Welcome to Nudge Accounting, We have over 80+ years of expertise in accounting and bookkeeping services.
Online Bookkeeping & Accounting Services Nudge Accounting

Suite 139/243 Pyrmont Street, Pyrmont NSW 2009

Mon - Fri 9.00 AM - 6.00 PM (AEST)

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Tax Tip Tuesday: How long do I need to keep tax records for?

Tax tips, tax records, small business tax records, ato, small business, startups

Often small business owners ask us if they can throw out their tax records once they have lodged their tax return and received their Notice of Assessment from the ATO. The answer is no – definitely not!

Small business owners are required to keep their records for much longer than that. As a general rule of thumb, you must keep your records for the later of five years from when your tax return is due to be lodged, or when you lodge your tax return. Continue reading “Tax Tip Tuesday: How long do I need to keep tax records for?”

How does my Tax Return affect my PAYG Instalments?

Tax tips, accounting, PAYG Instalments, bookkeeping, small business, nudge accounting, startupsSo you have been organised this year and have prepared the Income Tax Return for your small business. Last year was a great year, which means that you are stuck with a tax bill. At first you think lets lodge it on the last day so I can defer paying the tax as late as possible.

What does this mean for the quarterly PAYG Instalments you have to pay?

Lets look at an example:
A small business works out the taxable income for the year ended 30 June 2014 is $100,000. Company income tax on this is $30,000.

The company has paid quarterly PAYG Instalment of $2,000 per quarter. The total PAYG Instalments is $8,000.

On this basis, the balance of the income tax payable when the return is lodged is $22,000.

Depending on when the income tax return is lodged, the small business will need to make a catch up PAYG Instalment in that quarter. What this means for the PAYG Instalments is as follows:

(a) If the income tax return is lodged in the September 2014 quarter, the quarterly PAYG Instalments going forward will be approximately $7,500 per quarter.

(b) If the income tax return is lodged in the December 2014 quarter, the quarterly PAYG Instalment for the December quarter will be approximately $13,000, then $7,500 for the following quarters.

(c) If the income tax return is lodged in the March 2015 quarter, the quarterly PAYG Instalment for the March quarter will be approximately $18,500, then $7,500 for the following quarter.

(d) If the income tax return is lodged in the June 2015 quarter, the quarterly PAYG Instalment
for the June quarter will be approximately $24,000.

Bear in mind for the above example that the quarterly instalments remain at $2,000 per quarter until the income tax return is lodged.

So in summary, once a return is lodged, the ATO will reassess the quarterly PAYG instalments. We just need to be aware of how this is calculated so business cash flow for the rest of the financial year is not so lumpy.

This Tax Tips Tuesday is brought to you with love by Nudge Accounting. You can read more about PAYG Instalments and other Tax Tips here.

Tax Tips Tuesday – What are PAYG Instalments?

Tax tips, accounting, PAYG Instalments, bookkeeping, small business, nudge accounting, startupsPay As You Go Instalments (PAYG Instalments) is the Australian Tax Office’s way of making us prepay our income tax during the year. This means that when you lodge your Income Tax Return for your small business, any PAYG Instalments paid during the year will be a credit against the Income Tax calculated.

So, although no one likes to pay tax, PAYG Instalments helps avoid or reduce the lumpy tax payments at year end. Generally, this is paid through the Business Activity Statements each quarter and the ATO gives two options to calculate how much to pay:

  • PAYG Instalment Amount (this is a fixed dollar amount they provide)
  • PAYG Instalment Method (this is a % that you apply to business or investment income)

Registration for PAYG Instalments will be triggered once the ATO sees your income tax return includes business or investment income (eg dividends, interest, partnership or trust distributions) and, if you are a sole trader, when your income from these sources is more than $4,000. Continue reading “Tax Tips Tuesday – What are PAYG Instalments?”

Small business tax concessions

Small business tax, nudge accounting, online accountingChanges to small business tax concessions are now in place with the Mineral Resources Rent Tax being abolished this week. And the Australian Financial Review interviewed the ATO as to what these changes mean for small businesses around Australia.

