Understanding what tax deductions to claim, the right ways to claim them, and the optimal way to attain financial success for a business may seem like daunting tasks, especially without the help of a tax accounting specialist.
However, here are some great tips business owners should consider to get the most out of their tax returns and to make it a smooth experience as possible.
Do not wait until the end of the financial year
Managing your tax affairs is a year-round effort. It is essential for business owners to keep accurate and up-to-date records over the course of a year. In doing so, you wouldn’t have to reconstruct what you did earlier in the year, which in turn, will make life easier for you and your business.
In addition, the Australian Taxation Office (ATO) can refuse any tax deduction claims business owners made if they do not have documented evidence. On top of that, the ATO has the power to impose penalties and interest on invalid tax deduction claims.
Get your corporate structure right
Some business owners may assume that the way they run their business now is the manner in which it should always run. However, there are corporate structures that you may not know of that have a lot more tax advantages depending on your specific situation.
For example, a sole trader may want to consider integrating or doing business through a trust. This is because the tax rates in those entities could be lower than personal income.
In addition, placing a business into a different entity will help safeguard a business owner’s personal assets because the trust protects it from their personal liability.
A seasoned tax advisor can make your life easier in these areas, especially around an audit. Sphere business tax accountants and advisors have the professional experience and knowledge to help you find all the tax deductions that you are entitled to. We can also ensure that tax time can be a simple and easy experience. Contact us here today.