Record keeping: Tax basics for small company

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There are the foundation of a good business, so it’s a good idea to truly have a suitable record keeping system all set from day one. You can keep your records electronically or on paper. Creating electronic records whenever you start can save you time later whenever you lodge your activity statements or prepare your tax return. They automatically total amounts, permit you to print invoices and provide summary details for the activity statements and tax returns. A variety of electronic records keeping packages are available. Some software lets you lodge your activity statement and certain forms directly from your own software to the ATO. These are called Standard Business Reporting – or SBR-enabled software. To lodge online, you will need an AUSkey. To learn more about SBR, visit sbr.gov.au, or ato.gov.au/online services. You’ll need to help keep records of your sales and expenses to prepare your activity statements, annual tax returns and to meet other tax obligations. Generally, records you need to help keep include: Income and sales records of sales and barter transactions – for example, invoices, receipt books, cash register tapes and records of cash sales.

You’ll also need to help keep records of business expenses, including cash purchases. Records could include receipts, invoices, cheque butts, charge card vouchers and diaries to record petty cash expenses. And you need to keep all bank records, such as for example bank statements and loan documents. Other records you need to help keep include information on what assets you purchase and everything you spend on those assets. A tool register can assist you to record these expenses. You’ll also need to help keep copies of contracts and franchise and other agreements. As well as year-end records, including lists of creditors or debtors and worksheets for depreciating assets. For certain work, car and business travel expenses, it’s not necessarily possible to get a receipt. But you can still claim the expenses as deductions as long as you record the facts of these expenses in a journal or logbook.

The key GST records you need to help keep are tax invoices and adjustment notes. If you’re registered for GST, you’ll need a tax invoice to claim GST credits included in the buying price of any good or service you purchase for your business that cost higher than a certain amount. Any tax invoices you issue to your web visitors or receive from your own suppliers must contain certain information to be valid. It must show the date the document is issued and it must retain the supplier’s name and ABN, as well as a short description of what’s sold, including the quantity and the buying price of what’s sold. It must show the extent to which each sale is a taxable sale – this is often shown separately or as a statement such as for example’ total price includes GST’.

To work out your fuel tax credits and to aid your claims, you need to help keep records showing the date you acquired the fuel, the quantity and form of fuel you acquired and the company activity you used it in. You must keep records right away of your business activity so you’re prepared to calculate and claim your fuel tax credits. For employees, you need to help keep records of wages, allowances and other payments you designed to them. As well as superannuation guarantee records, including payments you made and records that show you have met picking a super fund obligations. Additionally you need to help keep records of Fringe Benefits Tax calculations, worksheets, declarations, elections and supporting details, as well as copies of TFN declarations or withholding declarations. You might have to help keep logbooks, lease or loan documents or yearly odometer readings for motor vehicles you use in your business. I’ve got a good tip for you.

I found a free of charge record keeping evaluation tool on the ATO’s website. It’s this great interactive computer software that helps me know what records I have to keep and helps me decide whether my record keeping needs improving or not. It provides a list of records tailored designed for my business, a written report on how well the company is keeping its records and suggested improvements where appropriate. And it’s completely anonymous; the ATO can’t access the information I input the tool. You must keep written records in English. In the event that you keep electronic records on your desktop, they need to take a form that you can easily access and convert into written English. You must keep any account books, records or documents linked to preparing your tax return for at the very least five years after they’re prepared, obtained or the transaction is completed, whichever occurs last..

Tags: #Business #Small Business

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