Fellow Aussies i need help with TAX

16 replies
Hello my fellow aussies,
i am trying to build my own inline business. And i would like to know what steps i need to take to pay tax correctly. What forms do i need to fill out? Do i have to register a business name? I suppose i need and ABN? How do you guys pay tax? I guess that's what i am really asking.

Any help here would be much appreciated thanks people.
#aussies #fellow #tax
  • Profile picture of the author angela99
    Get an accountant.

    That's all you need to know if you're contemplating any business, especially IM.
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    • Profile picture of the author AndrewCavanagh
      Most accountants will give you a free first consultation.

      In Australia to get started you CAN just trade under your own name...you just need to apply for an ABN number under your own name.

      But there are a whole lot of strategies etc you may want to consider if you're building a big business with a large income.

      If you are just playing with this then just get started and do it.

      Until you're making money there are no tax issues.

      Kindest regards,
      Andrew Cavanagh
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  • Profile picture of the author maverick8
    Thanks people for your advice. I am currently making about $3200 a month. I don't want to get in trouble by not paying tax on the money i earn. Thanks
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    • Profile picture of the author Kyle Tully
      Yup get an accountant.

      It's a TOTAL waste of time for you to worry about that sort of stuff.

      You're making more than enough to over the costs, and the expense itself is usually a tax write off anyway.

      Plus a good accountant will usually save you many times more than their cost.
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    • Profile picture of the author astaga
      Like Angela said, get an accountant, a good TAX savy accountant.
      Congrats on making that amount monthly; a good tax accountant will identify what you are spending to make that, and so are an important part of your strategy.

      Originally Posted by maverick8 View Post

      Thanks people for your advice. I am currently making about $3200 a month. I don't want to get in trouble by not paying tax on the money i earn. Thanks
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  • Profile picture of the author ripsnorta2
    I have had an accountant do my taxes for years, just for the PAYE (Pay As You Earn for our international friends) and it's been absolutely worth it. The first year I employed the accountant my tax return more than doubled over the previous years when I did it myself. In fact I haven't had to pay the taxman anything since.

    If you're not earning much in IM you could probably just add it to your taxable income, but you might end up with a bill at the end of the financial year. Make sure you check that you are not liable for with-holding taxes, that can happen after a certain threshold I believe.
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  • Profile picture of the author designfuschion
    Thanks for posting this. I was going to post a similar thread.

    If i am a sole trader and 100% income is online coming from overseas(where declaring to any customer an ABN number is pointless)..is it really needed?

    I did look into it and from what i understand,an ABN is required by sole traders if turnover is $1million plus or 100k.(not sure exact figure).
    I've decided personally to not apply for ABN and if i hit my expected sales goal before end of june i'll definitely be going to a tax agent(mum has a excellent one).

    Legally what do you call your profession on tax return? (you know the bit on tax return that asks your job title) Do you actually say "Internet Marketer"?

    I wouldn't know what to classify myself as,..considering i want to site flip,create products,freelance.
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  • Profile picture of the author ripsnorta2
    I don't think there's a reason why you can't call yourself an Internet Marketer, but... the ATO does see certain professions as red flags and they are prone to get investigated. Talk to your accountant.
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  • Profile picture of the author rondo
    All businesses need an ABN, it's the GST registration which may not be needed.


    Andrew
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    • Profile picture of the author DotMK
      Just register for an ABN, you wont need to register a company if you dont want to.

      Dont register for GST, as your not selling goods and services, your just making cold hard cash :-)

      oh and claim your expenses, like advertising, books, pc internet etc.

      get more advice off your accountant/tax agent.

      Do things right the first time :-)
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  • Profile picture of the author Danny Turner
    m
    Dont register for GST, as your not selling goods and services, your just making cold hard cash :-) - well, no and no
    You don't need to register for gst if your turnover (total income) is less than $50K
    As an Aus. resident I believe all your earnings are taxable (worth checking) - as soon as you bring the money into a Aussie account - definitely taxable
    once over $50K you need to register - but only charge gst to Aussie residents
    - however you make your cash (other than as an employee) - it's considered providing a service - and will require gst (to fellow Aussie's)
    mmm .... and get an accountant- let them advise - however like anything - be educated - I've met plenty of business owners who followed accountants advice blindly and lived to regret it
    If in doubt - call the tax office - they don't bite - you can get advice without disclosing your details
    Cheers
    Danny
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  • Profile picture of the author maverick8
    Thanks for the advice guys i think i will have contact an accountant. Then i will have to probably get an ABN number. But at least i know where to start.
    Thank again
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  • Profile picture of the author designfuschion
    Danny,
    Excellent advice.

    Unlike some ,I am familiar with accounting practises.I studied it in yr 11 and 12,just so when it came to running my own business one day -precisely so no accountant could rip me off! LOL

    Basically if it looks like your doing business with australian's to register for an ABN,GST only if your turnover is 50k +. Which is why i'm not registering for an ABN.
    I do know for sure that you don't have to register for an ABN straight away.
    You have upto 3 months to register.

    Also (I am not 100% sure,i will be checking this with the accountant when i do my taxes) ..as a sole trader what you put in superannuation is 100% tax deductable.
    Go read the super section in ato.gov.au site..or superannuation.gov.au to understand what i'm talking about.

    Basically this ruling came in july last year. Simply work out your estimated tax due,put that amount in a super account before you lodge,and claim a deduction. I crunched the numbers and i can remember off the top of my head that with this ruling/legislation a sole traders tax rate is essentially 1.6%(medicare levy) [ plus 10% if you have to pay gst].plus the taxes payable on your super account.
    This totals to about 16% tax.
    Thats my assumption,based on my understanding of what i read on ato website.

    Here's 2 links from ATO about super deduction for self employed.
    Super Changes at a Glance for the Self Employed
    Co-Contribution for Self-Employed People

    some useful links
    Investment Allowance: small business and general business tax break
    Tax concessions for small business
    What is personal services income? - sole traders

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  • Profile picture of the author Quentin
    Also just remember that anything you sell offshore is an exported good so make sure you keep good records. Anything you sell in Australia you have to have GST.

    Quentin
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    • Profile picture of the author endpoint
      Just tacking onto this.

      I plan on getting a Business bank account to start depositing my cheques.
      I haven't made enough money yet to warrant seeing an accountant, but once I hit a certain amount, I will head in.

      Is there a bank account that suits Internet marketers in Australia better than others?
      Do you I have to keep an eye on anything? (PS I have a ABN etc)
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      • Profile picture of the author endpoint
        Also is it recommend to purchase tax and accounting software?

        IF so, any recommendations (im sure the accountant will!)?
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