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Business Tax – The Basics
If you are starting a new business, or you are simply looking to update your knowledge in the area of business tax, you should seriously consider using a firm of tax accountants to assist you. Taxation is a complex area and, with regulations changing on a regular basis, it is nearly impossible for any individual business owner to stay on top of things.
Using a tax professional on the other hand is the only certain way you know you are doing things properly and fulfilling obligations, whilst at the same time ensuring that you are not paying too much tax.
To clarify the situation, let’s take a look at some of the basics you need to understand about the way business tax operates for Australian businesses.
Every Australian business must register for a tax file number and lodge annual income tax returns. In most instances you will also have to apply for an Australian Business Number which must be used to complete activity statements and lodged with the Australian Tax Office on the due dates. These returns ensure that you are paying the correct amount of GST. If you have employees, or are paying yourself as an employee, you need to record all payments made and include this on your business activity statement. At the end of the financial year you must also lodge a PAYG installment return. This is used by the Australian Tax Office to calculate the correct amount of income tax deductions your business has to pay. This means that you must also register for PAYG withholding if you make payments and have to withhold tax from your employees. These amounts have to be paid quarterly or, alternatively, whenever your BAS is due. The goods and services tax applies to any business that is carrying on an enterprise where the annual turnover is $75,000 or more. Business Activity Statements (BAS) must be lodged at least annually, although most businesses choose to lodge them quarterly. If you are in the wine industry or sell luxury cars, you also have to register for the wine equalisation tax or the luxury car tax. If you are paying your employees any form of benefit, you must also register for the fringe benefits tax. This may require you to lodge an annual fringe benefits tax return, and to pay quarterly installments on your activity statement. Balancing payments are also due to be made on 21 May every year. One of the most important aspects of taxation is the superannuation guarantee. Although you don’t have to register you must pay a minimum level of superannuation contributions for every eligible employee. This includes directors and contractors in some circumstances. At the moment, the minimum level of contribution is 9% of an employee’s ordinary time earnings.
The complexity which the above matters raise highlights the importance of using a qualified professional to assist you with every aspect of your business. Using a qualified firm of tax accountants is the first step every business owner should take to ensure they set up their operation effectively and efficiently.
Maximize Small Business Tax Deductions and Tax Credits For 2009, 2010
Owning a small business can give you an edge at income tax time, if you are armed with as much information about business tax credits and deductions as you can.
Since small business owners are three times more likely to be audited by the IRS than a non-owner, it is very important to have accurate information, and to make sure you qualify for the credits and deductions you are claiming.
This article will touch on a few tax deductions available to business owners.
What deductions can you safely claim? You can claim business tax deductions on things that are reasonable and necessary to run your business. This could include your home office, office supplies, furniture and equipment, mileage necessary to operate your business, travel, dinner and entertainment expenses.
It can also include real estate tax, mortgage interest, depreciation costs, insurance, rent, security systems and utilities and services like phone, internet and garbage collection. Health insurance cost and liability insurance costs may be taken as deductions.
With this many items or more to think about, it is important that you have the most recent and accurate information about small tax credit and deductions.
It is also important to know about self-employment tax as your obligation for contributions to social security and any real or potential retirement contributions to a SEP/IRA. There is help for you.
Since I know that as a small business owner you are independent minded and like to do things on your own, you may find an on-line small business tax preparation program helpful. Such a program can walk you through all the deductions and credits, so that you will know when you file that you have taken advantage of all the credit breaks you deserve, and have met all the qualifications required by the IRS.
You want to feel that if you are one of the “three times more likely”, that you are in the best possible standings you can be for that audit.
Owning a small business can be rewarding and give you a break at tax time. Make sure you have as much accurate information about small business tax credits and deductions that you can. An on-line tax preparation program may be just what you are looking for to keep that edge.
How to Start a Tax Service
Tax Service Businesses from home are the hot home business of today. As more and more companies downsize and outsource work, there’s a higher demand for business tax service, tax preparation service and small business tax advice than ever before. If you’re thinking about starting a tax service business from home, consider these things:
Do you have the background and education you need? If not, are you willing to, and do you know where to go to get it? Do you want to have an income tax preparation service or a business tax service, or would you prefer to offer small business tax advice? Is this a profession you want to pursue full-time or only part-time? Will your family be affected by your having a tax service business in your home? Do you like working with numbers? Can you deal with frustrated and angry people? Is there a space in your home for an office? What equipment or supplies do you need? Do you need to get any financial assistance in starting a tax service business? Are you willing to put the necessary effort starting a tax service business? Should you have a partner? Do you need to get any additional insurance? What accounting knowledge will you need for your tax service business? Where will you go to get the information about what your state’s requirements are on starting a tax business from home? Does your state require you to have a license? What are your neighborhood’s zoning regulations concerning home businesses?
Questions like these will start you thinking about all the details you need to attend to before opening the doors to your tax business from home. Do as much research as you possibly can before making a decision.
Once you’ve done your homework and have decided that, yes, you want to go ahead with starting your own tax service business from home, make or purchase a business plan. Outline what you need to get started with your own tax business and the steps you need to take.
Goals aren’t reached by magic. They’re reached by understanding what’s involved in undertaking starting a tax business and knowing what you need to do. Making a business plan and following it will keep you on track. This will enable you to actually open a tax service from home more quickly with less trial and error. Ultimately, a good business plan ensures you’ll be successful at your tax business.
Even with a good business plan, you need to be aware that there will be obstacles in having your own tax business from home. There will be days you think you must’ve been nuts to go into business for yourself. Especially if you’re used to being in a larger business environment where there many people to help carry the business.
Because in a small business, whether it’s a tax business from home or a home show business, you’re forced to wear many hats. You have to be the boss, the administrative assistant, the office manager, the accountant, the receptionist, as well as the employee doing the work-often all at once. And there’s also the stress and pressure of having all the work, as well as all the financial burdens on your shoulders alone. Having your own business isn’t for everybody.
And, if after you’ve given it some thought and done your research, you’ve decided that a tax business from home is just the right business opportunity for you, you have many things to look forward to. There are far more positives to being your own boss than there are negatives. Not facing that morning commute is usually enough to make most people never look back. Not having to face that evening commute either, is enough to make them rejoice-and never regret for a minute, starting a tax service business at home of their own.