Bookkeeping Solutions - Why You Need To Keep Tax Invoices!
Small Business Australia certainly has more compliance issues since the introduction
of GST! A lot of Micro business owners find it quite challenging keeping track of all their Tax Invoices. Prior to GST most bookkeeping entries were coded to the correct expense account straight from the Business Bank Statement, but now it is necessary to refer to your Tax Invoices when recording your expenses in your Accounting Software Program. Setting up a system to keep track of your Tax Invoices is essential.
A tip for easy bookkeeping is to get yourself organized, and sorting out your paperwork is the first step in this process.
Since GST was introduced in the year 2000, it has become necessary to refer to the supporting paperwork (Tax Invoices) when entering your business expenses. Most business expenses, but not all, have a portion of GST that needs to be identified. When you are entering your expenses you need to make sure you record the correct amount of GST for each expense, and identify expenses that are GST free. You can not just assume that all expenses are subject to 10% GST.
Examples of expenses that are not subject to 10% GST are:
Insurance (the Stamp Duty Portion is GST Free)
Bank Fees (GST Free)
Workcover (the OH&S levy is GST Free)
Food (GST Free)
This is why it is now so important to keep all your Tax Invoices!
The ATO guidelines on retaining tax invoices states that if the amount of the business expense is greater than $82.50 (including GST) you need to retain a valid Tax invoice to claim back the GST credit. As the Micro Business owner you will want to claim back all the GST Credits you can as this reduces your business expenses!
Tax Invoices should be kept and filed away in case they need to be produced at a later date. If your Micro Small Business Australia is ever audited by the ATO you will need to produce these Tax Invoices to verify the GST Credits you have claimed back in your BAS Statements.
For some Micro Business Owners it can be difficult to keep track of all their paperwork. If you are on the road a lot why not put a box or file in your car to keep Tax Invoices in until you can process them. If you receive supplier invoices via email, you will need to decide whether you are going to print and file, or keep electronic copies (where you can find them!).
BOOKKEEPING TIP:
If you need to calculate the GST portion of an expense (where the GST is 10%) just divide the gross amount of the expense by 11 to give you the GST amount:
Gross Amount of Expense = $82.50
Divide $82.50 by 11
GST = $7.50
Net amount of Expense = $75.00
If you would like more great Bookkeeping Information and Tips, or you would like to learn more about managing the Bookkeeping for your Micro Business, see my bookkeeping manual Be Your Own Bookkeeper at
http://www.BeYourOwnBookkeeper.com
by: Robyn Howard
Dont Let Taxes Catch You Off-guard During Tax Preparation Season Live Philadelphia Eagles VS Cincinnati Bengals NFL Preseason Week 2 on August 20, 2010 Eagles VS Bengals live stream NFL Preseason Week 2 on your PC on August 20, 2010 Watch Cincinnati Bengals VS Philadelphia Eagles live stream NFL Preseason Week 2 on Aug 20 Are You Using The 1031 Tax Deferred Exchanges With Your Investments? Lower The Taxes On What You Earn So You Can Retire Rich What Are The Tax Consequences For A Short Sale? Cantor & Webb P.A. Further Expands Its International Tax Department Depreciation - The Forgotten Tax Deduction Singapore Taxes Support Economic Growth Ways To Find A Good Tax Accountant Your Payroll And Your Tax Computation Discount Baltimore Ravens nfl tickets