Business Advice on Best Practices Suitable for Small Business Taxes

by Stuart Iles Partners Tax Consulting

A business in Hobart runs successfully when the owner follows the tax accountants’ business advice. Likewise, every activity is in track for audits.

Each year, a business owner in Hobart faces the complexities of filing taxes, as well as running the business. Working with the tax accountants throughout the year helps to run the business and even to prepare your tax returns. To avoid putting yourself at risk, you should make financial decisions based on consultations and business advice given by accountants or tax advisors.
The tax agents or the tax accounts are apt as a consultant or financial advisors to provide business advice for benefit of your business in Hobart with regards to tax preparations, small business accounting.

Why Should You Hire the Right Accountant?

An experienced and intensive accountant offers a number of services as well as prepares the financial statement and help with taxes. Being qualified, the accountants work with you all the year-round to keep a track of your income and spending for ensuring you do not face the cash flow problems, and even for monitoring your gross and net profits. All the business advice they provide is related to the importance of accounting that ultimately leads to your business survival and growth.

i. Importance of Keeping Adequate Records

Correct tax returns are ensured by accurate and thorough records for the entire year. Inadequate record keeping forces to leave deductions unhandled and you might pose yourself at risks during an audit. For all the small scale businesses, the entrepreneurs should make a basic version investment on the user-friendly and inexpensive accounting software like MYOB or QuickBooks to easily track all your expenses and income.

ii. Keep the Business Expenses Separated from Personal Expenses

If ATO detects that your personal expenses have been with business expenses during the audit, then despite reporting the business expenses correctly, ATO will start to look at your personal accounts due to the co-mingled money. So, make sure to keep a separate bank account and credit cards only for your business and make the businesses just from those accounts.

iii. Be Clear With the Differences Between Gross and Net Income

When the cost of production for your products is more than you are charging for it in the market, then you shall lose money even if you sell a lot of units. Small business owners must take the difference between gross and net income. For instance, when the cost of production for the product is $100 and you are selling it for $150, then you earn $50 as your gross income. But after you deduct all your expenses, then your net income could drop down to $10. Thus, knowing the gross and net profits is extremely crucial to enhance the business profitability and business growth.

iv. Classify Your Business Correctly

You might have to overpay taxes if you do not classify your business properly. So, you need to decide in classifying your company as S Corporation, C Corporation, Limited Liability Company, Limited Liability Partnership, Sole Proprietor, or Single Member LLC so the effect on your taxes is different. Owning a small business, you have to consult with an accountant for determining the way to classify your business.

v. Payroll Management

You need to take help from the accountants providing payroll services as the ATO typically checks to make sure that the payroll taxes are paid. So, hiring professional tax accountants help in payroll management.

vi. Take an Accountant's Advice for Business Plan

A qualified and experienced accountant gives proper advice regarding your business growth. Their advice is incredible to determine the amount you need to contribute to your retirement fund, should you take a bonus, or keep it delayed for a year. The accountants can always guide you when you are to buy a small space to allocate it for your store or for your business, other than renting, to save on money.

vii. Take the Capitalization Rules To Your Advantage

Once you have acquired the tangible property and equipment for your business, then you should even take a significant deduction. Your accountant will help you to understand the rules revolving around capitalization.

Business advice from the qualified and experienced accountants help you to run your business legally and fruitfully. Following their instructions, you can keep up to the taxes and in the long run, grow and develop your business.