TAX

Tax Talk: How to Handle Taxation as an Australian Business Owne

February 24, 2020 by Reporter Leave a Comment

Taxation is one of those things that most of us dread. Let’s face it – it’s not the most fun of activities and requires a great deal of accuracy. If you are a new business owner, sorting your taxes out for the first time can be an incredibly daunting experience. Thankfully, today we’re here to guide you through all the steps you need to take as a small business owner when it comes to handling your taxes. Read on to find out more!

   Do Your Research

The best thing you could do for your business taxes is to do your research. Do you know other business owners? Why not ask them for tips or guidance on how you can go about sorting your business taxes in the easiest and most efficient and compliant way possible. We also highly recommend looking up various Australian tax invoice templates to get a rough idea on how you should go about organising and preparing your small business taxes.

   Ensure You Are STP Compliant

As of 2019, all businesses in Australia are required to be STP compliant. STP, or Single Touch Payroll, is a system that was introduced by the ATO in 2018. STP requires business owners to send employee payroll information including wages, salary, superannuation and PAYG withholding to the ATO on a payment-to-payment basis. Previously, employers only needed to do this on an annual basis. Ensuring that you are STP compliant is incredibly important in order to not land your business in hot water or accrue fines from the ATO.

   Keep Strong Records

Keeping strong records is always recommended to any business owner as this allows for ease of filing taxes at the end of the financial year. It is never too early to start keeping records, and we highly recommend utilising various software such as payroll software, invoicing software and so on to ensure that your data is as accurate as possible. Most software can now integrate with one another (including automated STP software), ensuring that your processes are automated and kept complaint at all times.

   Get On Those Deductions

It is always recommended that small business owners claim as many appropriate deductions as they can. This can include costs for utilities, rent, legal services and repairs for your business. It is also recommended by experts that business owners pre-pay for these expenses if possible, in order to bring forward as many expense deductions prior to the July 1st deadline. Always remember that anything deducted has to be directly related to earning your business income and that you have full and in-depth data on how you have calculated these costs.

   Get Superannuation In On Time

The golden rule is to always get your superannuation in on time and before the 30th of June. Failing to do so will result in the loss of your opportunity for a deduction. Always remember that superannuation needs to be paid to your staff 28 days after the end of each yearly quarter. Failing to meet these guidelines will result in you losing your eligibility for tax deduction.

   Utilise Income Tax Offset

The income tax offset can see you shaving up to $1000 off your taxes if you earn a revenue of under 5 million dollars annually. At this moment in time, the offset is set at 8% of tax payable, but it is estimated that this figure will grow up to as much as 16% over the next decade or so. This offset applies to sole traders and micro-business owners and is an incredibly helpful resource and tool for new business owners.

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Handling your taxation as an Australian business owner needn’t be a stressful or miserable task. We hope that the tips we have brought to you today have assisted you in further understanding the process of sorting out your business taxes.

10 Expenses You Can Claim as a Uber Car Driver

September 5, 2017 by Reporter Leave a Comment

As a Uber driver, it’s the time of the year when taxes are in the forefront. As a rideshare driver, one is bracketed in the realm of an independent contractor, who is now responsible for their own taxes. You would receive the 1099 form from the contractors but filing taxes can be frustrating at times.

As a current Uber driver, there are a number of tax deductions that every Uber driver is qualified for. They can claim deductions based on business related expenses and use of mileage rates. One can use mileage deduction when doing taxes or even opt to itemize expenses including fuel, insurance, maintenance, and the like, but one cannot qualify for both.

One just has to worry about mileage accumulated when conducting business when opting for mileage deductions, which is 57.5 cents/mile for miles driven during business. If you opt for the latter approach, the following is list of expenses used for claiming tax deductions

List of Expenses for Claiming Tax Deductions

· Uber Fee

Uber fees are pretty much straightforward especially with respect to parking fees when on a business ride. One can also include garage fees and meter fees under this criteria.

