Savings Through Taxable Income: Proven Recipe of Millionaires

The tax system is complex and keeps on raising questions for many entrepreneurs. Starting with the question of which types of taxes are relevant for you and your company, through various tax obligations and deadlines that must be observed, to the question of how you, as a self-employed person, can save taxes.

More money through depreciation and lump sums

In order to properly save or reduce business expenses, it is first important to understand what it is all about. Depreciation is a decrease in value that ultimately helps you lower your tax burden. Business people show the depreciation of larger purchases; this loss lowers the company's profit and can thus lower the tax liability. The extent to which objects can be written off depends on the respective asset.

In addition to depreciation, lump sums offer you another option to reduce your taxable income regardless of the actual amount of the costs. Some of these so-called allowances or deductions are paid directly by the tax office. You have to have others in your own tax declaration specifications. In order to claim a flat rate, no evidence is usually required. Supporting documents are only used if the actual costs are higher than the flat rate. In this case you can claim these costs additionally.

Reduction of business expenses from tax

Business expenses play an important role as far as tax deductions are concerned. You are not referring to advertising in the sense of marketing but at the expense of working people in the course of their work and their profit diminish. This also includes contributions to professional associations and profession-specific insurance companies.

You can claim advertising expenses with the help of the flat rate. This is currently $ 1,000 per year. Married couples who are jointly assessed can use this even though one of the partners does not even reach the flat rate. For example, if one partner has advertising expenses of $ 800 and the other advertising expenses of $ 1,500, they can claim a total of $ 2,500, as in this case both partners are entitled to the full flat-rate advertising expenses.

The advertising costs include, among other things:

● Customer service,

● Application costs,

● Telephone costs,

● Account management fees,

● Training costs.

Deduct company cars from tax

Please note: The company car can also be tax-deductible. With a commercial use of 90 percent or more, you can save as much as possible, since all relevant expenses such as fuel and insurance for the vehicle can be deducted as advertising costs. In order to deduct travel expenses, it is mandatory to keep a logbook.

Deduct work equipment from the tax

The self-employed can also state work equipment as business expenses. It is important that at least 90 percent of these are also used commercially to be able to deduct them for tax services.

Work equipment includes:

● Office furniture,

● Mobile,

● Computers and laptops,

● Software,

● Professional support,

● Specialist literature.

Regulations for study and rent

Usually home expenses are not deductible. Under certain circumstances, however, the legislature still allows the removal of a private study. There are two prerequisites for this:

● If there is no other workplace available to you, you can deduct up to $ 1,250 per year as operating costs. This category includes, for example, people who work from home because their employer does not provide them with an individual workplace.

● If your study is the focus of your activity, the entire costs can be deducted. This is especially true for freelancers such as writers or freelance journalists.

So, you can save not only on rent, but also on energy, cleaning or renovation costs as well as the property tax with your home insurance.

Deduct company outings from the tax

On a joint excursion with the company, some costs come together: admission tickets, bills, trainers, or tickets make for extraordinary expenses. Here, you have to know that there are also tax exemptions: With up to two excursions per year, expenses of less than 110 euros per participant are tax-free. Further excursions must be taxed in full. If employees bring relatives to the company outing, the costs incurred will be charged to the respective employee.

As a result, the allowance is quickly exceeded. If the expenses exceed the amount of the exemption, they are considered a pecuniary benefit and must be taxed. Alternatively, the difference between the tax exemption and the costs actually incurred can be in the form of flat-rate wage taxis paid by the employer to the tax office. This is currently 25 percent.

Handicrafts and household services

Expenses for craftsmen, household help or gardeners do not reduce the taxable income, but can be deducted directly from the tax liability. Handicraft services related to the household, such as renovation or maintenance work, can almost always be deducted. The prerequisite is that the work is done in your own household.

In order for you to benefit from tax breaks for household-related services, it must be a marginal part of the job. It is also important that you participate in the so-called household check procedure and register your domestic help. You can only take advantage of this tax reduction if you receive an invoice or the contribution to be paid has been transferred. Cash payments are not accepted.

Special expenses: Tax deductible donations and health insurance

Special expenses include all expenses that do not fall into the category of business expenses or advertising expenses. From pension expenses to church tax, there are a number of expenses that can be deducted as special expenses. Here is an overview of possible special editions:

Deduct health insurance from tax

With the introduction of the Citizens Relief Act in 2010, the self-employed have the opportunity to deduct health and long-term care insurance contributions from tax. The contributions to statutory health insurance and long-term care insurance can be almost completely deducted. Note that there is also a maximum limit for pension expenses. If this is exceeded, only the contributions that exist within the framework of the basic benefits can be taken into account. Optional tariffs and additional services are not deductible.

For privately insured persons, somewhat different regulations apply, which are usually somewhat more complicated, as various, non-deductible additional benefits are often involved.

Donations in the tax return

Those who donate are doing good and can save taxes at the same time. As a self-employed person, you can state donations as special expenses in your income tax return. Companies consider this category under business expenses. In order for donations to be actually recognized as such, the following requirements must be met:

● They support charitable, charitable or church purposes.

● The donations do not constitute payment for something in return.

● They take place for voluntary and unselfish reasons.

● The recipient is from a tax office recognized as non-profit.

In order for the tax office to accept donations in your tax return, you must also provide evidence. For donations of up to $ 200, the deposit slip or a bank statement is sufficient. If the sum exceeds this amount, an officially recognized donation receipt must be presented.

Save on church tax

Anyone who lives in the USA and is a member of a religious community who is entitled to the collection of church tax must pay church tax. The amount depends on the respective place of residence and is divided into two percentages. For example, in some states, you pay 8 percent and 9 percent in other states. The church tax can also be indicated in the special expenses. Those who leave the church are accordingly exempt from church tax liability.

