What is a Tax Liability?
The tax liability is the total amount of debt (money) a taxpayer or entity is legally obligated to pay the government as the result of the occurrence of a taxable event. Different taxable events command different tax liabilities and include, but are limited to:
• The receipt of Annual Income (i.e. money)
• All revenues derived from a business, less all expenses
• The sale of an asset for profit (i.e. real estate, stocks, liens, a patent, accounts receivables, or a claim on debts), or
• An inheritance of money or assets from an estate
How is a Tax Liability Recorded in Financial Statements?
The tax liability is recorded as a short-term liability in financial statements, and takes precedence over all other liabilities.
How are Tax Liabilities Incurred?
Tax liabilities are mostly incurred because; taxpayers (entities) are not setting aside enough cash (money) in the event of the following occurrences:
• Large increase or decrease in earnings
• Accountant errors, bookkeeper errors or tax planning errors
• A change in the circumstances of a business
• Unsound budgeting for tax obligations (i.e. accrued or assessed taxes)
Are you Able to pay your Tax Liability?
Every financial year you may be just like many other taxpayers or entities whereby you, find yourself in a situation, where you have not put aside the necessary cash to pay the tax liability you may owe to the government for any or all of the following taxes:
• PAYG Tax
• Goods and Services Tax
• Business Tax
• Fringe Benefits Tax, or
• Capital Gains Tax
What Options do I have to pay my Tax Liability?
Like many other debt problems, tax liabilities will not go away. Listed below are some options for you to consider and, which may be suitable for you:
• "Low Doc" Tax Debt loans (http://www.singhfinance.com.au/commercial-finance/short-term-business-loans) – when you do not have your financials
• Tax Debt loans when you have all of your financial statements available
• Tax Debt loans when you have credit blemishes
• "Fast Tax Debt" loans when you may have the Australian Taxation Office (ATO) hot on your heels
In addition to the above loans, you may be able to arrange a "Payment Plan" with the ATO. However, the payment terms may or may not be suitable for you, because:
• The ATO will usually require you to pay back the whole debt in 1-2 years and this can make your ATO payment structure plus your ongoing tax liabilities difficult to sustain
• The ATO will usually not re-instigate a payment plan if you have missed any payments, even by one day
Can I claim a Tax Deduction on the Interest Payable on my Tax Liability Loan?
• If you are carrying out business as a Company then, the interest paid on your tax liability loan can be considered as a tax deduction. However, it is advisable that you seek assistance from your accountant
• The interest on your tax liability loan is not allowed as a tax deduction if you are:
>> An individual (i.e. non-business)
>> Trading as a sole trader, or
>> In a partnership
Can anyone help me pay my Tax Liability?
Yes, if you are unable to pay any of your tax liabilities, do not take tension. Simply contact a reputed brokerage firm. It will arrange a tax liability loan and ensure that the following actions are not taken against you by the Australian Taxation Office:
• A Court Judgment
• Outsource the debt owing to a debt collection agency, or
• Even force you into Bankruptcy
So, this is how you can obtain tax debt loans and pay off your tax liability.
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Singh Finance helps you with fast tax debt loans. It also ensures that you don’t face any problem in securing quick credit for your business and its equipment. Contact the firm today for low doc business equipment loan.
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