Once you get your business started, you'll want to plan how you'll pay your tax bill. Staying on top of it will be the key to having a successful tax season. You can make pre-payments on your tax bill, put extra money aside to cover your tax bill, or enter an instalment agreement. As soon as you lodge your annual taxes and you report your tax-payable amount, the ATO may automatically enter you into a pay as you go (PAYG) instalment agreement. If you opt-in before the ATO automatically enters you into this agreement, you can make quarterly tax bill payments. You can lodge all of your taxesonline through the ATO's website.
If you have your small business registered for goods and services tax (GST), you'll have to lodge a business activity statement (BAS) each year as well. This report will help you report and correctly pay your small business's GST, PAYG, PAYG withholding, and any other taxes. The ATO will automatically send each small business owner a BAS when it is time to lodge your taxes as long as you register your small business for an Australia Business Number (ABN). You can either lodge your BAS by mail, electronically, or by phone. The due date for each quarterly lodging are:
Quarter One - July, August, and September: 28th October
Quarter Two - October, November, and December: 28th February
Quarter Three - January, February, March: 28th April
Quarter Four - April, May, and June: 28th July
Monthly - 21st of Each Month
You can lodge your BAS online on the ATO's website, through their business portal or through any Standard Business Reporting software. Secondly, you can lodge your BAS through a registered tax or BAS agent. They will also gain access to your quarterly reports and payment information. Finally, you can lodge by phone or by mail.
Small Business Bookkeeping
Your bookkeeping is extremely important. You'll want to get an efficient system in place as you're setting up your small business. Having a good bookkeeping system will allow you to make smart financial decisions regarding your business, analyse your current cash flow at a glance, determine how healthy your business is, and give you a tool to help demonstrate your financial position to business associates, lenders, and the ATO.Under the ATO's tax laws, your bookkeeping records have to explain each transaction your business does. They have to be either electronic or on paper, in English and legible, and you must keep them for five years. If you can't produce the proper records, the ATO may penalise your small business. By keeping accurate records, you're also reducing the risk of having your taxes slowed down or returned due to errors. You can choose to do all of the bookkeeping yourself, have a bookkeeper on staff, or you can use a registered tax agent or a registered BAS agent to do all or part of your bookkeeping.Starting up and running your small business should be a happy and exciting time in your life. You want to ensure that you're doing everything correctly and that you're keeping good records so you won't have any problem when it comes time to lodge your annual tax return. A registered tax agent can assist with this process to make it go smoothly each year.