Managing payroll service is one of the most complicated parts of running a small business. Most small businesses generally have little manpower. Thus, most of them don’t have in-house accountants. As a result, managing the payroll and paying taxes accordingly becomes troublesome.

One of the best ways to deal with payroll is to get a payroll service. A payroll service would manage your paperwork, make the payment process smoother, and help you submit your documents during tax times. 

However, getting payroll services in the eastern suburbs isn’t that easy. Not every service is worth the investment. So, you need to take a few things into account before getting a payroll service.

In this article, we’re going to discuss a few essential factors that you need to consider before getting a payroll service in the eastern suburbs. Let’s begin!

Factors to Consider Before Getting a Payroll Service in the Eastern Suburbs:

Type of Payroll Service:

There are many types of payroll services in the eastern suburb for you to choose from. Generally, small businesses don’t have an in-house accountant due to financial constraints. However, small businesses can have bookkeepers who will maintain payroll-related information for your business. You can either hire a bookkeeper or choose a bookkeeping service for your business.

Furthermore, you can also opt for a digital payroll system for a more “hands-on” approach. There are two types of digital payroll systems, online and offline software-based payroll. In an online system, most of your information stays on the cloud. So, you can access that information anytime, anywhere you want. However, you’d have to pay for cloud storage, constant internet, and regular software subscription.

However, you can save a bit of money by getting offline software. You can store the information on your computer and access it from there. There aren’t any cloud computing or software update costs. But, you might lose your data if your computer goes out of order or your folders get corrupted.

Services offered:

Your payroll system for eastern suburbs should be comprehensive. It should deal with all the nitty-gritty of your payroll. From paying your staff to filing taxes, your payroll should be able to get everything done.

When you’re getting a payroll service in the eastern suburbs, make sure it provides you with the basic necessities. These include; payroll processing, filing necessary taxation, making adjustments after every new recruitment, annual reports, etc. Prioritize these before other features.

However, other additional services, such as mobile access, self-service, PTO management, etc., are welcome additions that can massively help your business. So, make sure you’re always going for a feature-packed service.

Cost:

Now, let’s talk about the elephant in the room, the cost of getting a payroll service! Most small businesses opt for a cost-effective solution due to financial constraints. However, getting the cheapest shouldn’t always be the option.

Investing a bit of money in your payroll can have its own benefits. These include ease of payment and eligibility for subsidies. Furthermore, some payroll services in the eastern suburbs have hidden costs involved. So, make sure you know all the details before investing your money.

Security:

Whenever you’re getting a payroll service, make sure it’s secure. Your payroll provider will have to deal with a plethora of sensitive information. Information such as the number of employees in your business, your payment details etc. is extremely sensitive. 

Ensure your sensitive data is stored in secured servers, and the information is delivered through secure channels. Compromising your information to save up some money can be suicidal in the long run.

Ease of Use:

Payroll is a complicated task. But, payroll management shouldn’t be rocket science. Your payroll service should be easy and efficient. Whether you’re using digital services or consulting an office, it should be easy to work with.

If your payroll service isn’t user-friendly, we recommend getting a new service immediately.

Demo Service:

This is eligible for people who are availing online services. Some online providers provide a free demo of their service to attract users. In such demos, you either get the full service for free for a few days, or some benefits for one month. 

If your preferred service has a demo available, try to avail it. This will give you an idea of the payroll service and i’s technicalities. If you like the demo service, you can pay for the whole deal.

However, juggling around demo services for too long can be detrimental. So, make sure you make your decision quickly.

Reviews:

Before you sign an agreement with a payroll service in the eastern suburbs, do your research. Look for their old clients and their reviews of the business. Reach out to their clients and get a complete idea about their service. If the reviews don’t live up to your expectation, don’t go for it!

Liabilities:

To err is human, mistakes can happen any time, and that’s normal. However, the reason you’re receiving a payroll service is to avoid penalties due to errors in your tax documents. 

However, your payroll service should be liable for their mistakes. If they make any mistake in the paperwork, they should be willing to pay the penalties and reimburse your losses. Otherwise, not only you’re paying for a service, but you’re also paying for their mistakes. 

Qualifications and Accreditations:

Every good payroll provider should have enough documents to back up for credibility. There are specific certifications and accreditations a payroll provider should have to run a service in Australia.

So, if you’re getting a payroll service in the Eastern Suburbs, make sure they’re qualified enough to deal with your information.

Conclusion:

Payroll is an integral part of your business. Not managing your payroll can lead to employee dissatisfaction and a plethora of problems. So, getting a good payroll service might be the boost your business needs in the long run.

However, you shouldn’t just get any payroll service for you. You need to consider a few factors beforehand. In this article, we’ve discussed these factors o help you out. We hope you find this article helpful!

Early October, Australian Treasurer Josh Frydenberg revealed Australia’s federal budget. It was Australia’s first recession budget in 30 years. And is the first of the next few budgets that will focus on repairing our nation’s economy that has been tattled due to the pandemic we know as COVID-19. The budget details steps to boost the economy after the impact of COVID-19, and has an estimated budget deficit for 2020-21 of $213.7 billion. There are further deficits anticipated over the medium term due to the unprecedented spending in the 2019-20 financial year to support health and livelihoods during the coronavirus pandemic. 

In summary, the budget’s main theme is to focus on jobs and investments, and the steps Australia needs to follow to restore employment. This involves spending measures that will keep businesses afloat, employees working and businesses functioning. Net debt is predicted to reach AU$966 billion (44 percent of the gross domestic product) by June 2024. In addition, the government is expecting unemployment to rise from its current pandemic low to 6.5 percent by June 2022. The new figures expect unemployment to drop to 6.25 percent in 2021-22 and dramatically fall to just 5.25 percent by 2023-24.

Frydenberg has described Australia’s path to recovery as “monumental”, and has stated that personal income tax cuts, infrastructure spending and incentives for business would further to create employment and increase consumer spending.

What does this mean for Australians? 

The road ahead for Australia is going to be a challenging one, however, there is an expectation that the economy will improve more than the government had previously predicted – as unemployment and budget recovers faster than expected. 

