Perhaps tax day is approaching and you are scrambling to get all of your financial documents in order to prepare your tax return. Maybe you are just launching a new business and want to make sure that your tax preparation practices are sound from the word go. Either way, it’s a good idea to have a firm grasp on the basic do’s and don’ts of small business tax preparation. Here are a few best practice ideas that every small business in Australia should keep in mind as tax time approaches.
Do: Hire a tax preparation company. Tax laws in Australia can be confusing, particularly if you run a small or growing business. Hiring a tax preparation service in South Morang can help you to get a handle on all of the different laws and rules that come with paying business taxes. Whether you are trying to minimise your tax burden through deductions or need to know how a major year-to-date business growth might affect your tax rates, it’s always worth it to consult a tax preparation expert before your file.
Don’t: Track your expenses using pen and paper methods. Receipts, notepad pages and other odd pieces of paper might hold a lot of the information about your company’s earnings and expenses. However, you absolutely should not leave these hard copies as your only records of financial activity. Set up an Excel spreadsheet, use a cloud-based accounting software or hire a bookkeeper to help your track finances. Regardless of which option you choose, there should be one comprehensive record of your company’s revenues and expenses. Having that document and maintaining throughout the year will make it much, much easier to file your tax return, or to get the advice you need from a tax preparation professional in South Morang.
Do: Take every deduction you can. Don’t feel bad about using deductions to minimise your tax burden. It’s smart business to take every deduction you can and to pay the lowest tax rate possible. However, you need to know what you can and cannot deduct from a legal standpoint. Some businesses, for instance, will try to write off restaurant bills on a regular basis, but you can only deduct dining and entertainment costs in a limited number of situations. Speak with your tax preparation service in South Morang to find out what deductions are fair game for your business—or better yet, to go through your expenses and find deductions for you.
If you want to know more about the basic do’s and don’ts of business tax preparation, or if you need help preparing a tax return for your small business, call Northcity Accountants today. We provide a range of different finance and tax preparation services in South Morang and are happy to help your business build greater financial security and peace of mind. You can reach us now by dialling 03 9404 2737.