Tax Benefits Of Starting A Business In Bundoora

Thinking of turning your dream into a reality by starting a business in Bundoora?  

Congratulations!  

Australia boasts a profitable business environment, and the government actively encourages new ventures through a range of tax breaks and incentives.

But with the excitement comes the practicalities, and handling the tax landscape can feel tough.

But fear not! KPG Taxation expert tax accountant Bundoora is here!

And we are coming up with this blog that will equip you with the knowledge you need to understand the tax benefits available to budding Bundoora business owners.

Tax Benefits For New Business Owners

Following are some of the major tax benefits for new business owners:

#1 Deduction Of Initial Fees

The Australian Finance Ministry has recently introduced tax relief for entrepreneurs to reduce the tax burden incurred in the early stages. Any business with a turnover of less than $10 million a year is allowed deductions of fees incurred during the start of the business venture.

These expenses may include accounting and legal advice, government charges, and taxes. The benefits also extend to tax deductions for payments made to government agencies relating to regulatory costs incurred in starting the business venture. These may include costs such as fees for creating a company and stamp duty.

#2 Professional Advice Fees

To boost new businesses in Australia, the government has implemented measures for getting advice from lawyers and accountants. This includes advice from professionals in setting up the business and its structures and consulting with tax agent Bundoora. Moreover, developing a business plan also covers costs associated with raising debt and equity capital for the operation of the proposed business.

#3 Sole Trader or Proprietorship

For sole traders, there are minimal legal and professional costs to start your business. The advantage of being a sole trader is its simplicity. You can file your business taxes in your personal tax return rather than filing a separate tax return for your business.

As taxes are applied at the individual level, you may write off taxes from other accessible income such as salary and wages, as well as income from other business activities. If you don’t have any other form of income or are undergoing losses, you may carry those losses forward and apply them against income generated in future years. Additionally, there is a 50% capital gain tax relief available once you sell your business.

However, there are downsides to being a sole trader. Once you start generating profit, you may be subjected to a marginal tax rate of up to 47%. The potential profit split between family members is also unavailable in such a scenario.

#4 Company

A company is a legal entity that has a separate legal existence from its owners, usually formed by a group of individuals to operate a business in a commercial capacity. Any business with a turnover of less than $10 million is subject to a fixed company tax rate of 27.5% in Australia.

The main advantage of setting up a company is the access to limited liability for shareholders against the debt of the company. The creditors of the company won’t be able to access the assets of the shareholders if they are not personally liable. However, there is no 50% capital gain tax deduction available in this form of business.

#5 Trust

A trust is a form of business structure where trustees carry out the business on behalf of the owners. Family-run businesses are often set up as a trust so that family members can be made beneficiaries without having involvement in running the business.

One of the advantages of a trust is the ability to decide who benefits from the income generated by the trust. When you start trading profitably, the trustee may distribute income in the most effective way possible. Since the beneficiaries of the trust may not be the legal owners of the business, creditors won’t be able to access the assets of the business if they encounter financial problems.

Comparison Of Business Structures And Tax Implications

To understand the differences and benefits more clearly, here is a comparison of business structures and their respective tax implications:

Role Of Tax Accountant Bundoora

When starting a business in Bundoora, consulting with a tax agent Bundoora or a tax accountant Bundoora is crucial. These professionals can guide you through the various tax benefits and ensure you make the most of the available deductions and reliefs. They can also help you choose the most suitable business structure based on your specific needs and future plans.

Moreover, an accountant Bundoora can assist in maintaining accurate financial records, ensuring compliance with tax regulations, and providing strategic advice to optimise your business’s financial performance. Utilising the expertise of these professionals can significantly ease the process of starting and running a new business, allowing you to focus on growth and development.

Conclusion

Starting a business in Bundoora comes with several tax benefits that can help reduce the initial financial burden. 

If you're starting a new business in Bundoora and confused about tax implications, you can consult KPG Taxation. Our tax agent Bundoora, tax accountant Bundoora, or an accountant Bundoora can provide invaluable assistance in handling the complexities of tax laws and maximising the advantages available to new business owners.