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Reckon/Quickbooks/MYOB – How to enter Transfers of money to pay business expenses

Reckon/Quickbooks/MYOB – How to enter Transfers of money to pay business expenses

Reckon/Quickbooks/MYOB – How to enter Transfers of money to pay business expenses

A regular client emailed to check they had entered transaction correctly – to enter Transfers of money to pay business expenses in this case, to cover a PAYG payment to the Australian Tax Office (ATO) – they emailed –

I am a little unsure about an entry I have made and wonder if you can tell me if I have done correctly.

I had a PAYG for Chris and at the time there wasn’t quite enough funds in Bus. a/c so I transferred money from personal a/c to cover.

For MYOB entry I put to:        Receive Money

Payer:                                       C and  personal

Amount:                                   $ —– 

Method:                                    Other –then put note in details.

Memo:                                      Funds transfer from Pers. to Bus a/c

Then I credited  

21410- PAYG Tax                  Which is where the payment will come from

Is this correct or should I have put to something else?

Kind regards

L

Answer –

Good effort – nearly right!

There are 2 transactions to do, just to be clear (and a third one to pay it back later) –

1. You lend money to Business Bank account –

– Receive Money

  • Top account is Bus bank account, then date, $ etc
  • Memo – eg “C&L loan to Bus bank”
  • Lower account is YOUR Personal Loan account – either a number 2 Liability (Long Term), or Equity – but number 2 and set as a CREDIT CARD allows you to use in other Transactions like a bank account at the top account

2. The Business PAYS the PAYG –

– Spend Money

  • Top account is Bus bank account, then date, $ etc
  • Memo – eg “Pay ATO PAYG” – add name if specifically matches an employee amount
  • Lower account is the 2-1410 PAYG Tax account

3. The Business pays you back – if this occurs later (or can just leave as is and business always owes you this later)

– Spend Money

  • Top account is Bus bank account, then date, $ etc
  • Memo – eg “Pay ATO PAYG” – add name if specifically matches an employee amount
  • Lower account is the 2 Liability Personal Loan Account

Hope that is clear!

Need help? Not sure? Call for FREE 30min Advice / Strategy session today!

Call 0407 361 596 Aust and also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right!

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Business Tax Tips – Leasing and how GST applies

Business Tax Tips – Hire Purchase and how GST applies

Hire Purchase and how GST applies

Businesses can acquire assets such as equipment by entering into hire purchase (covered last month) or leasing agreements to pay for and use goods over a period of time rather than paying the full cost up front. Then they need to know how GST applies.

Here is some information about leasing and how GST applies from the ATO website to assist, including links for further information –

Leasing

How does leasing work?

Leasing agreements commonly apply to goods such as vehicles, office equipment and machinery.

Under a lease agreement, the person who:

  • Grants the lease (lessor) is the owner of the goods;
  • Leases the goods under the lease (lessee) uses them for a specified time and, in return, makes a series of payments that can be fixed or flexible.

Do you pay GST on lease agreements?

Generally, lease agreements are subject to GST.

On each activity statement, you must report payments you make for goods under a lease agreement that extends over a number of tax periods. That is, you treat each payment as though you are making a separate purchase each tax period, even though each payment is for the same goods under the same lease agreement.

Find out more

Special rules apply where you lease property to make input taxed supplies, including financial supplies. For more information about whether you can claim GST credits, refer to Claiming GST credits.  

Special rules may also apply to leases you entered into before 1 July 2000 for a supply of goods still ongoing after 1 July 2005. For more information, refer to GST and long-term non-reviewable contracts.

End of find out more

How do you claim GST credits on lease agreements?

You may be able to claim GST credits for any GST included in the lease charges.

If you account for GST on a non-cash (accruals) basis, you are entitled to a GST credit of one-eleventh of the lease instalments for each tax period when you do any of the following:

  • Make any part of the lease payment due in that period;
  • Receive an invoice from the supplier.

If you account for GST on a cash basis, you claim a GST credit of one-eleventh of the lease instalment amounts paid in each tax period.

What happens if you take ownership of goods?

At the end of the lease, you may have to pay GST on residual payments under lease agreements. These are payments you make to take ownership of the goods, which is treated as a separate transaction to the lease agreement.

If you purchase the goods at the end of the lease agreement, you may be eligible to claim a GST credit for any GST you paid in the price of the purchase.

