Small businesses benefit greatly from internal audits, and there are many more advantages than you might realize. In actuality, internal audits are relied upon by the majority of small businesses today. Hiring a specialist to conduct the internal audit is typically helpful for small organizations that have their hands full in various departments. 

The short answer would be that working with auditors is a cost-effective way of seeing where your company needs to make financial improvements. For a more in-depth look at the help that internal audits offer to your small business, the following are some of its most helpful advantages:

1) Gain Valuable Insight

The first benefit of an internal audit is that it supplies you with useful information. An internal audit allows you to examine your firm and identify areas for improvement. The audit will also assist you in determining whether there are any dangers to the company’s existence, and you can use it to track your company’s financial success.

2) Achieve Better Compliance

The internal audit will determine whether or not you comply with applicable laws and regulations. This will ensure that you are always running as effectively as possible. Compliance with regulations and legislation is necessary to avoid fines and penalties. No need to fret because internal auditing will assist you in accomplishing this.

3) Raise Efficiency

If you have never performed an internal audit, you should do so as soon as possible. The main goal is to achieve and maintain efficiency within the organization. You may not be aware of the progress your organization is making, but an audit can be seen as an eyeopener. This is because it will allow you to make sure everything is running smoothly, ensuring and raising efficiency in your operations.

4) Have Better Overall Control

Whether you have a larger company or a small business, you need to have sufficient control over everything that goes on. By conducting an internal audit, you will have better control over your company. If you are just starting, then you need to take precautions to make sure your business is secure, and the best option is to perform an internal audit.

5) Secure Processes

The main advantage of doing an internal audit is that it allows you to secure your business procedures. Internal audits can be quite beneficial to small businesses. A standard internal audit will ensure that everything financial is handled correctly and that the processes are completed. This is an excellent technique for small businesses to ensure everything is going well.

6) Prevent Business Risk

Internal audits will enable you to keep your firm safe from any unnecessary risks that can plague you throughout your operations. You will have a better chance of detecting possible issues if you have already identified them internally. These audits will also highlight flaws in your organization, allowing you to take corrective action.

Conclusion

 In conclusion, whether you are a large corporation or a small business, conducting an internal audit makes sure that everything is running smoothly. Readers should have a pretty good idea of what an internal audit is and how valuable it is for a business, so execute it now.

Looking for an audit of your processes? SMB Accounting does small business accounting with various packages available,  self-managed Super fund audits and Xero accounting software. Get in touch with us today!

If you find yourself with a bigger tax bill than anticipated, don’t panic. With a little bit of planning, you can avoid this common issue for sole traders. All you need are a few software tools and a basic understanding of your tax schedule. Use our practical tips to better manage your income and taxes, and you’ll be on your way to avoiding a massive tax bill down the road.

Essential Tips to Avoid a Huge Tax Bill as a Sole Trader

1 – Be Knowledgeable About Your Tax Bracket and Tax Rates

Your effective tax rate is the tax rate you pay on your taxable income. The more you earn, the higher your tax rate will be. Your tax bracket is determined by your filing status and taxable income.

Certain expenses are deductible, meaning they will lower your taxable income and lower your tax liability. However, they’re only deductible if they’re business expenses. You’ll need to keep track of all your expenses, including mileage and travel, to ensure that you’re getting the most tax savings possible.

2 – Separate Business and Personal Accounts

A large tax bill usually occurs when your business and personal accounts are mixed together. Your business accounts and credit cards should not be used for personal items. Try to keep as much of your money in business accounts as possible.

Keep your business and personal finances separate and organized. Use separate checking accounts and business credit cards. If you’re self-employed, open your own business bank account. Then, once a week, transfer any money you earned that week into that account. This will help you keep track of your income, and it will also help you identify where you’re spending your money so you can keep a better eye on it.

3 – Anticipate Your Tax Bill

The easiest way to avoid a huge tax bill is to plan for it. Keep track of your income for the year. Try to anticipate what your final tax bill might be before it’s time to pay it.

If you have a home office, keep good records of your home office expenses. If you have a second car, keep a good track of how many miles you’re driving and what you’re driving it for. If you’re planning a big purchase, like a car or a home, consider how it will affect your taxes. Planning ahead will help you avoid a big tax bill.