In addition, there has been a huge demand for Australian iron ore, primarily from China. The iron ore has recorded its highest selling prices; however, the federal government is playing it safe and not factoring in the potential windfall in its budget recovery. The demand coming from China has been welcomed in the wake of their COVID-19 stimulus package. And also due to Brazil being unable to produce its normal volume for exportation. This has resulted in a temporary boom for Australian iron ore exporters. The Australian Federal Government has opted to manage expectations and assume that the high prices are not a permanent fixture. Frydenberg is unclear on how long the Chinese stimulus program will continue or when iron ore production levels will return to normal in Brazil. 

The 2020-21 budget has also unveiled an increase in aged care spending in the Mid-Year Economic and Fiscal Outlook (MYEFO). This is the third consecutive year that the Federal Government is investing in aged care. In the 2020-21 budget, 10,000 new home care packages costing AU$850 million will be created. This additional investment brings the total number of packages funded to 50,000 since the Aged Care Royal Commission’s interim report was released. It recommended the entire waiting list of about 100,000 be cleared. Australia’s Prime Minister, Scott Morrison has pointed out that the health and wellbeing of older Australians is “an absolute priority”.

What about small businesses? 

Business investment, growth, and consumer spending is one of the key foundations of the Government’s economic recovery plan. There are many measures that affect small and medium businesses – in fact, many medium businesses will transform into “small” businesses for tax law purposes. These mostly come up in the JobMaker section of the Federal budget. 

In summary, here are a few key points that are relevant to small business. 

Instant asset write-off

This instant asset write-off has been one of the key announcements – and is expected to cost Australia AU$27 billion. Essentially, what this means once it passes into law is that small businesses will have the possibility to write off the value of assets purchased until 2022. This is expected to cover 96 percent of businesses. And is an incentive to get businesses purchasing new equipment over second-hand equipment. It also is a marketing opportunity for businesses that supply depreciable assets.

Carry back tax losses

$1.9 billion has been assigned for businesses to carry-back tax losses from 2019-20, 2020-21, or 2021-22 income years to offset previously taxed profits in 2018-19 or later income years.

JobMaker 

The JobMaker Hiring Credit is a transition away from JobKeeper. And will target businesses that have been hit the hardest by recent unemployment. The $850 million JobMaker Hiring Credit can be payable to businesses for up to twelve months when they hire individuals between the ages of 16 and 35 years. 

Boosting apprentices and trainees

The Supporting Apprentices and Trainees (SAT) wage subsidy has been extended, which is to keep apprentices and trainees employed. Businesses can claim the new Boosting Apprentices Wage Subsidy for new apprentices. Or trainees and are eligible to be reimbursed for up to 50 percent of the apprentice or trainee wages. The subsidy capped at $7,000 per quarter for gross wages of new apprentices and trainees.

Technology

To help businesses invest in technology, the national digitisation plan has been developed to help small businesses use technology. And help fund a national directory overseen by the Australian Taxation Office.  

Mental health

COVID-19 has seen many employers and employees fall into depression as they deal with the pandemic and isolation. The Federal budget has set $4.3 million for Beyond Blue’s NewAccess service to provide mental support for small businesses. Businesses will have the ability to access free of charge telehealth sessions with mental health coaches. 

Changes to Fringe Benefits Tax

1. Record keeping: Employers will have the possibility to rely on existing corporate records. As opposed to employee declarations to finalise their fringe benefits tax returns. 
2. Exemption to support retraining and reskilling: The Government will introduce an exemption from fringe benefits tax for retraining. And reskilling provided by employers to redundant. Or soon to be redundant employees – where the benefits may not be related to their current employment.  

If you’re unsure about how the Australian Federal government budget for 2020-21 affects your business, then give us a call at our Eastern Suburbs tax accountant practice. We work effortlessly to understand and simplify all the budget information and assess what your business can be eligible for. RT Taxation can help you focus on your business while you leave the boring tax stuff to us. We want you to have the confidence to run your business while our tax experts work on ensuring you are up-to-date with your tax requirements.

Recently, a small business owner came to RT Taxation to enquire about the services that were on offer – in particular the tax services. While in the discussion, he asked if we were worried about the evolving trends. And the increase in the use of cloud-based software to perform accounting tasks. With so much software easily available online, it does make a business owner question their investment into outsourcing to a tax accountant. While I did understand his questioning of tax accountants services and whether the investment is worth it – I assured him that we at RT taxation are not concerned with the rise in accounting software. In fact, it is exciting to work in a constantly changing, evolving, and competitive industry. The increase of cutting edge, advanced accounting software also helps us as a tax accounting firm to save time on monotonous filing. And also spend more time helping our customers grow their business. 

What did concern me about our conversation, was that the small business owner was under the impression that with accounting software, you no longer need an accountant – but you can do all your accounting by yourself… Well, if this were true, then I would definitely be out of a job. But I can assure you, accounting software does not make a tax accountant obsolete. And just because you invest in accounting software to avoid the cost of outsourcing to a tax accountant, doesn’t mean you won’t need one in the long run. Business owners are still time-poor, and they will often need professional guidance, advice, and someone to assist them with navigating tax. 

Benefits of accounting software to tax accountants

As a small business, you may not be able to focus on the small details. You may overlook the details when it comes to observing sales patterns and the umbrella picture of your business profits and loss. Working together with a tax accountant and financial professional allows them to keep an eye on the details that you oversee. Finding the right accountant with complementary abilities is crucial for you to continue growing your business. A tax accountant is details oriented and their role is all based on facts. Business owners want accurate and relevant numbers for clarity and legal requirements. In addition, business owners need to be aware and up-to-date with applicable legislations that apply to their business. 

While tax accountants live and breathe all the finer details – they find themselves so busy finalizing the end of year financials, chasing up missing records, problem-solving the best taxable benefits and situations, and also trying to find new customers. Therefore, it is welcoming when our clients are using accounting software and are educated on basic accounting principles. It means we can spend more time consulting and discussing business issues, rather than spending our valuable time explaining the basics of accounting which often takes up a precious and costly consultation time. When our clients have an understanding of the accounting software, they are empowered to also keep an eye on basic accounting tasks and have confidence that the tax accountants will be taking care of the finer details. While the software is obviously important to keep track of many things accounting, it also helps a business owner understand the reasoning behind the problem-solving tax accountants take and allows them to feel confident following their advice. 

