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Every venture has strategies and business practices that are sure to help boost its sales and clients in the long run. While not all of it may work 100% of the time, it is still advisable to have a couple of them so that you will have a clear trajectory of where your business is heading.
That being said, no company may ever get far without implementing some of the best accounting practices in the industry.
Overlooking them may spell trouble for your numbers as a whole, after all.
In such a case, you may need to take note of the examples below.
No matter how you look at it, most people in the accounting business are taught how to do the basics right. It is mainly because starting off with these may be the easiest way to ensure that you will be able to effectively transform your company into a success.
As a result, you must make sure that you will be able to:
Just because you have enough experience on your side doesn’t mean that you will be able to rely on that alone.
When it comes to managing the company’s finances, you must always make sure that you will consult a professional accountant who will be able to guide you through the journey.
Basically, there is no shame in doing that.
A professional accountant will know the best practices that you should execute and the ones that you should steer clear of. With this, you will be able to create a solid foundation for your business to thrive.
In today’s digital world, there is no denying that it is quite useful to follow the latest trends when it comes to streamlining your business operations, especially when it comes to accounting solutions.
With cloud-based solutions, you will have the chance to:
In the end, your business will save time and money on unnecessary expenses and expenditures.
At the end of the day, every company, big or small, has to take certain risks as a whole. It is a proven method in helping them grow and expand further, even if they are unsure if it will actually work or not.
For instance, there are a lot of people who are in the business of business loans because of the potential it has, especially if they pick their clients well.
In this case, they will have a better chance of getting approved, even if they have a bad credit score or a low income.
Overall, these are just some of the best accounting practices that every venture must implement if they want to be successful. The best part about these is that they are easy to remember and simple to implement, making it one way for you to run the company more efficiently.
After all, learning new things is what every entrepreneur needs to do in order to grow their companies into the leaders of their industries.
With all of that being said, if you are looking for the best accountants on the Gold Coast, look no further than our experts here at New Wave Accounting & Business Advisory. We provide end-to-end accounting and bookkeeping services that help scale and grow businesses. Call us today and let us help you crunch the numbers with our well-established accounting practices.
The Tax-Free Threshold (sometimes referred to as the Lowest Personal Income Tax Rate) is a term that applies to Australian taxes and refers to the amount you can earn before you will be taxed. Understanding what the tax-free threshold for Australia is important if you want to make sense of the income tax system.
Australians are able to earn an income up to a certain amount before tax becomes payable. This is called the tax-free threshold, and the amount is $18,200. It means that Australians have a limit by which they can earn money each year before they start paying tax on any income above this amount. If you are an Australian resident with a tax file number, the tax-free threshold could be beneficial to you.
To claim the tax-free threshold in Australia, you must:
If you are a non-resident for tax purposes, you will not be able to access the tax-free threshold. This includes Australian citizens based overseas for more than six months in any given year.
Generally, you can only claim the tax-free threshold from one job. If your total income from all sources is less than $18,200, you can claim the exemption from each source.
However, if you earn more than $18,200 for the year, you may need to fill out a withholding declaration form and inform one of your employers that you will no longer claim the tax-free threshold from your income.
If you claim the tax-free threshold from more than one employer, your second income source and any other sources of income beyond will be taxed at a higher rate.
If you don’t claim the tax-free threshold at all for a financial year, then you may have to pay income tax on all your income. For example, if you earned $18,200 in Australia in a financial year and claimed the tax-free threshold, and then you earned $19,000 in a later year and did not claim the exemption, the extra $1,000 will be taxed at the top rate of tax.
If you want to calculate how the tax-free threshold will affect your pay, simply aim to work out your gross earnings first. Then, work out how much of your income will be exempt from income tax, and deduct that amount from your gross earnings. You will then be left with your take-home pay.
The tax-free threshold is a critical aspect of the Australian income tax system. If you are earning an income in Australia, you may be able to claim the tax-free threshold, meaning you don’t have to pay tax on all of your earnings.
Let a reliable accountant in Gold Coast help you here at New Wave. We provide end-to-end accounting and bookkeeping services. Contact us!
When it comes to allowances, they are treated as separate identified payments made to employees to cover various expenses while they’re working. It can include a variety of things from travel expenses, meal allowances, and the like. Regardless, different allowances need to be understood, all because they have special treatment in the eyes of the Australian Taxation Office
That said, today, let’s delve deeper into travel allowance and living away from home allowance, outlining what each is and their differences from each other:
Travel allowance is money paid to an employee to cover costs they incur while they’re travelling while they’re at work. It can include airfares, rental cars, accommodation, costs for meals and incidentals. The tax treatment of this allowance depends on the length of the trip.
