Answers to your Questions about Taxes and Accounting in Australia
Have questions about taxes? We're here to help!
Deciding whether to hire an accountant
Do I need an accountant for my contracting business?
In most cases, the answer is yes. As your contracting business grows you will find that the complexity of your taxes increases.
Although you may feel comfortable learning to use software for your accounting needs, you will find that contractors and freelancers are eligible for a number of tax breaks that you may not be aware of.
Not only can an accountant save you valuable time, and provide a level of legal protection for your contracting business, they can also save you money in tax deductions.
When should I hire a bookkeeper?
When you have a business, or you rent property. In almost all scenarios, even with a contracting business, the amount of legality involved in tax compliance is complex enough for businesses and landlords that not hiring a bookkeeper ends up costing more money than hiring one would. For this reason, it is rare to see businesses managing their own books.
A bookkeeper can also help you to manage your personal financial data – an option that is becoming increasingly popular. In this high-paced modern era, many middle class workers are choosing to hire a bookkeeper to help save money on home improvements, investments, and stocks, and help to maintain a healthy work-life balance.
Services Accountants Provide
What is bookkeeping?
Bookkeeping is the profession of tracking and managing the financial accounts of an individual or business. A bookkeeper helps individuals and businesses collect and organize all of the necessary information for filing end of year tax returns. In addition, Bookkeepers can also address concerns that would result in additional costs, before they become an issue.
What does an accountant do?
Accountants help businesses and companies to operate legally and efficiently. Accountants help businesses manage their financial records, make important decisions about large expenses, set budgets, manage a payroll, and more. One of the most important functions that an Accountant fulfills for a business is to provide a liasion between the ATO and the business themselves. This protects a business from having to answer awkward on the spot questions, or misunderstanding information.
Is an accountant better than a website for filing tax returns?
Yes. The reason an accountant is so useful when it comes to filing tax returns, is that an account is aware of a wide variety of opportunities in tax law that will allow you to get deductions or otherwise save money on your taxes.
An accountant can also advise you on when to sell assets, and how to employ other money-saving methods.
Tax Planning FAQ’s
What is the importance of record keeping in business?
Diligence in keeping records of your finances is essential! You must keep all records relating to the business so as to provide the ATO with information they may need to satisfy them in determining the business’ taxation status. If you cannot produce records (e.g. receipts), then you must keep a diary in order to provide some substantive detail to support your filings with the ATO.
Tax planning Australia – What do I need to plan for and when?
At the end of the financial year you start planning for the next year. Whether setting up new business structures or initiating new salary sacrifice arrangements, these need to be excuted in advance. It is not easy to utiilise these structures at the end of the financial year if you have not planned for it in advance. With the large number of changes to the tax code in recent years, it is very difficult to stay on top of everything that is happening. For this reason business owners should consiger engaging professional consultants (such as Neena) to make sure that the business is optimised for tax purposes – why pay more tax than is necessary?
Can I use a Self Managed Super Fund to minimise my tax and provide for retirement?
In the past, Self Managed Super Funds (SMSFs) have been very attractive for the purposes of minimising tax and growing retirement assests. However, changes in recent years have reduced some of the benefits. Even after the changes, there are still a lot benefits that can be realised by properly structuring finances for retirement savings. Contact Neena to see how a SMSF could help you minimise tax.
The ATO has notified me of a substantial financial penalty, what do I do?
Do not do anything until you contact us! It is important not to try to liaise with the ATO yourself – as there is a good chance that you may end up paying a penalty that could have been easily avoided.
We are experienced in raising objections and negotiating on behalf of clients to obtain favourable rulings from the ATO. The immediate appearance of a financial penalty notice may appear to suggest that the case is closed and you have lost your fight with the ATO, but we would suggest that you contact us immediately to explore whether there are any avenues that might offer exceptions that result in the penalty being waived.
We have had great success in the past dealing with that ATO and we are trusted by the department. We strongly suggest that you do not attempt to deal with the ATO (a huge bureaucratic monster) yourself.
Tax Terms and Definitions
What is the ATO?
The ATO is the Australian Tax Office, and they are responsible for regulation tax laws and collections in Australia.
What is a CPA?
CPA stands for Certified Public Accountant. A person who is a CPA has been educated and approved to practice accounting.
What is AR in accounting?
Accounts Receivable. It is the amount of money that clients and customers owe to a business after a product has been sold or a service has been rendered.
What is Accounts Payable?
Accounts Payable, or AP, is the amount of money that a business or company owes other companies (such as their suppliers).
What is an Asset?
Assets refer to any items of value, including money, but also including objects which could be sold for money such as a house.
What is Diversification?
Diversification means to split up your money into different investment opportunities. The reason a person would diversify would be to protect themselves from losing all of their investment at once, while making the most of the fact that any number of their investments may succeed more than the rest.
Why choose Minimise Tax?
Minimise Tax has a proven track record of helping clients to address issues that were brought on by personal accounting, or hiring less able accountants. Confidentiality is key with us, which means that your private information, questions, and financial data will be kept strictly between you and your tax agent.
Why choose Neena Wang as your CPA?
When it comes to satisfying clients, Neena Wang is a master. If her agile mind and experience are not enough to impress her potential clients, her excellent local reputation will be. Businesses and individuals can enjoy a professional working relationship that can be as informative and hands-on as they would like, or as hands-off as is possible. Neena Wang may be a top notch accountant, but she also appreciates business and the bottom line. Working with this Parramatta CPA is a highly efficient, affordable experience.
Do I need a personal accountant?
Personal accountants can be very useful for people who have complex financial assets and liabilities. If you have a rental property, stocks, or investments, hiring a personal accountant is likely a good decision for you to make.