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Calling all Aussie Marketers

by whitechapel75
10 replies
Hi There

I am looking for some background structure on how you run your marketing business in relation to obtaining tax numbers and registering as a business. How does this workout in paying tax on your earnings?

Also is it a straight forward process or a headache

Thanks a Lot

Michael
#aussie #calling #marketers
  • Profile picture of the author Scott Kennedy
    You register for an ABN here; https://abr.gov.au/

    After it's been approved you will be sent, via snail mail, your documentation. I would suggest opting to be a Sole Trader and any income you derive from your IM ventures will be added onto your personal marginal tax rate.

    You will NOT need to register for GST if your expected yearly revenue is less than $75,000. Once you've got your ABN however you will need to keep detailed books relating to the business. This can be done with MYOB, quickbooks, or using a simple excel spreadsheet.

    During tax time you will be asked if you are a sole trader and if you tick yes, any income you derived from the business will be added onto your marginal tax rate.

    That's it. Pretty straight forward mate.

    I would only opt to register as a private company if you believe your marginal tax rate will be >30% as companies are taxed a flat 30% no matter what they earn. However the documentation required by the tax office in order to run the company is a lot more involved than it is for a sole trader.
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    • Profile picture of the author WillR
      Originally Posted by Scott Kennedy View Post

      You register for an ABN here; https://abr.gov.au/

      After it's been approved you will be sent, via snail mail, your documentation. I would suggest opting to be a Sole Trader and any income you derive from your IM ventures will be added onto your personal marginal tax rate.

      You will NOT need to register for GST if your expected yearly revenue is less than $75,000. Once you've got your ABN however you will need to keep detailed books relating to the business. This can be done with MYOB, quickbooks, or using a simple excel spreadsheet.

      During tax time you will be asked if you are a sole trader and if you tick yes, any income you derived from the business will be added onto your marginal tax rate.

      That's it. Pretty straight forward mate.

      I would only opt to register as a private company if you believe your marginal tax rate will be >30% as companies are taxed a flat 30% no matter what they earn. However the documentation required by the tax office in order to run the company is a lot more involved than it is for a sole trader.
      Great answer and exactly how I have things set up.

      The only thing you don't get by being a sole trader is limited liability. So if something were to happen and you were sued by someone they can start taking your personal assets - if you're a company then obviously they can only take assets that company owns.

      I keep all my records in a simple Excel spreadsheet. I have one for all my incomes and one for all my expenses. I also like to keep a print out of every receipt and payment I receive incase the tax department were ever to audit me. You are suppose to have those records available for the last 5 years.

      One other thing to note is expenses can only be claimed against the related income. So, for example, your hosting and domain expenses cannot be claimed against income from another job you might have - they can only be claimed against any income you derive from your Internet business.

      I suggest you get an ABN (which is FREE) and start keeping records right away. Even if you are not making any money yet you can still claim your expenses each and every year and they get carried over each year so when you finally do start making money, all those expenses will come off your first earnings.
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      • Profile picture of the author whitechapel75
        Thanks for the information, thats fantastic.

        I have applied for the ABN Number so waiting back to hear from them

        I have kept track of my expenses so far such as hosting etc,

        What other items should i be keeping record of at this stage?

        Cheers
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        • Profile picture of the author WillR
          Originally Posted by whitechapel75 View Post

          Thanks for the information, thats fantastic.

          I have applied for the ABN Number so waiting back to hear from them

          I have kept track of my expenses so far such as hosting etc,

          What other items should i be keeping record of at this stage?

          Cheers
          Anything you are spending money on to try and make your income. Things like hosting, registering a business name, domains, autoresponders, graphics, article writing services, etc, etc.

          Another thing I forgot to mention is an ABN will get cancelled if it hasn't been used for a year or two. So that's why, even if you are not making any income, you should always claim your expenses against that ABN each year so it stays valid.
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          • Profile picture of the author whitechapel75
            Originally Posted by WillR View Post

            Anything you are spending money on to try and make your income. Things like hosting, registering a business name, domains, autoresponders, graphics, article writing services, etc, etc.

            Another thing I forgot to mention is an ABN will get cancelled if it hasn't been used for a year or two. So that's why, even if you are not making any income, you should always claim your expenses against that ABN each year so it stays valid.

            Thanks for that!
            I have only ever dealt with tax on investments, and my IM career is in its infancy.

            One more question what would the tax be if in the initial stages of the business if the income is secondary to my main (Non IM related) occupation.

            Does that mean any income i earn will be at a higher tax rate. I am currently earning in the low 100,000's in my current occupation, i am speculating here that any IM income whilst i am working will be added onto my gross income

            Cheers
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  • Profile picture of the author dadamson
    Quick loophole - If you sell only to people outside of Australia you do not need to register of charge tax on your services...
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    • Profile picture of the author whitechapel75
      Originally Posted by dadamson View Post

      Quick loophole - If you sell only to people outside of Australia you do not need to register of charge tax on your services...
      Great
      How is the best way to document the location of your customers? Through Paypal accounts?
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    • Profile picture of the author WealthWithin
      Originally Posted by dadamson View Post

      Quick loophole - If you sell only to people outside of Australia you do not need to register of charge tax on your services...

      What about clickbank and adsense?

      If they're sending payments from US customers, do you still pay taxes in Aus?

      I'm guessing, if you don't pay taxes, you can't claim expenses - right?
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      • Profile picture of the author tryinhere
        Originally Posted by WealthWithin View Post

        What about clickbank and adsense?

        If they're sending payments from US customers, do you still pay taxes in Aus?

        I'm guessing, if you don't pay taxes, you can't claim expenses - right?
        ? May be wrong but i think the post may have been in relation to charging gst on your service.

        All income would be taxable regardless, if you meet the taxable thresholds.

        It may be best to speak with you accountant for verification, or you can speak with the ato and get free advice regarding your own tax liabilities.
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  • Profile picture of the author dadamson
    Yeah, if you're serious, I definitely advise seeing an accountant.

    I have a 1.5hr session with mine for around $150 where he basically told me all I needed to know and some great tips.

    I'll need to go back for a 'refresher' at some point though, all gets quite confusing at first!
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