Tips for Business Tax Return in Australia

By Kaleem Ulah

January 22, 2024

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The stress that comes with a business tax return is not spoken about enough. It’s the time small business owners’ stress is amplified. You need to consider what you're eligible for and how to maximise your business' profits after the fiscal year. Any company unsure of its business criminal status should contact the Australian Taxation Office (ATO) for guidance. It is best to get everything in order before the financial year ends. This will help you maximise your money from your tax claim. There are a few approaches to getting a good return from the Australian Taxation Office. They include activities that take place throughout the year as well as specific approaches to dealing with your tax claim. Therefore, let's look at important tips for business tax returns in Australia.  

Lodging and making tax payments to the ATO

Each year, you are required to submit a tax return for your income expenses. In addition to that, most businesses are required to file business activity statements. You can furthermore be required to submit certain other reports or returns. It is essential to file and pay your taxes promptly. The Australian Taxation Office offers several online services that taxpayers can use to file their returns and make tax payments. Accessing these services requires using an authenticated login service like AUSkey or Manage ABN Connections. You can utilise the myGov account linked to the ATO if you run your business independently.

Business tax return in Australia: Top 8 tips

Now, let's go into the top tax tips small businesses in Australia should take seriously for easy taxation. 

Business tax return in Australia_ Top 8 tips

1. Optimise depreciation deductions

Simplified depreciation is the most common method of depreciating an asset. Businesses that qualify for temporary full expenses can deduct the entire cost of qualifying assets instantly. The assets must be owned, utilised, installed, and ready for use for a taxable purpose by June 30. You must execute the full expensing requirements if you manage a business and want to use simplified depreciation standards.

2. Distribute your earnings among family members

If your company is structured as a trust, the income its beneficiaries receive from it is subject to taxation. The trustee has discretion over how the trust's income is dispersed. Giving the most money to the lowest marginal tax rate may make sense if the beneficiaries are family members. Furthermore, if the trust distributions are the only source of income for those beneficiaries, their tax liability for those earnings might be relatively low.

3. Handle your GST

Taking care of your GST can also be made easier now. This is because qualifying businesses are only needed to account for GST once they receive payment. You also have the option to pay the GST in instalments. The ATO will figure out the total amount of each instalment on its own. A small business can decide to use part of its purchases for personal use. However, it has the option of claiming the full GST credits. Then, you can make a single adjustment at the end of the tax year to account for the private use percentage.

In addition, small businesses can take advantage of pay-as-you-go tax instalments. It enables them to pay quarterly taxes under a formula from their most recent tax return assessment. You won't need to go through the trouble of performing calculations in "long form." This is because the income reported has been updated to reflect the most recent rise in gross domestic product. This will save you time.

4. Use unpaid invoices in your favour

The good news is that if you have unpaid invoices, you can write those off as bad debts. This can come from customers who are unable to pay. The term "bad debt" is any unpaid invoices you are sure you won't get paid back. The cancellation of bad debts can have the effect of lowering your taxable income. So, it is always preferable to have a conversation with your business tax accountant about the situation.

5. Superannuation guarantee

Make sure that the employees' superannuation guarantee payments are current. Also, check that their contributions are sent to their designated super funds by the end of June. Notify the ATO of any missing payments and take the necessary steps to correct them. You will submit and pay superannuation guarantee charge statements if you do not pay on time. The SGC does not qualify for a tax deduction, and users will be subject to considerable administrative expenses, fees, and penalties. Because of this, always check that your payments towards the superannuation guarantee are always accurate.

6. Maintain accurate financial records

Most options for reducing taxes that we discussed in this article require tax receipts or other documents to be kept. If you keep your records on paper, you should scan them and keep them on the cloud. This way,  you can organise and retrieve the information. Remember that the ATO mandates that you preserve records for at least 5 years after submitting your tax return.

7. Utilise accounting software 

When you are a business owner, it can be tough to keep track of all of your spending and every tax deduction. However, if you utilise accounting software, all your essential financial information will be recorded in a single location. Also, you can utilise your software to manage taxes and basic reports, keep track of GST, and submit BAS. This is one of the roles of modern-day bookkeeping you should always utilise.

8. Obtain capital gains tax advantages

Because of this concession, you can postpone the realisation of 50% of the capital gain on the sale of a corporate asset. To qualify for a 50% decrease in active assets, you must meet the same criteria as all CGT small business discounts. You can use all concessions until your capital gain is zero (certain conditions apply). If you are still unsure, visit the ATO website for more information.

Conclusion

As a business owner in Australia, knowing how to simplify your tax return is very important. Sometimes, you only need a tax agent from Australia to make your business tax returns simple and seamless. Go through the tips on How To Find A Tax Preparer to ensure you are on the right path.

If you are in Australia, you can get assistance from The Kalculators in navigating tax returns for businesses. Our small business tax experts are highly experienced and committed to promptly meeting your tax return requirements. Our expertise spans the entirety of the field of taxes as well as the connected fields of accounting and business advisory. This ranges from regulatory compliance to growth and tax-efficient strategy. For further information, please get in touch with our team.

Subscribe to our enlightening email updates to learn more about the Australian taxation system.

Frequently asked questions 

When is the last day to file an Australian Business Tax Return?

Every year, the last day to file an Australian Business Tax Return is around October 31. However, it is important to double-check the exact due date because it may be different for each type of business and tax year.

How long does it take to process a Business Tax Return?

This depends on several things, such as how complicated the return is and how many of them are sent in. Usually, you'll get an evaluation letter for your tax return a few weeks after you file it. It takes around two weeks (14 days) for the majority of online returns to be processed. However, if the ATO has to physically process it, it might take up to thirty days. Processing of paper returns can take up to ten weeks, which is equivalent to fifty business days. The processing of your tax return will take longer if it requires manual verification.

What do I need to fill out an Australian Business Tax Return?

In Australia, you need to gather different papers to make sure that your business tax return is correct and complete. These papers could have financial statements, bills, receipts, bank accounts, contracts, and other important details.

If you need assistance with this, contact The Kalculators now!!!

Do I need a professional to do my Australian Business Tax Return?

In Australia, you don't have to hire a professional accountant to help you file your business tax. However, it is strongly suggested that you do so. These professionals know a lot about tax laws and rules, and they've also done tax reports for businesses before. They can help keep mistakes to a minimum and ensure that tax rules are followed. if you are in Adelaide and its environs, The Kalculators is always available to help you with your taxes.

Tip: Check out How to Get The Most Value From Your Bookkeeper here.

Why is it important to file my Australian business tax return on time?

In Australia, filing your business tax return on time has a number of perks, such as:

  • Staying away from fines and late fees
  • Making sure the business has a good name
  • Getting the most tax breaks and credits
  • Knowing what tax responsibilities you have and any changes
  • Making sure rules are followed and avoiding possible legal problems

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About the Author / By Kaleem Ulah

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Kaleem is CEO & Author at "The Kalculators". With more than 10 years of experience in financial services, He built Kalculators to transform your financial challenges into strategic triumphs!

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