· Uber Supply

You can deduct things you buy for the rideshare business even if they are not vehicle-related, but related to business purposes, including drinks/ snacks for “passengers”. Some other things that are “necessary and ordinary” can be counted under this header.

· Fuel expenses

You can deduct fuel expenses with the help of receipts, especially if one is audited by the IRS. You can use tax deduction on fuel costs as long as it is part of Uber business. All route expenses when meeting with potential Uber drivers for signing up can be deducted under fuel costs as well.

· Registration & Insurance

Keep the registration and insurance receipts along with bank records related to servicing, repairs, tires, and even maintenance costs. They can be claimed.

· Repair & Maintenance

One can deduct some maintenance and repair costs as part of business matter but not entirely as it can be used for personal purposes too. You can deduct costs related to the tires, oil changes, replacement of brake pads, and anything related to car maintenance that is crucial for ride share business.

· Mobile & Internet Expenses

The cost of smartphones for Uber rides is tax deductible along with phone payments for the time one used it for business use. As rideshare drivers, smartphones are used for business purposes, and hence some cell phone bills can be claimed. You also need to attach expenses related to the internet charges since the route affirmation and ride costs are calculated automatically when connected to the web.

· Protective items

Any hi-visibility clothing or sunglasses that you wear during rides can be mentioned in protective safety gear for riders. Although you can only mention the percentage of use involved in these rides

· Car Depreciation

If you buy the car used for Uber, you can deduct the cost of your car over a 5-year period with the help of depreciation. The depreciation expenses can be spread throughout the 5-year period.

· Car Hire Fees

If you hire a car, you need to deduct the proportion of car lease payment especially when the car is being used for Uber

· Other relevant expenses

One can mention relevant expenses as required based on car maintenance that can be used as a tax deduction for car expenses.

Conclusion

As Uber driver, one can save money while filing tax returns by being alert about the payments and expenses throughout the year, and by keeping a systematic record of the same.

Disclaimer:

This Guest post is brought to you by Mike Watson. For more information on the Tax return and other financial services visit Universal Taxation Service.

How are your taxes calculated in US?

May 29, 2014 by Reporter Leave a Comment

Taxes are common for every state or city you live in, all over the United States and if you do not pay them on time, you are likely to get in trouble. What many people don’t realize is that the amount of taxes owed actually varies from state to state and even from town to town. The reason for this is the fact that for tax calculations each state considers different factors and follows different laws.

What are some unique tax laws for the different US cities?

Although most of the taxes are rather trivial – you owe tax for your pet, vehicle and property, there are some that seem more or less strange, here are some of them:

· In the state of Colorado, some food packaging is not considered essential and therefore it’s eligible for taxation. For example, if you go to any fast food chain and order your favorite drink – its cup is considered essential, but the closing lid is not, so it will be taxed with 2.9%!

· In the state of Indian, you will owe sales taxes if you decide to get custom made Halloween costume. However, if you decide to get a pre-made one, you will not owe extra taxes.

· In Kansas taxes are applied to "any place providing amusement, entertainment or recreation services." Although, taxes can’t be imposed to airlines and airport passengers, the state’s department decided to apply sales taxes only to hot air balloon rides.

· In Kentucky candy not containing flour is imposed with taxes, while products containing it are exempt.

· In New York you will owe sales taxes if you decide to visit a haunted house! Think this is weird – you owe taxes for prepared bagels, but the ones you cook yourself are tax free!

· Fine Texas clothing is also eligible for extra sales taxes. For example, you can buy nice leather belt is tax free, but if you purchase a belt buckle you will be charged with sales tax.

· In Wisconsin ice cream cakes are subject of sales taxes, if the ice cream is mixed with another food item by the retailer. If you made the ice cream cake yourself or by anyone else than the retailer, you might not have to pay taxes unless it can be considered a prepared food.

