How to Prepare Taxes for Small Businesses in Australia

As per the Australian tax office, small businesses play an essential role in a country’s economy. As per statistics, more than 99% of all businesses in Australia make up the list, and they contribute more than $413 billion to the country’s economy.

These businesses employ more than 5.5 billion people in the process. As per the ATO’s tax regulations, every small business needs to pay its tax annually. If you are one of them, this needs to be important to you, and if you have problems, tax agents can be helpful to you.

Getting Started 

It is essential to have your business structure from the very beginning. This will ensure that your business will have a strong foundation for support moving forward into the future and can be profitable. 

You need to be aware of each area of your business that needs to be addressed before you get further success in your business. To protect your business from any problems that arise in the future, you must access all the support that you have before you start planning. 

You need to fulfil the tax obligations and know how and when to pay the tax to the ATO office; this is an integral part of your business. If you understand all the requirements, it may help to prevent mistakes that might cost you valuable time and money. 

Consult a Tax Professional 

Before you start to create your business plan, you need to ensure that you consult a small business tax consultant. They have the experience required to support your business structure to fulfil the ATO tax requirements and ensure you avoid any possible tax problems. 

Some issues that a tax professional can advise you on are the following:

• A business structure that can support your small company the most
• What you require to know about your business’s day-to-day running.
• Tax obligations are set out by the ATO and ways to implement them.
• The annual cost of their support for your business.

Maintain Regular Contact with Your Tax Professional 

It is important to keep your tax professional notified of how well your business is doing. If you do so, they will be prepared to support your business for any unexpected problems if they arise. 

If you maintain regular contact with your tax return agent, they can ensure that the day to day operations of your business go smoothly. You should not hide any business problems from your tax professional, as the sooner they know about your problem, the faster they can act to solve it. 

Tax Payments in the First Year of Your Business 

When you plan to start your small business, you must understand everything clearly regarding the tax obligations set out by the Australian taxation office. Some important things you need to keep in mind are:

• You need to ensure that you put aside sufficient funds to pay the first tax bill.
• You have to set up a tax bill account before paying any payments.
• You need to start paying tax due instalments voluntarily. 

Keeping Records for a Small Business 

Accurate and current record-keeping is important from the first day if you want your small business to run as efficiently as possible. For five years, the Australian taxation office needs all your business-related records, including income and expenses information. 

• You need to use the latest technology available if you want to record and retain all your small business transactions, including point of sale software and accounting systems for your business. Using these systems will help give a fast summary of the current business financial state. 
• Suppose you want to understand the financial state of your business. In that case, you need to ensure that you carry out the reconciliation process by using all the information available, including receipts, tax invoices and bank statements.
• If you do not have the available time, a small business tax consultant can help support you and your business as they have all the required information to ensure record keeping is accurate. They will keep up to date with changes in tax laws and tax obligations for your small business and any law that can affect your business. 

Getting Income and Expenses Right from the Start 

To ensure that you will submit an annual tax return to fulfil your tax obligations as per the ATO, you need to set up a business system that can keep an accurate and current summary of your business’s income and expenses. 

• Income recording for a small business 

1. As per the Australian tax office, all business-related incomes need to be declared. The income includes any cash payments or funds made to you on your private account. 
2. It is your responsibility to ensure that your business income reporting is accurate, and this will be supported by the business system that you have. 
3. The ATO can track business irregularities, so you need to be honest with all aspects of your financial dealing and avoid any form of investigations by them.

• Expenses recording for a small business 

1. Before your business starts to operate, it is advised to consult a small business tax return agent for information regarding the business expenses that you can claim.
2. You need to clarify that the expenses that you are claiming are related to the growth of your business. Recording and retaining paperwork can help you to produce it in the future as proof of actual expenses.  
3. The percentage of expenses you can claim can be calculated if you work out your office area compared to the dwelling’s total area.
4. Expenses that are collected by a home-based business are called occupancy expenses and running expenses. 

Contact a Tax Agent in Perth 

If you want your small business to thrive, paying taxes as per the law is vital. If you cannot handle the tax-related work by yourself, you need to contact a small business tax consultant in Perth.

Due to their experience and expertise in handling tax-related problems, they can provide your business with the best taxation solutions and help to minimize your tax liabilities. So without further delay, hire a tax agent today for your small business.