How Knowledgeable Are You Regarding Financials?

Whether you are an individual or running a business as a sole owner or a partnership, you have to have a very good understanding about its financials or your own personal accounting details. Because every year you need to pay your taxes and your business must always abide by the rules and regulations of the government.

What if you are a business owner?

If you have a business you may belong to one of the categories of running your own business as a single businessman which is known as sole proprietorship or a sole trader or owning a business with another person which is known as a partnership or having a separate legal entity like a company or even running a trust. Each one of these entities must abide by the rules and regulations and the taxation laws of the country. If you are a sole proprietorship, then all the income of the business becomes your individual income. Which means, as a single person there is no need to lodge a separate tax return for your business if you are owning your own company. You as an individual will be doing it. Visit this link for more info on tax return Newtown.

Other organizations

 If you are part of a partnership company, which is run by you and one or more other people, the company will have its own file number but it won’t be required to pay income tax based on the profit earned. Each separate partner has to report the individual portion of that partnership income and that will be considered when calculating the taxes. However, a separate document has to be filed under “partnership return” each year. If you are part of an NGO or an NFP which stands for Not For Profit organisations, you will find that there are some concessions. You can enquire from department of industry or visit their website to find out more details.

A separate legal entity

If you are a director of a company, which is a sperate legal entity, there is nothing binding you to the company’s taxes. Thankful to the famous legal case of Soloman V. A Soloman & Company, it was decided that even if a certain company has the owner’s own relatives as shareholders, if it is registered as a “company”, the debtors have no way to seek justice for them. It is the company which owes them, not the owner. Similarly, taxes also, has to be paid by the company. However, it is bad practice to not to return what you owe, so hire a tax accountant Surry Hills and make sure your payments are done on time. It is important and prudent that you know what you have to pay and when. It will save a lot of money and time to both you as well as the relevant governmental organisations.