Do you keep track of any business income in your private accounts so that you can report it correctly in your business tax return?
The ATO have no concerns with business owners banking their business takings or other sales in private accounts, however, this can become a major problem for your bookkeeper! Not to mention, it also creates an issue if you don’t report this income to the ATO.
A great way to avoid this problem is to establish a separate business bank account and only deposit your sales and other business income into this account. This will help you and your bookkeeper with record keeping and monitoring your business’s cash flow.
Remember, your business income includes all sales, whether they’re cash or electronic (for example, internet sales). These are all assessable income sources and must be reported on your business’s tax return. You also need to report earnings for services your business provides.
The ATO uses many tools to identify income earned and to check if it matches income reported.
If you are unsure about what income you need to declare, check out the online resources via the ATO website or consult with a tax professional for advice.
The team at Paris Financial are here to help! Feel free to contact our office to discuss further: (03) 8393 1000.