Taxes often take a backseat when putting up a small business, as focus is normally on acquiring new customers and driving sales. During tax season, however, pay attention to your taxes so as not to make mistakes that can result in overpayments, penalties, or worse, an audit.
Whether you’re running a corporation, an LLC, or a mom-and-pop shop in Australia, there are many areas where you can easily make errors, from misreporting income and expenses, to missing out on possible money-saving tax credits.
To help you navigate the minefield that is small-business taxes, here’s a list of some of oft-ignored errors you should avoid so you won’t be stressed out come tax time.
Mixing Personal and Business Accounts and Expenses
While having a separate bank and credit account for your business and personal use is not strictly required, it is advisable not to mix the two together. Ask any professional tax accountants in Perth, for example, and they’ll tell you it’s best to separate personal money from that of the company’s. This not only makes taxes easier, it also ensures your bookkeeping and financial reporting tasks will be more accurate.
Not Paying Super
One item often forgotten come tax season is super contributions. Your superannuation is payable 28 days after the end of the quarter. But if you want to claim a tax deduction, you need to have made the contribution before the end of the tax year, that is, June 30. Not paying your superannuation by the due date can also lead to penalties imposed by the Australian Taxation Office (ATO).
Forgetting Reimbursable Expenses
Many small business owners often pay for company expenses from their own money or with their personal credit cards then make the mistake of failing to track these expenses. Some of these expenditures are reimbursable. You just need to submit the paperwork to the company.
Doing it Yourself
No matter how much you like crunching numbers, it’s still best to have the experts handle it. Working with certified tax accountants in Perth will not only help make tax preparation and bookkeeping easier, it also like having a second pair of eyes to make recommendations and find any mistakes you might have overlooked.
Having your own business can be rewarding, but only if you work and do well on every aspect of the business, including handling taxes.