Tax season, whether you operate a sole proprietorship or a corporation, is never an easy time. There’s always a crunch in tax season. You’ve got the best seat in the house if you have someone to handle your taxes for you. However, being a small company owner or entrepreneur might be difficult. Even if you can, it’s still important to understand what types of taxes you are obligated to pay and how to submit your returns correctly and efficiently. We’ll talk about what kinds of taxes the ATO expects to receive later in this post, as well as where to send them.
Sole traders
You’re a sole trader if you run a small firm by yourself. You and your company are considered a single entity under this system, so you don’t have to pay any extra taxes on top of your personal income tax. You don’t need an ABN, either.
Every year, by October 31st, you must submit your personal income taxes to the ATO. You may submit it online using the myTax tool. Here’s how to fill out a tax form for an individual.
Partnerships
A business partnership is a kind of collaboration among two or more individuals. You’ll need a distinct ABN for your company, and as a firm entity, you’ll be subject to the Partnership Tax. This is the amount earned by the company after all costs and deductions have been subtracted. Here’s how to report your partnership tax.
Trusts
A trust is a safeguard for people who wish to leave their assets to others upon death. The owner of the trust becomes the trustor, and the trustee is in charge. Every individual involved in the trust must file his or her own tax return.
Trust tax: There are several sorts of trusts to fit any need, but all are required to pay an annual trust tax. This is handled by the trustee.
Beneficiaries: Each beneficiary named in the trust should submit this earnings information to their personal tax return, since trust assets that generate income, such as equities, real estate, and other investments, must be reported by each beneficiary.
Trustee: The trustee, who is in charge of the trust as well as any associated taxes, should include the income generated by the trust on their tax return.
Companies
All firms, regardless of size or type, must pay an annual company tax. The amount you pay is determined by your income and the government-approved company tax rate. All board members and stockholders are also required to report their share of the firm’s revenue on their personal taxes.
You could also have to pay additional taxes, such as the Medicare Levy. If your company’s total revenue is more than $75,000 per year, you must register for the Goods and Services Tax. You may be required to pay extra taxes if you work in certain industries, such as the wine equalisation tax or a luxury automobile tax.
