Taxation is an essential but complicated part of running a business in Australia as a tradesperson or ”tradie”. Keeping up with all of the tax requirements can be difficult and time-consuming, especially when, as a tradie, a large chunk of your time is spent on the job. Part of being a successful tradie is ensuring the finances are set up and managed correctly, as this will give you the financial support and resources you need to grow the business.
This tradies tax checklist outlines some of the key areas that should be addressed when planning and undertaking tax as a tradie. Taking the time to understand these processes and preparing for the upcoming tax year can make a huge difference to your tax preparation and compliance costs down the line.
Ensure Business Structures are Compliant
In Australia, tradies have different business options to choose from, such as sole trader, partnership and trust/company structures. The right choice of structure will depend on the size of the business and the tax minimisation goals.
It’s important to make sure that the structure you use is not only compliant but also cost-efficient. Making sure to seek the right advice in the form of an accountant or lawyer is essential.
Understand Record-Keeping Requirements
Record-keeping is a fundamental part of tax compliance for businesses, including tradies. This involves keeping documents and reports on income and expenses, business activities, assets for depreciation and anything that could be relevant to filing or paying taxes.
Business activity statements should be completed and lodged with the Australian Taxation Office (ATO) on a regular basis. This form details the sales, service income, capital purchases, income tax withheld, and GST collected throughout the quarter. By keeping these records in order and up-to-date, tradies can ensure they are compliant with the tax requirements.
Review Financial Planning and Tax Strategies
For tradies, financial planning and tax strategies are crucial for ongoing success. This includes planning and diversifying income, evaluating how to structure the business to maximise investments and deductions, monitoring cash flow as well as banking and investing decisions.
Working with a reputable financial planner can help tradies reach their financial goals and successfully manage their tax. A financial planner or accountant can assist with the implementation of sound financial strategies, tax planning, budgeting, setting up systems and monitoring performance.
As a tradie, it can be overwhelming to stay up-to-date with the changing tax rules and regulations. At Griffiths Advisory, we understand the challenges that tradies can face when it comes to taxes and are here to help. With our expertise in the taxation and compliance areas, we can ensure that your finances are managed in the most cost-effective and efficient way. Get in touch with us today.
Related posts:
- Benefits of Hiring a Professional Tradie Accountant
- Cash Flow Management Tips for Tradies
- Essential ABN Information for Tradies Starting Their Own Business
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Phil has been the Managing Director of Griffiths Advisory for 29 years, combining his expertise in taxation, business advisory, superannuation, negative gearing, and wealth creation. He also loves an active lifestyle, indulging in surfing, cycling, snowboarding, and spending quality time with his wife and two children.