If it’s local travel, that is, the employee’s travel is entirely within the employee’s home base of work or within a fifty-kilometre radius of their home base of work, then the living away from home allowance does not apply.
If the travel doesn’t fall under this criteria, then the living away from home allowance applies.
Living away from home allowance is an allowance paid to an employee to cover the extra costs they incur while they’re travelling on a work-related business. The rule of thumb is that the employee must be away from their home base of work for a period longer than a normal day’s work. It includes any overnight travel, accommodation, and meals.
The treatment and taxation of this allowance depend on the length of the travel. If the employee is away from their home base for less than a week, then it attracts a flat deduction. If the employee is away for longer than a week, it is a taxable allowance.
If the employee is away on a short-term trip and they are required to sleep away from home, then they can claim a deduction for the expenses associated with that travel as well.
When it comes to tax deductions and treatment, the rule of thumb is that travel allowance is tax-deductible when the employee is away for less than a week, whereas living away from home is taxable when the employee is away for longer than a week.
If you’re an employer and you want to claim a deduction for travel allowance or living away from home allowance, you need to ensure you have the relevant evidence to back the claim up. If you’re an employee who is getting a travel allowance or living away from home allowance, then when you send your tax return to the ATO, you need to ensure that you state how many days you were away from home and for how long along with the rates that were paid to you.
When you’re working and travelling, it’s important that you’re able to get the right deductions and treatment for your travel allowance. This will help you get more money back when you send in your tax return. By keeping a record of your travels and how much you are paid for each, you’ll be better prepared to claim your entitlements when the time comes!New Wave Accounting offers end-to-end accounting and bookkeeping services to help businesses grow. If you are looking for an accountant on Gold Coast to help you out, work with us today!
Congratulations to our Senior Bookkeeper, Brittny Henderson (nee Porter) for being shortlisted for Bookkeeper of the Year in the 2022 Accountants Daily Australian Accounting Awards! This award recognises outstanding Australian bookkeepers who operate in a contemporary environment and have responded to market challenges with innovation.
As a bookkeeper and a leader, Brittny is extremely deserving of this recognition. Her excellent communication skills and the personalised touch she provides each client is admired and appreciated by her colleagues and clients alike. Brittny’s passion for eCommerce has seen her extend her skills and knowledge in this domain and allowed her to offer a highly sought-after eCommerce specialisation in her services. Brittny is known for harnessing the latest technologies and software platforms to achieve better results. She has a high level of knowledge around Shopify, Paypal, Merchant Platforms and tried and tested integrations like A2X, which empowers her clients and gives them clarity and confidence to make informed business decisions.
The Australian Accounting Awards is the premier event in showcasing the depth of talent in the nation’s accounting professionals and businesses, recognising their success and their passion for the sector.
The finalist list, which was announced on Tuesday, 26 April, features over 290 high-achieving professionals across 34 submission-based categories.
Reaching the finalists stage is regarded as an incredible achievement across the Australian accounting industry, showcasing the depth of dedication and commitment each individual and business brings to advancing the industry.
Accountants Daily editor Philip King said: “The Accountants Daily Australian Accounting Awards night is renowned as the premier event each year when the profession recognises and celebrates those right at the top of their game.
“This year it is especially poignant as the first face-to-face awards night since the onset of COVID. It offers the whole industry a chance to come together and mark its exceptional contributions to the national wellbeing through the trials of the pandemic and testing natural disasters.
“Under such difficult circumstances, to be shortlisted from among the hundreds of high-quality entries is a mark of high achievement, one that echoes throughout the profession.”
Winners will be announced at the Awards Gala in June later this year.
Congratulations Brittny and Goodluck!
To learn more about our bookkeeping services, contact Brittny on 07 5504 1999
Do you run a business in Australia? If so, you already know just how complicated the process of running a payroll can be. The structure is complicated and can vary depending on the industry that you work in, as well as the number of employees. Here’s a simple rundown to help you understand Australian payroll.
The payroll structure in Australia is a fairly straightforward one. It’s split into different components in order to ensure that the money is paid out in the most appropriate manner. Simply put, the full amount of tax that you need to pay is already calculated when you take into account your tax bracket when you first input your taxes for the year. Your tax bracket is calculated based on the total amount of pay that you will likely earn in the year. This number is used to calculate the amount of tax that you need to pay per paycheck.
Your employer will then take the amount of tax that they owe and pay it to the Australian Tax Office (ATO) on your behalf. This is done on a monthly basis regardless of whether or not you are paid monthly. This is how your tax bracket is determined.