On the contrary – some business owners do not want to invest their time to understanding accounting software used for their business. They feel it is more important to continue focusing on the business and empowering the tax accountant to focus on all things financial. However, with the emergence of social media, and the ability to have information (and opinions) available at the press of a finger, the kind of hands-off behavior is much rarer. Business owners are more ambitious and want to feel more empowered – taking ownership of their business and financial decisions. They want to be involved in the financial process and make decisions based on real-time information. Therefore, to please their determination and curiosity – accounting software is used together with a tax accountant. 

Evolving accounting firms

Accountants are workers who need to adapt quickly to change. They are constantly on the receiving end of evolving tax laws, payroll legislation, and remuneration thresholds to name a few. And the speed of change is quick. In the past, a tax accountants’ value proposition was to assure that all their client’s information was accurate, to timely file and pay taxes, wages and abide by relevant legislation. They also interpreted the data to assist business owners to make educated decisions. While these value propositions remain the same, the new sources of information that are available to business owners have changed. These include Key Performance Indicators (KPI’s), customer behaviors and engagement metrics, customer lifetime cycle, customer sales cycle, cost of customer acquisition (through advertising spend), organic customer acquisition, and customer satisfaction. This information can now be integrated into leading accounting software and business owners can access this information at any time. 

The challenge for tax accountants is that their value proposition needs to go beyond filing taxes, compliance, and keeping a store of a client’s data. Fundamentally, business owners need a partner who is also a technology champion – and accounting firms are quickly ensuring that this is one of their services – ensuring that their tax accountants know how to get the best results from technology and how to integrate all aspects of the technology stack together. When tax accountants and accounting firms have a comprehensive view of what information a business is capturing, their value adds to business owners is indispensable. The combination of a tax accountants’ skills and the information retrieved from accounting software allows for better interpretation from a business owner. 

When we discuss the role of tax accountants and the importance of outsourcing to an accounting firm, we are reminded that our role as tax accountants is not only to file taxes and abide by compliance laws. It is also to provide solutions to client’s problems and guide them in taking steps to overcome business challenges and assist with their business growth. And it doesn’t end there – with the emergence of accounting technology and cloud software, our services include championing this very technology to ensure our customers can work together with us to streamline daunting accounting tasks and make the most out of the information that can be retrieved from the accounting software. At RT Taxation and Accounting Services, we can be your technology champion. We can manage your accounting tasks and work together with you to understand your business and what requirements you need to make the most out of your accounting software. Get on top of your accounting software today, and reach out to us at R T Taxation & Accounting Services.

Whether you’re an employee working eight hours a day, or a small businessman trying to find their feet in the unforgiving business world, taxes are hard for everyone. There are a lot of complicated rules, policies that we need to adhere to. Even the slightest mistake can result in serious consequences. However, the Australian Government is continuously initiating policies to make taxation easier for everyone. Considering the current pandemic, a lot of people are struggling to make ends meet, and that’s where tax deductions in Australia can play a crucial role. 

You’re currently eligible for a plethora of tax deductions in Australia that can reduce your taxes by a significant amount. However, the lack of knowledge about tax deductions as well as the complicated nature of tax deductions can make them hard to avail of. To make life easier for you, we’re discussing the steps to applying for tax deductions to make life easier for you. Let’s begin!

What are Tax Deductions in Australia?

Tax deductions are specific discounts that you can claim. The deductions will be calculated and deducted from your final income tax. Deductions can be based on many factors, these include the type of work, location, the risk involved in the field of work, etc.

Generally, the Australian Government provides tax deductions in industries it has subsidized. Also, things like clothing, travel, education, etc. are eligible tor tax deduction under specific criteria. You’d receive tax cuts if you’re eligible for any of these deductions.

Furthermore, the current pandemic has made businesses take drastic measures to keep their business afloat. These include home office costs and losses incurred due to the pandemic. While these deductions are only temporary, they might be the boost your business needs.

However, you need to make sure all the documents are for your deductions to be calculated.

How to Apply for Tax Deductions in Australia:

Applying for tax deductions in Australia can seem like a complicated process. However, it’s actually relatively simple with some technical bits involved. You need to follow a few simple steps for a seamless process. The steps are:

Step 1: Research:

Taxation is a complicated process. Whether it’s filing taxes or applying for deductions, there are a lot of technical aspects. So, if you’re planning to apply for tax eductions in Australia, the first step should be to research. Find out the deductions available for your field of work and whether you’re eligible for any of them. 

Also, deductions are available in multiple other factors along with subsidies. Whether you have a specific attire for your workplace or got yourself enrolled in a particular course to improve at your field of work. Furthermore, your expenses during the pandemic are also taken into account. 

So, research to find what tax deductions you’re eligible for before going to the next step. Knowing your information beforehand can be very useful.

Step 2: Consult a Tax Accountant:

Now that you know what deductions you are eligible for, consult a tax accountant. Your tax accountant can help you get the best outcome. Tax accountants have years of experience in taxation laws and policies. So, they’ll be able to provide you with the best possible solution.

Furthermore, once you discuss with your tax accountant, you can receive a better idea about things. You might get a better idea about how much money you can get as a deduction. Also, your tax accountant can help you receive more deductions than you had planned initially. 

So, make sure you’ve discussed your plans with your accountant thoroughly. A good accountant can be a life-saver. 

Step 3: Calculate Your Deductions:

Now that you know which deductions to apply for, you need to find out how much money you’d get in deductions. In order to do so, you need to gather proof of your expenses and add them up. 

Use receipts, brochures, diary records etc. of the amounts you’re applying for a deduction. Items like furniture, travel, uniform costs, etc. generally require you to show documents to prove your expenditure. So, make sure you have proof of these items.

However, different items like home office costs, laundry, education, etc. don’t necessarily require you to show receipts. However, you might need to show some form of proof as a guarantee of your expenses.

To make tax deductions in Australia more comfortable for you, the Australian Government has introduced the MyDeductions app. It’s a tool that helps you calculate your taxes and deductions, upload your receipts and email them to the relevant authorities. It’s an excellent option for people who are busy and find it hard to physically visit taxation offices. 

Furthermore, the MyDeductions app is a great option if you’re looking for a contactless alternative to the physical queues. This is great, especially considering the threat of the pandemic at hand.

Step 4: Submit Your Documents:

Now that you have an idea about everything, it’s time for the last step. You have to submit your deduction documents along with the other tax documents. The taxation committee will evaluate your paperwork and approve your deductions.