· Since the 1960s businesses offering their customers the opportunity to dance in the state of Washington are subject to sales taxes!

· If you are more than 100 years old in the state of New Mexico you are able to receive tax-exempt. Why? Because for 100 years you have paid enough taxes according to the state’s laws.

· Some Virginia and Maryland residents need to pay taxes for flushing their toilets!

· Business owners in Utah, employing nude or partially nude workers need to pay 10$ sales tax.

· If you are resident of the state of Arkansas and you have tattoos, you will be required to pay 6% sales tax.

Besides these rather weird and unique tax laws for every state, there are many other things you need to know when it comes to calculating the amount of taxes you owe. You can learn more from this beautiful infographic titled – The Geography of Taxation!

Europe, Australia , India want their fair share of tax

December 14, 2012 by Reporter Leave a Comment

The big American corporates are not safe anymore with their complicated tax structures that let them pay minimum tax . France and India ( vodafone case) have already started taking steps to amend their country legislation to make it harder for big corporates to profit in their country without paying full tax.make money in their country while small business and other countries doe not get their fair share of profits taken from their country.

UK and Australia are currently are looking into the tax strategy known as the Double Irish Dutch Sandwich ( The manoeuvre allows multinationals to move large amounts of money to other subsidiaries in the form of royalty payments )

Google chairman Eric Schmidt has defended the company’s tax policies, saying of the internet giant’s moves to get out of paying billions of dollars: “It’s called capitalism”.

Amazon, Google and Starbucks have been accused of an “immoral” use of secretive jurisdictions and complex company tax structures to avoid paying tax on British profits by a committee of MPs.-http://www.guardian.co.uk

Europe and UK hit hard with the recession have also amended tax laws and intend taking legal action and more scrutiny of tax legislation to claw back more tax from these big American company’s. The US itself is hurting with it not getting much of the tax share even though many of these top Tech companies are originally from the US , but have their head offices in tax saving accounting havens with the result of US also not benefitting much from the profits of these companies.

Apple Inc the tech company everyone knows paid an income tax rate of only 1.9 per cent on its earnings outside the US in its latest fiscal year reports Sbs.com.au

AMAZON

FRANCE has demanded $US252 million ($A242.72 million) in back taxes from Amazon, bringing into spotlight the online retailer over its controversial corporate structure in Europe.

The back taxes that the French are seeking from Amazon relate to earnings in France for the years 2006-10 and “the allocation of income between foreign jurisdictions”

Small, brick-and-mortar retailers have a legitimate gripe that Amazon’s avoidance of the sales tax gives it a competitive advantages

The guardian reports “ Amazon avoids UK taxes by reporting European sales through a Luxembourg-based unit. This structure allowed it to pay a rate of less than 12% on foreign profits last year – less than half the average corporate income tax rate in its major markets.”

Google.

Img from : http://www.watoday.com.au/business/how-savvy-multinationals-curb-their-tax-bills-20121116-29hhm.html

Starbucks

The Seattle-based coffee STARBUCKS company has 700 British outlets in UK , but has paid just STG8.6 million in corporation tax in 14 years. Starbucks Corp says this is due to a process involving paying royalties to its European headquarters in The Netherlands – perthnow.com

Amazon and Google confirmed that the companies both use favourable tax jurisdictions – Luxembourg and Ireland, respectively – due to their low taxation levels.

Google

The soul of Google’s (GOOG) international operations is a plush looking office building in Dublin. In 2009 the office, which houses roughly 2,000 Google employees, was credited with 88 percent of the search Company’s $12.5 billion in sales outside the U.S. Most of the profits from various countries surprisingly went to the tax haven of Bermuda and not even the USA.

The Australian government using a combination of beefed up transfer pricing rules and a commitment to setting up a think tank that will review the elaborate tax structures, is making it clear that Google, Apple, Amazon and any other e-commerce giants will need to pay more tax in the future if its doing business on its shores.

