Tag Archive: Tax Refund

Tax Return Vs Compiled Financial Statements

There are millions who submit tax returns each and every year and for the most part, they handle them with somewhat ease. However, when it comes to running a business in Australia, a lot of people get confused as to the type of returns they must complete. There are some who believe a standard tax return is necessary, while others believe financial statements are a must. It’s hard to know which way to turn so, what are the differences between a tax return and compiled financial statements? Read on to find out more.

What Goes Into A Tax Return?

Individuals and businesses can complete returns to report certain information to the Australian government. For instance, they can report how much money they earn or make throughout the entire year but there is a lot of additional information that can be reported. Income, deductions from work, exemptions, business expenses and lots of other information is added to ensure the government knows about your current working status. There are many who are exempt from tax returns such as those who have worked only part of the year or who do not earn over a certain threshold. However, a return can show what someone earns and for businesses, it can show what money they have made throughout the year. This could be important for investors and those looking to buy-out a company.

What Is A Compiled Financial Statement?

A Compiled financial statement is in fact very easy to complete and doesn’t take as much time as you would think either. However, this is different from a tax return in a sense. It will show the cash flow of a business, the income it makes throughout the calendar year, along with its expenses and of course any assets or liabilities it has. This basically shows the worth or value of a business and that can really attract investors if the info is good for them. To find out more, check out taxreturn247.com.au.

Will A Tax Return Still Be Required?

It doesn’t matter if you are completing a compiled financial statement, you will still need to complete a return for the past financial year. A lot of people forget this and find they get into a lot of trouble so it’s best for you to ensure you cover yourself and complete the necessary forms. Dealing with tax returns can seem a big pain but they are still necessary. Compiled financial statements are important for a business view and if you are planning to offer shares to someone, they need to be able to see your value. That is why both of these things are important.

Ensure Your Business Is Covered

Financial matters can be tiresome and for a lot of business owners they don’t actually know how to handle these but that cannot be any excuse. If you aren’t already aware, tax returns are necessary for businesses and individuals throughout the year. There can be some exceptions to this (if you haven’t earned enough) but for the most part, you’ll have to complete it. If you aren’t sure how to handle your tax return, get some help, especially if you have a business!

Income Tax Refund Advance

Income Tax Refund

This tax season, many taxpayers will accept an income tax refund advance. Most of these individuals will not fully understand the exact nature of this refund anticipation loan.

The process is easy; the individual completes and submits their federal and perhaps state tax returns. They then receive a loan from a lender who could be connected with the tax preparation or could be independent. The loan repayment comes out of their refund, which goes to the lender.

Unfortunately, many of these taxpayers do not understand the risks they are taking when they accept one of these loans against their refund.
Most income tax refund advance loans are provided by the companies who also prepare the returns, including H&R Block, Jackson Hewitt and Liberty. They have small or temporary offices set up in low income areas filled with working class people who do not understand that what they receive is a loan, not their actual refund.

The risk lies in the possibility that the refund may not come through as hoped from the Internal Revenue Service. The borrower is obligated to repay this loan regardless of what happens when IRS receives and reviews the paperwork. The lender is also going to charge the borrower interest and fees for the loan whether or not IRS accept it.

The tax filer needs to understand that the tax preparers do not have the final say on the validity of the return. The preparer only fills out the forms and submits them on behalf of the filer. Only IRS has the authority to determine the filing is acceptable and then process it.view website here!

The approval by IRS happens after an agency official reviews the return and determines that it is accurate, complete and includes required documentation. The review process takes several days to several weeks depending on whether the tax return was filed electronically or by mail.

Lenders have no problem with this risk because the odds of getting their loaned money back are excellent. The Internal Revenue Service approves virtually all returns within a week of their submission. Even if a few returns end up being rejected, the amount of income earned on the huge majority that do pass IRS inspection justifies the relatively few losses on return rejections.

If the IRS decides that the return is inaccurate, incomplete or IRS objects to some deductions, the refund could be delayed, reduced or eliminated. IRS may refuse to pay the refund as requested and then the borrower must struggle to repay the income tax refund advance out of their own funds. If they are unable to fulfill the loan conditions, their credit rating, future credit worthiness and credit interest rates could suffer. Some tax services are able to protect their own interests by recovering anticipation loans that were not repaid from tax refunds in future years.

The wisest course for most taxpayers is to avoid the process unless they are in truly desperate need of immediate funds. This eliminates all concern over being able to repay the loan or getting the refund in time to avoid any extra interest or late charges.

Income Tax RefundThe emergency needs to be very immediate, because IRS processes refunds quickly. Those who file electronically and have their refund direct deposited frequently get the refund within a week at no charge from IRS or the bank. Even refunds submitted by mail usually get processed within a month if submitted early in the tax season.

Most important to the tax filer is the knowledge that they are getting every penny of their hard-earned money. None of the refund is going to the preparer on top of their charges for preparing the return. The money that was going toward loan interest and fees is instead going into the taxpayer’s pocket. There is really no point in an anticipation loan for most individuals.

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