Home – New Forums Money matters Profit/Expenses tax help

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  • #989012
    Perth Garage Doors
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    This is probably been asked before but im finding it hard to find a clear answer if I’ve completed $100,000 worth of jobs but materials for those jobs cost $40,000 so profit of $60,000 when I loge my tax do I pay tax on the whole $100,000 and then they minus the $40,000 cost of materials off my tax bill and that’s the amount I need to pay.

    Example
    Job worth $2400
    Materials cost $1000
    job completed customer gives me $2400, $1000 goes straight to materials bill $1400 comes to me

    Do I pay tax on $1400 profit or the hole $2400

    #1170049
    TehCamel
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    Tax, or GST?
    Are you a company or a sole trader, or something else ?

    #1170050
    Perth Garage Doors
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    TehCamel, post: 197207 wrote:
    Tax, or GST?
    Are you a company or a sole trader, or something else ?

    Hi I am a sole trader I just want to make sure I’m getting taxed correctly on my profit. not gst

    Example bank statements show $100,000 has gone in from jobs $40,000 of that is cost of materials I want to make sure that I’m getting taxed on $60,000 not $100,000 it has been listed by book keeper that $60,000 is actual profit and $40,000 is materials I hope this makes sense

    #1170051
    FalzonFinancial
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    Hi,

    Pursuant to section 8-1 of the ITAA97′ businesses are able to deduct expenditure where it has a relevant connection with income earning activities, providing it is not prohibited by one of the four negative limbs. The main ones being private in nature or other legislation doesn’t allow the deduction.

    Providing your $40,000 is deductible you generally will pay tax on your profit (excluding GST if you are registered).

    Hope this helps.

    Matthew

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