The business structure you operate, determines which tax returns Australia you may be required to lodge. All business people should be familiar with the specific dictates of Australian tax law in relation to reporting requirements as ignorance is not an excuse that will help to escape penalties.

Note: The information in this article is of a general nature. It’s important to consult a small business accountant before acting on any of the information in this article to ensure your specific situation is considered.

Income tax return

Sole trader: Sole traders  must lodge an individual tax return to report your taxable income or loss as well as any business income and other income in the form of salary and wages, dividends and rental income, less any allowable deductions that you are allowed to claim against these amounts.

Partnership: The entity must lodge a partnership tax return. The return show the net taxable income after providing for for any allowable deductions. A partnership tax return will reflect the total of all income amounts reported by each partner in their own tax returns and must include all income sources such as wages, dividends and rental income.

Trust: This trust entity must lodge a trust tax return. Only after reducing the gross income by the allowable expense deductions can the tax amount be worked out. Beneficiaries of the trust, are also required to report any income or benefit received from the trust, including assessable income such as salary, wages, dividends and rental income.

Company: The company must lodge a company tax return. The initial gross income amount is reduced by the allowable deductions to arrive at an amount to which tax is applied. Companies operating inside Australia have a tax rate of 30% applied to their earnings. Each legal entity needs to submit their own tax returns and this applied to individuals as well as companies.

Fringe Benefit Tax Return

Benefits given by employers to employees such as company cars, low interest loans, gym membership and free tickets to concerts as entertainment benefits are usually classed as fringe benefits. Fringe Benefit Tax (FBT) is paid on these items.

GST Return

Businesses with a projected annual turnover of at least $75,000 ($150,000 for non-profit organisations) are required to lodge a GST return. GST returns must still be lodged by businesses that fall below the minimum level if they have registered to participate in the GST system.

PAYG

If you have employees or pay employees of another business, you are required to withhold an amount from payments you make to them and report these under the PAYG withholding system. Taxes required to be witheld by employers must be reported as per Tax Office guidelines.

Payments requiring withholding tax include:

• Payments for invoices where there is no ABN;
• royalty and interest payments to foreign entities;
• if you operate a company – payments made to company directors.

In summary Australian tax return types include individual tax returns, partnership tax returns, company tax returns and trust tax returns. PAYG and FBT are the other reporting requirements covered in this guide to tax returns.

Raleigh NC Accountant

W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…

Between 1868 to 1913, about ninety percent of the national government’s revenue was gotten from taxes on alcohol and tobacco. While the Civil War was occurring there was a brief income tax, but it was not until 1913 that the sixteenth Amendment permitted Congress to tax incomes “from whatever sources derived.” The initial 1040’s were due on March 1, 1914. No money was taken from paychecks and none was sent in with the return. Each taxpayer’s computations were checked by IRS field agents and a bill mailed to the taxpayer on June 1st.

1766 – Colony leaders got together to extinguish British taxes in place by the Stamp Act. The Stamp Act Congress, as it was called, was the beginning of the American independence movement and the origin of the modern U.S.

1782 – The first Congress under the Articles of Confederation formed. This Congress had no taxing powers.

1789 – America granted a newly formed Congress the ability to tax. Without taxing powers, the initial Congress of the United States scantly lasted seven years before being dubbed a failed attempt; the 2nd Congress, granted taxation powers, is still going strong after almost 300 years. If you’re feeling the pressure with today’s taxes, call a CPA for Tax Preparation in Raleigh, NC for all your tax-related needs!

1792 – Alexander Hamilton coerces Congress into passing an excise tax on whiskey to raise revenue and curb alcohol consumption. On the western frontier whiskey was the basic mode of exchange, and the 25% tax was a bit difficult to deal with. By 1794 the area was in open rebellion. The father of the Internal Revenue Service was created to enforce the tax. Go here if you want help from a modern-day CPA firm in Raleigh, NC.

1832 – The national debt that remained after the Revolutionary War and the War of 1812 is finally accounted for and paid. The South sees no reason for continued high import taxes that increase prices for Southern consumers and promote industrial monopolies in the North.

1850 – John C. Calhoun of South Carolina tells Congress that the South might leave the Union because heavy taxation in the South raised funds that were spent in the North, causing a great change in money from the South to the North.

Stay tuned for Parts 2 and 3 of the Timeline of US Tax Policy!

http://www.marccpa.com/