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MelissaN
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Hi Joy,

If you’re total taxable income for the year is already over 80k, then you’re definitely in the 37%+ tax bracket. Can’t backtrack, sorry.

There are only a few weeks left, but if your taxable income is going to remain below 180k, then trade the year out. Sounds like you’re doing really well for just starting out. Excellent news.

However, if you believe that your 2011/2012 taxable income is going to be roughly similar, then it may well worth be transferring to a company, BUT, I cannot say for certain as I don’t know your personal circumstances.

Do you operate with inventory at all? If not and there aren’t many invoices in and out, then maybe Quickbooks isn’t necessary (hate the program myself but it does work for some). Perhaps a quarterly spreadsheet is the way to go and is easy to set up and use if you do what I say hehe.

Any business should really utilise Financial Statements. For Partnerships, Trusts and Companies, it is vital, but for sole traders, if no inventory, isn’t always necessary but is preferable especially if selling business or transferring assets and liabilities over.

Either way, the bill is going to be over $500….if it’s not, then I don’t trust the accountant you’re seeing.

For sole trader, you do use the same tax return, but there is a business schedule in there that gets used. So although separate, is amalgamated overall and if you have a profit, it increases your taxable income and if you have a loss (with over 20k cash income), then that loss can be offset against other taxable income in that year. If cash income is less than 20k, it gets deferred to future years when it is.

PAYG is NOT the same as an employee. You do not pay yourself wages. After the first tax return is lodged, the ATO will forward and if registered for GST, will be included in your BAS and PAYG Instalment section. This is usually based on the previous years taxable income. It can be ANYTHING and needs to be reviewed to ensure it’s going to be sufficient to cover the potential bill at eoy.

I hope this helps.

Melissa

bj333, post: 71424 wrote:
Hi, I have just started IT goods/service business and I have already started trading under business name, did my first BAS by myself.
If you can provide some advice and suggestion on this that would be really great! Currently I have already visited 2 tax agent/accountant, and they have given me some suggestions. I don’t know whether I should keep doing what i am doing cause I have only few data entries for a month (10-12 invoices & 6-7 expenses). I am keeping all records like expenses and Invoice on my Quickbooks and update the Excel sheet to get report so that I can prepare BAS.
Could you please provide more info on preparation of end of year tax returns, what’s the process for EOY TAX return for sole trader, heard its same as for personal tax. (how PAYG works like i used to get group certificate from employer)
And, some saying turn business into company and some saying remain as sole trader….for this yr I think its better to remain as sole trader my total income could fall in between 80,001-$180,000 (but rate for this range is 37%, higher than company rate). I will fall in this range for 2010-2011 period (including 4-5months job income before starting this business I hope i can do tax returns at same time.
thanks. Joy