To claim work-related expenses, you must have spent the money yourself and not been reimbursed, the expense must be directly related to earning your income, and you must have a record to prove it. To claim work-related expenses, you must have spent the money yourself and not been reimbursed, the expense must be directly related to earning your income, and you must have a record to prove it.
You can only claim expenses that are related to work. For example, if you work from home three days a week and travel to work two days a week, you can only calculate your phone bill for the calls you made for work.
There are three components that make up an Australian employee’s pay: The PAYG (Pay As You Go) component, the Superannuation component, and the Fringe Benefits Tax component.
PAYG (Pay As You Go) –
The first component is the PAYG component. The PAYG component is basically your tax that is withheld from your wages. This method is used to determine how much tax you will pay during the year and is what makes up your tax bracket.
Superannuation –
The next component is the superannuation component. Superannuation is paid to employees as a way to help prepare them for retirement. Superannuation is not mandatory, but many people choose to pay into a fund due to government incentives.
Fringe Benefits Tax (FBT)-
The Fringe Benefits Tax component is how you go about claiming the money that you spent on your employer through fringe benefits. There are special tax laws that allow you to retain these benefits, and the money that you spend on them is tax-free, but only if you claim it.
The main tax that you will be most concerned with is the income tax in Australia. There are two different income taxes in Australia: personal income tax and corporate income tax.
The personal income tax is the money that you pay on your personal wage and salary income. This is calculated at a rate of 19% on your income between $18,201 and $45,000, at 32.5% between $45,001 and $120,000, and at 37% on anything above $120,000.
These tax rates are subject to change every year, so be sure to look out for them. Please take note that the above rates do not include the Medicare levy of 2%.
Corporate income tax is charged on the company profits. This means that not all businesses have to pay income tax. Those who do not have to pay income tax are referred to as government companies or government exempt entities, including banks, Australian state and territory governments, and some charitable organisations.
If you are a resident of Australia, you are taxed at your resident rate. If you are not a resident of Australia, you are taxed at your deemed rate, which is your worldwide income tax rate.
If you are a company that employs workers in Australia, you will have to pay your earned income on a PAYG basis. You can also claim a salary expenses amount that is the lower of either the salary that you pay your employee or the salary that the employee actually earns.
Australian Payroll is a fairly simple process that requires you to be a little more in tune with the tax code than most other countries. Being aware of the tax bracket that you fall into ensures that you’re paying the proper amount of tax. This way, you can use the tax code to your advantage to make sure that you’re saving as much money as possible.
New Wave Accounting provides end-to-end accounting and bookkeeping services to help you reach your goals. We make it possible for businesses to run their companies like a well-oiled machine. If you’re ever in need of an accountant in Gold Coast to help you get on top of your tax obligations, we are the ones to call. Get in touch with us today to book a consultation with our accountants.
Asset protection is often viewed as a luxury for the rich, but it is really more successful when implemented as early as possible. You wouldn’t start a business if you didn’t believe it would be lucrative!
You shouldn’t wait for your business to become big and profitable before prioritising asset protection. After all, for someone who is just starting, the financial impact of a lawsuit will be far more significant than for someone who is already well-off.
Several potentially disastrous life situations can be mitigated by employing asset protection measures. This can include a divorce, a death in the family, bankruptcy, or any legal action taken against your business.
This article will run you through some basic asset protection tactics.
Minimising your risk exposure is easier said than done. However, this is one of the most helpful ways to protect you and your assets.
If it is not in your professional field of business, it is best not to do a task. Leave these tasks to someone qualified. Doing work you aren’t eligible for puts you at risk of lawsuits for negligence.
Every firm should have public liability insurance as part of its normal insurance package. While you may think this is costly initially, you may change your mind when you need to pay $10,000,000 for settlement.
With the right insurance broker, you may even save more money through your insurance coverage. You can seek the help of your business accountant or insurance agent to help ensure that you are getting enough coverage for your business.
Before you even get in trouble for any legal matter, ensure your assets are already protected by transferring them. Don’t own any assets under your name.
You can have a trusted family member to keep your relevant assets within a legally separate entity.
You can also hold your money through self-managed super funds (SMSFs). However, you must have this ready in place by the time you start your company. Should you fail to do this, your property will not be protected even if you sell or transfer them.
If you file for bankruptcy, following the paper trail and seizing assets is within the court’s purview. For four years following the filing of the bankruptcy petition, a court may examine any transfers of assets.
Capital gains tax difficulties might arise if you transfer assets at a later period, resulting in unnecessary tax payments. If you hire professional bookkeeping services, they can help you transfer your assets and ensure you are not overpaying.
