Self-employees, freelancers, sole traders and the like have a lot of benefits to being their own boss.
But the financial side can be a complicated component, especially if you’re running a small business by yourself.
Speak to an accountant to help you save money by choosing the right tax structure, helping you meet important deadlines, and more!
How to set up your own business
When you start your business, you need to remember to set it up with an ABN and make sure that you’re registered to pay taxes.
If you don’t do this, you won’t be able to submit your tax return at the end of the year because there’ll be nothing for you to lodge.
You also won’t be eligible for any insurance, grants, or loans.
You can also get into legal trouble if you don’t properly set up your business to be taxed, especially if you’re making a lot of money.
Everything mentioned in this blog is in reference to people who have set up their business by the book. If you haven’t, all the help you can get from an accountant may not be applicable.
What advice can an accountant provide if I’m a sole trader?
If you are self-employed, seeing your personal accountant in Melbourne at least once a year will benefit you in many ways.
Since you don’t have a bookkeeper or accountant working directly under you, it’s important to get advice to make sure you’re meeting all the regulations and so that you can make the most out of your business.
An accountant can help sole traders with:
- Lodging quarterly BAS statements
- Helping you with your tax return
- Helping you know what tax structure you should have
- Financial planning
- Helping you forecast a business plan
- Ensure you understand superannuation rules
- Self-managed super funds
- IAS statements
What are self-managed super funds?
Having a self-managed super fund, commonly referred to as SMSF, means that your super fund isn’t run through any Super company.
Instead, you register your own fund through the Government that you orchestrate yourself.
These can be beneficial to self-employers because a lot of people become self-employers as they like to be independent and be in control.
Can accountants set up SMSF? Yes, they can. Speak to an accountant today about self-managed super funds.
What are good questions to ask an accountant?
If you are self-employed, one of the main things to ask your accountant is about which tax structure you may benefit from the most.
The four tax structures are:
Depending on how much you make, how long you’ve been working, and how you run your business, each tax structure can give you different benefits.
Speak to an accountant about which one suits you. You can also set up one tax structure and change to another as your business grows.
You should also ask your accountant about what business insurance you should have.
You can get sick leave insurance so that if you get sick and can’t work, your insurance company will pay you for the days you’re sick.
You can also get business disruption insurance so if something happens to disrupt your business, you can still get paid.
For example, if you are working at a market selling handmade clothing, but then a COVID-19 lockdown occurs and the markets shut, you may be eligible for payment from your insurance company for the days you miss.
You can also get public liability insurance which means that if a third party sues you, they will pay for the legal fees.
What information does my accountant need for business taxes?
When agreeing with an accountant to get assistance doing taxes, you need to agree to give your accountant a lot of financial information about your business.
Accountants are legally obliged not to share your information with anyone.
For your tax return, your accountant needs to know your:
- Business structure
- Business data
- Previous tax returns
- Proof of expenses
- Revenue and cash flow
How do I report self-employment expenses?
All your expenses for anything that you use for your business can be written as deductibles on your tax return.
When filing your return, there will be a deductibles section where you can claim things like:
- Internet bills
- Gas and electricity bills for wherever you work
- Equipment and tools
But remember, getting tax back depends on how much you make and the proof you attach for it.
Always keep receipts for every expense that you use for your business, so that it can be included in your tax return.
What is the best way to file taxes when self-employed?
If you are a small business you can either report your taxes as a part of a business tax return or you can report your taxes on a personal income tax return.
Depending on your business and your tax structure, one way might be better than the other. But you can only do one per business.
Your accountant can help you understand the best method to file your taxes.
How do I choose a good accountant?
When choosing which accountant to go for, make sure you look for the right accounting firm values, including:
Contact Bruce Edmunds & Associates today!
Bruce Edmunds & Associates is an accounting firm in Bayside. We help businesses in the South East and all across Melbourne with anything related to your business or personal accounting.
Thanks to our qualified and experienced team, we’re at the forefront of both business and personal accounting.
Our top-of-the-market services ensure we can cater to all business types and industries, including those who are self-employed.