Running a small business has many extra requirements – one of the most important is planning for reporting and managing small business taxes. Here are tips for the ATO – Australian Tax Office, to get you organised –
Reporting and paying tax
As soon as you start up your business, you need to plan for how you will pay the tax you will owe each year when you lodge your tax return.
Paying tax in your first year
In your first year of business, you can stay on top of your obligations by:
- making tax pre-payments into your tax bill account;
- putting money aside for your expected tax bill;
- voluntarily entering into instalments.
Paying tax by instalments
Once you lodge your first income tax return and report a tax-payable amount above a certain threshold, you will automatically enter the pay-as-you-go (PAYG) instalment system.
If you voluntarily enter into instalments prior to lodgment of your first tax return, you will be able to make quarterly payments towards you tax bill.
Once you’re up and running, you’ll need to report your business income and other tax information. The key reports you should be aware of are:
- Business Activity Statement (BAS) –
- the main taxes you will report on will be GST (if you’re registered for GST)
- any tax you withhold from employees’ pay
- instalments towards your own tax once you are in the pay as you go instalments system;
- Income tax return
- to report your personal and business income and claim deductions.
Most of your business reporting can be done online.
- Lodge online (using myTax – for sole traders)
- Online services – Businesses
- Business activity statements (BAS)
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