you with the transition from a sole trader to a company. We can provide you with the best growth strategy that will help your expansion.

Lotus Smart Accountants has an exceptional team of qualified small business accountants. We can help you whether you are in Mulgrave, Glen Waverly or anywhere in Melbourne. At Lotus Smart Accountants, your success is our priority!  Call us at 03 9561 9922or visit our website at www.lotussmart.com.au.

Three essential things you need to know before getting a mortgage

Buying your first home is one of the best things you will achieve in life. After putting up with years of long working hours, numerous overtimes and years of savings, finally having your own keys to your own home is a dream comes true. When mortgage comes into your life, aside from consulting a home loan broker in Melbourne, you should still brush up on your knowledge and learn what to do before applying.

1)   Credit is very important – Before applying for a mortgage, getting your credit check to figure out the status of your credit is highly important.“Before risking their money on your mortgage, Financial institutions are very mindful of whom they lend money to.”

2)    Know how much you can afford – understand your requirement and borrowing capacity. Always keep in mind the future not just the present. Lotus Smart Accountants has a team of experienced mortgage brokers in Melbourne who can advise you your borrowing requirement. We will thoroughly check how much you can borrow relative to your income to ensure that you can repay it.

3)    First home buyers – Are you a first home buyer? If so, you may qualify for some benefits that could help you with your home loan. Lotus Smart Accountants can always help you to identify opportunities that could make your purchase easier.

Lotus Smart Accountants has an exceptional team of qualified mortgage brokers that can help you regardless of your financial situation. Our combined knowledge, experience, and attention to the individual needs and requirements make us one of the best home loan brokers in Melbourne.

Call us at 03 9561 9922 OR visit our website at www.lotussmart.com.au.

 

 

 

 

13 reasons to choose Lotus Smart Accountants

  1. We help you maximise your tax refund and make sure that your return is within the laws and ATO guidelines.
  2. We not only provide tax service but also educate our clients the right way achieve maximum tax deductions.
  3. We help you with strategic tax planning for your short term and long term financial goals. We educate you on negative gearing, salary sacrifice and capital gains which are essential if you are serious about wealth creation.
  4. We deal with the Australian Tax Office on your behalf – saving your stress and long hours on the phone.
  5. We pride ourselves for providing quality professional services at affordable prices. We follow fixed price model and we will not surprise you with any unexpected bills.
  6. Getting a return on your rental property can be tricky especially if you own rental property for the first time. You can book an obligation free meeting with us before the end of the financial year for getting organized in the tax time.
  7. Your tax will get affected if your status changes to: married, divorced, unemployed, have children or receive an inheritance etc. Lotus Smart Accountants carefully analyse your personal circumstances and guide you through the right approach.
  8. If you own or are planning to buy shares, bonds, bit coins, derivatives etc, we educate you on tax implications and other aspects of such transactions before getting any surprise bills from the tax office.
  9. If you are working full time and you own a business at the same time, you will be entitled for various tax deductions. Sometimes claiming deductions can be tricky. Getting the advice from an experienced Chartered Accountant would tremendously help you to get through your financial journey smoothly.
  10. We ensure you have the best legal structure (e.g company, trust, SMSF, SMSF bare trust etc.,) for your business or investment. We help you to successfully plan and implement strategies on tax minimisation, asset protection and wealth creation.
  11. Do you know that if you are an Uber driver, courier driver or run a cleaning company, there are extra compliance on GST and ATO reporting? Lotus Smart Accountants will take complete care of your compliance requirement.
  12. By choosing Lotus Smart Accountants, you will have peace of mind on your tax and other financial affairs. We guarantee you the best personalized service throughout the year.
  13. If you are an international students or on temporary visa, you may be entitled to receive Medicare Levy exemption and some specific deductions. Lotus Smart Accountants are specialized to prepare tax returns for international students, backpackers and temporary residents.

Call us today on 03 9561 9922 to arrange an obligation free meeting to discuss your business and personal requirements. We will answer your queries or concerns within 24 hours.

