If you have a trust or a company, your business money is not the same as your money. We usually declare some kind of distribution, dividend or salary for you as a business owner. But if you have taken a lot of private drawings during the year over and above that, this affects your income tax return.
The best way to control your drawings during the year is to:
- Use your STP (Single Touch Payroll) to pay yourself a budgeted salary that you can live on, pay yourself super and report the wages and PAYGW tax with each STP report, and on your BAS.
- Pay personal expenses out of your personal account; pay only business expenses from your business bank accounts
- Check your balance sheet and regularly check your Director Loan Account or Beneficiary account. Do you owe the business, or does your business owe you?
ATO has a summary and a quick explanation on how you should use your business’ assets. Click here >