Make sure the documents you’ve provided are authentic and accurate. Expired documents, falsified information or inadequate information, will not only reduce your chances of getting the deduction, but it can cause you legal trouble as well.

Furthermore, make sure the standard taxation documents are also accurate. Your payment information, legal information, payroll etc. should be in order.

Conclusion:

Paying taxes is essential for every citizen. It helps the country run smoothly and keep everything in order. To makes taxes easier for the people, tax deductions are a great option. They reduce the burden of excessive taxes to make the experience smoother.

However, the lack of knowledge about tax deductions in Australia makes many people shy away from regularly paying taxes. And thus, we’ve decided to make lives easier for you! We’ve discussed the simple steps to applying for tax deductions in this article. We hope you find this useful!

For most Australians, taxes is a massive hassle. The enormous amount of paperwork, paired with the bureaucratic hassle and complying with the plethora of laws, can be challenging. However, a lack of knowledge about taxes can be disastrous. To make life smoother for small businesses, the Australian Government provides a significant number of deductions and subsidies. These tax deductions can be incredibly beneficial for people who are struggling to find their feet in the business world. 

In this article, we will discuss all the nooks and crannies of tax deductions in Australia. Let’s begin!

What is a Tax Deduction:

A tax deduction is a deduction that allows a business or an individual to lower the amount of tax it has to pay. Multiple factors are used to deduct an amount from the taxable income. Generally, tax deductions are expenses that you make for your business that are subsidised by the Australian Government. 

However, tax deductions in Australia are very technical. So they require some bit of effort from you. But tax deductions can be crucial for you in the long run.

Types of Tax Deductions in Australia:

Generally, you’re eligible for multiple types of tax deductions in Australia. These include:

Home Office Deductions:

The COVID-19 pandemic has changed work environments for us drastically. One of the significant changes is the shift to “work from home” or home-offices. Many employers have allowed their employers to work from home instead of travelling to their workplace to keep them safe.

To make the transition to home offices smooth, the Australian Government provides tax-deductions to individuals and businesses. In this case, you’d get deductions for office-related expenses. These include phone and internet bills, stationery and computer parts, and furniture and appliances related to the home office.

However, you’d be eligible for a tax deduction on furniture if the furniture cost is below 300AUD and it’s only for home office purposes. Furthermore, typical household expenses that are viable for home offices are not considered for tax deductions. These include; rents, mortgages, electric bills, household expenses, etc.

Clothing and Uniform Related Expenses:

Many workplaces require you to wear a uniform for work reasons. Furthermore, you might need to wear protective clothing to protect yourself from the risks in your workplace. You need to spend an amount of money every year purchasing, cleaning, and repairing these clothes. In certain situations, you would be eligible for tax deductions on these clothes. 

You can get tax deductions for clothing in Australia, but it can be very technical. Firstly, you’d receive tax deductions for your work clothing if they’re unique to your workplace. These include specific uniforms, costumes, and clothes with logos on them. However, if you need to buy standard clothing for work, such as suits or dress shirts, they won’t be considered for tax deductions. 

Furthermore, if your area of work requires protective equipment such as hard hats, protective clothes, and shoes, you’d receive tax deductions for them. Also, if you have to spend a considerable amount of money every year cleaning and maintaining them, you’d receive tax deductions for them as well. However, you have to show adequate proof, such as receipts and records, to be eligible.

Travel Expenses:

If your work requires you to travel regularly, you might be able to receive tax deductions on your travel costs. However, there are a few factors involved.

To begin with, you won’t get a tax deduction in Australia for traveling from your home to your workplace and vice versa. If your home is a base for work or you have to travel to an alternative workplace, you’d be eligible for a tax cut.

However, if you have to travel to a different region for work purposes, you can receive a tax cut for it. Also, you’d still have to show proof of your travels to the relevant authority. 

Finally, in the case of transfers and relocations, you won’t be eligible for a tax cut unless there’s an emergency issue. 

Industry-based Education:

Skill development is essential for development in any field of work. Different courses and training are a great way to amplify our skills and take us to the next level. However, training can be expensive, and that’s why the Government is willing to help.

If you’re doing a course that’s important for your work, you can apply for a tax deduction. However, it will not be applicable to your student debt or loans. Also, you might not receive a deduction on your entire cost, so keep that in check as well.

Industry Related Expenses:

The Australian Government subsidises certain industry-related expenses. If you’re working in such an industry, you might be eligible for specific tax cuts and deductions.

The Australian Taxation Office has a detailed list of professions where you are eligible for tax deductions in Australia. Check the list to see whether your area of work is suitable.

Charity and Donations:

Most companies tend to make donations as a part of their Corporate social responsibilities. While these donations are great for charities that work for a cause, they can reduce your taxes by a bit as well.

You can claim certain donations for tax deductions. Also, any gift you send to charities and companies, you can put that up for tax reductions as well. Although these are very technical, they might be beneficial for your business.

Investment Incomes:

If you have savings and investments, you can receive tax deductions based on them as well. These include interest payment in your savings, dividends from shares, profits from other businesses, rents from owned properties, etc. 

Conclusion:

Paying taxes is essential for any citizen. Taxes help keep the country running and ensure all the citizens are taken care of. However, many times our taxes can be too much for us to bear. Especially for small businesses, too much taxes are a problem.

Tax deductions in Australia are a great way to save money. However, people tend to get flustered by the rules around them. In this article, we’ve discussed everything you need to know about tax deductions in Australia. We hope you find this article useful!

Are you drowning in paperwork and confused about all the legislation that is constantly changing. And also how it is affecting your business? Then it may be time that you start looking for someone to help you. They will manage your books, payroll and give you the extra support so you can continue running your business. There is no better time than today to start looking for the best tax accountant. That is going to help you with all your financial accounting needs. And also assist you in navigating the challenges that you are faced with. As a business owner, you cannot understate how important it is to correctly file your taxes, be up-to-date with all employee tax regulations. And meticulously keep correct records in the case that the Australian Taxation Office burdens you with an audit. 

You may be left wondering if you need a bookkeeper OR a tax accountant or both for that matter. To answer your question, bookkeepers and accountants both have common goals. But their services are used at different points of your financial cycle. A bookkeeper fulfills tasks like recording financial transactions including purchases, sales, issuing invoices, chasing up payments, producing receipts, and executing payroll payments for a business. They ensure that everything is recorded, and your books are left clean and healthy for an auditor to review. 

