Small business accountants in Melbourne explain how business structure affects taxes
Your specific business structure has a direct impact on the way you conduct your taxes. From sole proprietorships to corporations, the way taxes are handled is different for all business structures. Our small business accountants have listed below some the different business structures and how taxes differ for them.
In a sole proprietorship there is no distinction between you and the business. Although you are entitled to all profits, you are also responsible for all business debts, liabilities and losses. For business accounting in Melbourne, our accountants calculate business and personal taxes together as one entity.
Ownership, profits and losses are shared by 2 or more people in a partnership. Our Melbourne small business accountants require all partnerships to understand that partners must file a return of income for their business. They must also file taxes personally on their share of income or losses.
A corporation is a legal entity owned by shareholders. In a corporation, owners are shielded from legal and monetary liability. Corporate taxes are generally lower than personal taxes, they have the ability to generate capital and most importantly have limited liability.
For more information regarding your business structure and taxes, please contact our small business accountants in Melbourne today.