Managing a financial portfolio is never an easy exercise.
Depending on the type of income that is earned over the span of a financial year, there will be particular stipulations and taxes placed on that money.
Among the subjects to discuss with experts and accountants in this field, citizens want franking credits explained.
This has been a buzzword of conversation ever since it took the spotlight during the 2019 Federal Election.
While it can seem like an abstract area for many people, it is a policy that has very tangible consequences for others.
We will look at the reasons why men and women want to know more about this program and how it applies to their returns through the Australian Tax Office (ATO).
To Dispel Conjecture & Separate Fact From Fiction
Citizens want franking credits explained in many situations because the information they have been provided by media identities, politicians, friends, family members and other participants might not be 100% accurate. In certain cases, there are particular agendas in play or interpretations that could be off the mark depending on the time that the opinions are broadcast. Rather than having an abstract idea about the concept or one that does not apply to their individual circumstances, having it explained in clear terms will allow clients to navigate their own demands and think about the process in the most practical of terms.
To Bypass Double Taxation
The very role of this financial tool is to ensure that people and businesses are not taxed twice for their earned income. It is a small detail on the face of it through a return to the ATO, but citizens want franking credits explained because it allows them to enjoy more of their savings and stronger returns through their investments than they would have without these regulatory frameworks. For example, if a personal investor has earned back 70c of their $1 owed dividend after the company has already paid 30c of tax, then they will be afforded that extra 30c as a credit.
To See What Income is Subjected to Tax
Local members who work through their tax return will know that they have money arriving through a number of different channels. There will be their income via their employer as well as cash arriving courtesy of business interests, stocks and other domains. Citizens want franking credits explained because it will allow them to differentiate what income is subjected to tax and what is subjected more than once, opening up avenues for offsets and credits to ensure that they receive every dollar and every cent they are owed through the government.
To Establish Clarity Through an Accountant
Among the reasons why citizens want franking credits explained, it is to help them establish a positive working relationship with their accountant or financial representative. If they are still left unsure about what is involved, what they owe and what they are entitled to, then they may very well be looking for another party to deal with. Citizens want franking credits explained because it allows them to shape who they consult with and who represents their financial interests moving forward.
To Avoid Penalties & ATO Frustration
For most situations, citizens want franking credits explained to help them avoid any financial penalties or impositions that are set through the ATO. People simply want to be able to lodge their tax returns, outlining what they earned and what they owe before moving onto more pressing matters. If they are unaware about where credits lie, what applies as an offset and what could be out of bounds, then the ATO can be in a position to hand out penalties depending on the circumstances.