4 – Hire a Tax Professional

The best way to avoid a huge tax bill is to hire a tax professional. A good accountant will make sure you’re doing everything properly and taking advantage of everything the government allows to lower your tax bill.

Good accounting firms will offer pre-filing tax services, year-end tax planning and tax preparation services. Those services can help you keep an eye on your business income and expenses as they happen throughout the year, which will ultimately help you minimize your tax bill.

Conclusion

A big tax bill can be stressful and overwhelming. A big bill could be in the thousands, and that money could have been used to pay bills, pay down debt or save for retirement. Fortunately, if you’re prepared, you can minimize your tax bill and avoid an unexpected tax bill.

If you need an accounting firms on the Sunshine Coast to help with your taxes, contact SMB Accounting. Our business does Individual tax returns, small business accounting with various small business accounting packages available, SMSF audits (self-managed super funds), as well as a Xero accounting software-based accounting business. We also offer the following audits: trust account audits, audits of non-profit organizations, audits of special purposes financial statements, special needs audits, and more.

Sport is a significant part of Australian culture and social life. It provides entertainment and recreation and contributes to health and well-being.

Many sporting clubs, for example, are registered for tax exemption on the basis that they provide or contribute to the provision of facilities and materials, services and education to their members. Those are predominantly for social, cultural, recreational and sporting purposes.

Today, let’s explore how to know if your sporting club can be exempt. Here’s what you need to know:

What Type of Entity Is Your Organisation?

If your organisation is incorporated, it will be an Australian Public Company (or a non-registered public company) or a non-profit public organisation. Both categories of incorporated entities will require you to be a registered charity. If not incorporated, you might be a non-profit company, not-for-profit organisation, or non-profit public organisation.

To become a registered charity, you will have to apply to the Australian Charities and Not-For-Profit Commission (ACNC). The ACNC will tell you if your organisation can be a registered charity and if it can be a public company. If your organisation is already registered, it will provide you with the relevant details of your registration.

What Is Your Organisation’s Purpose?

Before engaging in tax exemption, your organisation must demonstrate that its purpose is charitable. It is for a public benefit, that it does not make a profit, and that it is not an organisation established for profit.

The ACNC has produced a set of public benefit principles to guide a group considering applying to be a registered charity.

Suppose your organisation is applying to be a public company. In that case, you will have to demonstrate that you need to be a company to achieve your purpose. In other words, you will need to show that you are a charitable organisation under the Corporations Act 2001.

Some examples of organisations that have been established as public companies include The Bupa Foundation and the Ronald McDonald House Charities.

Income Tax Exemption for Sporting Clubs

Suppose your organisation has been determined to be a public charity or a public company and has a purpose relating to the sport. In that case, it might qualify for income tax exemption.

To qualify for income tax exemption, your organisation must meet certain conditions. The only condition that applies to public charity status is that your organisation must be a “substantial contributor” to sport (or to providing facilities for sport).

The ACNC has published guidelines on what it considers a substantial contributor. Other than that, the income tax exemption that applies to public companies is very similar to the income tax exemption that applies to public companies.

Other Things to Consider

In addition to income tax exemption, there is a range of other taxes and duties available to sporting organisations that fit within the definition of a ‘substantial contributor to sport’.

The application of the GST and duty exemptions for public companies is similar to that for other public companies. For public companies that have been determined to be a public charities, there are GST and duty exemptions that apply to the charity’s activities. These are broadly similar to those that apply to non-profit companies.

The ACNC provides more information about the tax treatment of charities and public companies.

If you are considering applying for income tax exemption for your sporting club, it would be a good idea to seek the assistance of a tax professional.

The Bottom Line

Suppose your sporting club is a registered charity or a public company. In that case, your purpose is for sporting purposes, and you are a substantial contributor to the sport, you might be eligible for income tax exemption. Check with the Australian Charities and Not-for-Profits Commission to find out if your organisation can be a registered charity and if it can be a public company.

If you are looking for assistance with your trust account audits, we can help you. SMB Accounting does individual tax returns, small business accounting with various small business accounting packages available, audits, and more. Contact us today or sign up for our newsletter to learn more!

