Are you looking for ways and a guide to tax returns? Make sure that you know everything about tax returns in Australia, along with the accounting services involved with it. A tax return depends on the business structure that you handle and is lodged accordingly. Australian Taxpayers have the benefit of filing their returns online with the help of ATO’s my tax software. These returns are filed by ordering a printed copy of the tax return form or with the professional assistance of a tax return accountant or agent. A punctual record of tax returns will help you increase your credit score and maintain a sound financial life in Australia. Make sure that you check out this complete guide and know everything about tax returns in Australia.
Tax Pack, a free document that helps people complete their returns, was published by the ATO in 2011. It was soon replaced with small instruction documents as people have shifted to e-tax software. Using a Registered Tax Agent operating on a high lodgement system gets the benefits of extensions of their deadline for lodging a tax return under some circumstances. In Australia, personal tax returns and entity tax returns had to be lodged through different returns with the ATO due to various taxation standards and protocols.
Your tax return will depend on the size of the business entity that you operate. The laws and regulations for taxes in Australia have specific guidelines and protocols for reporting and computing accounts relevant to various taxes that every business personnel is familiar with and the risk of assessing penalties with it.
The federal government of Australia imposed Income tax on the taxable income of individuals and companies. The state government is not liable to impose any income taxes. For individual citizens of Australia, income tax gets levied at the rate that increases with increased income amount. The income of trusts and partnerships is not directly taxed but is taxed on the distribution to the beneficiaries or partners. In the Australian taxation system, income tax is the most crucial source of income for the government, collected by the Australian taxation office on behalf of the federal government.
Check out for the best tax accountant in Perth to know these few points with elaboration and explanation.
- Solo/Individual Trader: Ensure that if you work as a sole trader, you have to submit an individual tax return for reporting your taxable income or loss to the federal government. You must also lodge any form of business income and other income that are in the state of salary, wages, dividends, rental income, and so on. You can also less any deductible allowance that you are allowed to claim against the amounts.
- Partnership Tax Returns: If you’re a business entity, then lodge a partnership tax return for your net income. This tax return must show your net income calculated by deducting expenditure and other factors from the gross income. Some details that you need to report as a partner are – share of partnership income, dividends, rental incomes, salary, or wage in your income tax return. Get yourself a partnership tax return accountant for the immediate and effective lodging of these returns without any stress.
- Trust: The entity should file a trust tax return that depicts its income, fewer expenses, and deductions of all essentials. Suppose you are the beneficiary of the trust. In that case, you must report any income or benefit received from the trust, such as any assessable income like salary, dividends, rental income, and wages.
- Company Tax Returns: Since 2001, the federal government has charged a flat rate of 30% as the tax from the profit of the various companies. Dividends paid by Australian companies are related to the Australian dividend imputation system. Under this system, Australian shareholders who receive a dividend from an Australian company that has paid its company tax are entitled to claim a tax credit on the company tax attributed or associated with the dividend, as declared by the company. The Australian company must file a tax return depicting its net income, which includes the income amount minus deductions. The corporate IT return rate in Australia is fixed at 30% of the net taxable income to date. The company’s income tax is different from your income tax, for which you need to lodge a personal income tax return.
Personal income and its tax is a progressive taxation system whose rates differ from resident individuals to non-resident taxpayers. The highest marginal rate of taxes for individuals is 45%. Most importantly, Australians are liable to pay the Medicare levy for which they have to pay the standard 2% of taxable income. For more knowledge and consultation, contact the best personal tax account, agent.
Income tax is withheld from salaries and wages in Australia, enabling refunds payable to taxpayers. If you are an employee, then quote the tax file number to your employer to withhold tax from your pay. So get the benefit of this comprehensive guide for paying your taxes on time and the rules and guidelines attached with it.