Tax deduction from private schools

The young have a right to education – and in private schools this right is expensive compared to state schools. If you send your child to a private school, you can also deduct part of the school fees for tax purposes. A maximum of 30 percent of the costs may be claimed, but may not exceed $ 5,000 per child. If the child attends a foreign school, this must be recognized by the State authorities in order to claim the costs.

Deduct maintenance from tax

Anyone who is obliged to pay maintenance can regularly deduct this from tax. The maximum amount here is $ 9,000 per calendar year. If the payments are specified as special expenses, one speaks of real splitting. This is where the tax performance principle comes into play. This means that the maintenance payments reduce the performance of the payer and increase that of the recipient. Ultimately, this leads to a reduction in your tax burden when you have to make maintenance payments. For this principle to take effect, the maintenance recipient must be on the income tax return sign.

Extraordinary burdens in the event of unexpected events

In order to avoid cases of hardship due to extraordinary burdens, these can also be claimed as special expenses. The limit up to which you can claim these expenses is determined individually by the tax office and is based on factors such as marital status and number of children.

Some examples of such extraordinary burdens are:

● Allergies: Medicines and therapies can be deducted as medical expenses. If you make permanent use of a drug, it is best to submit a permanent prescription to the tax office.

● Alternative medicine: These are costs that arise for homeopathy or herbal medicine. If a doctor has prescribed the treatments, an official medical certificate is not necessary.

● Funeral costs: If the estate is insufficient to cover the costs of a funeral, relatives can claim them for tax purposes. This includes costs for the coffin, flowers and wreaths as well as obituaries.

● Treatment costs: The health insurance does not always cover all costs incurred for a spa treatment or therapeutic treatment. Costs borne by yourself for accommodation or travel can be deducted from tax.

● Care costs: Age-related accommodation in a retirement home is not tax-deductible. However, if this occurs for reasons of illness, this is also one of the extraordinary burdens.

Punctuality and order pay off

It is helpful to deal with the unavoidable tax return not only when it is due, but for the entire financial year. Keeping your documents tidy and keeping your invoices and receipts carefully and orderly saves you a lot of work and time.

In addition, a separate business account of personal and professional income and expenses as well as the corresponding evidence to the tax office. In addition, you can easily keep an eye on your professional expenses.

Home Loan Tax Benefits That You Should Know

With the constant rise in real estate prices, it’s become almost impossible for an individual or a family to purchase a house without the help of a home loan.While many are apprehensive about taking a loan because of the kind of interest rates that they come with, what most people are unaware of are the tax benefits that you can enjoy on home loans. If you’ve got a mortgage on your house, you can avail of benefits and deductions under 3 separate sections of the Income Tax Act.

Deduction Under Section 80C: 

If you’ve taken out a loan to purchase a home for which the construction is complete, and you have the completion certificate, you can enjoy deductions on the amount you pay towards repaying the principal amount of the loan. This clause is only applicable for individuals or Hindu Undivided Families (HUF). The maximum deduction under this section is Rs. 1.5 lakhs. It’s important to remember that deductions will not be valid on any repayments made before the construction is complete.

Even if you haven’t taken a loan to purchase a house, you can still enjoy deductions on the amount that you have paid towards the stamp duty and registration fee of your new home.

Deduction Under Section 24: 

When you’re repaying a loan, you will pay a certain, fixed amount to the lender every month as your Equated Monthly Installment or EMI. Your EMI amount is calculated based on the loan amount, the rate of interest, and the tenure of the loan. Typically, your EMI is made up of a principal repayment amount, and an interest amount. The interest amount that you pay is exempt from tax under Section 24 of the Income Tax Act. You can claim this deduction at the start of the year in which the house’s construction is completed. This benefit is also available if you’ve utilized the loan to repair or reconstruct an existing property.Additionally, if you’ve rented out your home, you can claim for a deduction for the interest amount paid all through the year.

Deduction Under Section 80EE: 

When you apply for a home loan to finance your first-ever house, you can get additional tax benefits on the interest payment sunder this section. To claim this deduction, you will be required to provide a statement from your lender which clearly indicates the total amount payable, your principal amount, and the amount paid towards your interest. The maximum deduction you can claim under this section is Rs. 50,000.

Now that you know about the various deductions and claims you can enjoy when you take out a property loan, you should easily be able to determine which benefits apply to you and which ones don’t. If you’re still having trouble understanding how to figure out the deductions, you can use an online tax benefit calculator. The calculator will help you understand how much money you can save despite the fact that you have to pay interest on the loan amount.

Over the years, home loans in India have helped numerous families find the home of their dreams. With so many additional tax benefits to home loans, it’s getting easier for young individuals to put aside enough money for a down payment and then secure a loan to help themselves find their own little place in the world. So, it’s time to put all your worries to rest, and fill out that application for a loan. Your dreams are counting on it.

ULIPs Yield Great Tax Saving Investment Options – Find Out

Several investment options in India have been affected by demonetization and our own spending habits. On the other hand, most of the fixed deposit rates have been lowered by banks post this demonetization drive. Chances are here that the FD rates might drop even further. This is a situation where in all investors are preferring life insurance over other investment options.

ULIPs (Unit-linked Life Insurance Policies) have gained much presence in the investment market as they’re considered to be a much safer means of creating wealth in the long run. Reasons behind the increasing popularity of these ULIPs comprise of their lucrative returns besides their tax saving and protective nature. Out of all the features of a unit-linked insurance plan or ULIP, the most important one seems to be its capacity to invest an individual’s premiums into equity funds as well as mixed debts in different proportions. It doesn’t even yield any tax liability for enacting transfers between separate funds.Besides yielding extra tax-saving advantages for the investors, ULIPs act as a financial tool that links multiple investment options.

Few of the ULIP advantages have been mentioned below:

Deductible premiums

The premiums that are paid for a coverage plan like ULIP get invested with certain financial instruments, debt, and equity. The premium that goes out towards this policy is shown as a deduction under section 80C of IT Act. ULIP premiums may be considered as a deduction from the taxable income up to a certain limit under section 80C. In addition, a ULIP enables the policyholder to pick an asset class and contribute towards his investment planning accordingly. The risk-tolerance of a young investor is much higher and it enables him to follow the more-risk more-return equity investment strategy. To lower your market risks and fetch quality returns, you may pick a mix of financial market instruments, debt, and equity.