March 29 2022 treasurer Josh Frydenberg has handed down the budget. Having a strategy of stimulus pursued alongside major infrastructure, health and defense spending. Borders are open and Australia is getting back to business Added to this spending, is the assistance through tax breaks and cash payments to assist with the cost of living…Download our full budget summary

For small businesses, auditing can be extra and unnecessary work. It can be costly, and small businesses would rather not do so, especially if not required. However, auditing can be beneficial for a lot of small businesses. If you consider getting your business audited, check the list below to learn more about how it could help your business.

Applying for a Business Loan

If you are planning to get a business loan, you need to be able to present your company as a legitimate business to the lender. An excellent way to do this is by getting your business audited by an expert. A business audit can help make your business look like a viable investment on the lender’s part; they want to ensure that your business is doing well so they do not lose their money.

Securing Government Grants

Like with lenders, the government will not give grants to just anyone. They would want to receive an accurate financial statement of how the business is faring. An audit will not only provide accurate data, but it can be excellent proof that the company is doing good and will continue to do well in the future.

Keeping Shareholders Updated

Shareholders will want to know how well the business is doing financially. They would like to keep track, considering they own a part of the business. An audit will give your shareholders a good view of the stand of the business in terms of its finances. It assures them that they are not being swindled and that their investment is in good hands.

It will also help them understand which aspects of the business may need more attention than others and how they can continue to support the company as shareholders.

Track Fraudulent Activity

If your business is not auditing, anyone can get away with committing fraud, especially the employees. Auditing is a detailed manner of checking finances and identifying any discrepancies in statements. Furthermore, you can check the business’s weak areas and see what can be done about them.

Without an audit, your business could be easily losing money without being detected. It may already be too late by the time you notice it, and the perpetrator can get away with it and hide their tracks.

Selling Your Business

For people planning to sell their businesses, audits are a must. An audit will give buyers all the information they need to make a good decision on purchasing a business. It will provide buyers with confidence in the choice, and it would also make sure the owner commits no fraud.

Complying with Regulatory Obligations

If you are not auditing your small business, you are not complying with rules and regulations. It is a good idea to get your business regularly audited to have documents to show that you comply with Australia’s laws.

Conclusion

If you have not been auditing your small business, then it is time you do so. Auditing can help your business get loans and apply for government grants, as well as keep your shareholders updated on your financial status. It will also help you track any fraud or discrepancies in the company and help you prevent it before it gets worse. Overall, auditing gives you an overview of your business and how it is going.

If you need a small business audit done, you can work with SMB Accounting. You do not have to worry about keeping track of your books and finances, and you can focus on growing your business. Contact SMB Accounting today to get started.

Each fiscal year, no matter the profit earned, all businesses must file a tax return with the Australian Taxation Office (ATO). As a business owner, you must file a tax return if you own a business that operated in the previous year. Today, there is more than one way to accomplish this task.

For example, you can file it electronically via MyTax, on paper, or through a licensed tax agency. Because the file must be completed within a certain time frame, you, as the business owner, must proceed with considerable caution. 

Read on to discover everything about lodging your company tax return.

Options for Filing myTax Return

A tax return can be filed in a myriad of ways. Depending on your circumstances, you may choose an alternative.

  • Online: It is safe, simple, and secure to use myTax to create and submit your tax return online.
  • Tax Agent: Licensed tax agents have a wide range of interests, which may make hiring one advantageous. If this is your first time filing taxes, you should seek advice from a certified tax agent.
  • Paper: If you don’t feel comfortable filing electronically, you can do so on paper. It is possible that exceptional circumstances will emerge, in which case you must respond accordingly.
  • Advanced Filing: You may file your tax return early if you are leaving Australia permanently.
  • Abroad Filing: Assume you are filing your tax return for a legitimate cause while abroad. In that scenario, you’ll need to make modifications to your myGov account settings. In order to receive any returns, your Australian bank account must be active.

Note that any previously unfiled tax returns must be filed. Otherwise, sanctions could be imposed. Meanwhile, non-lodgement counsel is required when no tax return is required.

Details to Provide

Prior to completing your corporate tax return, you will need the following information:

  • Account number and bank’s state branch
  • Statements of Earnings for All Employees 
  • Centrelink payment summaries 
  • Income from your spouse
  • Expense or receipt statements for tax deductions
  • Information of private health insurance

Because the ATO fills up the majority of the information for you when you apply online, you should file your tax return through myTax. You must first link your myGov account to the ATO in order to file your tax return online. Furthermore, the needed information fluctuates from year to year, so double-check before booking.