On the other hand,

A tax accountant also records financial transactions, however, they also sort, store, summarise, and retrieve your financial information. And also presents your financial transactions in a way that you can make informed decisions on your business based on its financial health. An accountant can present you with reports that assist you in analysing strategic financial matters like operating costs and forecasting. The main purpose of a tax accountant is to produce you with an understanding of your business’s profitability. As well as giving you an understanding of how your cash flow is impacting your business. Tax accountants use the information that has been made available by the bookkeepers.

And of course, tax accountants can file your tax returns. And also have the ability to access any extending Australian Taxation Office submission dates for tax returns. If you decided that a tax accountant is a right path for your business, know that your investment will cover you for accounting. Also tax planning and preparation, payroll services, and strategic advice on how you can grow your business.

Before you make the decision whether you choose a bookkeeper or a tax accountant, it is important that you: 

1. Are clear with what service you need. Be specific – don’t feel the need to hire a bookkeeper if you need a tax return. And don’t work with an accountant if you just need data entry.  
2. Understand if you want a one-off service, a weekly, monthly, or yearly service.
3. Write down what your requirements are. 
4. Have a budget in mind for bookkeeping and or tax accountant services. 
5. Find out the going rate for bookkeepers and accountants to understand costings. In general, bookkeepers charge a lower hourly rate than tax accountants. 

You could possibly work with both a bookkeeper or a tax account. Since a bookkeeper is cheaper than an accountant you save money if they do the data entry. And then your books can be handed over to a tax accountant to finalise and lodge all your taxes. Or, the better option for you may be to work with a tax accountant. If that has an in-house bookkeeper to keep your costs down.  

For business,

Advice, finance, and accounting needs – we believe a tax accountant is the right start to guarantee your small business is receiving the right guidance, implementing the right processes, and ensuring your business taxes are completed in a timely matter. When your small business continues to grow, your issues may start to become more complicated and your taxes become too confusing for you to handle, which is why working alongside a tax accountant for a small business will benefit you. They can assist small business owners to take on financial tasks that you are no longer able to overcome. 

A tax accountant is a real necessity for your business rather than a nice to have. You need to view your tax accountant as a partner for your business. It cannot function without rather than a business luxury expense. A tax accountant has your business’s best interest in mind. And they ensure that you avoid issues with the Australian Taxation Office. When you hire a tax accountant, you can take advantage of their services and they can become a partner to work together with. Your tax accountant can track your sales, expenses, cash flow, outgoings and if they have a bookkeeper in-house, the bookkeeper can pay your invoices in a timely manner. They are specialised in small business financial needs and can partner with you to assist in business growth, identifying key growth and cost-saving opportunities, and advise on your company finances. 

In addition,

A very important feature to be aware of – tax accountants for small businesses can also run your payroll! This means that you do not need to have an in-house payroll employee, and your tax accountant service can stay on top of all legislation that is required for your business. Your tax accountant is like a one-stop-shop for your business. 

You need to be able to count on your tax accountant – they need to feel like they are part of your team. It is best for you to do your research and meet with at least three tax accountant firms to find the best tax accountant for small businesses. And when you do meet with prospective firms, be aware of all the services they offer to gain the most out of your outsourcing investment. A tax accountant service for small businesses is an important part of your company’s success. You need a firm that is reliable and there for you when an issue arises.

When you choose an accountant firm for a small business, they can manage your accounting tasks and offer your business advice and support. Start your accounting firm search today, by getting in touch with us at R T Taxation & Accounting Services. You can take advantage of our Outsourced CFO Services to leave the administrative hassle of running your small business to the experts and for you to do what you know best.

Did you know that you can take ownership of your own superannuation, and start a Self Managed Superannuation Fund (SMSF)? In a financial climate that shows uncertainty, it is enticing to take complete control over your financial future. In 2020 – the markets have been volatile. Pair this with the feeling of ambiguity the large super funds leave you. And you are left questioning if you should be taking charge of your own finances by opening your own self managed super fund. But before you start preparing all of your paperwork and take the plunge into managing your own super, you need to understand if a self-managed super fund is a right solution for you and your business.  An SMSF is not for everyone – but it definitely comes with advantages. However, there are also risks associated. If you are not compliant with superannuation rules. 

What is a self-managed super fund? 

A self-managed superannuation fund is a super fund that you manage yourself. These self-managed super funds are different from the industry and retail super funds that you see in the workplace. When you are in control of your own self managed super fund, you put the money that we would normally put into a retail or industry super fund into your own SMSF. You have total ownership of the investments and insurance. 

A self-managed super fund is a fund with less than five members, and each of those members is a trustee of the fund or a director of the trustee company. These other four members (including that you are the fifth member) can be friends, family, or colleagues. As all members of the fund are trustees, all are responsible for the fund. And it is important to note that a super fund is a form of trust. And a trust deed is required for the fund to function. The trust deed and superannuation legislation determine all activities of the fund. 

A self-managed super fund works like a retail super fund – where the superannuation benefits will be paid upon retirement. In addition, self-managed super funds receive the same concessional tax treatments whilst in the growth stage and payment phase. Due to the concessional tax treatment, there are strict rules and penalties to ensure that all funds adhere to receive retirement benefits. It is these rules and regulations that often deter individuals from starting their own self managed super fund. The additional work and risk outweigh the ownership of the self-managed super fund. Nevertheless, there are individuals that are taking ownership of their super. 

Benefits of Self Managed Super Funds

In a recent SMSF quarterly statistical report it is stated that nearly 43 percent of new self-managed super funds were opened by individuals. Between the ages of 25 and 44. They are gaining more and more popularity through the younger to middle-age workers. Because of the control members have to make their own investment decisions. Also, give the opportunity to invest in funds that are not included in the mainstream retail super funds. Some of the main benefits of managing your own self managed super fund include: 

Investment freedom

Members can manage their own funds and control their investments. They have the liberty to a greater pool of investment choices – and can jump on investment opportunities.
This also allows members to act quickly on investment decisions. You have the freedom to adjust an asset allocation very quickly if market conditions change. 

In addition, you can choose to invest in asset classes that you wouldn’t have the opportunity to invest in if you were with a retail super fund. As an example, you can buy physical gold or invest in art. These are all possible with a self-managed super fund. 