Flexibility to change asset classes

A ULIP investor can switch over to a new asset class from the existing one or may even get the funding proportion modified for his current investment in financial instruments, debt or equity.

Non-taxable withdrawals

Apart from the benefits mentioned before, ULIPs may come with great tax saving opportunities against withdrawals. These benefits aren’t meant for the mutual fund investors. Withdrawals may occur when the policyholder needs to withdraw a portion of his investment, when the policy gets maturity or when the policyholder passes away. Death benefit offered by your ULIP isn’t taxable at all. ULIPs show a close similarity to any traditional insurance plan that yields guaranteed financial protection for the dependents of the insured.

Extended coverage

Periodic top-ups offered under ULIPs are a good investment option for individuals possessing excess cash. In a favorable situation, an investor is likely to gain certain tax saving advantages, guaranteed protection, and great returns through different modes of investment like that of mutual funds and life insurance policies. However, it’s quite tough and challenging to strike the right balance between various investment options.

That’s one reason why so many of the modern investors are opting for ULIP and similar combination products. This is certainly an effective option to get your life coverage benefits trebled. Without experiencing any complication and risk of suffering losses, you’ll now be able to enjoy these tax saving options and high ROIs.

5 Ways to Save Tax for Salaried Employees

It is the duty of every citizen of India to pay taxes. As a diligent taxpayer, it is imperative to know about the various deductions and exemptions allowed under various sections of the Income Tax Act, 1961. Besides, there are numerous other methods to reduce your tax liability largely.

Following are five most popular and common ways to save tax for salaried employees in India.

1. Submit medical bills to your employer on time

Most salaried individuals are eligible to receive medical reimbursement of INR 15000 as part of their Cost ToCompany (CTC). Therefore, you may claim a tax deduction for all your medical expenses up to this amount. For this purpose, you may submit all your medical bills, medical reports, lab test bills, or doctor’s consultation bills to your employer. It is important to note that such a tax benefit may be claimed only through your employer, and hence you may submit such bills to your employer on a timely basis.

2. Save tax through House Rent Allowance

House Rent Allowance (HRA) is a common component for many salaried individuals. The rules of tax deduction on HRA are stated in Section 10 (13A), Income Tax Act. The amount that may be claimed as exemption is a minimum of –

a) Actual HRA amount received

b) 50% of the salary in case you live in a metropolitan city or 40% for a non-metropolitan region

c) Excess of rent paid annually above 10% of your salary.

In order to claim deductions on House Rent Allowance, you may submit rent receipts to your employer.

3. Claim deductions under Section 10(14)

The good news for salaried individuals is that they may avail of numerous deductions as per Section 10(14) of the Income Tax Act. You may avail of deduction on children’s education allowance up to a maximum amount of INR 100 a month, per child, up to two children. Besides, you may seek deduction on hostel expenditure allowance of INR 300 a month per child up to two children. You may also claim an exemption on helper or assistant allowance as well as uniform allowance up to the amount of expenses incurred.

4. Invest in medical insurance

You may claim health insurance tax benefits on your health plan. A medical insurance plan is indeed an integral part of financial planning. Besides providing a great degree of financial security during a medical contingency, it also provides tax benefits. You may seek health insurance tax benefits on the premium paid towards your policy. You may claim health insurance tax exemptions on premiums paid for yourself, spouse, parents, and dependent children. According to Section 80D, medical insurancepremiums are exempted up to a maximum of INR 25000. In an event that you or any of the covered members are senior citizens, you may enjoy a higher limit of INR 30000. You may, therefore, avail of such health insurance tax exemptions and reduce your tax liability.

5. Maximize utilization under Section 80C

Section 80C of the Income Tax Act allows a maximum deduction of INR 1.5 lakh. You may claim a deduction on investments made in various financial vehicles such as Public Provident Fund (PPF), Unit-Linked Insurance Plans (ULIPs),National Savings Certificate (NSC), andEquity-Linked Savings Scheme, among others. You may also avail of this section to reduce your taxable income through premiums paid on life insurance plans. Besides, you may claim deductions on tuition fees paid for the education of two children.

The Income Tax Act allows for numerous such deductions and exemptions for salaried individuals. You may, therefore, avail of health insurance tax exemption, numerous investment vehicles, and HRA component of your salary, among numerous others. You may take advantage of them and lower the amount paid towards income tax.

How Does Indexation Impact Tax Charged on Gains from Debt Mutual Funds?

When you invest, you aim to maximize your returns. However, inflation eats into your actual returns. Additionally, when you exit your investments, you need to pay capital gains tax. Fortunately, the government offers a solution for this, which is known as the indexation benefit.

The basic reasoning for indexation benefit is to ensure you pay tax only on your returns after being adjusted for inflation. This allows you to pay 20% capital gains tax after taking advantage of indexation benefit.

Indexation plays a pivotal role in taxation when it comes to debt mutual fund investments. You may wonder what indexation is. In simple terms, it considers the rate of inflation when you calculate your returns on investments. Indexation results in a significant impact on your actual returns earned when you exit your investments in debt funds. Through indexation, your investment price is adjusted for inflation for the purpose of determining your tax liability when you exit. Indexation offers you several benefits because of the inflation adjustment.

Benefit of indexation

The indexed cost of your investment in debt mutual funds is based on the ratio of the inflation index at the time when you exit your investment. Therefore, a higher value means a reduction in your tax liability. During the long-term, the rising inflation adds up to the purchase cost of your debt funds. On a cumulative basis, it may result in the reduction of your taxable returns when you redeem your investment.

In case of smaller returns over a longer period, your entire returns on investments may be eaten up due to rising inflation. It is likely that in such a situation, you may not have to pay any taxes. It is beneficial because if most of your returns are erased due to inflation, paying taxes is not logical. Furthermore, the returns are only notional and not real due to the rising inflation.