Business owners can employ a variety of assets to safeguard and exchange their assets. Here are some business structures you may want to consider to protect your assets:
Asset protection is not an option but a necessity. You’ll be surprised how many risks you are exposed to as a business. Make sure you have the necessary asset protection measures in place to face these risks head-on.
Are you looking for a reliable accountant in Gold Coast? New Wave Accounting offers end-to-end accounting to help you grow your business. Give us a call to learn more!
Understanding the concept of depreciation is an essential aspect of your business. Depreciation will affect your taxes, prices and the overall value of your business. It can also affect any decisions you make regarding your business.
Depreciation is the percentage of value that a piece of equipment or asset loses each year, usually a percentage of the first year’s cost estimate. For example, you purchased a $20,000 piece of equipment in 2011. After five years, its value goes down to $15,000, depreciating with a $1,000 value per year.
There are several reasons why depreciation is important in your business account and finances.
There are different types of assets that can be depreciated. Depending on what type they are, their value will also vary.
You can use different methods to calculate depreciation, including straight-line depreciation and diminishing value depreciation. Whichever way you choose will affect the outcome of the value.
When your business purchases new equipment, furniture or vehicles, you will have to pay taxes on the value of the assets. Understanding the purpose of depreciation and how it will affect your business is important for tax planning and your financial future.
If you need an accountant in Gold Coast to help with your business, you can contact us at New Wave Accounting. We offer accounting and bookkeeping services to all businesses, helping you grow. Get in touch with us today for a consultation.
You may have heard about the benefits of owning a family trust and wondered how it would work for you. Family trusts are generally used to transfer wealth to the next generation, but many people are wary of forming one due to legal and tax complications.
Below is a guide that helps to explain family trusts further—if they’re right for you, their benefits and some tax considerations you need to know.
A trustee is a person who manages a trust. They’re responsible for making decisions regarding the assets within the trust and are accountable to the beneficiaries named within the trust.
Trustees are often nominated by those who establish the family trust. They typically appoint the trustees at the time of drafting the trust deed. The most common types of trustees are the executor of an estate, and the person awarded an asset by the trust.
They are personally liable for any decisions they make as a trustee. For instance, if a trust becomes insolvent or bankrupt, the trustees will be held personally liable. This is why it is important to choose trustworthy and financially capable trustees.
Including a family trust in your estate planning can provide you with several benefits.
Asset Protection
A trust is protected. You can use a trust to protect certain assets from the creditors or dependents of trust beneficiaries. This can be particularly valuable during a divorce settlement or in the event of an unexpected death.
A trust can also help you protect your assets from future lawsuits if your beneficiaries are involved in accidents or medical claims.
Income Distribution Flexibility
Trusts can be designed to provide particular beneficiaries with more income or capital than others. You can also use a trust to provide certain beneficiaries with trust income while giving others a share of the capital sum. If a trust grows in value, you can also use it to provide a higher income level to the beneficiaries who need it.
Tax Concessions
Although you’ll have to pay income tax on the trust capital, any income generated by the trust is not subject to tax.
You can also gift capital to the trust tax-free. This can help beneficiaries save on inheritance tax, particularly if they haven’t reached their personal allowance.
There are several situations in which a trustee can be liable for trust income tax, including:
Non-Resident Beneficiary
When a part of the trust income is given to a non-Australian resident beneficiary, the trustee should pay tax on behalf of the non-resident beneficiary.
Minor Beneficiary
The trustee should pay tax on behalf of minor beneficiaries under 18 years old as of 30 June of the financial year.
Undistributed Trust Income
If the trust income is not distributed to beneficiaries fully, the trustee should pay tax on the income retained in the trust and the top marginal rate of 45%.
A family trust is a valid way to plan and protect your assets for the future. It can help you reduce the amount of taxes you and your beneficiaries will pay while providing the flexibility to distribute the income and capital to your beneficiaries accordingly. However, you must be mindful of the tax consequences as well.
Let a tax accountant in Gold Coast help you out. New Wave offers end-to-end accounting and bookkeeping services to scale and grow businesses. We can also help you with your family trust. Get in touch with us today!
Selling your business property is a big decision, but a misstep can cost you. Many owners forget to factor in GST, which is a big error. However, there are valuable opportunities for tax credits, so you should keep records of all related documents to satisfy the ATO.
GST is a tax charged on most things, except fresh fruit, vegetables, and some other items. The amount of GST you pay is based on the price you pay, which includes the price of the item plus any freight and insurance costs, plus any other charges.
The GST in Australia is ten per cent. This flat tax rate applies to all Australian businesses and individuals.