Ability to purchase a residential property

A very interesting benefit of self-managed super funds is the fact that you can buy an investment property through your self managed super fund. And go on to earn income from the rental payments. You will also enjoy the capital gains against the value of the property. The property purchase is your responsibility. And you have control over what you choose to buy. And who you rent it to (provided it is not a direct family member). This benefit is only for those who have a self-managed super fund – and not a standard retail fund. 

Fund tax position

Similarly to industry superannuation funds, your self managed super fund is taxed at a lower rate of only 15 percent. This is considerably lower than a marginal tax rate for work-related income which can be up to 45 percent. 

You can gain a tax benefit by contributing to your self managed super fund through concessional contributions. Your employer can pay the compulsory superannuation guarantee (9.5 percent p.a) into your self managed super fund. This will then be taxed at the concessional rate of 15 percent as opposed to your full tax rate (according to your salary). 

Family pool

When you start a self-managed super fund, you can have up to another four members join the fund. These members can be anyone you choose. As an idea, you can choose family members – pool together your collective super balance as a family. And invest more together and reduce the overall fees of a self-managed super fund (and retail industry super fund). 

Is an SMSF right for me? 

Even though self-managed super funds offer some enticing investment and tax benefits – they aren’t the right option for everyone. Before you consider opening up your own self-managed super fund, be sure to know what is involved, what admin work is required to make it work, and the costs that are involved. And most importantly you must know the risks that come with opening a self-managed super fund. Below are some points that outline if a self-managed super fund may be the right choice for you. 

1. Your super balance (or accumulated family super pool) is over AU$200,000. This is not mandatory, however, considering the costs involved in setting up a self-managed super fund, it’s a good amount to consider. 
2. You have an understanding of investments, the share market, asset classes, finances, and tax. You will need to have the knowledge to buy and manage an investment property and how to invest in international markets, even during volatile climates. 
3. Managing an SMSF is time-consuming. You need to ensure that you have the capacity to invest your time (not just invest your money) into your self managed super fund. If you are not capable of dedicating time, then your investments may suffer and you may not be able to stay ahead of your reporting required by the Australian Taxation Office.  
4. Need to have an understanding of legal requirements. Everyone required to adhere to legal obligations such as setting up a trust deed. You may not have legal experience, but an understanding will help.

Starting your own self managed super fund is a lot of work and comes with risk. If you are 100 percent committed and understand what is involved in opening up your own fund, then consider professional advice. Have a chat with us at RT Taxation about your self managed super fund. We can help you start your super fund and steer you in the right direction – allowing you to feel confident in your investment decisions.

If you are on the final stretch to retirement pensions and would love to start winding back your working hours but you do not think you can afford it, read further.

Also, for those who plan to keep working full time for a while longer and want to boost your super but have not got the ready cash to make extra contributions.

Help could be at hand in both cases in the form of a transition-to-retirement pension or income stream (TTR). This strategy can be used to either:

• Work fewer hours and use a TTR pension to supplement your income.
• Salary sacrifice some of your salary into super to save tax and use a TTR pension to replace some or all the lost income, even if you continue working full time.

Am I Eligible?

If you have reached your preservation age and still working, you are good to go. Your preservation age will be between 55 and 60, depending on your date of birth.

You must also be a member of an accumulation fund, not a defined benefit fund. Generally, only about 10% of Australians are members of defined benefit funds and tend to be members of public sector or older corporate funds.

What Are the Advantages?

The taxation of TTR pensions has always been one of their key attractions. They are still tax-effective for many people, although they lost a little of their shine after a change to the tax rules in 2017.

Even so, depending on your personal circumstances TTR pensions still have much to offer. They can help you:

• Ease into retirement pensions by reducing your working hours without cutting your income or compromising your lifestyle.
• Continue to make contributions to your super accumulation account (or have them made by your employer).
• Receive tax-free pension payments (but only if you are aged over 60).
• Grow your super and save tax via salary sacrifice or voluntary contribution, even if you continue working full time.

When a member salary sacrifices or make a voluntary concessional contribution into super, your contributions are taxed at the concessional rate of 15% up to an annual cap of $25,000. This can be a valuable strategy for those aged over 60, on a marginal tax rate higher than 15%, and a super balance that could do with a boost.

What Are the Disadvantages?

The financial benefits of a TTR strategy may be marginal before you turn 60 depending on your personal tax bracket so here are some things to keep in mind.

• If you are aged between 55-59, the taxable portion of your TTR pension payments is taxed at your marginal rate less a 15% tax offset.
• The more of the super funds you withdraw during your TTR phase, the less money you will have available when you do retire.
• If you or your partner currently receive any Centrelink payments, a TTR pension may affect your entitlements.
• Your fund may require you to leave a minimum amount in your accumulation account to maintain your insurance cover.
• The tax savings (and super boost) of salary sacrifice or voluntary contributions into super may not be worthwhile for low- and high-income earners, as illustrated below.

For a low-income earner on a marginal income tax rate of 19% or less, the tax savings of a TTR strategy will be negligible.

Take the example of Jim, who earns $35,000 and can afford to salary sacrifice $5,000 a year into super. He would only save 4% tax by doing this (the difference between his marginal rate of 19% and the 15% super tax rate), or $200. He may be better off combining salary sacrifice (without a TTR strategy) with an after-tax super contribution of $1,000, for which he would receive the maximum government co-contribution of $500.

For high-income earners, there may be limited scope to make additional concessional contributions.

Take the example of Sam, who earns $180,000 and receives Super Guarantee payments of $17,100 a year, just $7,900 shore of the $25,000 cap. He has enough ready cash to make a tax-deductible contribution of $7,900 a year without having to bother with a TTR pension.

How to Start?

You start a Transition to retirement pension by transferring some of your super from your accumulation account into a pension account. Most super funds offer a pension account, but if your fund does not you can start a TTR pension with another fund.

The transferred funds do not count towards your transfer balance cap because you are still working and therefore not in the retirement pensions phase. But the funds in your TTR pension account will count towards your transfer balance cap once you do retire. This cap is currently $1.6 million.

You must leave at least a small balance in your accumulation account so that it remains open to receive your employer’s compulsory 9.5% super guarantee contributions or any voluntary contributions you may want to make.

Investment earnings in both your accumulation and pension accounts are taxed at 15%.

