Taxes are stressful for everyone, but more so for small
business owners. If they are not careful, then a small error can see them paying away thousands in penalties;
alternately, negligence can also cause them to pay more than they have to in
taxes. For the newly formed small businesses, getting hold of a tax accountant in Adelaide or any of
the other Australian cities is an imperative before tax season sets in.
For small business owners who are not savvy about taxes, it
can be a veritable minefield with ample chances for disaster. The most common
mistakes that small business owners may commit are:
i. Inaccurate payroll records
Inconsistent payroll records may create a lot of challenges
in terms of tax preparation. It is a common incident for new business owners to
incur penalties from the ATO due to the
inability to maintain and organise their
payroll records. Small businesses should do the smart thing by hiring
professional accounting firms in
Adelaide or other cities to get their payroll sorted.
ii. Pre-emptive tax readiness
As mentioned above, tax preparation or readiness is
essential if you want to reduce scruples for your business when the time comes
to file your taxes. As suggested in the previous point, hiring a professional
accounting firm beforehand can ensure your records are organised with time in hand. Waiting until the end of the hour
can spell disaster for a small business, as it curtails planning and strategy
time.
iii. Taxable income exclusion
A lot of small companies try to avoid including most of
their income in the write-up to prevent it from being taxable. It needs to be said that this is both detrimental and a
felony. Given the strict standards of the concerned bodies, failure to include
a taxable income can incur an audit.
For business owners who are not aware if a certain income, such as fringe benefits
should be taxable or not, hiring
professional accounting firms in
Adelaide or the other major cities, is an excellent place to start.
iv. Missing deductions and benefits
For a small business, the deductions and benefits make a lot
of difference. Improper book-keeping and lack of knowledge about what qualifies
for a deduction can result in unnecessary financial bleeding. Your gross income
will always go up when you can obtain tax deductions.
It all comes down to efficient record-keeping. You can
easily find a tax accountant in Adelaide
or whichever city your business is based to
educate you about possible deductions.
v. Mixing up personal and business tax
write-offs
One of the oldest tricks in the book for small business
owners is to write off their expenses like
that of the business. The ATO is quite severe about mingling personal expenses
in your business records. Hence, as a business owner,
one has to keep records for distributions taken from the business expenses.
These mistakes are just the tip of the iceberg for small
businesses. Majority of these mistakes can be
avoided by hiring a professional tax consultancy firm.
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