Affinity Insights – Issue 21, March 2023

Welcome to our 21^st edition of Affinity Insights.

We are already a quarter of the way through the year, and what a first quarter it has been. With the consistent rise of interest rates, and the failure of two US banks, before we know it, it will be tax time again.

We recently hosted the March Market Update webinar with Drummond Capital Partners and received great feedback. Thank you to all those who attended. The video of the webinar is now available to view via our website. We endeavour to host more insightful events in the near future both online and in person.

We do hope you enjoy this issue of Affinity Insights and we welcome any feedback or suggestions for future topics.

From Rodney M. DeGabriele and Tony Vikram

In our most recent market update titled, “Crisis Averted”, we discussed the failure of two US Banks: Silicon Valley Bank (SIVB) and Signature Bank (SBNY), and though these failures were relatively small in the context of the total US banking system, they were large in the context of historical bank failures.

You can read the full article here.

We review recent developments in generative artificial intelligence and the potential impact on global economies and markets. From our perspective, the practical applications of this technology for businesses are greater than anything released since the original iPhone.

You can read the full article here.

The US Federal Reserve’s interest rate hikes have been sharper than any other time in recent history. And it doesn’t look likely to stop.

“We have got to get inflation behind us,” said Chair Jerome Powell during a press conference. “I wish there were a painless way to do that. There isn’t.”

Stepping back: this is a good reminder about the risk of knee-jerk reactions (particularly in the investing world). As Naval Ravikant said in a recent tweet:

“Panic led to lockdowns. Lockdowns led to fiscal stimulus. Stimulus led to inflation. Inflation led to monetary tightening. Tightening leads to recession. The panic wasn’t free – and the bill is coming due.”

Naval was the founder of Angelist, a website that helps startups get venture capital funding.

Reference: www.marketindex.com.au

Good record keeping helps you manage your business and cash flow, and ensures you get the right outcome with your tax return.

Check you’re setting yourself up for success with these top 4 tips:

1. Always keep detailed records of payments to contractors providing taxable payment reporting system (TPRS) services so it’s easier to prepare and lodge your tax return.
2. Make sure your vehicle logbook records are no more than 5 years old. If your logbook will be older than this when you plan to lodge your return, you need to start a new logbook.
3. Check if government grants or payments made to your business are taxable and need to be reported as part of your business income when you lodge your return. This includes payments from the National Disability Insurance Scheme (NDIS) or Childcare Subsidy payments.
4. Record the amounts withheld from any payments made to your business and keep written evidence from the payer, including their details and ABN. Payments may be withheld because:
   • you couldn’t quote an ABN
   • you’ve done subcontracting work through a labour hire firm.
   • you have a voluntary agreement with your payer to withhold tax amounts.

Remember, registered tax agents can help advise you on your record keeping requirements.

https://www.ato.gov.au/Business/Small-business-newsroom/General/Four-tips-to-help-nail-your-record-keeping/?sbnews20230322