Deadlines for Your Company’s Tax Return

When it comes to the tax return filing deadline, keep the following points in mind:

  • The deadline for filing it on your own is 31 October each year.
  • If the 31st of October falls on a weekend, you must file by the next working day.
  • If you hire a tax preparer, they will be given the option to file returns at a later date. You must, however, recruit them by October 31.
  • If you receive a tax bill after filing your return, you must pay it by November 21 of the following year.
  • If you are having trouble filing your tax return or paying your tax obligations, please contact the ATO right away.

Conclusion

Note that sometimes it’s not all about raking in revenue and increasing your profit. A part of your company’s success is fulfilling your responsibilities and adhering to laws. This way, your company can function at its fullest without worries. As you file your company tax returns properly and timely, you’ll reach success without undercutting the necessary steps.

Are you in need of a professional accountant in Australia? SMB Accounting is here to manage your small business’ finances, and more. Work with us today!

A tax deduction reduces taxable income, allowing qualifying businesses and individuals to lower their tax obligations. There are two basic types of tax deduction in Australia: deductions for eligible expenses and tax deductions for specific types of income. If you are preparing your business for tax season, keep in mind that you could get potential tax deductions if you know the right one for you. 

Let this article enumerate some you can use.

The Instant Business Asset Write-Off

The instant asset write-off is available to businesses with a turnover of less than $10 million. The main goal of this is to reduce the compliance burden of small businesses and allow them to invest more in their business assets.

From March 2020, every asset’s instant asset write-off threshold amount is $150,000, significantly higher than the previous $30,000. Businesses are also allowed until 30 June 2021 to first use or install the said asset, which should have been ready for use. The only note is that the asset should have been purchased by 31 December 2020.

This tax deduction is for small businesses with an annual turnover of less than $10 million and allows a depreciation deduction for assets used to generate income. It aims to ensure businesses have enough money to cover the cost of assets and reduce the burden for small businesses.

Your Prepaid Expenses

If you are a small business owner, you may be able to claim a tax deduction on work you have already done. That includes paying a deposit on your business premises or buying stock to be sold in your small business. Remember, though, that your prepaid expenses must help you earn taxable income.

There is one important thing to remember when claiming your prepaid expenses. If you use the cash basis tax system, the prepaid expenses must be paid in the same income year. If you use the accrual basis, you can claim prepaid expenses under the following rules:

You can claim the expenses if they are incurred and paid in the same income year. If the expenses were incurred but not paid in the income year, you could claim the payments in the income year you paid for them. 

Personal Super Contributions Deductions

If you make personal super contributions, you can claim them as a tax deduction. To qualify for this tax deduction, you must make personal super contributions to your super fund, not to your spouse’s super fund. It’s important to note that personal super contributions must satisfy the following:

  • You must not be contribution- or benefit-restricted
  • Your total super must be less than $1.6 million
  • You must have at least 10% of your total contributions in your super fund in the income year

The tax deduction is available for personal contributions up to $3,000 per year, and a maximum of $30,000 over three years. However, if you are over 49 years of age and you meet the above conditions, you may be able to claim a tax deduction for personal super contributions up to $100,000 over a three-year period.

You can claim your tax deduction for personal super contributions in the same income year you made the contributions.

Conclusion

Preparing for taxes can be exhausting. However, one important thing to remember is that your business has some deductions you can take advantage of. When preparing for tax time, you should check whether your small business can claim a tax deduction on your expenses or whether you can claim a tax deduction on your personal super contributions. These tax deductions may save you money come tax time.

If you are unsure of these rules and limits, we can help. SMB Accounting is an accounting firm along the Sunshine Coast that can provide you with your much-needed SMB tax solutions. Contact us today at 1-300-854-159.

Given how messy finances can be it pays to have a quality audit every once in a while. It’s understandable of course to face difficulties with organizing your financial records— what’s important is how you deal with them. Thus, it is vital that any audit you undergo is kept to a standard. It’s the only way to really know that the service you’re paying for is worth your time and money.