You must withdraw a minimum of 2% of your pension account balance each year (if you are aged under 65) and a maximum of 10%. At least one withdrawal must be made each year.

Once you are over 65 there are different minimum pension payments rates.

If you are aged 65 and over, there are no restrictions on the amount of super you can withdraw even if you are still working. Rather than set up a TTR pension you can start a normal super pension which has added benefits.

How Do I Stop a TTR Pension?

A TTR pension automatically converts to an account-based pension when you meet a superannuation condition of release, such as retiring or reaching age 65.

When your TTR pension becomes an account-based pension, you will be entitled to tax-free investment earnings and no upper limit to withdrawals.

You can also transfer your pension account funds back into your accumulation account at any time. If you are under 65, you must have made the minimum 4% withdrawal in the financial year you stop your TTR pension.

Can I Start a TTR From My SMSF?

The short answer is yes, provided this is allowed in your SMSF’s trust deed.

If you are a trustee and want to start a TTR for yourself or another member of your fund, you should get independent professional advice. The rules are complex and not complying can be costly.

Before you set up a TTR pension, it is important to establish the mix of assets you (or your fund members) have in your SMSF. This could include a mix of:

• Unrestricted non-preserved benefits (which can be accessed without meeting a superannuation condition of release)
• Restricted non-preserved benefits
• Preserved benefits.

All three of these asset categories can be transferred to support a TTR pension, but they must be chosen in the order outlined above. The tax-free and taxable components of any assets used must also be identified so that appropriate tax payments can be made.

It is important to understand that if assets supporting a TTR pension have both taxable and non-taxable components, you (or your fellow member) cannot choose to apply one or the other to the pension. The components must be applied proportionally.

For example, if an asset supporting the TTR pension has a taxable component of 70% and a tax-free component of 30%, these proportions must be applied for tax calculation purposes when the asset is transferred to the pension.

What Else Do SMSFs Need to Know?

Record-keeping is crucial if you are paying a TTR pension from your SMSF. You need to keep records that show:

• The value of the Transition to retirement pensions account when it commences, on July 1 each year, and when it enters the retirement phase.
• All TTR pension payments made (and how they were made).
• The adjusted values of the assets supporting the TTR pension after payments have been made.
• The date you (or your fellow fund member) retire. This is when your TTR pension enters the retirement phase and is subject to ‘normal’ account-based pension treatment.
• The share of your fund’s earnings that are allocated to the TTR pension (and therefore taxable at 15%).

In addition, it is important to ensure that:

• Any fund contributions you (or a fund member) receive from your employer are kept separate from the super benefit supporting the Transition to retirement pensions.
• Pay the minimum 4% annual TTR pension amount and do not exceed the 10% maximum.
• You pay 15% tax on earnings from the assets supporting the TTR pension. You (or the member receiving the pension) will be entitled to offset this amount in your tax return.

Failure to do any of these things can mean your fund becomes non-compliant, and you know what that means. The Australian Taxation Office can impose a range of penalties on SMSF trustees for non-compliance.

R T Accounting & Taxation Services Are Here to Help

Transition to retirement pensions have real benefits for some people but maybe less attractive for others. Deciding whether a TTR strategy is appropriate for you is an important decision and will depend on your personal financial circumstances and goals.

Please do not hesitate to get in touch with the SMSF specialists at R T Accounting & Taxation Services for a guide on how TRIS & TTR work specifically for you as all cases are different.

Although paying taxes is a must for every business, taxation can be a hassle for many people. There’s a lot of paperwork involved, and everything needs to be in order to work. Even the slightest error can cause a lot of trouble. So, it’s essential that you provide your accountant with all the right information and documents.

If you’re in the eastern suburb, you can reach out to the tax accountants in your region to help you with your taxes. However, to ensure that the entire experience is seamless, a bit of research is necessary. You need to submit some documents to your accountant so that they can get your taxation ready. 

If you’re taking accountant services for small businesses in the eastern suburb, here are the things you need to give your accountant:

Things to Give your Accountant at Tax Time:

Identification Information:

To begin with, you need to provide legal identification information for yourself as well as your business. Legal identification includes your name, address, contact information, and social security number. If you have your social security card, you should take it with you as well. 

Along with your personal information, you need to provide information about your business as well. The name, address, and whereabouts of your company, along with other identification documents, are required. You need to provide your Employer Identification Number (EIN) to be eligible for accountant services for small businesses in the eastern suburb.

Previous Tax Returns:

Although this isn’t a must, this can make the entire process much more efficient. If you have tax records of your previous taxes, your accountant will better understand your business. 

Furthermore, if you have former tax returns, it’s very easy to calculate how much profit or loss your business made in the fiscal year. This makes calculating tax for your current year much more comfortable.

However, if you’re a new business paying taxes for the first time, you don’t have to show previous tax documents. 

Income Statement:

Your income statement is the most important document of your business. It contains details of your yearly income and expenditure. The income statement should include how much your business made in the fiscal year and whether it was a profit or a loss. Your income will play a key role in determining your tax.

Balance Sheet:

The balance sheet is where your assets are described. The liquid assets you have, as well as the liabilities, should be mentioned here. Furthermore, if you have any loans or rents that you have to pay, you should mention it in the balance sheet. 

Make sure all of your investments that affect your business is mentioned in your balance sheet. Otherwise, it will cause a fair bit of legal hassle for you in the long run.

However, only mentioning assets or loans would not be sufficient. You have to attach relevant proof of your assets as well. These include bonds, receipts, loan documents, etc. 

Payroll Information:

If you have hired employees, it’s crucial that you mention their payroll in your documents. Whether they have health insurance or not, the amount of money they receive, etc., are essential factors you need to look into.

You can currently use payroll management software to easily arrange the relevant data you’d need regarding your employees. However, if you don’t have anyone working under you, payroll information isn’t necessary.

Information on deductible expenses:

When you’re receiving your accountant services for small businesses in the eastern suburb, there are a few things you need to keep in mind. There are some expenses that are deductible from your taxes. These include:

• Home Office expenses;

If you have a home office, you can be eligible for some tax cuts. However, the home space should be used exclusively for your business purposes. Other residential areas wouldn’t be considered for the cut.

• Uniform:

If your profession requires you to wear a uniform exclusive to your job, you will receive tax cuts on buying and cleaning your uniform.