Australian Carbon Tax 101

June 30, 2012 by Reporter Leave a Comment

While carbon price and carbon tax is all over the news, many people actually dont know what its all about specifically. Below is a guide and FAQ to get your facts and info on the carbon price in Australia and its effect on the common man as well as business

What is the carbon price or carbon tax ?

The carbon price is not a tax on Australians, but a tax levied on 260 companies and 34 councils. You might ask why councils ?, because councils deal will landfills and waste which adds to pollution they will have some carbon price to pay.

Who is exempt from the carbon price (tax) ?

Agriculture – carbon price will not apply for agricultural emissions

Family car – Emissions from the family car and light on road vehicles

How ill the carbon price effect the common man ?

Some of the costs borne but the top companies having to pay the carbon tax will be passed onto consumers which will most likely be in Electricity , GAS and FOOD

According to modelling done by CSIRO _ AECOM on likely increase in prices due to this

Electricity bills could increase by $2.80 aweek

Gas By 0.40 cent a week

Food by $1.20 a week

Compensation for the Utilities price rises to common man

$15 billion will be allocated to low and middle income households in the form of tax cuts and increased government payments.

Household assistance – Average assistance of $10.10 a week, and means 6 million households will be either no worse off or slightly better off.

From 1 July, the tax free threshold has been raised from $6000 to $18,200, which will mean a million people no longer having to fill out a tax return.

It will be raised again by $1200 to $19,400 in 2015-16.

1.7% rise for pensioners and recipients of the Family Tax Benefit, delivered as advance payments in May and June.

Business and carbon tax

Very few employers are said to be directly affected by the carbon tax, with only 500 large businesses said to be affected directly.

The government has allocated $9 billion to the industries that will be hit hard and who employ a lot of people in Australia . These companies will be assisted due to keep them competitive with their international competitors during this adjustment period. Its mainly Heavy industries like , Steel, aluminium, and cement manufacturing .

Where does the carbon tax received go ?

While the government is collecting this tax to develop clean energy, a significant part of this money received will be used to cerate new Clean energy technologies and create new jobs in this sector

This includes the

$10 billion Clean energy Finance corporation

$1.2 billion Clean technology program

Carbon tax , GST and tax return ?

The carbon tax has nothing to do with individuals and will not appear on you tax return or in a bill that you receive from a retail shop ( shopping bill). It is only a tax on large 500 companies

There will be some initial price rises to utilities, food and some other goods as companies pass on the costs of the carbon price to consumers.
The Australian Competition and Consumer Commission (ACCC) will be monitoring price rises during this period . Any unfair price rises can be reported on their hotline number is 1300 303 609.

Calculator the impact of the carbon price on my family / household?

There is an easy online tool to calcuate the impact carbon price on your family. The carbon price tool is based on independent analysis undertaken by CSIRO and AECOM, based on research commissioned by The Climate Institute, Go to http://www.yourcarbonprice.com.au/

Which companies and industries pay the carbon tax ?

Companies and councils individually generating more than 25,000 tonnes of carbon dioxide a year will be required to pay for their emissions under the carbon pricing mechanism.

Companies that directly emit greenhouse gases, such as power stations, mines and heavy industry, and some public authorities (councils)responsible for emissions from landfill

Why carbon tax in Australia ?

Before the introduction of the price on carbon or carbon tax , big companies could pollute as much as they liked for free. But the carbon price puts an economic and dollar value on pollution and treats it as a cost of doing business.

It works this way by requiring large companies that pollute to buy a permit valued at $23 for every tonne of carbon pollution they emit into Australia. The more emissions, the higher the financial cost for the polluter. This will help us not get to a stage like other countries like China and India who are facing major pollution problems and need to invest billion of dollars in trying to solve this problem.

Info Links:

INFOGRAPHIC – Carbon Price and cost of living joint report.pdf

The Eventual split in fosters.

