How you can lodge your business tax return
You lodge your own personal tax return. So, lodging your business tax return should be easy, right?
Well, not so fast.
Annual tax returns for a business are a little more complicated. It’s wise to know the rules for your business structure before you make any decisions.
Firstly, let’s check out what tax return you need to lodge according to your business structure:
- Are you a sole trader?
Sole traders do not need to lodge a business tax return.
But (there’s always a but!), you will need to lodge an individual tax return (as usual) but will need to include your business income using a separate business schedule.
- Are you a partnership?
Even though your partnership has its own tax file number (TFN), it doesn’t pay tax on its profits.
Each partner in the partnership will report its share of the partnership income in their own individual tax return.
Your partnership will also need to lodge a separate partnership return under its own TFN.
- Are you a company?
As a separate legal entity, your company must lodge a company tax return and pay tax on the company’s income.
As a director, you will need to lodge your own individual tax return as well.
- Are you a trust?
A trust has its own TFN and must lodge a trust income tax return.
- Are you a not-for-profit (NFP) organisation?
An NFP may be eligible for tax concessions.
Now that we have established the rules regarding annual tax returns, let’s explore what’s involved in compiling and lodging your company tax return.
What is a company tax return?
This is always a good place to start, so we are all on the same page.
A company tax return is where your company reports its taxable income (from sales, interest), tax offsets (all the expenses incurred by your business) and credits.
It will also include your PAYG instalments – these are the part payments of company tax you made when you lodged each quarterly BAS.
The bottom line of your annual tax return will show the amount of tax that is liable to pay on the income OR the amount that is refundable.
When do I need to lodge my business tax return?
The due date for your company tax return will depend on how you will be lodging your business tax return.
There are your options:
- If you use an accountant or a tax agent, they will advise when the due date is.
- If you are a sole trader, partnership or trust, and complete and lodge your business tax return yourself, it is due by 31 October.
- If you are a company and lodge the tax return yourself, the ATO will advise the due date. If you have any outstanding tax, it is due 31 October.
- If you lodge your tax return through your accountant, you will get more time (if your taxes are up to date!) to prepare, lodge and pay your business tax return. We say yay!
How do you lodge your business tax return?
You have three ways you can lodge your annual tax return:
- If you are lodging your own company annual tax return, you will use the standard business reporting (SBR) enabled software to lodge your annual return.
Your accounting software should include SBR-enabled software. This will allow you to submit your return securely to the ATO.
As a sole trader, you can use myTax.
- Through your accountant. Check they are a registered tax agent. They will have a registration number through the Tax Practitioners Board. For example, Sleek’s is TPB Agent 26131380.
- By paper
Sleek Scoop: Make sure you carefully check your business tax return before its lodged, even if you use an accountant. In most circumstances, you are liable for mistakes on your tax return.
What if your company didn’t earn any income in the financial year?
This is really important.
You will still need to lodge a company tax return even if your business hasn’t earned any income.
There is no threshold for business income, so every dollar earned, no matter how little, needs to be reported.
So, back to the original question – Can you lodge your own business tax return? Yes, you can.
However, Sleek recommends you know what you are doing. Company tax law can be complicated and the tax rules can change from time to time.
What are the benefits of using an accountant to complete and lodge your business tax return?
- Complete your annual tax return correctly and in compliance with tax law.
- Complete it on time (by helping you to get the information together!)
- Find opportunities for tax efficiencies and claims
- Save you time and effort when you can be working on building and growing your business.
- Enjoy an extended deadline to take the pressure off.
- Set up a process to help you with record keeping, to reduce the stress and ensure everything is included in the return.
- Give advice on what needs to be included on the tax return
- The go-between you and the ATO for tax matters. It can be daunting talking to the ATO, especially if you are having trouble understanding what they want.
- An accountant can bring valuable expertise in business and certain industry characteristics.
- They can become a trusted partner with a vested interest in your business’ success.
If after reading this, you have decided to lodge your own company tax return, we suggest you start with the ATO website, as it has valuable information you can use to guide you.
If you have decided you’re not up to the task and need an accountant to complete and lodge your business tax return, call our Sleek team of accountants. We’re ready to begin our partnership to become your trusted advisor.
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