Do you have dreams of being your own boss? Do you want to start your own business but have no idea where to start?
When you start a business, there are tax and super responsibilities you need to be aware of, including:
- The tax implications of your business structure
- Whether you’re entitled to an ABNExternal Link
- Registering your business
- Records you need to keep
- Deductions you can claim.
Before you get Started
As you get your business up and running, there are a few things you may need to consider, including:
- When your tax and other obligations start – this will depend on whether you are in business yet
- The implications of the structure you choose – tax and legal
- The location of your business (such as working from home)
Getting up and Running
As soon as your business is running you’re going to face new obligations. Understanding what you need to do from an early stage will help you stay on top of things.
- Register your business
- Record keeping – Ensure you have a good record keeping system to track your income and expenses right from the start. This helps you know how your business is going, as well as meet your tax responsibilities and be able to claim all the deductions to which you are entitled.
- Hiring Workers – If you’re thinking of taking on workers it’s important to understand you will have extra responsibilities. You may have to deduct tax from their pay and send it to the ATO, pay super contributions to their nominated super fund, and pay fringe benefits tax if you provide them with benefits in addition to their wages.
- 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.
- Reporting – 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) and Income tax return.
Starting a small business is not as daunting as it seems. Talking with your accountant makes the task easier and more simple. Make an appointment with Nicholas Pender to discuss starting your small business today.