May 27, 2010 by Reporter 5 Comments

Foster’s Group said Wednesday that it would split its beer and wine businesses, and sending the company’s stocks leaping. Fosters is popular for its local beer business and international wine operations

Splitting Foster’s Wine and Beer Business

The Alcohol and spirit company, which is the largest alcoholic beverage maker in Australia, said in its “demerger proposal” filed to the ASX that it aimed to list the units separately.

“Potential benefits of a demerger include increased transparency allowing investors to more appropriately value each business over time,” the company said, citing the freedom the units’ boards would have to “develop their own corporate strategies.”

The timing of the deal and structure was to be determined, the company said but its completion is unlikely before the first half of next year. Foster’s shares were up 0.38 Australian cents, or 7.379 percent, at 5.53 dollars, or $4.59, at the close in Sydney.

Beer and Wine brands of fosters group

Foster’s stable of Australian premium beer brands includes key brands Victoria Bitter, Crown Lager, Foster’s LightIce, Carlton Cold, Carlton Draught and of course, Foster’s Lager. Fosters wine rag=nge includes names like high-end brands such as Penfolds Grange, Beringer, Chateau St Jean and St Clement.

Beer

Foster’s American business unit, Foster’s Wine Estates, sells a range of premium wines including Beringer and St Clement from California’s Napa, Chateau St Jean from nearby Sonoma and Foster’s range of Australian imported wines.

Foster’s, which produces the beer of the same name, has not done as well with the wine unit, which the company has tried to sell before. “Foster’s wine business is showing signs of growth, but continues to be impacted by oversupply in Australia, subdued consumer demand in key international markets and a strong Australian dollar during the 2010 financial year,” said Ian Johnston, chief executive of Foster’s Group.

Marco Gulpers, beverage analyst at ING, said that while he saw little interest for the wine unit coming from European companies like Pernod and Diageo, there were several possibilities for the beer business.

The brand’s strong Australian heritage and sense of ‘fun’ continues to appeal to consumers seeking to savour the unique taste of Australia’s most famous beer

$94 billion has been wiped from the stock market

May 25, 2010 by Reporter Leave a Comment

$94 billion has still been wiped from the stock market value over the past week duue to various factors like the greece problems , australian internal new reform issues and the wall street market performances.

Billions wiped from Australian stockmarket

It fell 6.6 per cent for the week on fears that Europe’s debt crisis will hit global markets and affect growth of the world economy. It has been the market’s worst week since the height of the financial crisis in 2008.

However, the booming Australian resources industry has come under attack from politicians who are threatening to impose huge new taxes. Prime Minister Kevin Rudd has proposed a ’super tax’ on resource profits in order to pay for rising health care costs for an aging population.

The tax which, would be equal to 40% of resource gathering firms’ profits, is proposed to begin in July 2012 and would raise an estimated $8 billion a year from 2013-14, which is about 0.7 per cent of national income.

The tax has not become law yet and is strongly opposed by many conservative politicians. The new tax would “eventually choke the goose that’s laid the golden egg for Australia,” said conservative Tony Abbott. “Australia’s future depends on the bulk carriers traveling to Asia.”

ref: http://etfdb.com/2010/will-resource-tax-sink-australia-etf/

Abbott announced that after rescinding the resource rent tax, a future Liberal government would not be able to match Labor’s planned reduction of the corporate tax rate from 30 to 28 percent. The decision indicated the opposition’s determination to win the backing of the mining companies, even at the expense of other sections of big business, which have long demanded corporate tax rate cuts to bolster Australian capitalism’s international competitiveness. The Australian resource sector is currently booming, driven by record commodity prices caused by China’s industrial expansion. Much of the rest of the “two track” economy, however, especially manufacturing, is in recession or near-recession.

TAX

Tax Talk: How to Handle Taxation as an Australian Business Owne

Do Your Research

Ensure You Are STP Compliant

Keep Strong Records

Get On Those Deductions

Get Superannuation In On Time

Utilise Income Tax Offset