Want to forecast and assess your trust or sole trader tax position during the year.

Without a simple template, it can be difficult to know what tax you have incurred and whether you have put enough funds aside.

Check out the video showing how to do this at https://courses.morrisonabs.com.au/tax

The video goes through the steps below, so that you can regular assess your tax position and whether you are in front or behind with regard to instalments paid to the ATO and funds put aside..

Step 1       Check Xero is accurate

              In the bank reconciliation reports, check there are no outstanding payments or receipts that need to be cleared out

              Check all reconciliations are up to date


2        Check whether your tax return is on an accruals or cash basis

              Ask your accountant

              Review prior year tax return and see if there are reconciliation items for debtors and creditors


3        Download profit and loss statement based on whether your tax return is on an accruals or cash basis


4        ‘Annualise’ the profit to calculate a full-year forecast


5        Add in year-end adjustments such as;


              Hire purchase charges on car payments

              Interest on loans


6        Add in tax return adjustments such as;


              Increase or decrease in superannuation payable

              Increase or decrease in other provisions (eg. annual leave)


7        For discretionary trusts, decide who will receive the profit***


8        Calculate the forecast tax for the year

              For a trust, allocate profit to beneficiaries and apply the relevant tax rate

              For a sole trader, apply the personal marginal tax rate

                  Take into account instalments paid during the year


9        Assess whether you have currently put aside enough tax


10      Calculate the percentage of gross sales to put aside for tax