Working of indexation

Indexation takes into account the date on which you invested your funds and the rate of inflation since then. When you apply the indexation benefit, your purchase cost increases. As a result, your profits at the time of exit reduce thereby reducing your tax liability.

Indexation and debt funds

Mutual fund investments are liable either to short-term or long-term capital gains tax. When you opt for tax-saving investments, long-term is defined as at least three years. Therefore, when you stay invested for at least three years, you will be liable to pay long-term capital gains tax. The current applicable rate is 20% post-indexation benefit.

For applicability of indexation, the formula is:

Original investment cost X Cost of Inflation Index (CII) at the time of exit/CII at the time of purchase

Let us understand this further with an example.

Assume that you invested INR 20,000 in tax-saving investments in May 2010. Further, assume that you redeemed your investment in June 2013 to earn INR 40,000. Therefore, your long-term capital gains before indexation are INR 20,000. However, your entire returns are not liable to tax because you remained invested for a period exceeding three years. You are allowed to avail of the indexation benefit, which reduces your long-term capital gains tax.

The indexed returns will be (20000*220)/167, which is equal to INR 26347 (CII was 167 in 2010-11and 220 in 2013-14).

Therefore, your taxable profits = 40000 – 26347 = INR 13653, which is a reduction of INR 6347 (20000 – 13653).

Until recently, the indexation base year was 1981, which is now modified to 2001. Therefore, if you invested before April 1, 1981, your profits may be calculated based on 1981 fair value. However, all investments after April 1 2017 will use 2001 as the base year to calculate the fair value.

In addition to earning profits, investments aim to determine how to save tax. One way is to use the indexation benefits on your long-term investments. You may also choose to pay taxes without taking the indexation benefit at a pre-specified tax rate.

You may choose from several mutual fund schemes. However, you may not have the experience or expertise to compare different schemes. In such a situation, you may consider using the ARQ investment engine, the core feature of Angel Wealth’s mobile application.

One major differentiation of ARQ from other available options is that all the recommendations originate through machines without any human bias or intervention. Based on your personal requirements and risk appetite, ARQ offers investment options that only deliver better returns but also help you know how to save tax.

Download the Angel Wealth app today and enjoy smart and quick investment tips.

3 Tips To Get Through Tax Return Season

Filing your tax return is boring, thankless task that takes up valuable time. However, it does not need to be so painful. Here are some helpful tips for getting your tax return done.

Records

You should be keeping records of everything. You need to know the exact amount of income you have had over the year as well as any business expenses. These can be stored in a spreadsheet for ease of access and backed up to prevent data loss. If you keep these records up to date throughout the year, then when it comes down to file your tax return you are prepared and know exactly what your finances have been throughout the year. You can use something like Google Sheets to automatically tall various columns and sums together so that you have even less work to do. If you look on the Internet or through Microsoft Office, then you will be able to find templates for tracking and monitoring all your incomings and outgoings. This will be helpful in your daily life and not just when filing your tax forms.

Use Automatic Generation

There are a lot of free online calculator services available on the internet which can automatically do parts of your tax return for you. If you have employees, then one example is getting your W2 forms automatically completed. This needs to be sent to your employees each year, and it breaks down their annual wages and tax payments. If you have other people’s tax to worry about, then something like this can save you a lot of time. Plenty of these kinds of sites make the W2 form 2017 printable, so you do not need to worry about making it fit to a certain page size. There are other sites that can automatically tally up your income similar to what is done through a spreadsheet as mentioned above, but they can go into more detail and provide the exact information that you need. Doing a bit of research could end up saving you a lot of time.

Start Early

There is nothing worse than having a deadline loom over you and for you to not have enough time to complete your forms. If you start early, then you will not get into a situation where you need to rush through them in the last few days. This will help to prevent any mistakes and errors when submitting your tax return and it will make the entire process far less stressful. If you start early, then you can set aside an hour a week to work through it and by the time the deadline comes around you will have finished ages ago. Taking this approach is especially effective if you often struggle with understanding and remember what needs to be done when filing your tax. This is because it allows time to seek advice and work your way through all of the requirements. Starting early can save you a headache and make the entire process far less annoying.

How To 'Adult' With Money

Being an adult isn’t easy, suddenly you have to know how to do a million and one things that you weren’t taught in school. For a while you’re in that horrible stage where you are an adult, having to understand the adult world yet you can’t buy a beer. But worry not - here are some brief explanations on how to get your head around some money situations you are going to find yourself in over the coming years.

Taxes

Schools really should cover this in class. Because doing your own taxes isn’t something that comes naturally to anyone. More than 43.6 million Americans filed their own taxes in 2013, and the figure has been steadily rising. How did they learn to do it? The internet. Like everything in this day and age, the web holds all the answers to your questions - and some answers you really didn’t need to know. Businessinsider.com lays out what taxes are and why they are so important. Basically ‘tax’ is a percentage of your income which goes back to the government. It pays for public and emergency services.

Loans

Applying for a loan can be a foreign concept and make you feel like you can’t even understand your own language anymore. After you have double checked you’re in the right country, break the information down. Often websites will have a frequently asked section, and banks will have people on hand to explain things to you. Online forms should be designed to be as straightforward as possible as there is no one with you to explain them. There are many different loans from student to personal, and they all come with their own interest rates and contractual commitments. Before applying for a loan, check out sites like personalloan.co (if you’re looking for a personal loan) to figure out if you are getting the best deal.

Budgeting

You might have done this throughout college, or you might have touched on it with your parents. And starting young is always the best. If you start budgeting and keeping track of your money when you only have your phone bill and your Netflix subscription, it becomes a lot easier when you have to start adding on more and more things. Think about it like sliding into the pool rather than jumping into the deep end. Budgeting templates and tools are out there to help you to get started, Office.com have thousands of templates where you just fill in the relevant areas, whereas others help you to build one from scratch.

