Business tax laws are complex and constantly changing, so it is vital to always be on top of your tax obligations: especially if you want to pay less tax and avoid difficulties with the ATO.
What is a business tax return?
A business tax return is basically an income tax return. The return is a statement of income and expenditure of the business. Also, any tax to be paid on the profits made by you is declared in this return. The return also contains details of the assets and liabilities held by the business. Items like fixed assets, debtors, and creditors of the business, loans were taken, and loans were given are declared here.
There are four main types of business tax returns:
Sole trader tax return:
As a sole trader, you should lodge an individual tax return that adds all business income into a separate schedule of business. Separate tax returns are not required: although some limitations do apply where business losses are offset against your non-business income
Partnership tax return:
In the case of a partnership, the business has a separate tax file number and lodges a separate tax return to the partners involved. However, tax on partnership income is paid by the partners, not by the partnership. Therefore, the partnership’s profits should be included in the partners’ individual tax returns. A partnership tax return can be extremely complex with many deductions, and payments made to partners cannot be claimed as deductions by the partnership.
Company tax return:
Because a company has a distinct legal identity it is effectively treated as an ‘artificial person’. Therefore, a company tax return must be lodged separately from the director’s, or any other stakeholder’s return
Trust tax return:
A trust must lodge a tax return separately to its beneficiaries. The trust’s income is then distributed to the beneficiaries and included in their tax returns. All tax paid on trust income is therefore paid by the beneficiaries or in some circumstances, by the trustee.
What are the due dates for filing of returns?
In Australia, the 31st of October is the cut-off date for sole traders, trusts, and partnerships when the business tax return Australia is lodged personally. In the case of a small business tax return, the due date for lodgment is the 28th of February when no registered tax agent is involved. If you have any prior year returns outstanding, the due date will be 31 October.
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As a small business, you can take advantage of a raft of tax concessions and accelerated deductions to reduce your tax liability through our experienced agents at Tax Return Perth. Our accountants will not only help you lodge your business tax return but also advise you on tailor-made tax strategies to help reduce your tax liability.
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