However, this is a bit technical because the dress has to be exclusive to your work area. For example, if you work as a waiter and wear a shirt with the restaurants’ logo on it, you can receive tax cuts on buying and cleaning the shirt. However, if you wear a generic waiter’s attire that you can wear outside your workplace, you won’t be eligible for tax.

Furthermore, if you have to wear protective gear for your safety at work, the cost of your protective equipment will be eligible for a tax deduction

• Mileage and Travel:

Suppose your business requires you or your employees to travel to multiple places. In that case, you can receive a tax deduction on travel costs. However, you’d need a detailed mileage log for it. Make sure to calculate your mileage and record it correctly in a log that you can submit with other documents.

• Donations:

If your company makes a considerable amount of donations, make sure to bring receipts and proof for it. You might receive tax cuts and benefits for your charity.

Inventory Details:

The value of your inventory is essential in determining the amount of tax you’re eligible for. Do an inventory count of the amount of good you have in stock currently and the number of goods sold since the beginning of the year. You might also need to submit the Cost of Goods Sold (COGS) when you go for accountant services for small businesses in the eastern suburb for taxes.

Conclusion:

Paying taxes is a complicated process. There’s a lot of paperwork and planning that goes into it. Therefore, getting your taxes done by a professional accountant is a good idea. However, even if you have professionals to help you, you’d need to get some work done.

It is recommended that you prepare some documents before getting accountant services for small businesses in the eastern suburbs. In this article, we’ve discussed these documents in detail. We hope you find them useful!

One of the biggest advantages of having small businesses is the freedom you get. Since you are your own boss, you can do things any way you want. From making your business plans to fixing your office hours, you have all the freedom in the world.

However, the unending freedom has its own share of troubles. Small businesses generally run on very tight budgets. Thus, they’re always trying to save money. As a result, business owners tend to take up more responsibility to save up money on human resources. But delegating your tasks can be crucial. Having experts in specific roles can take your venture to the next level.

Accountants play a vital role in any business. They are crucial for any business, whether that’s big or small. However, the need for accountants goes beyond just the basics. Here are a few benefits of getting accounting services for small businesses:

Benefits of Accounting Services for Small Businesses: 

Improved Financial Planning:

Financial planning is integral to small businesses. Since the budget is already tight, every decision you make comes with its share of consequences. So, it’s crucial that you think every decision through.

However, by having a professional accountant to your aid, you can get the job done much quickly and efficiently. Accountants can help you understand the technicalities of your plan in-depth. Thus, giving you suggestions to help you out.

Furthermore, the financial software and programs can better assess the situation to give you a realistic business plan that’s going to work with your resources.

Help With Legal Structure:

Determining your companies legal structure is vital to your companies growth. Whether you’re a limited company or a low liability company is crucial for your company’s future in the long run.

The amount of tax you have to pay and the effect of your profit on your assets will depend on your business’s legal status. Even if you’re working on your own as a self-employed venture, you’re still entitled to pay taxes.

Getting accounting services for small businesses will help you determine your company’s legal status, which will be very beneficial for you in the long run. Although the legal status depends on a lot of factors, finances are a crucial issue. Thus, being unaware of finances before determining legal status can be deadly.

Keeping Financial Records:

Keeping track of finances can be pretty complicated. It’s harder for small businesses because of the lack of manpower. For this reason, getting accounting services for small businesses is necessary.

An accountant will always ensure the finances are in check. They will keep record books of financial information to give you an idea of your expenses and make the best out of them. 

Furthermore, having an idea about your company’s financial expenses helps you make decisions better and help you manage your current situation. You can decide things like wages, future business plans etc. better if you have accounting services for small businesses to help you with it.

Dealing with Government Paperwork:

Dealing with government paperwork can be daunting. Whether you have taxes to file or licenses to renew, your financial documents need to be consistent and meet every required criterion. 

Having an accountant to help you with government-related documentation is very important. They will make sure all the tax documents are filed accordingly. Also ensuring the legal documentation is in place, and the government register is up-to-date.

Furthermore, if your business has multiple employees, keeping a record of their taxes is important. An accountant will keep the payroll in check and ensure all the employees have their tax papers ready. 

You’d be surprised to know how much money you can save by keeping track of your taxes. You can prevent additional expenses and be eligible for subsidies and tax deductions if you can arrange your documents correctly.

Types of Accounting Services for Small Businesses:

The world of accounting is massive. There are multiple types of accountants who specialise in different fields. You have to choose the right ones for you based on your condition.

The types of accountants include:

General Accountants:

General or staff accounts are the most common group of accountants. They’re practitioners with a degree in accounting who can carry out a plethora of responsibilities. From preparing financial statements to maintaining company accounts, they’re your go-to people for doing it all.

If you’re planning to hire a full-time accountant for your business, a general accountant is what you need. They’re a must for any business that’s trying to grow.

Auditors:

Auditors are people who specialise in tax-management. They’re experts in tax-related paperwork, taxation laws and management. They evaluate all the necessary paperwork to ensure everything is in place and provides the business with the best option for tax.

Although auditors can be hired internally, we recommend seeking advice from expert audit firms. They’re working in the field for years and will provide your company with the best service.

Forensic Accountants:

The Sherlock Holmes of the accounting world, forensic accountants, help us whenever there’s a crisis. They go through the companies records to find problems. They’re used to investigate cases of fraud and retrieve information that has been lost or compromised. Forensic accountants are hired on a contractual basis.

Cost Accountants:

If you need someone to look into your company’s expenses, cost accountants are the way to go. They look into the amount of money being spent by the company and provide suggestions.

Cost accountants can provide recommendations on utilising the expenses and getting the best end product for the company. Cost accountants can be hired both internally or recruited contractually based on the company’s needs.

Project-based accountants:

Project-based accountants are a shadow version of the general accountants. They’re hired on a contractual basis for a specific period of time. They manage accounts and keep finances in check during their tenure.

If you have a small business, hiring an accountant might be too hard for you. Thus, getting a project account can be beneficial. They provide accounting services for small businesses for much cheaper.

Conclusion:

The key to the success of any business is stability. If your business is financially stable, it creates more opportunities and allows you to take financial decisions better. For every small business owner, keeping their finances in check should be the priority.

Having an accountant can be life-changing for any small business. Although the role of an accountant is often underrated, they’re the heart of every business. In this article, we’ve discussed why you need accounting services for small businesses. We hope you find this article useful!