January 15th, 2009 advice
It doesnt matter what tax strategies you have implemented or how you have structured your business, if you don’t have an effective and efficient way of recording all your expenses you will end up paying more tax than you need.
Alot of small business owners hate, and I mean really detest, having to look after the financial side of their business whether they do it themselves or not. This could be you.
However in order to ensure you are claming the maximum amount of tax deductions and therefore paying the lowest amount of tax you need to record them. You also need to record them in a way that is acceptable for the Tax Office.
Regards,
Glenn Wallace
Business Adviser
Chartered Accountant
CPA
Australian Registered Tax Agent
Superannuation
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January 14th, 2009 advice
The Australian Tax Office has warned of an email scam where people send emails that look like they are from the Tax Office.
The email talks about a tax refund and you need to enter your credit card details. The Tax Office never asks you for your credit card details.
If you have entered your credit card details as a result of replying to one of these emails you should report it to your credit card provider.
It appears that the United States IRS had this same problem back in 2005.
Regards,
Glenn Wallace
Business Adviser
Chartered Accountant
CPA
Australian Registered Tax Agent
Superannuation
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January 5th, 2009 advice
I read Michael Campbell’s newsletter the other day and he talked about Business Secret #1. I thought I would share it with you.
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Business Secret #1
The first thing to do is separate your business and personal accounts. Evenif you’re not incorporated and don’t have a company account, use separate cards for each.
Use your Gold card for business and your Silver for personal. That way, if you ever get audited, you’ll have clean records for the tax man to look at.
That triggers or flags an audit? Sudden jumps in income, deductions, travel or complaints. If you trigger a flag, you’re 3-5 times more likely to get audited if you, or a “bookkeeper” did your taxes.
Look for and hire a professional. In Canada they’re called CGAs. In the US they’re CPAs. In the UK they’re CCAs. These professionals – and others like them – are held accountable for their accounting. They must abide by the rules of their associations and the government.
Get one and you won’t lose any sleep over your taxes.
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So Business Secret #1 is to get a Professional Tax Accountant.
Regards,
Glenn Wallace
Business Adviser
Chartered Accountant
CPA
Australian Registered Tax Agent
Superannuation
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January 3rd, 2009 advice
There has been talk about a 20% tax break for the December Quarter BAS. Could this be a Cbristmas New Year present? Its actually a deferral not a cut.
Its only in relation to the income tax paid in advance, known as Pay As You Go Instalment (PAYGI). This is paid as part of your BAS payment for December. Normally the income tax in advance is calculated by the Tax Office as a fixed amount or as a certain percentage of your income ex GST.
According to the Prime Minister the 20% reduction is available to small businesses with annual turnover of less than $2 million. This effects about 1.2 million businesses. It is not that significant in that you can reduce the instalment manually in some cases in any BAS statement.
Here are some extracts from the press release.
“While there is a tolerance in the existing provisions that allows taxpayers to vary instalments down of their own accord, many small businesses are reluctant to do so, especially those with unpredictable income streams. This action by the Government will reduce uncertainty for those small business taxpayers and relieve them of the cost of doing their own calculations.”
and another extract outlining how it will apply
“How will it apply?
The 20 per cent reduction applies to the instalment amount shown on the Business Activity Statement (BAS) dispatched by the Australian Taxation Office (ATO) in December 2008 for the quarter ending on 31 December 2008. This instalment amount is due on or before 28 February 2009 (which will be extended to 2 March 2009 as 28 February 2009 falls on a weekend) for most small business taxpayers. For some small business taxpayers (for example, small businesses which elect to report and pay the goods and services tax on a monthly basis), this due date is 21 January 2009. As such, for the quarter ending 31 December 2008, small business entities are only required to pay 80 per cent of the instalment amount shown on the BAS on 21 January 2009 or 2 March 2009.
Small businesses can further vary their instalments based on the reduced amount in accordance with the existing law.
This reduction does not apply to taxpayers who calculate their instalments based on the instalment rate notified by the ATO. Their payments will automatically adjust when they apply the given rate to their actual income for the quarter.”
If you have a cash flow issue this will be welcome, however you still have to pay the tax at the end of the year.
So not really a present but maybe a gift which has to be returned.
Regards,
Glenn Wallace
Business Adviser
Chartered Accountant
CPA
Australian Registered Tax Agent
Superannuation
Posted in PAYG | No Comments »
