Tax season can be stressful and overwhelming. At Rate Money, we understand that. We can help you maximise your cash flow and avoid unnecessary interest charges.
The Australian tax system operates under a self-assessment system, which means it is up to you to ensure you meet your tax obligations. However, even if you do everything right, there are still some things that can happen that can lead to tax debt, such as;
- Not paying your taxes on time.
- Making a mistake on your tax return.
- Not declaring all of your income.
- Not paying the correct amount of tax.
No matter the reason, tax debt can be a stressful and overwhelming experience. The good news is that there are ways to deal with tax debt.
How to tackle your tax debt
The best way to avoid tax debt is to prevent it from happening in the first place. Here are a few tips on how to do that:
- Manage your cash flow properly. This means carefully tracking your income and expenses and ensuring you have enough money to pay your taxes on time.
- Keep your GST and income tax payments separate from your other finances. This will make tracking your tax liability easier and ensure you pay the correct amount.
- Update your business records frequently. This will help you keep track of your income and expenses and make it easier to file your tax returns accurately.
Top tips to maximise your cash flow
If you already have tax debt, there are several things you can do to deal with it. Here are a few tips:
Have you considered consolidating your tax debt?
Debt consolidation is the ability to include debts such as tax obligations in a loan product. This is a good option if the loan product has a lower interest rate than the General Interest Rate charged by the ATO.
You could set up a payment plan through the ATO that allows you to break down your debt into smaller, more manageable payments. If you decide to take this route, it’s important to note that the ATO will charge a General Interest Charge (GIC) on unpaid tax debts. The current GIC rate is 10.90% from July 1st, 2023 (compounding daily). This means that the amount of interest you owe will increase over time, even if you are making payments on your debt.
However, we could consolidate your tax debt at Rate Money rather than paying 10.90% ATO GIC on it into a home loan! This would reduce your interest rate and monthly repayments. In addition, it would free up cash flow so you can invest back into your business.
Rate Money could help. Rather than paying 10.90% (ATO GIC) on your tax debt, Rate Money could consolidate it into a home loan! Unlike most mainstream lenders, this will drastically reduce your interest rate and monthly repayments. Better yet, it will free up cash flow for you to invest back into your business.
You will still need to have a good line of credit, make your current home loan repayments on time, and have equity for this option.
Ask your lender if you are eligible for cash out!
If you don’t have any ATO debt but want to grow your business, speak to a local Rate Money Branch about cash out for business purposes.
At Rate Money, we understand that you need to invest to grow. That’s why we offer cash out for business purposes at prime residential rates up to 80% LVR, and all you need is an Accountant’s Declaration!
Financial Success Starts With Expert Guidance
Regardless of your financial situation, it is always a good idea to consult with an accountant or financial advisor. These professionals can help you understand your options and make the best decisions for your business.
When you are speaking with an accountant or financial advisor, be sure to ask about the following:
- Are there any new tax rulings coming in that will affect my business?
- Should I be making purchases now with an automatic tax write-off?
- Do I need to restructure my business from a sole trader to a company for tax reasons?
- Or, if already a company, should I look at setting up a trust?
- Should I set up a self-managed super fund?
At Rate Money, we foster strong relationships with financial advisors and accountants across Australia. We can connect you with an expert who can guide you through your financial situation.
Contact Rate Money today to discover how our services can help drive your business growth. We offer a range of solutions, including SMSF, Residential, and Commercial Loans, and that is only the beginning. Through Rate Money, you can optimise your cash flow and pave the way for long-term financial success.