Accounts

Opening an account at the bank is easier than ever before. With online banking, all you have to is click a few buttons. But just opening a savings account or a cash ISA isn’t enough - you need to do the research. You want a high-interest savings account, but a low-interest overdraft. Go into different banks and see what they can offer before opening anything new.

Your Company Needs A Car, And Here’s Why

Businesses have lots of expenses to contemplate. From tech to new machinery, the list is endless. But, one purchase which doesn’t get the same amount of time is a company car. To most firms, it is a luxury, and indulgence they can’t afford. So, you leave it to the big boys to swan around in their motors and show off. However, prestige and reputation are not the only reasons businesses have company cars. In truth, there are plenty of reasons to consider kitting out the organization with a car. These are the main ones. 

Employee Satisfaction

From a worker’s point of view, a company car is a great addition. Why? It’s because they get a free car essentially. Because the company can claim back the tax, they don’t have to pay for gas. And, they are not going to fork out tens of thousands for the initial purchase because that is madness. Then, there is the cheap insurance to consider, as well as a multi purpose vehicle they can use outside of work. Simply put, a car is an excellent incentive for employees who are high enough up in the firm. If you don’t have the budget to compete with your rivals, this is a fantastic option.

Tax Deduction

“Wait there a minute. Why would you buy a fleet of cars if you don’t have a big budget?” Good question because vehicles are not cheap, especially if there is more than one. However, when a business buys or rents a car, they don’t go through the same process. Because it is for commercial purposes, there are tax deductions which can save the firm money. For example, it is possible to claim the overall cost as a business expense. If a vehicle's price is $15,000, it is $15,000 off the bill at the end of the tax year.

Brand Awareness

Everyone has seen the cars which are full of logos and advertising materials. Gaudy they may be, but they are also effective. People see the cars on the roads and can’t help but notice the brand. Of course, awareness of the company increases as a result. If this is too ostentatious, there is the firm’s reputation within the industry to consider. When you go to a meeting, you can’t turn up in an old banger which chugs and sputters. Instead, a sleek and professional car, like a Range Rover, is necessary to reflect the business. The good new is that Cars & Co Range Rover dealers have the price covered. You just need to make sure you choose wisely for the sake of the company. 

Helping Around The Factory

It is rare to find a business which doesn’t make deliveries in 2017. You probably have a contract in place with a shipping company, but a company car is an alternative. With a vehicle, it is easy to make shipments and deliveries to fulfill customer orders. And, there is the added extra of rolling up in a new whip and impressing your base.

Ultimately, a company car can help everything from the firm’s finances to employee turnover. Therefore, it’s a no-brainer.

Investments: How To Work Out If They’re Right For You

When it comes to earning money, it may be tempting to think that you only have one option. Your job may be your primary source of income, but it doesn’t have to be the only one. When it comes to diversifying your income, it can often be a smart step to take. When you have money coming in from a range of different avenues, you can feel more secure. However, when you’re new to the idea of investments, you may not always know where to start. So read on for some simple tips on how to discover if an investment is right for you.

Do Some Research

The first thing that you’re going to need to do is research. Not only does this mean you may want to research the investment market and how it works in general so that you get a good feel for things, but also any specific opportunities that you’re interested in or have been offered. When you start to dig around a bit and get to know your options in a little more detail, you’ll find it easier to work out if it seems a good fit for you.

Speak To A Specialist

If you’re really unsure of where to start, what to do, or what kind of call to make on a particular investment opportunity, seek advice. If you’re able to choose a financial advisor that you can trust, it will feel all the more easier. When you’re new to investing, or if you have little time to spend on the matters, working with a financial professional can help you to make sure that any investments you make are worthwhile.

Read The Small Print

It’s also important that you read the small print that coincides with any form of investment that you’re considering making. In business, if you’re asking yourself how the dividend tax affects me, then you’re going to need to get more information before you plunge into investing in a company. With bonds, you need to make sure that you know what terms you’re agreeing to before you jump in and find yourself caught out.

Start Small

One way to find out how an investment is going to pan out is to start off with something small where you can. If you’re new to investing altogether, then you may want to go with a small investment first, such as a no-risk bond, then work your way up. If you are investing in stocks, you may want to test the water first by buying a small amount, and then going for more if you feel like your investment is going to pay off.

Go With Your Gut

Above all else, you need to go with your gut instinct. A lot of the time, we can feel in ourselves if something is right or if it seems completely wrong for us. If your mind or body is telling you no, then don’t do it. If ever you’re worried that it's too much of a risk, don’t take it.

Why Failing To Track Your Finances Is Failing Them Altogether

When it comes to your finances, you can often feel as if you’ve got complete control over them, or that you’d just rather not look. If you fall in the first camp, there’s probably one thing that you’re doing that the guys in the latter camp aren’t, and that’s tracking your finances. Although you may feel that avoiding the situation will stop you from worrying about it, not knowing what is going on with your money can only be a bad thing. It’s important to keep a close eye on everything if you ever want to improve your financial situation. So, let’s run through a few reasons why you should start to keep track.

To Keep Within Your Means

First of all, keeping track of your finances is the only way that you can learn to stay within your means. If you get into the habit of spending more than what you earn, you may find that you fall drastically into to debt. But, you can certainly stop that spiral from happening by simply knowing what’s going on. When you know what money you get in and how much goes out, you can set yourself spending limits to ensure that your financial situation starts to look up.

To Make Sure Your Income Is Right

Plus, when you think about it, by not keeping a close eye on your finances not only do you not know what you’re spending, but you don’t know what you’re getting in either. Without looking, how do you know that your income is right? When you keep track of the payments going in and out of your financial life, you’ll easily be able to spot when something isn’t right and be able to rectify it right away. When you don’t, you may be getting paid the wrong amount and never even know.

