When it comes to tax season, you might have numerous questions in your mind. Many of you may ask several questions to their tax accountants, to ensure that they are on the right track. To answer all your questions regarding income tax, we have come up with answers that will guide you in the right way. You may have questions about income tax, what to expect during tax return lodgment, what if you fail to meet tax obligations, and so on. Continue reading this blog and get to know everything about tax returns.
Do low-income earners need to lodge a tax return?
The answer is yes! Even if you are a low-income earner, you are required to lodge a tax return. Tax return lodgment is crucial in Australia. Without lodging a tax return, the ATO cannot conduct an assessment regarding your income tax liabilities. With tax return lodgment, you can inform the ATO about your earnings and other relevant information. If you come under an exemption category in the financial year, you still have to update your information with the ATO. It’s essential to file the update prior to the due date of your tax return to avoid penalties. If you don’t know how to file taxes, you can reach out to a tax accountant near your area by searching online for ‘tax accountant near me’.
What is the failure to lodge on time penalty?
If you have a deadline to lodge or report something by a specific date, but don’t meet it, you may face a Failure to Lodge (FTL) penalty. This could apply to lodging your tax return, reporting PAYG instalments, GST, or PAYG withholding on an activity statement by the due date.
When is your tax return due?
If you are planning to lodge a tax return without getting help from a registered tax agent, then you need to lodge it on or prior to October 31st. On the other hand, if you engage a registered tax agent for tax return lodgment, then you will be able to lodge after the 31 October deadline. The due date for your tax return will be based on your personal circumstances and when you get help from your tax agent. You must get in touch with a tax accountant for advice about your situation. If you are getting help from a tax accountant for the first time, or using a different tax accountant, you are required to get in touch with them prior to 31 October. Despite this, it’s advisable to look for a tax accountant’s experience and knowledge when you search online for ‘an accountant for a small business near me’.
Do I need to register for GST?
You need to register for GST
- When your business’s GST turnover reaches $75,000 or more.
- When you start a new business and expect that a GST turnover could reach the GST threshold in the first year of operation.
- If you already have reached the GST threshold.
- If the yearly GST turnover of your non-profit reaches or surpasses $150,000.
- When you facilitate your passengers with limousine or taxi travel, irrespective of your GST turnover.
- If you are interested in claiming fuel tax credits for your enterprise or business.
What if you fail to meet tax obligations?
Tax laws authorise the ATO to impose penalties when you don’t meet tax obligations. Taxpayers are encouraged by the penalty provisions to take reasonable care to meet their tax obligations. Tax return lodgment requires you to have accurate records, so you can be sure that your provided information is accurate. For accurate records, you can get small business bookkeeping services.
How do tax deductions work?
Some of your expenses can be claimed as deductions on your tax return.These expenses are mostly related to earning your income, but some aren’t, such as donations. Deductions lower your taxable income.
It works like this:
your assessable income (the money you earn from work or investments)minus your allowable deductions (like costs you incur to earn your income)equals your taxable income (the amount you actually pay tax on).
Conclusion
Whether you are an individual entity or a small business owner, you need to meet tax obligations and file tax returns on time to avoid paying tax penalties or fines. If you need help from Reliable Melbourne Accountants to help you deal with tax matters, you can reach out to us.