Why This Is Important

The main reason you want to make sure that your audit is done right is to make sure that the people dependent on your company’s financial statements, shareholders and investors alike, will feel more confident if they know that your records are clean and accurate. After all, if people know they can trust you that makes making deals with them a lot easier for you, right?

The challenge now is that it can be tricky for others to find the perfect auditing firm. With so many new firms popping up it becomes difficult to find a firm that is strict with its practice. For that, you’ll need to know what makes a good firm.

A Proper Vision

The right firm will have the right vision. It might seem like a vague tip now but you’ll know it when you actually get to talk with their management. If you can get an idea of what their goal is, you can have a better understanding of what you stand to gain with them.

It should be noted that not every firm will even be willing to talk to you. Take this as a reflection of their attitude. A professional firm should be open to dialogue with anyone, be it a current client or a potential one.

A Firm With Integrity

When you look for an auditing firm you are putting the firm up against a list of requirements and such for them to pass your standards. This shouldn’t be a one-sided thing. Make sure that whatever auditing firm you check out is checking your background as well.

The reason for this is that you do not want an auditing firm that is willing to work with shady companies. Think about, should they be implicated, all your records will be thrown into question immediately. It’s a show of quality whether they care about your background or not.

Financial histories, relationships, and similar topics should be covered in whatever interview you end up doing. Of course, others might make use of forms but, again, take this as a reflection of their approach. We all know a face-to-face interview would be a lot more effective.

The Right Team

Lastly, we have the team. Take your time talking to all the members of the auditing firm you can. Try to get a feel for what they focus on, what their attitudes about work are like, and how they treat their clients.

The reason you need to do this is to understand what kind of people will be working on your financial records. Of course, you’re going to have to factor in the fact that these are all unique individuals. The point here is to get a feel on how seriously jobs are taken in their team.

Conclusion

At the end of the day, it’s all about being prepared. It’s unsurprising that auditing firms are such a necessary service but it is something that we should take seriously every time we undergo an audit. Take some time to learn what you can about the auditing firms you are interested in before even visiting. What’s important is that the job is done right.

SMB Accounting provides quality services for an SMSF audit in Australia. Aside from that, we also do other types of audits to ensure that you’ll have an idea of how your business or your finances are doing to help you take the best course of action. Contact us today to learn more!

Our financial year ends on 30 June, and for some people, it’s straightforward. But for others it can be a little more complicated, especially if you are doing your numbers for the first time. 

The average number of Australians during the 2010 – 2011 financial year, who lodged their tax returns online with the ATO (Australian Taxation Office) were 5.3 million people. 

Many people search for legal tips to maximise their tax returns, while others look to reduce tax liability legally. Even if you want to pay your tax in full, there are legal steps that can help you save money. 

Here is how you can do it.

1) Claim Work-From-Home Expenses

You can claim a deduction for expenses that you incur while working from home. Generally, you can claim either the ‘actual’ or ‘reasonable’ amount of the expense. 

In ‘actual’ claim, you can deduct expenses that actually have occurred. These expenses may be work related, such as phone calls and internet. You can also claim for cleaning expenses – for example, cleaning products, vacuum cleaner and laundry detergent. 

On the other hand, in ‘Reasonable’ claims, you may not have spent the money on a particular item, but if the cost is in line with market conditions, you can claim the actual amount that you have spent. 

To claim work related expenses, you need to keep receipts and other records of your expenses. The ATO will typically send you a Notice of Assessment at the end of the financial year.

2) Claim Other Work-Related Expenses

Working from home isn’t the only way to claim work-related expenses. Here are some other deductions you can claim:

If you bought a computer for work, you can claim for depreciation. If you are on an hourly wage and you use an electronic diary to clock your hours, you can claim for the diary. If you travel for work, you can claim your travel expenses. If you bought a uniform, you can claim for those.

Keep all receipts. If you are not sure whether your claim is tax deductible or not, you can search the ATO’s website or contact them to settle your doubt.

3) Reclaim Your Donations

You can claim tax deductions for donations, up to certain limits. If you have donated to charity or religious organisations, or if you have made donations under the tax-deductible gift recipient scheme, you can claim tax deductions. You will be able to claim a deduction if you have paid for someone else’s travel, accommodation and meals.

The basic rule is that you can claim a tax deduction for donations to charities, approved organisations and religious institutions that are registered with the Australian Charities and Not-for-profits Commission (ACNC).

