In a pickle: Small business/Family Assistance

[BreithCuidiu]

So... I think I made a mistake. I started a business and gave FAO an estimate which excluded what I estimated that my business start up/running costs might be.

Now a friend has told me that FAO don't take your business running costs into account. Money coming in is money coming in... It doesn't matter that most of your takings go toward the business.

So it looks like I underestimated about $10k :O I already have a debt going back a couple of years too.

Also, with FTB A and B, do you have to report earnings fortnightly? I have just learned this also. I am partnered and thought I only had to give a yearly estimate. I've not yet done BAS or seen an accountant as my accountant won't get back to me. Busy time I guess. Probably should have been better prepared.

Im freaking out!!! Are there any accountants/FAO gurus who can help?

[lulu 2]

You do a yearly estimate but most small business owners I know only claim the allowances when they do their tax return as if you don't know how much you will earn it is hard to estimate and if it is over then you could end up having to pay back money to CL.
Now I am not sure how you have your business set up but i think if your a sole owner and there is no actual set wage then all of the earnings of the business is your income ( could be so wrong but that's how I think it works) but if you have the business and it has it's own tax return and you get a wage then you can set your earning how you like and claim higher benefits.
I always had problems when reporting as it always doubled for some reason cutting me off so I gave up and went to claiming once a yr during tax time so I knew what I was getting was what I was entitled to. Understandably not all can afford to do that so it is good to review your earnings 3 monthly and if it has changed then correct your estimate with SS ,this could also see you cut off or amounts reduced so you don't get overpaid.
Def speak to an accountant as they can help you work out which is the best way to have your business set up so you don't loose your allowances. Hope that helps.

[2Bboys]

Your business income is the amount of profit made not the turnover.

Example, you sell $10,000 worth of stock. Said stock was purchased by you wholesale for $7,000. Taxable income is $3,000 (the amount declarable to FAO. Obviously you also need to factor in running costs of the business too (rent, phone, bank fees, accounting fees, insurance etc) and deduct these amounts from you gross profit too.

Sorry I'm on my phone, I hope that made sense.

[2Bboys]

And as per PP advice it is more ideal to submit your claim as an annual return as income is difficult to estimate.

[happykat]

As pp said it is your profit that matters not all your income. I run my own business and they have only ever used my taxable income (ie income minus all expenses) to work it out. You only need to do an annual estimate for FTB but if you or your partner get any other payment you would generally need to report fortnightly. I always make sure I overestimate so I am not caught out with a debt but depending on what business you run, it may be very difficult to work it out properly.

[MsMummy]

It is your taxable income, not your turnover, that counts for family tax purposes.

Get an accountant to do your tax return. Most people who run small businesses can claim a lot of expenses, and significantly reduce their taxable income.

But, either way, your income is going to vary, so it's probably safer to claim ftb annually. We claim ours after we lodge our returns, and then there is no issue about incorrect estimates.