 

 

tax
admin October 15, 2017 No Comments

Are You Looking for a Dandenong Tax Agent?

Are You Looking for a Dandenong Tax Agent who provides personal attention into your tax affairs? Don’t worry, Accountants at Lotus Smart are ready to help you. We are approachable, friendly and provide advice for your maximum tax returns. Those are the reasons why our clients love us and we are building up our practice bigger and better.

Accountants at Lotus Smart are committed to offer you the first class tax advice, at a reasonable price. We are based in Dandenong North and provide service in surrounding suburbs including Narre Warren, Berwick, Hallam, Hampton Park, Lyndhurst, Lynbrook, Cranbourne and Noble Park.

We offer all kinds of tax returns services from simple individual tax return to multiple years and complex business tax returns. We prepare tax returns for partnerships, companies, trusts and Self Managed Superannuation Funds (SMSF). We take time to understand your business and personal circumstances and spend many hours to research on supporting your business better.

We deliver premium service to all our clients and ensure maximum possible return in a legal manner. No job is small or big for us. We are proactive and deal with you happily whether you are a sole trader or owner of a multi-million dollar business. We ensure that information about you and your business is fully protected and secured. We respect and protect the privacy of your information. Each and every client is very important to us.

Personal Tax Returns

We handle all individual income tax returns from basic to complex. Your tax return will be prepared and lodged by a registered tax agent and lodged to ATO within 24 hours. Our specialisation on individual income tax covers, but not limited to:
– Rental Property
– Capital Gain calculation
– Profit shares from partnerships & trusts
– Personal Services Income
– Sole trader business income and expenses
– Centrelink payments
– Investment income

Business Tax Return

Lotus Smart Accountants look after all your taxation obligations no matter what industry you are in. The experience gained during our interaction with different industries for last 20 years has put us on a preponderant position among our direct and indirect rivals. Our extremely high efficient business taxation services are:

– Business Activity Statements (BAS)
– Installment Activity Statements (IAS)
– Business Tax returns including schedules such as Depreciation & loss schedules depend on different circumstances
– Fringe Benefit Taxation
– Payroll tax returns
– Taxable Payments Annual Report for construction industry
– Preparation of PAYG payment summaries for employees

Communication with our clients and ATO is our top priority. We deal with ATO in a timely manner and assist you to appeal to ATO for the waiver of fines and penalty if you have the genuine reasons for such appeal. We have a variety of clients from diverse range of industries. Hence, we are well aware of all of your industry requirements and obligations. Our diversified client base mostly comprises of:
– Cafes, Restaurants and take away shops
– Property developer
– Family Day Care Educators
– Printing businesses
– Construction and Building businesses
– RTO (Registered Training Organization)
– Petrol station
– Transportation & Courier services
– Engineering services
– Saloons, beauty parlous and cosmetic business

We are just a phone call away. Call us today on 03 8751 5768 to book your tax time appointment.

home loan rates
admin May 4, 2016 No Comments

Reserve Bank of Australia cuts cash rate to 1.75%

The Reserve Bank of Australia on Tuesday cut the official cash rate to 1.75 per cent in a bid to address falling prices and an economic downturn.

 

The Australian Bureau of Statistics on Wednesday published a report of deflation in Australian economy. The consumer price index (CPI) contracted 0.2 per cent in the three months to the end of March, taking the annual rate to 1.3 per cent, compared with 1.7 per cent at the end of December. This is below the target inflation rate which the RBA is mandated. The RBA would like to keep the inflation by 2 to 3 %.

 

NAB, CBA and Westpac have already passed on the full rate cut to its home loan customers. ANZ is the only bank not passing on the full rate cut. Instead, ANZ Bank will reduce its home loan rates by 0.19 of a percentage point.

 

If the 25 basis point cut was fully passed on to home loans by the banks, it would equate to a $43-a-month saving on a typical 25-year $300,000 mortgage.