Unfortunately, this time of the year many doctors and dentists get either an unwelcome or very pleasant tax surprise.
Either of those should not really happen at all. We like to make sure all of our clients know what to expect before lodging their tax return.
Well, it is never ideal if you either get hit with an unexpected tax bill and haven’t provided for it, or if you get a big refund.
In the latter scenario, it means that you have overpaid tax throughout the year, and may have missed out on the funds offsetting your mortgage for example. It’s a bit like providing an interest-free loan to the tax office!
We like our clients to have smooth and reliable cash flow, as we apply that cash flow to strategies such as debt repayment and wealth creation throughout the year. Any distortion of this regular cash flow is most unwelcome.
So how you can avoid any surprises at tax time?
Well, it requires a more proactive approach from both yourself and your accountant.
If you are self-employed you can keep track of your tax obligations via your BAS reporting. Your accountant can check whether your current quarterly tax instalments track your current earnings, and then make adjustments where required.
If you are employed and have a lot of deductions that lead to big refunds, you may want to vary your PAYG tax to ensure you don’t end up overpaying too much tax.
What should you do if you end up with a big tax bill?
Don’t panic, talk to your accountant and the ATO if needed, and work out the most efficient funding mechanism – some people may need to negotiate a payment plan with the ATO or take on a short term debt. Learn from this experience to avoid it from happening again in the future.
If you get a big refund, don’t blow it! Apply it to a sensible strategy such as debt reduction or super contributions for example.
If you would like to discuss your tax planning or would like a referral to a specialist medical accountant, please contact me on 08 9381 2704 or Yves@affluenceprivate.com.au.
As I understand your time is extremely valuable and scarce, I am able to offer flexible meetings times, including outside business hours and during the weekend. I can even come and meet you somewhere convenient, or talk via videoconference on Skype.
My first consultation is free. I allocate up to 90 minutes to discuss your personal circumstances and to establish how I may best assist you. Where you already have an existing adviser, I would be happy to offer a second opinion. I always quote a fixed dollar fee before we start working together.
Please contact me on firstname.lastname@example.org or call me direct on 0432 885 295. You can follow me on Twitter @YvesSchoof or connect with me on LinkedIn to receive new articles.
Yves Schoof and Affluence Private Wealth are Authorised Representatives of Synchron, AFS Licence No. 243313.
The information posted is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation or needs.
Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. In particular, you should seek independent financial advice and read the relevant product disclosure statement (PDS) or other offer document prior to making a decision.
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