So what are the things you should be aware when considering these small business tax changes:

  • The instant tax write-off of assets under $6,500 cannot be claimed by Small Businesses from 1 January 2014. We wrote about this previously in our June tax update which means that assets can only be written off if they were purchased for under $1,000. “The Tax Office said it will only apply to assets acquired on or after January 1, 2014 “as such it will impact on the returns for the 2013-14 income year”, so if this $6,500 was claimed in your 2014 Income tax Return, an amendment will need to be processed.
  • Loss carry-back allowed companies to use a current-year loss against taxable income in previous years, resulting in a refund for all or part of the tax value of the loss. Under the changes that will now be repealed , businesses were able to carry-back up to $1 million in losses each year and get back a $300,000 refund in subsequent years. These changes which are expected to be prospective will remove this concession.

You can read more about this article in the AFR here.

Photo courtesy of the Australian Financial Review.

Small business tax terms

Small business taxUnderstanding what small business tax terms apply to your business can be confusing and complicated. So we have put together a list of some terms that will help you better understand how to manage your small business tax:

Goods and Services Tax (GST)

GST is a broad based consumer tax of 10% that is applied to most supplies of goods and services in Australia. If a small business is registered for GST, they are required to submit a Business Activity Statement each quarter. Businesses registered for GST use this statement to report their business tax entitlements and obligations to the ATO.

Dividends

A dividend is a distribution of the profits of a company to its shareholders. What is important to small business owners is that they can also claim franking credits when they pay a dividend. A franking credit is an income tax credit that a corporate tax entity can pass on to its shareholders. What this means is that when you pay a dividend with a franking credit, you can claim the franking credit in your personal income tax return to offset any tax payable on the dividend.

For more information on taking money out of a company, you can read our post here.

Australian Business Number (ABN)

All small businesses in Australia are required to register for an ABN. An ABN allows you to be identified with Government departments and it is a requirement that you include it on all tax invoices issued to customers.

Super guarantee contributions

A super contribution is the amount an employer must contribute to super on behalf of their eligible employees. The rate is currently equal to 9.5% of an employee’s ordinary time earnings.

For more information about superannuation for small business, read here.

We Are E.S.T. 2012

Who WE Are

At Nudge, we do it all for your small business: bookkeeping, accounting and tax. we can also help you with tax advice, company setups, personal tax, monthly performance summaries and specialist advice for small business owners. All work is completed by Aussie Accountants so you’ll never have to worry about compliance again.

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TESTIMONIALS

OUR COMPANY

OUR COMPANY Quality

With the uprising of technology and the plethora of competition in the majority of industries, business owners tend to seek help and assistance in managing and tailoring their business to suit the era’s needs and expectations. The process of accounting provides reports that bring key financial indicators together. Understanding financial concepts and gearing clients to financial success is what we exceed at here at Nudge Accounting.Our expertise lingers throughout the field of online accounting and engulfs all financial cases. With years of extensive experience and a dedication for our clients success, we endeavour to evolve our existing methodologies, in order to transform into Australia’s leading online financial firm.

OUR COMPANY Commitment

A successful marriage between bookkeeping and accounting will contribute to the long-term financial success of any business. Nudge Accounting takes pride with their online bookkeeping and online accounting services that encompass all aspects and sectors of finance to ensure our clients receive the utmost finest service. Commitment is an attribute we stand for as client satisfaction is always key to evolution.Our reliability is second to none, as we ensure our clients are well organised and pursuit their financial tasks with accuracy and precision. Nudge Accounting propelled their excellence and with their dynamic team of online accounting professionals transcended competition and have cemented themselves as the leading online bookkeepers in Australia.

OUR COMPANY Success

Our software and technological client interface is meticulous and seldom do alternative online accounting companies acquire this quality of infrastructure. This is what portrays our excellence and gears Nudge Accounting towards success. We ensure client satisfaction, by going through all the details and explaining financial situations to our clients. Engaging the client is what makes us stand out!Online accounting software, combined with online accounting techniques is a much more effective procedure than filling out paperwork because half the work is already done for you! Nudge Accounting take pride in providing the utmost finest online accounting service across Australia, with a variety of small to medium businesses and accounting excellence, technology and Nudge go hand in hand, just like the glove fits the hand!

WE HELPING SMALL BUSINESSES

Nudge provide exceptional accounting service and support whilst remaining price competitive. All of our packages provide the same great features for your small business accounting needs, which includes:

  • Performance Management Reporting
  • Annual Tax Return Preparation and Lodgements
  • Annual Financial Statements
  • Financial Monthly Statements
  • QTR BAS Preparation and Lodgements
  • Monthly KPI's to Identify Improvement Areas
80
YEARS OF
EXPERIENCES
$250m
UNDER MANAGEMENT
REVENUE
$150m
TOTAL
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100
% SECURE
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