You Don’t Have to Be the Expert to Understand How Your Actions Impact Your Taxes and Your Finances
When it comes to running your business either online or a rental property, you should have experts on your team, who can do the work for you. Most people are taught to turn their finances over to a financial advisor who is not part of the business.
And, they are usually taught that taxes are too difficult so they need to hand them over to a tax advisor. The problem with this is that many people think this is the end-all solution and once it is handed over, they can forget about it.
The idea of handing over your taxes and finances to someone else can be tempting. The reality is, the likelihood of getting the results you want is very slim when you hand over your taxes or your finances. Even the best advisors cannot provide the best results if their clients are not involved in the process. You know the day to day expenses and purchases better than a third party.
You are the custodian of the business assets and record-keeping for example:
- A copy of the purchase contract and receipts for expenses relating to the purchase of the property, for example, stamp duty, legal fees, survey, and valuation fees.
- A record of capital expenditure on improvements, non-capital costs and capital expenditure on maintaining title or right to an asset that you incurred during your period of ownership.
- All records relating to the CGT event if you are in Australia, and all relevant expenses-for example, the sale contract, and records of legal fees and stamp duty.
What I do is compile my income and expenditure checklist that all the figures are correctly entered into the ledger before sending it to the tax agents for final compilation to ATO.
One key piece of knowledge the wealthy have is that they understand how their daily decisions and actions impact their wealth and taxes.
In that way, you will have a smooth running of your real estate business for profit!