Are you working as a contractor? Tax Implication when you work as an independent contractor
Independent contractors are in business and they have tax obligations to meet. If you are working in some particular trades, there are some tax implications that follow you. A good number of people have a difficult time telling if they are employees or contractors. This applies even to those who are hiring them and failure to understand this can have a negative impact on your business. In this article, we will clarify the various issues that surround such trades and help you understand your obligations.
Ideally, contractors are small businesses and in some cases, they are referred to as contractors. These are experts who offer specific services in a particular trade. They will be hired to offer their services for a specified period. As such, they would be the ones to do the work without any supervision. In the same manner that they take care of the business, the expectation is to also handle their tax matters. The payment is made once the project is completed and contractors get a fee and not a salary. This allows the contractors to move from one project to another.
What Are Your Tax Obligations as a Contractor?
Unlike employees, contractors have to pay their own taxes, which should be deducted from the gross earnings. As a contractor, you will also need to make your superannuation contributions. When you are hired for any work, it is important to have the right distinction made so that you can have the correct tax deductions. If you are running a business, it is important to be sure if you are hiring a person as a contractor or an employee.
The Fair Work Act is quite clear and has strict regulations on contracting arrangements. There are some employees who cheat the system by hiring employees and treating them as independent contractors. As such, they will avoid taking up the burden of the tax obligations and also avoid paying the worker the rightful entitlements. It is unlawful for any business to try and present its employees as contractors as this will amount to tax evasion.
Professional Tax Accounting Services for Contractors
If you are a contractor, there is a very high possibility that you may not have a tax department in your small business. Accurate Business and Accounting Services is your best partner and we will make it your life easier by handling the accounting bit of your tax requirements. We will streamline your income and sales accounts so that you can run with all your projects easily. Our tailored accounting solutions allow you to keep up with all the transactions for tax purposes.
We have a myriad of services that we can offer you to help manage the accounting of your business. Ultimately, this makes it easier to know and remit your tax payments.
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We are a company that offers the right tax services for contractors and small businesses. We are available to offer free consultation to review your business and make professional recommendations. Contractors are busy and we want to offer our accounting support services so as to ensure that your business is always tax compliant. Our tax advisers will be willing to answer all your questions and clarify your tax implications.
Call us today and get professional tax advice as a contractor.