A Lesson in Business Tax

Taxes can be quite complex with different types of taxes such as income, GST, and property taxes, each with their own set of rules and regulations. Moreover, these taxes can be levied by different government entities at the federal, state, and local levels, each with their own unique regulations. It’s no wonder many individuals find the tax process to be quite daunting.

For small business owners, taxes can be an added burden amidst the daily operations and growth of their business. Keeping up with tax regulations and requirements can be time-consuming and challenging. However, there are ways to simplify the process. This is where a tax accountant comes in.

By having a tax accountant on your side, you can stay organized and compliant with your taxes, freeing up time to focus on other aspects of your business which can be much more rewarding to you. Furthermore, a tax accountant can help you maximise your deductions and minimise your tax liability, ultimately saving you both time and money. If you don’t already have a tax accountant, it’s time to seriously consider reaching out to one.

A Basic Overview of Small Business Taxes in Australia

The tax system in Australia is complex and can be daunting for small business owners. However, it is essential to understand the basics of small business taxes to ensure you are compliant with the law. There are two main types of taxes that small businesses are required to pay in Australia: income tax and GST.

Income tax is a tax on your business’s profits. The tax rate can vary depending on the size of your business, with smaller enterprises paying a lower rate than larger businesses.

GST is a consumption tax on most goods and services sold in Australia. The current GST rate is 10%. As a small business owner, you must register for GST if your business has a turnover of more than $75,000 annually. You will then need to charge GST on all goods and services your company sells.

Several other taxes may apply to your small business, depending on the type of business you operate. These include payroll tax, land tax, and stamp duty. The best way to ensure you comply with all small business tax requirements is to seek professional advice from a seasoned tax accountant.

What Do You Need to Know about Critical Business Taxes?

You need to be aware of some other critical business taxes in Australia. We have already discussed income tax and GST, so let’s talk about, company tax, payroll tax and stamp duty.

Company tax is levied on companies (and is a Federal Tax), and the current company tax rate is 25%, meaning that for every $1 of profit, you will need to pay $0.25 in tax. Payroll tax is a tax that is levied on the wages paid by businesses (and is levied by the State Government). The current payroll tax rate is 4.85%, which means that for every $1 of wages paid, you will need to pay $0.0485 in tax (assuming you have a payroll larger than $700,000).

Stamp duty is a tax on the transfer of property (also levied by the State Government). The current stamp duty rate is 2.5%, which means that for every $1 of property value, you will need to pay $0.025 in tax. If you are buying a commercial property, and GST applies, then you pay stamp duty on the GST inclusive price – yes – that is definitely tax on tax.

Conclusion

A tax accountant can help you get through the complexities of taxes intelligently. By knowing the ins and outs of the tax laws, a tax accountant can help you save money on your taxes and ensure that you comply with the tens of thousands of pages of legislation.

Meet your tax and compliance obligations on time every time. With MKS Group in your corner, we’ll provide you with driven, proven tax advice to ensure your business goals are met. Our experienced tax advisers understand all your business obligations and know how to help you legally minimise tax, while keeping your ATO compliance up to date. We’ll make sure you have all your important documents lodged on time, every time.

To learn more contact our team on (03) 9374 8400 or email us. We are here to help:

(03) 9374 8400

enquiries@mksgroup.com.au