The ten per cent tax rate means larger businesses can pay less, as they have more opportunities to take advantage of tax deductions. Small businesses, however, may have more difficulty and find it hard to come up with the cash to pay the tax bill.
It is also a cash tax, so you have to pay it in full even if you don’t have the funds. This makes it particularly difficult for smaller businesses.
The costs are high. You need to withhold the GST and remit the money to the ATO. The GST has been growing in popularity, and the current rate is ten per cent. This is for most goods and services. If you are not providing a GST-free service, you will be required to collect the GST.
You also need to know the tax credits available when you buy something. For example, if you buy a business asset, you can claim it as a tax credit. This applies to all business purchases of GST-inclusive items.
Businesses claiming credit for a GST-inclusive purchase need to keep purchase invoices and other records to support the claim.
Many owners forget that the GST is based on the price, not the amount received. So, if you are selling your business property and you have already received the payment, you will have to refund the value of the GST back to the buyer of the property.
This means you will have to pay the GST out of your own pocket before you can pay the rest of the agreed price to the buyer of your business property.
The tax credits you might get for the GST-inclusive purchase are also lost because you are entitled to receive the tax credits only when required to pay the GST.
Not only that, but you need to pay back the value of the GST to the buyer of your business property. And perhaps this is what you want to do. If you want to pay back the taxes, you will claim it as a tax deduction. This will reduce the tax you need to remit to the ATO.
This also means you should get a tax invoice for the GST amount you are paying back, as you will need to claim it as a tax deduction.
You should not assume that you are free from the GST when you sell your business property. You and the buyer need to factor in the GST in the price. You can’t forget to pay the GST and ask the buyer to reimburse you later.
If you are selling your business property, you can let the buyer pay the GST or pay the GST to the buyer. You are eligible for a tax credit for the GST paid to the buyer, but this is only if you are required to pay the GST.
Unlike many Small Business Accountants on the Gold Coast, New Wave Accounting provides end-to-end accounting and bookkeeping services that help scale and grow businesses. We understand small businesses and have worked with over 600 businesses in several industries. This has allowed our Gold Coast Accountants to understand each industry and create tailored solutions for our clients. If you’re looking for a reliable accountant on the Gold Coast, we’ve got you covered. Get in touch with us today and let us know how we can help.
Everyone loves tax deductions. Besides the fact that people will be able to get back a few of their investments, it will also allow them to save up in the long run. The thing is, this is even more prevalent in home-based businesses, much so that there are appropriate steps to acquire them without much hassle.
If you are curious about how to get tax deductions for your home-based venture, look no further than our valuable tips below.
This first step is as obvious as it can be. If you are using your home as an office, you will surely be able to get your tax deductions as you will be paying rent and utility bills as well. All these expenses are allowable, so make sure to note them down every time, well enough for you to claim them during tax season.
You are only eligible to have a separate Australian business number (ABN) if you operate your home business as a sole proprietorship. This means that you will be legally responsible for everything done in your home business, and hence, you will also be getting a separate tax return.
Having said that, you will also be going with a separate tax rate. This is actually good news, as this means that you will be getting deductions from your business since the company itself is considered legally separate from your personal income.
You will surely know how hard it is to track your spending for the home-based business, especially as you are in charge of running your venture. One of the best solutions here in Australia is writing all your expenses down as you go anywhere. This will make it easier for you to file for your tax returns and get the deductions you deserve.
This is another smart thing to do, especially if you have a home-based business. The professionals you consult here in Australia might charge you as much as $100 or even more, depending on the work they do. That said, when you file for your tax return, you can claim all these costs, which will surely lower your tax liability.
If you employ people to help out in the company you operate, you will get deductions in terms of the wages that you pay. However, you should ensure that you are honest with your employees about the taxes you are paying as well so that they may do the same thing.
Basically, this means that you should let everyone know that taxation is vital for your home-based business and it will be beneficial for them to do their part.
The best way to get your tax deductions for your home-based business is to hire a tax advisor. This will make it easier for you to get all your deductions, especially if you are not aware of the various things that you need to be looking for.
With these tips, you will be able to get your tax deductions for your home-based business in no time! Remember to file for your ABN, keep track of your expenses, and remind your employees to ensure that they are also filing for their taxes. That should be enough for you to get your tax deductions and make it easier for you to file the required documents and other known requirements.
With all of that being said, if you are looking for small business accountants in the Gold Coast, look no further than our experts here at New Wave Accounting & Business Advisory. We provide end-to-end accounting and bookkeeping services that help scale and grow businesses. Call us today and let our advisors help you out with your taxes.
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