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  1. #11
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    Quote Originally Posted by witherwings View Post
    I wouldn't bother registering for GST or registering a business name. You can make up a name for your Facebook page and website without actually registering a business name.
    Thank you! I really wanted to know this!

    So when I do my own personal tax there is a business section? Sorry for the ignorance, I've never ran business nor has my DH. Can I do it myself or must I use an accountant? When you say a spreadsheet is that simply expenses vs profits on a spreadsheet? How do you prove profit?

    Sorry for so many questions lol

  2. #12
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    Quote Originally Posted by delirium View Post
    Thank you! I really wanted to know this!

    So when I do my own personal tax there is a business section? Sorry for the ignorance, I've never ran business nor has my DH. Can I do it myself or must I use an accountant? When you say a spreadsheet is that simply expenses vs profits on a spreadsheet? How do you prove profit?

    Sorry for so many questions lol
    You can do the tax return yourself, yes.

    In the tax return there is a business schedule you can fill out which shows the income you received and your expenses. It's easier to fill this table out if you have a spreadsheet or even a list of expenses you incurred throughout the year, particularly as there isn't a label for every type of expense. The main ones are there - purchases of materials/goods/inventory, car expense, rent, interest, lease fees, repairs.. etc. then a label for "all other expenses".

    When you do it through an accountant or tax agent, they can give you advice about things you can claim but to be honest, it's quite simple. You could definitely do it yourself. And you would know what expenses you incurred in relation to that business income.

  3. #13
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    Default New home business questions

    Forgot to add: the profit is just whatever your income is minus the expenses you are claiming. That then becomes your taxable income in your return.

    ETA - and you're welcome happy to answer any questions. I'm a Tax accountant so ask away
    Last edited by witherwings; 31-08-2016 at 01:12.

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    delirium  (31-08-2016)

  5. #14
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    You are brilliant thanks so much for so succinctly answering my questions without all the jargon and confusing stuff.

    Last question - how do I prove income? invoice copies? Do I have to send those in or only if I'm audited?

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    you'll need to issue tax invoices. there are certain requirements for what a tax invoice needs to have on it in order to be valid. amongst other things, it needs to say tax invoice and quote your abn. there's info on the ATO website about what needs to go on a tax invoice.

    as far as "proving" income, you can use your invoices to track income and this can be substantiated with bank records, i.e. deposits to your nominated account. it's rare the ATO ask you to prove your income. especially at the smaller entry level end of things. if anything they will be more interested in proof of expenses. so keep all your receipts!

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    delirium  (31-08-2016)

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    Quote Originally Posted by witherwings View Post
    I'm a Tax accountant so ask away
    Can we start an ask Witherwings a tax question thread!?

    Sorry to de rail. I registered for an ABN and have expenses basically for that registration, domain purchase and that's it but I haven't traded yet and I'm not registered for GST. Do I still have to put anything in my tax return even though I've made no money at all?

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    Quote Originally Posted by A-Squared View Post
    Can we start an ask Witherwings a tax question thread!?

    Sorry to de rail. I registered for an ABN and have expenses basically for that registration, domain purchase and that's it but I haven't traded yet and I'm not registered for GST. Do I still have to put anything in my tax return even though I've made no money at all?
    No, go for it I'm wondering the same. So domain is deductible too?

  10. #18
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    Default New home business questions

    Quote Originally Posted by delirium View Post
    You are brilliant thanks so much for so succinctly answering my questions without all the jargon and confusing stuff.

    Last question - how do I prove income? invoice copies? Do I have to send those in or only if I'm audited?
    Your income is basically whatever you received into your bank account or in cash from the business, whether you issued invoices or not. Issuing invoices is just good business practice and if you are registered for GST or if you make a sale of more than $75 then you are obligated to issue an invoice (it is only a "tax invoice" if GST is included). ATO generally isn't concerned with your invoices, even when you're audited. as long as your reported income matches the funds that went through your account, but if you're a cash-in-hand business, they do scrutinise more the income-side of things. Honestly i don't think you need to worry about "proving" income. Proving deductions is what you should focus on.

    I always advise clients to try to have as much of their business transactions going through bank accounts and credit cards, as it's easier to keep track. For substantiation/proof of deductions, you could take a photo or scan each receipt and keep it in multiple places, like hard drive, USB, on the cloud.. Just so you don't lose it due to a software issue or virus. Don't bother keeping the hard copies, they fade or get lost anyway.

    ETA: re- invoices, if the sale amount is less than $75, and your customer asks for an invoice, you have to issue one.

    Invoices are really easy to make. You can find heaps of templates online.
    Last edited by witherwings; 31-08-2016 at 20:09.

  11. #19
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    Quote Originally Posted by turquoisecoast View Post
    you'll need to issue tax invoices. there are certain requirements for what a tax invoice needs to have on it in order to be valid. amongst other things, it needs to say tax invoice and quote your abn. there's info on the ATO website about what needs to go on a tax invoice.

    as far as "proving" income, you can use your invoices to track income and this can be substantiated with bank records, i.e. deposits to your nominated account. it's rare the ATO ask you to prove your income. especially at the smaller entry level end of things. if anything they will be more interested in proof of expenses. so keep all your receipts!
    Snap!!

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  13. #20
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    Quote Originally Posted by A-Squared View Post
    Can we start an ask Witherwings a tax question thread!?

    Sorry to de rail. I registered for an ABN and have expenses basically for that registration, domain purchase and that's it but I haven't traded yet and I'm not registered for GST. Do I still have to put anything in my tax return even though I've made no money at all?
    You don't have to put something in your return, but it might be a good idea to anyway, because you'll have a loss that you can carry forward to future years when you do start trading.

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