To Pay Your Bills On Time

Likewise, when you track the comings and goings of your financial accounts, you’re able to make sure that you’re paying your bills on time. Missing payments can harm your financial standing, so this point should definitely give you the motivation you need to be able to get yourself back on track and start improving your situation.

To Get What’s Owed To You

Again, when you’re not tracking anything in your financial life, how can you ever be sure that you’re where you need to be. When you lend money, or you’re due payment for selling goods or a service, without checking, you’ll never know that you got the money. Then, you’d have to use a people search or online profiles to find who you’re looking for to track down the money. But when you keep a close eye, you’ll know right away and can do something about it.

To Make Sure You Save

So many of us wish that we could save more. But trying to save more money isn’t something you’re likely to be able to do when you have no idea what’s going on with your finances. To start saving, you need to know what money you have available to put away. So if you’ve ever wanted to have a safety net, now’s the time to start tracking your finances, get money back in order and make good on that savings promise.

Where There's A Bill, There's A Way! Completing Your Tax Return

It’s one of the most stressful things you can do in your life, your tax return, it’s a mountain of paperwork and complicated figures, and once you have done it, you feel better than having conquered Everest without any oxygen, exhausted, great, and slightly out of breath! But what happens when you finish the return, and you discover, much to your horror, that you owe tax to the IRS, and not just that, but it’s tax you can't afford to pay? It can be somewhat stressful, especially if you're concerned about getting a criminal record! However, there are ways around the issue, which mainly consists of staying on the good side of the IRS!

Double Check Your Tax Return

This should be your first port of call because you could have added the same income twice by accident, or you forgot to make a deduction. Because, if you thought that you had qualified for a deduction, you need to be sure that you had answered the questions correctly. And if your tax return details are exactly the same as the previous tax year, it could be an issue with the IRS, and not you! In which case, call them to get some clarity on what the problem might be.

Reducing The Amount Of Penalties And Interest

If you owe a huge amount, penalties and interest can bump up that final cost even more! If you hire the help of a tax attorney who has experience with the IRS, it will make the process much less stressful! At least when you’ve got someone on your side who has years of experience in these issues, the problem can get resolved quickly and with few casualties. You can also aim to reduce your penalties by any of these:

Exceptions to underpayment – so, if you underpaid this year, but you owed less money last tax year, you don’t have to pay any penalty.

Ask them for an abatement - write a letter to the IRS. Make sure to explain your financial situation in depth and make the most what might have caused an issue in the past, such as a mitigating circumstance like a long illness, and specifically ask for “an abatement.” If your case is strong enough, they may waive the penalties. 

Pay the outstanding tax soon as possible- either filing early or being able to pay as much as possible shows that you are keen to get this issue sorted.

Ask To Pay The Balance In Installments

You can set up a payment plan through Filing Form 9465, known as the Installment Agreement Request. Setting up a payment plan will allow you some time, and if you can show you're unable to pay the full amount, the IRS must let you make the payments in three years or under, but this is if you owe $25,000 or less. Follow these ideas, and you will be sure to stay on the right side of the IRS! It can be stressful, but where there’s a bill, there’s a way!

Estate Planning For Dummies

At some point, all of us will have to do some type of estate planning (unless of course, a technological singularity means that we get to live forever) - and it’s never too early to start thinking about it. There’s a perception out there that estate planning is only something the rich have to worry about. However, even if your estate is small, you still might want to consider who gets what. After all, tax issues can mount up quickly without significant planning.

Offset Taxes With Insurance

The beneficiaries of your assets can end up losing a lot of money when they receive inheritance assets, thanks to estate and income taxes. However, many of these losses can be offset by having life insurance in place.

To understand how, consider the following example. Suppose that your estate planning attorney estimates that you owe more than $200,000 in income and property taxes. All you need to do is purchase life insurance to cover than amount to be paid to whoever is going to receive your assets. This will ensure that they receive the full value, despite the government taking a cut since life insurance proceeds are tax-free.

Declare Who Gets What

Most people just assume that if they don’t write a will, then their estate will be divided up and given to their family. And while this is true, there’s nothing in the law that says who should get what specifically. For many people, this can be problematic. For instance, you might want to pass on a classic car to a particular member of your family. But if you leave the government to divide up your estate, there’s no guarantee that the correct beneficiary will receive the car.

Another reason to declare who gets what is if you plan to give money to people who aren’t your next of kin. In these situations, you’ll need to explicitly declare their share in a witnessed, formal will.

Choose How The Money Will Be Spent

You may plan to have some of your assets cover particular expenses, like the cost of a new car or college education. If that’s the case, then you might want to place some of your money in a trust so that it is earmarked for a particular project. Trusts ensure that the person receiving the money - the trustee - spends it on the thing that you say they have to spend it on.

Minimize Income And Estate Taxes

If you’re leaving a substantial estate, there’s a good chance that you’ll owe a significant amount of property and income taxes. Though these taxes can be burdensome, there are ways to reduce them. For instance, one way to reduce the amount of tax is to leave your taxable assets to institutions, like charities, which are tax exempt. You can then give your other beneficiaries all your assets which are tax-exempt, such as after-tax savings, life insurance payouts and retirement accounts.

To reduce your overall tax burden, you’re also able to give beneficiaries tax-free gifts up to the value of $13,000 a year.

Fight For Your Income Rights!

You always work hard to earn money and provide for your family. So, you should never let anyone rip you off and leave you broke. Fighting for your income rights is essential if you want to live a long and happy life. At some point, it is guaranteed that something bad will happen and you’ll get a raw deal. With that in mind, we wanted to draw your attention towards some of the most common problems. Hopefully, you can use the information in this article to ensure you never lose out. You just need to make sure you take the right steps, and you can get things back on track.

Taking your employer to a tribunal for an unfair dismissal

Employers have obligations to follow a standard disciplinary procedure before they fire workers. They are not allowed to sack you without taking certain steps first. If you feel you were dismissed unfairly, you can take the company to an employment tribunal. That is where you will present your evidence to a panel, and they will award compensation. In some instances, the business will have to pay you thousands of dollars. In other situations, they might have to offer you job back. Either way, you get your income back to normal and continue with your life. You’ll just have to contact an experienced lawyer to ensure you present your case properly.

