Friday, June 24, 2011

Tax Worries for Small Business Owners

Tax Worries for Small Business Owners
New figures indicate small business owners are anxious about tax time.

A massive 91 per cent of new small business owners have very little understanding of their annual tax obligations, while 84 per cent are unsure of the things they can claim as a business expense. This was revealed by the American Express Tax Time Survey.

According to Jason Fryer, head of small business services at American Express, understanding GST and the consequences of making a mistake cause a lot of worry amongst small business owners.

“Setting up your own business can be like jumping into the unknown. Our Tax Time Survey shows that completing the business tax return for the first time is often fraught with anxiety,” he said.

“The research shows that almost all new business owners wonder at some stage if they have complied with the latest tax legislation and whether they will fall foul of the tax office if they make a mistake,” Fryer added.

From the more than 500 Australian businesses that were surveyed by Galaxy Research, it was found out that 74 per cent of operators find it a burden to complete their business activity statements. The results further revealed that aside from cash flow management, tax related issues are also considered stressful for many business owners.

Taxation expert and author Adrian Raftery says, “The American Express research reveals considerable uncertainty among small business owners about tax reporting and what they can and can’t claim, which contributes to negative feelings about completing tax returns.”

“In fact, the two most common questions I am asked by small business owners at tax time are, ‘what is the likelihood of my business being audited?’ and ‘who are the ATO targeting this year?’ – demonstrating the level of concern among business owners,” he added.

American Express suggested to help relieve taxation stress of business owners that they should keep receipts and use one business card in order to keep personal and office spending organized.

Source: The Shout »

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