When you are self-employed in Australia, you need to take special care to manage your taxes correctly. There are many opportunities to minimize your tax burden and take advantage of deductions, but you need to plan carefully and know what you are doing. Without professional help, it is easy to miss out on some of the benefits you are entitled to, or to end up with an unexpectedly large tax bill. Interest charges and fines can also be a problem. However, if you take care of your money matters, you can enjoy the benefits of being self-employed. This is easier said than odne as managing your taxes can be rather tricky, especially if you have little to no experience doing this. To help you out, we thought it would be useful to put together a brief article about this subject. If this is something that you’re interested in learning more about, read on for a beginner’s guide to taxes for the self-employed.
Manage Your Cash Flow
Self-employed people usually have a good income, but the money doesn’t come in regularly. To help with this, only buy things that you can afford and have saved up for. It’s also a good idea to have some money saved up in case of an emergency. Since self-employed people don’t get paid holidays or sick leave, they need to save up money so they can still have a life outside of work.
Keep Your Personal and Business Money Separate
Basically, you want to make sure that you are keeping your personal finances separate from your business finances. This means having a separate bank account for your business and only using that account for business expenses. This will help you to keep track of your business expenses and income, and it will also make it easier to see how profitable your business is.
Maximise Your Super
Superannuation is a way of saving money for retirement. The money you contribute is taxed at a lower rate than your income, so it can be a good way to reduce your overall tax bill. If you’re self-employed, you can make your own super contributions and claim a tax deduction for them. You may also be eligible for the government super co-contribution, which is a payment the government makes into your super account if you meet certain criteria.
We hope this guide proves to be useful when it comes to helping you gain a better understanding of how taxes work for the self-employed. While it may seem difficult at first, the information that we’ve laid out above should go a long way into helping you navigate this process. Be sure to keep everything you’ve learned here in mind so that you can make the most informed decisions regarding your finances.
If you’re looking for a tax consultant, then you’ve come to the right place. SMB Accounting is fast becoming one of the leaders in Australia when it comes to providing accounting services. As an accounting firm serving Brisbane, Sunshine Coast, and Fraser Coast, we help clients by providing business advice, taxation, and XERO/MYOB/Quickbooks consulting. Whenever you need help managing your income tax returns or keeping your finances in check, SMB Accounting is the one to call. Contact us today to get started.