Five Common Tax Mistakes And How To Avoid Them
For the average small business owner, dealing with the required bookwork doesn't exactly spark joy - so what are some common tax mistakes to be aware of?
For businesses and brands of every size, managing their tax affairs is nothing short of a pain. Most of the time, you’re good at what you do, and would much prefer to be out there doing it. Instead, you find yourself figuring out expenses and venues, completing lengthy BAS forms, and whatever other paperwork is thrown in your direction. Managing your tax is a necessary evil, but the good news is that there are several common tax mistakes that can easily be avoided providing that you are aware of them.
FIVE Common Tax Mistakes To Be Aware Of
While there are over two million small businesses operating in Australia, a sad reality is that over one third of those are doomed to fail regardless of how hard they try. From payroll tax to super guarantee contributions to GST - businesses have been left blindsided by hefty penalties and tax debts, all because they put their legal obligations out of sight and mind.
If you want to avoid being another statistic, then there are a few helpful tips and tricks available in order to ensure you’re at the top of your tax game. After all, it’s been proven that one minor mistake can easily be your undoing as a small business owner in Australia, so it’s best to do yourself as many favours as you possibly can.
When it comes to navigating the many realms of tax, what are a few common tax mistakes to watch out for?
Awareness On Tax Laws - Did you know payroll tax rates changed this year? Many business owners didn’t, and it landed them in some serious hot water. Make sure your details are up to date with the Australian Tax Office, and check in regularly for updates.
Not Using An Accountant - Assumption is the mother of all stuff ups. While you might be savvy enough to get away with handling your own tax affairs, accountants are qualified professionals and do it all properly the first time - so don’t be afraid to invest in one.
Poor Record Keeping - Good records are the paper trail of a good business, and there’s simply no way around it when it comes to balancing the books. Small business owners need to keep track of their finer details, as the offsets can dramatically reduce the amount of tax due.
The Status Of Your Employees - Never try to palm off your employees as subcontractors, even if you think that it allows them to avoid superannuation, sick leave, holiday pay and payroll tax. Not only will you incur the wrath of the ATO, but also that of the Fair Work Commission.
Staff Superannuation - If cash strapped, too many operators turn to superannuation payments meant for their staff. In reality, this is one of the first expenses to consider, as the penalties are hefty - even if paid late.
Where To Find A Solution On Managing Your Tax
What you choose to invest in or shy away from as a business owner can have a domino effect that ripples through your entire team - so are you confident in your financial choices?
Ultimately, the team at Muro Accounting believe that every business owner is an entrepreneur. However, accounting does not discriminate - finances break down barriers and are not territorial. If you would like to take a deeper look into your finances, please get in touch with us at Muro today to ensure that you’re on the right path for success.