See some working examples further down the page at the ATO site HERE

Get a FREE 30 min answer to your query, and FREE ongoing email or phone support – No-one offers as much! Call and you also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right!

Email info@accountkeepingplus.com.au or call 0407 361 596 Australia


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Business Finance 101 – Small Business Superannuation Clearing House – How it can help your small business with SuperStream

Small Business Superannuation Clearing House – How it can help your small business with SuperStream

Small Business Superannuation Clearing House – How it can help your small business with SuperStream

The Australian Tax Office (ATO) has a service called the Small Business Superannuation Clearing House, which is to help your small business (with less than 19 employees) meet its super obligations as employers. Here is what the ATO site says –

The Small Business Superannuation Clearing House is a FREE, optional service for employers with 19 or fewer employees, as well as those businesses with an annual aggregated turnover of less than $2 million.

You can make your super guarantee (SG) contributions as a single electronic payment to the clearing house, which then distributes the payments to employees’ super funds.

The clearing house is designed to reduce red tape and compliance costs for small business.

If you register to use this service:

  • Your super guarantee contributions are counted as being paid on the date the clearing house accepts them (so long as the fund does not reject the payments).
  • You have 21 days to pass an employee’s choice of fund on to the clearing house.

The page with links to Register (or Login if you have started) is HERE to use the Small Business Superannuation Clearing House.

Or Phone 1300 660 048 or email SBSCHEnquiries@sbsch.gov.au for information.

Using the Small Business Superannuation Clearing House will ensure you are SuperStream compliant by 1 July 2015.

For answers to questions such as

What is SuperStream?

How will SuperStream benefit employers?

Who does SuperStream apply to?

When do I have to start using SuperStream?

What information do I need to collect from SMSFs?

Head to  Employer FAQs on SuperStream

Need help? Not sure? Call for FREE 30min advice / strategy session today! 0407 361 596 Aust

***BEFORE you BUY Ask us for a competitive software price BELOW retail – No obligation!

You also get FREE 30 min to assist in setting up your company in the software, and FREE ongoing email or phone support – No-one offers as much! Call and you also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right!

Email info@accountkeepingplus.com.au or call 0407 361 596 Australia


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Bookkeeping – The BAS and what your bookkeeping needs to supply to prepare the form at the GST Labels on your BAS

Bookkeeping – The BAS and what your bookkeeping needs to supply to prepare the form at the GST Labels on your BAS

The BAS and what your bookkeeping needs to supply to prepare the form at the GST Labels on your BAS

The ATO site is full of information to assist you in your tax reporting requirements – and tells you what your bookkeeping needs to supply you, to prepare the form at the GST labels on your BAS (Business Activity Statement). Here is the KEY details about what the BAS is, and about EACH label on the BAS – from the ATO site –

  • Business activity statements (BAS)

The business activity statement (BAS) is a tax reporting requirement for businesses issued by us on either a monthly or quarterly basis. It’s used for reporting and paying goods and services tax (GST), pay as you go (PAYG) instalments, PAYG withholding tax and other tax obligations.

When you register for an Australian business number (ABN) and GST, we will automatically send you a BAS when it is time to lodge.

All businesses registered for GST are required to lodge a BAS by the due date.  

Next steps:

You must complete the goods and services (GST) tax section of your business activity statement (BAS) if your business is registered for GST.

The GST labels you complete depend on the GST reporting option you have chosen:

Option 1
Calculate & report quarterly

Option 2
Calculate quarterly, report annually

Option 3
Pay instalment amount, report annually

G1 Total sales

G1 Total sales

 

G2 Export sales

 

 

G3 Other GST-free sales

 

 

G10 Capital purchases

 

 

G11 Non-capital purchases

 

 

 

 

G21 ATO instalment amount

 

 

If varying: G22 Estimated net GST for the year

 

 

If varying: G23 Varied amount for the quarter

 

 

If varying: G24 Reason code for variation

1A GST on sales or GST instalment

1A GST on sales or GST instalment

1A GST on sales or GST instalment

1B GST on purchases

1B GST on purchases

 

Need help? Not sure? Call for FREE 30min advice / Strategy session today!

Call and you also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right!

Email info@accountkeepingplus.com.au or call 0407 361 596 Australia