All businesses in Australia are required to lodge an annual company tax return. How your business lodges its annual income tax return depends on the type of business structure it operates under.
Business Tax Lodgement
Sole traders
You report your taxable income or loss on your individual tax return. This includes:
·your assessable business income less the business deductions you can claim
·any other assessable income, such as salary and wages (shown on a payment summary), dividends and rental income, less any allowable deductions against this income.
Partnerships and partners
The partnership lodges a partnership tax return to report its net income or loss. Each individual partner lodges an individual tax return to report their share of any partnership net income or loss, and any other assessable income.
As an individual partner, you report the following on your individual tax return:
·your share of any partnership net income or loss
·any other assessable income, such as salary and wages (shown on a payment summary), dividends and rental income.
Trusts and beneficiaries
The trust lodges a trust tax return to report its net income or loss. As a trust beneficiary, you lodge an individual tax return to report income you receive from the trust, and any other assessable income.
Companies
The company lodges a company tax return to report its income and the amount of tax it is liable to pay on that income, or the amount it is entitled to receive as a refund.
The company reports its taxable income, tax offsets and credits, PAYG instalments and the amount of tax it is liable to pay on that income or the amount that is refundable
It is possible in some circumstances to minimise the amount of tax that you are liable to pay by employing the use of tax offsets or credits. A sole trader/partnership/trust can have its tax on taxable income reduced if the ATO includes the specific credits and tax offsets that you are eligible for when calculating the tax payable. In the case of a company, you need to calculate how much tax you’re liable to pay, and then consider it with the tax offsets or credits in mind.
The world of tax can be extremely complex and if obligations are not adhered to it can often become quite stressful, not to mention costly. The Tax Accountants, Tax Lawyers and Tax Agents at The Quinn Group are able to assist you with all tax and ATO related matters. For advice or more information contact us now by submitting an online enquiry or call 1300 QUINNS or on +61 2 9223 9166 to arrange a meeting today.