Making a claim when an injury affects your earning capacity

There is no way of knowing when you will suffer an injury that limits your ability to earn income. If that happens and it was someone else’s fault, you can make a claim. Any good personal injury lawyer will assist you in simplifying the process and getting the best results. So, you just need to read reviews and find a reputable professional. It might take between six and twenty-four months to get your compensation. For that reason, it’s always sensible to keep some spare cash in your accounts. That way, you can continue to pay your bills while the case goes to court. In some instances, the guilty party will offer a settlement ahead of time. You just need to consult your lawyer and ask for their opinion before you accept.

Claiming tax back from the government

Lots of people end up paying too much tax to the government at the end of each financial year. There are methods you can use to claim that money back in most instances. You just need to read as much information as possible and make the right moves. However, the best way to keep your cash is to ensure you complete your return correctly. Perform a lot of research ahead of time and always list your expenses. There are professionals out there who can help you with the process. With that in mind, it could make sense to use a specialist accountant in the future. That way, you shouldn’t end up giving the IRS too much capital in the first place.

If you manage to navigate those situations successfully, you should keep your finances in order. As we mentioned only a moment ago, sometimes it makes sense to take action ahead of time. So, use an accountant, and educate yourself about employment law. It might take a few weeks to get things sorted, but at least you’ll have the right information and support. Good luck!

How to Use a Trust to Reduce Inheritance Tax

After over 40 years of workingyou’re looking forward to your retirement. And why not? You’ve paid your taxes and saved diligently to make sure you’ll live comfortably when you retire. But you’re worried that the taxman may take more than his fair share of your estate when you die. What can you do to prevent this?

One of the best ways to reduce Inheritance Tax (IHT) is to set up a Trust and put some of your cash, investments and property into it. The value of a Trust is deemed to be no longer part of your estate for IHT purposes. But be careful because setting up a Trust can be quite tricky. It’s best to take advice from yourchartered accountant, estate planner or inheritance tax specialists.

If you think your estate might have to pay inheritance tax in due course, then here are a few reasons why setting up a Trust makes good financial sense.

How a Trustcan benefit your IHT exposure

A Trust could be set up to pay for a grandchild’s education, or for the support of a family member who may have a disability, or to help reduce the effects of Inheritance Tax. A Trust is a useful IHT planning tool for the next generation. To understand how a Trust works, let’s look at a typical example.

Here, we have a family where the husband has considerable assets. If he places these assets in trust prior to his death it won’t affect his own IHT liability but it can substantially reduce the amount of tax his widow will have to pay when she dies. The husband can also keep control of his assets while he’s alive.

When the husband’s widow eventually dies, only those assets that have been transferred out of the Trust into her direct ownership are counted as part of her estate and liable for Inheritance Tax. By transferring assets if and only when necessary, it’s possible to keep the widow’s estate below the IHT threshold, even though the Trust may hold a much larger sum.

One of the rules of a Trust states that no potential beneficiary can have an ‘absolute entitlement’ to any of the assets. Instead, all transfers out of a Trust have to be made at the discretion of the trustees and they must all be in agreement.So, when setting up a Trust be very careful who you appoint as trustees. It only takes one person – a stepson or daughter who has a gripe with the widow – to vote against a transfer of funds. It’s recommend that at least two people are appointed as trustees. One of these could be a family member and the other a professional such as a solicitor.

The husband can write a ‘letter of wishes’ to the trustees setting out how he’d like the Trust‘s assets to be dealt with, but because beneficiaries have no absolute entitlement to any assets, the trustees do not have to follow the wishes contained in the letter.Trusts are normally wound up either after two years of the first spouse’s death or when the surviving spouse dies. When this happens, the remaining assets are dealt with according to the wishes letter.

Protect yourself with expert advice

As the rules around IHT exemptions are complicated, it’s best to consult your accountant or solicitor to see how much tax you could save by setting up a Trust. One of the strange things about a Trustis that the Trustitself may, in certain circumstances, have to pay Inheritance Tax, and the trustees, whoever they may be, might be liable to pay income tax at a rate of 45%.

Suffice to say that the rules around Trustareextremely complicated and not to be taken lightly, so don’t be foolish, take advice from a professional in these matters.

Capital Gains Tax (CGT)

If you transfer property into a Trust, be careful because there may be CGT implications. However, CGT does not apply if you establish the Trustin your Will. Speak to your accountant about this.

Life Insurance

One of the best things you can do is take out an insurance policy on your life. This won’t lessen the amount of IHTyour estate may have to pay, but your insurance settlement will definitely make it much easier for your surviving family to pay the Inheritance Tax bill.

The lumpsum amount from the insurance policy could prevent the family home from having to be sold to cover the IHT bill. But if you do take out a policy, make sure the proceeds are paid directly into trust – if you don’t it will increase the size of your estateand as a result more tax will become payable!

This article was written by Dakota Murphey, an independent content writer who specialises in family law.

The 7 Signs That You Are Financially Responsible

Financial responsibility is a skill that everybody should want to develop. After all, the amount of money a person has will have huge influences on their life opportunities. Moreover, it will impact your future as well as your present. Overlooking the importance of getting this part of life right is simply not an option.

So what are the telling attributes that will confirm whether you’re doing enough with your finances? Let’s take a closer look.

Respecting Your Credit Score

Everybody has a credit history, and yours will impact virtually every major financial decision. If you’re looking to receive any form of credit, your score will essentially dictate how likely you are to be accepted. Moreover, it could be the difference between taking on high or low interest.

We all make mistakes. But if your credit history is poor, it’s imperative that you start repairing the damage immediately. The first step is to access your free annual credit report to check where you are going wrong. While you’re at it, it’s best to check that any data held on file is accurate.

