If you’re a fresh entrepreneur, there’s a good chance you haven’t yet reached the point in your career where you can afford to hire an accountant.
But that doesn’t mean you should ignore the tax implications of your business—especially if you want to keep it afloat long enough to do some hiring of your own.
In this article, we’ll walk through 7 ways fresh entrepreneurs can save big on taxes in Brookvale, so they can keep more of their hard-earned cash while still in the trenches.
Use an Accountant Brookvale
An accountant Brookvale is a valuable asset to any business, especially when it comes to tax time. A professional accountant will work with you to set up your books properly so that all of your transactions are accounted for and recorded accurately. This will make filing your taxes much easier and more accurate.
An accountant Brookvale can also help you avoid penalties by ensuring that all necessary documents are filed on time every year.
Suppose any mistakes have been made during self-assessment. In that case, they can go back through all transactions made throughout the year and apply corrections where needed before filing them again to prevent further problems from occurring later on down the road.
Are you looking for an accountant Brookvale or even someone who knows how these things work? You’ll need someone who’s trained specifically in this area!
Anybody can do some basic filing, but what about everything else? So if you want someone who knows what they’re doing, look no further than here! Contact us today!
Know Your Deductions
As a small business owner, you can deduct expenses directly related to your revenue. For example, if your company buys a computer for $1,000 and uses it exclusively for work purposes, then it is allowed as a tax deduction.
On the other hand, if someone donates their old computer to you and you use this second-hand equipment for personal reasons like playing games and web browsing at home, then no deductions are allowed because the computer was not explicitly purchased for business purposes.”
As an employee, there are several deductions that may help lower your tax bill during the year. These include:
- Travel expenses – including meals while traveling away from home.
- Car expenses – including parking fees when driving between different places of work.
- Home office expense – including mortgage interest payments or rent.
Keep a Logbook
Logbook records are a great way of keeping track of your car and work-related use. If you don’t record all your business kilometers, you may have to estimate them in your tax return and pay fringe benefits tax on any car benefit you receive (including the fuel cost).
Consider a business structure that allows you to pay less tax (e.g., company, trust).
The type and structure of your business will determine how much tax you have to pay. The most common business structures are:
- Sole trader
- Company (or Pty Ltd)
Each of these structures has different tax rules, so choosing the one that best suits your needs and circumstances is essential.
For example, if you earn more than $18 000 in annual income from your business as an individual, your tax rate is 32%.
But if you choose to incorporate as a company or trust, you may only pay 28%* based on the company’s taxable income (and not yours).
Hire an experienced accountant Brookvale firm to manage your cash flow.
Don’t Be Late with Your BAS
Being late with your BAS is not just an administrative error; it’s also a costly mistake. If you’re not filing your BAS on time, you may be subject to penalties and interest that could cost you thousands of dollars.
To avoid being late in paying your tax liability, follow these steps:
- Ensure that your accountant has all the necessary information to prepare the BAS on time. You can find out what this includes by visiting the Australian Taxation Office
- Have enough funds available in your account so that when it comes time for payment, there are no problems with making the payments on time without having to apply for an extension or incurring additional fees due to insufficient funds in their bank accounts
Depreciate assets properly.
Depreciation is one of the most significant tax deductions. The idea behind depreciation is that you can deduct an asset’s cost throughout time based on its useful life. This will result in lower taxes and help you keep more cash in hand to reinvest into your business.
Depreciable assets include vehicles, computers, furniture, and office equipment. To calculate depreciation for these items, simply multiply the purchase price by a percentage based on the IRS guidelines (5 years per item).
Then divide this amount by 12 months to get an annual depreciation allowance that can be claimed as income-tax deductible each year until the asset is fully depreciated (sold or replaced).
We hope this article has given you the tools to start saving for your business. Taxation can be a confusing and intimidating subject, but it doesn’t have to be!
By following these tips and checking for more information about taxes, you’ll be on your way to being a savvy entrepreneur in no time.
If you have just started a small business and looking for a professional accountant Brookvale firm to manage your business, give us a call today for a free consultation.
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