Tax is likely to be tricky for most small business owners in Australia. A lot of deadlines are to be made and a series of rules are to be followed in the tax preparation process.
Here is what the tax returns preparation process involves.
What is meant by Tax Filing?
Small business owners normally have to file tax returns of three types, and they get it rightly done with the help of tax agents. In fact, the tax agents are ideal to be hired for the business owners to follow the tax returns rule in Hobart and in turn, avoid discrepancies during audits with ATO.
GST and BAS –
GST and BAS is the tax, which might have to be added to the prices. According to the Government’s expectations, the business owners have to collect the cash on their behalf, and then they are to send the cash in their way at the scheduled times.
Income Tax –
Income Tax is Calculated as their profits’ proportions.
Employee Related Taxes –
The small business owners are expected to withhold the income tax from their employee’s wages and hand the details over to the ATO. Following the rules of the ATO, the employer has to pay the payroll taxes.
Why Do These Three Tax Return Filling Matter?
When the business owners have to pay too much tax, then it is like giving away money. But when it is done correctly, then it greatly increases the chance to operate or run a profitable and indeed a smooth business.
How Should Taxes Be Filed?
The easiest part is filing the taxes. Filing taxes can be done online, and it is a huge set up differing from the times of paper returns. So, the trickier part is preparing the tax returns.
GST Returns –
The bookkeepers or else the registered tax agents generally handle the GST returns from the entire year. There are specific tabs to record the entries of the collections and adjust for the GST paid on purchases. Next, they put together the BAS and GST Report for the ATO. In case, there are any taxes due, then they are paid when the report is filed.
Business Income Tax –
The business income tax is calculated on profits. Higher Business income tax means more taxes have to be paid. In fact, a few ways exist for lowering the profits legitimately before the ATO. These are the instances when the matters turn technical with the stakes being high since the Government tax experts will check the tax returns. So, it is necessary for business owners to hire accountants for preparing their income tax returns.
Employee PAYG Taxes –
The Employee PAY G Taxes are first calculated and then collected from the employees’ pay at every pay run. Even, the business owners have to submit the necessary report to the ATO clearly mentioning the total amount and the breakups, they have paid to the employees and the amount of tax withheld. The ATO then informs when the business owners should pay them the necessary taxes.
Modern Tax Filing –
Now, the tax time, it not the ordeal it had used to be. These are the times when Accounting Software are doing a huge deal of work. So, filing time is now easier for the bookkeepers and accountants. For instance, the accounting software can make an estimate of the tax owed and soon produce the reports necessary to finalize the tax return. Through these efficiencies, tax seasons become less expensive and less stressed out.
Owing to the Accounting Software, which holds the record of every cash inflow and cash outflow from the business, the accountants and bookkeepers can calculate the mathematics for estimating the taxes. Filing and preparing tax returns are relatively much flexible by using Accounting Software like Xero, QuickBooks Online, Intuit QuickBooks, MYOB, Sage Business Cloud Accounting, and more.