Are you an experienced contractor or small business owner, who is familiar with the pain of Provisional and Terminal tax payments? Or are you a new contractor or small business owner who hasn’t yet had the pleasure? Either way read on – we have great news!
Here at Pulse Accountants we are fans of making life as easy as possible for our clients and minimising nasty tax surprises, so we are very excited about AIM (Accounting Income Method) – a different way to manage your tax obligations.
What is AIM and what does it mean for my business?
With AIM, income tax payments are based on your actual profits, not what happened last year + 5%, or worse still an estimation which could be over or under and leave you facing Use of Money interest.
Using AIM means that if you have seasonal income you are not stuck trying to find large amounts of money when the revenue is just not there.
What if I have a loss we hear you ask? Yes refunds during the year are possible provided some of the year you have had a profit! – see we said we had great news!
When do I pay Tax with AIM?
The filing of AIM is in line with your GST returns, however if you're not registered for GST you would file two monthly AIM returns.
So, we switch to the Accounting Income Method, then what?
Every two months a return is filed by Pulse Accountants, if you have made a profit there is tax to pay, if you have made a loss then a refund may be possible. At the end of the tax year there is likely to be a ‘small’ square up due to final adjustments and boom, there you have it – Income Tax sorted!
If you would like to know more, why not book an appointment to speak to me, Mandy, Pulse' Accountant’s resident AIM expert. I would love to talk you through the benefits and see if AIM might be a good fit for you and your business.