Your credit score might not directly impact the funds you currently have sitting in the bank. However, the influence it has on your future financial opportunities cannot be emphasized enough. Working towards the best score possible is essential.

Keeping Yourself Protected

It’s one thing to create a situation where you feel financially stable right now. But what happens if life serves up one of its many unforeseen situations? If you’re not prepared to deal with the worst, you could be setting yourself up for a very nasty surprise.

With this in mind, educating yourself over insurance is vital. It’s not enough to simply take out the first policy you see. Understanding the different categories and coverage levels is crucial. Hopefully, you’ll never need to exercise your plan. Still, knowing that you have the protection is as important for your emotional security as it could be your financial health.

Controlling Overheads

While there’s no denying that a high income is hugely beneficial, it isn’t the only key element of your financial status. Your outgoings can be equally important to determining where you stand both now and in the future. Thankfully, improving this area is far simpler than working towards a higher wage.

Most households are guilty of unnecessary overspend. Whether it’s modifying your cell phone package or your energy rates, each saving is a step towards a brighter financial future. Combine this with simple lifestyle changes, like organizing a carpool to work or couponing, to take those savings further.

Alternatively, upcycling can save the need for making additional purchases. Similarly, selling unwanted goods can generate income too.

Focusing One Eye On The Future

First and foremost, you need to take care of the present. However, planning ahead for the future is another hallmark of a responsible individual. Do not underestimate it for a second.

Investments play a crucial role in building a better future. This is especially true in today's climate as pensions are unlikely to offer enough support in later life. There are plenty of potential avenues to take, but property investment is easily one of the most secure solutions. Whether buying to sell or let, experts at STL Real Estate can help you maximize your profits. Just remember that you also want to survey any property before making a commitment.

Trading stocks and other opportunities may become available too. As long as you do your research before rushing in, there’s no reason that your savings can’t become the key to future riches.

Prioritizing Ambitions

Most people have a long list aspirations in life. Unfortunately, very few are in a position to actively chase them all at once. Sometimes, knowing when to be patient is the most telling quality of all. For example, if completing a smaller purchase is going to stop you from achieving your biggest goal, it doesn’t make sense. Knowing what you want most, and working towards that target will set you on the right pathway. In truth, those skills can aid other aspects of your life too.

Clearing debt should be your priority at all times. The longer you owe money, the bigger those repayments will become. Beside, getting back into the black is the greatest step towards your financial freedom. It may simply mean taking a consolidation loan to reduce your overall payments. Nevertheless, you should always take advantage of anything that will speed up the process of becoming clean.

Analyzing Your Options

Throughout your life, you will encounter thousands of financial decisions. Making better choices on a daily habit will help, but it’s particularly crucial when dealing with the major purchases. After all, the pathway you choose could potentially save you hundreds.

Take buying a car as an example. While you may think purchasing is the obvious option, the rate of depreciation means this might not always be the case. Car leasing can work out cheaper in the long run, especially if you plan to change your vehicle on a fairly regular basis. Besides, this way you don’t need to worry about the hassle of selling a used motor either.

There are many other situations where weighing up the pros and cons of each option could generate a huge influence on your financial health. As a responsible person, it’s imperative that you get into the habit.

Monitoring Your Situations

You may think that you’re handling your finances in a suitable fashion. But how can you ever be 100% certain until you actively analyze it?

Tracking your expenses will give you a far deeper understanding of where you stand, especially if you need to file your own taxes. Moreover, it should allow you to pinpoint any areas that need improving before they cause any more damage. When you rectify those mistakes ASAP, achieving the best financial status possible becomes far easier.

That doesn’t mean you’ll become a millionaire, but it will give you the best chance of staying secure. If that isn’t an incentive to go that extra mile, then what is?

Don't Fall Into These Small Business Finance Traps

There are many financial mistakes you can make which could potentially hurt your business. Taking the first step into business and making it a success is hard enough, but now you’ve got a multitude of things to worry about and fret over. With all of this, it can sometimes be easy to forget about certain things and fall into financial traps which can hurt varying parts of your business. You can see some outlined below.

Tax

Well of course you pay your tax, but are you paying too much? Many small businesses don’t have the time to look too much into their tax so they just pay what they logically owe and move on. However, depending on your business type you could be eligible for tax breaks, grants and varying government schemes that can end up leaving you with more money. Your best bet is to have a consultation with a tax planner who knows all the ins and outs of the trade and can help you get what you owe. Their fee can be worth it when you earn way more in tax breaks. But, if you don’t want a tax planner there’s no harm in looking into it yourself. It’ll take more time but it’ll be worth it if you end up saving money.

Payment

Have you ever been somewhere that says “cash only”? Or somewhere that doesn’t offer contactless pay? It can be quite frustrating, especially if you had planned to pay in a certain way. Well, you don’t want to alienate customers, because by only offering certain types of payment you can limit potential sales. Using a specific card reader can help, if they’re fast and reliable the customer is going to leave happy and not get held up. Customer service is paramount and can keep the customer coming back for more. The option of Apple and Android pay can also be a huge plus, it’s somewhat of a novelty, but allows for speedy service. It will also increase productivity, allowing you and your employees to get more done throughout the day. If you are considering buying a business then you definitely don't want to overpay. Make sure to use business valuation methods to analyze how well the business is doing and what is is truly worth.

Overpaying On Equipment

Some businesses pay far too much when ordering equipment. This is certainly the case with I.T equipment. If you’re ordering servers make sure you have the space for them and that you aren’t ordering too much. In this day and age you may not even need a server, opt for cloud based computing instead which is safer and far more flexible. The same for computers, yes, you may get a great business deal, but there’s no point in buying more than you actually need because it’ll end up setting you back. Watch the software bundles too, sometimes providers will throw extra things at an extra charge that you just don’t need. If you’re uncertain you can use a business analyst to check exactly what a business of your kind needs. Remember, as a business owner buying large quantities of stock you hold the cards and you have a significant amount of bargaining power. Use it.