For the average worker with a regular income and no complicated deductions it has never been easier to prepare your own tax return. The ATO (Australian Taxation Office) has free software on their website with instructions on how to use it, and information from your employer, bank and any government agencies you have dealt with is already prefilled.
Preparing Business Tax Returns a Complex Process
If you are running a business, however, the process is more complex and the possibility of making errors more likely if you are lodging your own return. Most people in business don’t have the time or knowledge to prepare their own tax returns and prefer instead to engage tax agents or accountants.
To help clients finalise tasks in readiness for their initial meeting, many accountants provide them with a detailed checklist of what will be required to finalise the accounts for the current financial year. Here at Charter Partners, we know how busy our business clients are, so we provide whatever assistance we can to help them get ready for the end of the tax year.
Comprehensive Checklists List Everything Likely to be Needed
To illustrate just how complex this exercise is, a typical checklist may be several pages long, covering everything any business would need to lodge a compliant tax return. It may ask to confirm if sundry creditors have been reviewed for accruals or sundry debtors reviewed for prepayments. It may also ask for information about accrued FBT (Fringe Benefits Tax) or trading stock or if the accounting profit/loss before tax reconciles with the profit and loss statement.
Many Questions, Checks and Balances
There may be questions about how finance leases and hire purchase agreements have been treated for tax purposes. It may ask if the entity has derived income that is exempt from tax or if the effective life of new acquisitions has been reviewed for depreciation purposes. There are other questions about superannuation, capital gains, repairs and maintenance and bad debts, and many more.
Checklist is Useful Tool to Assist Management
This type of comprehensive checklist is a trigger for the management to check that all the accounts are up to date and reconciled as a prerequisite to the preparation of the business tax returns. In a small business that is not especially complex, many of these questions will be answered as not applicable, but for a larger enterprise, it is an opportunity to get everything in order.
As you can see, this is not a simple task for a business, so we offer compliance expertise and support to our clients, working closely with them to do much more than just prepare their tax returns.