Understanding tax opportunities, implications for business

As we navigate through the economic impacts of the COVID-19 pandemic, many Australians have opted for a change in their work dynamic, starting their own businesses in an attempt to increase their income or to break free from the monotonous employment cycle. However, embarking on this journey can bring potential tax implications, which many tend to overlook. Q: Can you share some top tips and advice on the tax opportunities and implications of running a small business? A: One crucial aspect business owners need to understand is the need to declare your income. Regardless of whether your venture is small or large, the income generated is taxable and must be declared on your tax return. Using reliable accounting software can help you track and report this income accurately. Remember to claim deductions for any expenses incurred as part of running your business. This includes the fee or commission taken from the price you charge your customer for your services, as well as relevant home-office expenses. Transitioning from being an employee to running a business implies that you are now responsible for setting aside money for future tax bills. This is one of the most common pitfalls new businesses tend to fall into. In case your business turnover exceeds $75,000, you might need to register for GST. Also, remember to lodge a Business Activity Statement (BAS) with the ATO at least quarterly. Running your own business indeed comes with extra tax obligations, but it also provides certain tax perks, such as access to all the tax concessions available… Read More