Top Four Common Mistakes On Tax Return

A business tax return is best prepared by someone who knows the ins and outs of your business. Hiring an accountant gives you peace of mind when it comes to tackling one of the most challenging tasks of running your business. However, an accountant does not guarantee immunity to mistakes. There are many reasons your business can fail on making a business tax return.

Not taking bookkeeping seriously

Poork bookkeeping has a negative effect on your business as it involves record-keeping. Your company tax return is computed based on your records and when the task is handeed over another bookkeeper who seems to run through everything including making necessary adjustments, things can get really mixed up. For a seasoned bookkeeper, these tasks are just a walk in the part not until tax time. When the ATO knocks on your door, checking your records is one thing that make bookkeeping a tedious task.

Nowadays, bookkeepers no longer spend too much time on reconciling bank accounts, chasing unpaid debts, reviewing reports and others. Cloud services such as Xero allows bookkeepers to deliver accurate reports and ensure that superannuation is paid up. These are simple and basic tasks, but they are the ones that business owners often miss out.

Not paying on time

Tax returns are usually due on May at the end of the financial year. Since your company has all the time in the world to prepare and lodge timely payments, there are still business owners who still lodge late. As a result of late payment, business owners suffer from penalties.

The good news is penalties can be avoided by ensuring that your tax affairs are in order. Having a good process is key to preventing problems associated with your tax returns. It is also imperative that you plan your tax bills in advance.

Taking out personal loans

Cashflow is an important aspect of your business and just because you are the business owner does not mean you can borrow money from your company. Before making any decisions of taking the cash, take tax rules into consideration. Taking money from your company to cover living expenses can impact your business. Speak with your bookkeeper or accountant so you can obtain sound advice and recommendation.

Not paying superannuation

Superannuation brings stress to business owners especially those who do not completely understand how it works. If you are still wondering whether or not you should pay super, checking out ATO’s employee/contractor decision tool will be a huge help. Knowing what you need to pay for will enable you to pay the superannuation on time.

Simple Steps To Prevent Missing Tax Filing Deadline

Getting all the tax details in order can be a difficult tasks if the tax return deadline is quickly approaching.

However, this is not an excuse to miss the deadline because it can result in incurring penalties. Following great practices can help you file your tax return in a timely fashion. It only takes 5 steps to ensure you do not miss the tax filing deadline.

1. Correct discrepancies on your tax statements

Incorrect statements may be one of the reasons you miss tax filing deadline. You can still do something about these discrepancies by putting some pressure on your bookkeeper to send the documents you need or correct tax statement errors. Your tax documents must be available before the deadline to ensure you file your taxes in a timely manner.

2. File your tax return online

Since you now have the option to file online, take advantage of the opportunity to file your tax retun right away. Once you file your tax return, it will be processed within 24 hours.

3. Submit an extension

File an extension to prevent filing an amended return. The extension allows you to buy someĀ  time so you can deal with your tax statement. If you have enough time to check your tax statement, it will be easier for you to get your taxes filed correctly. This is a great option for those who cannot track down corrected tax forms. However, you still have to keep in mind that if you owe any tax, you will still have to pay the estimated balance on the required date.

4. Pay as much of the balance as possible

Keep your penalty charges and extra fees to a minimum by paying as much of the tax balance as possible. You can also apply for an installment agreement to pay the remaining balance. If your application for installment agreement is approved, you will no longer have to worry about paying interest charges and excess fees.

Some business owners also choose to pay the tax balance with a credit card. This option saves time and money as you do not have to pay for high interest rates and fees that the ATO charges.

5. Create a system

If you do not want to get caught by the same cycle of delayed tax payments, be sure to consider setting up a system for next year. A good tax system prevents delays and minimises stress. Timely filing of tax return gives you peace of mind as you no longer have to worry about paying for penalties.

The Benefits Of Lodging Your Tax Return Online

Filing your tax returns in a timely manner should be observed to avoid penalties and fees. You can also get a good impression from the ATO if you do not fall behind your schedule. Tax returns cover the financial year from July 1 to July 30. The due for lodgement of tax returns is by October 31. There are various ways you can lodge your tax return and the most convenient and easiest way is by using MyTax. Since MyTax is web-based, you have the option to lodge your tax return from any device be it your computer, tablet or smartphone. Make sure you have a myGov account linked to the ATO to use this option.

Why Lodge Online

  • By late August, the information from your bank, employer and government agencies will be pre-filled and what better way to do this than to opt for the online option.
  • When it comes to protecting your sensitive information, myTax uses online banking encryption to ensure that your information is safe from data breaches.
  • Regardless of the time you wish to lodge your tax return, myTax is available 24/7.
  • You can also get your refund within 2 weeks.
  • Even sole traders can take advantage of myTax because it is available for all individuals who wish to lodge their tax return online.

The upgrades and features to expect in 2016 include:

  • fully integrated tools and calculators
  • ability to amend or lodge prior year returns
  • myDeductions data automatically loads into your return
  • new online tools to records capital gains and depreciation
  • helpful messages that will guide you through lodgement

Pre-filling your online tax return

Pre-filling your tax return means partially completing the tax return by automatically loading information through myTax. The information you will find in your pre-filled tax return are the current year information from the organisations that report to the ATO. These usually include government agencies, employers and banks. The data from your previous tax returns and account activity are also supplied.

You can review your pre-filled information and supply any missing details. You can also update incorrect details. The purpose of pre-filling is to make the process of lodging your tax return easier. It also ensures that the information is complete and accurate. Once you report organisations report to the ATO, the pre-filling information will be available within a couple of days. The information is made available by early August.

Pre-filling is beneficial because it enables you to resolve discrepancies before you decide on lodging your tax return. Checking tax returns for any discrepancies is important because the ATO checks that the information you have provided matches the information your report on your tax return.