To claim a tax refund, you can log onto the website of the ACNC and search the list of registered charities and organisations. You can also ring up the ACNC to check whether an organisation is registered. 

4) Claim Your Extra Refund from Working Side Jobs

Extra earnings from side jobs are usually not enough to be included in your Tax Return. However, this does not mean that the tax office will not ask you to update your tax return. 

To have your extra income in the tax return, you need to be in the same occupation. For example, if you are a web designer and you have worked as a tutor, then you can add the income from the tutor job to your web designing job. 

Conclusion

In order to minimise your tax liabilities, you need to ensure that you are deducting all the right amounts. But be careful not to claim for something that you are not cetain about. 

If you’re not sure what to claim, get a professional opinion on your financial health. SMB Accounting has some of the best accountants in Sunshine Coast, QLD. Get in touch with us today to learn more.

Everyone makes errors from time to time. When preparing and lodging your self-managed super fund (SMSF) annual return (SAR), you want to get it right. The top five errors are listed below, along with some advice on how to avoid them and where to find the best accounting firms on Sunshine Coast. 

Not Stating a Bank Account in Your Fund’s Name 

You’ll need a bank account in your fund’s name to handle SMSF operations and accept contributions, rollovers of super, and investment income. When filing your SAR, you must include this account.

The account must be kept distinct from the accounts of your trustees and any associated employers or advisers. This will safeguard that you enjoy the benefits of SMSF and guarantee that super payments may be made to it.

Using The Wrong Electronic Service Address (ESA)

If you have members earning super from non-related jobs, an ESA permits your SMSF to receive electronic remittance advice and contributions.

An ESA is made up of alphanumeric characters that are case sensitive and contain a mix of upper- and lower-case characters. It’s not an email address or the SMSF messaging provider’s contact information.

Disregarding Assets In SMSF At Market Value 

To create your fund’s accounts, statements, and SAR, assets must be recorded at market value as of June 30. Your valuation will be accepted if you fulfil the appraisal rules.

It’s critical to have accurate asset valuations to keep your SMSF compliant. Inaccurate appraisals may result in penalties since they adversely affect your members’ balances.

Lodging With Zero Assets 

An SMSF isn’t legally created unless it has assets put aside for its members’ benefit. A SAR from an SMSF with no assets will not be accepted unless the fund is being wound up.

If this is your SMSF’s first year and you have no assets put aside for the benefit of your members, you can ask us to either terminate or indicate your fund’s registration as return not necessary (RNN).

Missing or Incorrectly Indicating Auditor Information in the SAR

Before lodging the Annual Return, your SMSF must have its financial accounts and records audited by a qualified SMSF auditor each year (SAR). Take note that within 45 days before your SAR is due, you’ll need to employ an approved SMSF audit in Australia. 

Take note of the following: 

  • Before filing your SAR, get a copy of the audit report.
  • On the SAR, report the accurate auditor information, including the SMSF auditor number, auditor name, and audit data.
  • If you submit your SAR without providing authorized SMSF auditor details, it will be stopped and not accepted. The fund’s compliance status will be affected until the SAR is submitted with the appropriate information.

You might be fined for making a false and misleading statement if the auditor’s information is wrong.

The advantages of incorporating your ABN

We urge you to disclose your Australian business number (ABN) on your SAR since it assists systems in appropriately matching your members. This guarantees that the SMSF account data is presented when a member accesses ATO online services.

If your member is filling out the following forms online, they will be able to select their SMSF account.

  • compassionate release of super
  • early release of super
  • excess concessional contribution election
  • excess non-concessional contribution election
  • Division 293 election

If your member utilizes a registered tax agent, it also implies that the member’s SMSF account data is displayed on online services for agents.

You may not need to file a return for the first year your fund was registered if it did not have any assets.

Conclusion 

Preparing an SMSF annual return is a major undertaking that must be done correctly if you don’t want your fund to become non-compliant and be required to pay tax at a rate of 45% on the fund’s entire value, excluding non-tax-deductible contributions.

SMB Accounting delivers a high-quality SMSF audit in Australia. Apart from that, we also perform various sorts of audits to guarantee that you understand how your business or finances will make the best decisions. Get in touch with us to learn more!