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taxpert
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samdwyer, post: 82200 wrote:
If I have a small business does the money I earn need to be taxed due to income tax. From what I’ve read i will not need to pay GST until I earn over $70,000. Furthermore, if I spend the profits, and some, one marketing and run the business at a loss, will this negate the income tax i will have to pay.

Hi all,

I’ve some how managed to survive another end of financial year and thought I’d get beck involved in these forums. Hope the other accountants here had a good 30th of June.

Sam, assuming that you are in business (and not just partaking in a hobby) then and that busines makes a profit then yes you will need to pay income tax. How that tax is calculated depends on what legal structure the business uses (e.g. is it a company, a sole trader etc).

If the business makes a loss then that loss will likely be carried forward to offset future income earned by the business. I am speaking generally here as once again the rules on business losses are different from structure to structure. If you give me more information about your circumstances I can go into more detail.

You don’t need to register for GST if your current and projected (expected) annual turnover is below $75,000 though it is possible that you may want to register voluntarily. There is a good article on GST somewhere on this site.

Cheers,