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September 21, 2014 at 2:40 am #989435Up::0
Hi Everyone
Wow what a awesome forum!!
I am 21 years old and very new to starting my first business selling fresh juices and beverages.
I have just registered my company and received my ACN, at this stage I have not started trading yet as I am just doing the groundwork ie setting up business bank account, applying permits, buying machines/equipment, looking for commercial leases etc …I went to a cooking kitchen expo earlier this week and found the perfect juicer machine kit to make my fresh juices and beverages. I want to buy this machine and the question I wanted to ask was do I buy this machine in my own name as I have the cash in my pocket or do I buy it in the company name through the business bank account I have just opened?
If I deposit capital into my business bank account would I have to pay taxes even if I have not yet started trading?
I just want to know what is the best method to utilize the best returns when it comes to depreciations and deductions when buying equipment for the business.
I apologize if I am not making sense or if this a dumb question, Its just that I am extremely excited on starting my 1st business and thought it’ll be better to ask a dumb question rather to than make a dumb mistake.
Thanks Everyone
September 21, 2014 at 2:46 am #1172180Up::0Re: New – Starting Business
Welcome to the forums, GE!
Congratulations on stepping out into the solo business world.
The question you’ve posed is far from a silly question and I hope someone will dive in with an answer. The only ‘silly’ question is an unasked one!
Have a think about adding signature to your post – via the Control Panel in the top left. Don’t forget to let us know your name
Love your work,
Sam on behalf of the FS team
September 21, 2014 at 10:07 am #1172181Up::0Congratulations on starting your business. I certainly would not have had the courage to do so at 21. In reply to your question, it depends on your company setup to an extant. The simplest way is to buy it using your company bank account. If you do buy it using your own money, then it becomes part of the owners/shareholders equity in the business.
You won’t pay tax on purchases, they can generally be claimed as deductions or depreciated, although if you are registered for GST you can claim back the GST credits.
Have you registered for GST? If you expect your sales to exceed $75k /yr you will need to register.
I would speak with an accountant about what expenses you can claim for your business.
Good luckSeptember 21, 2014 at 11:24 am #1172182Up::0ShellysBookkeeping, post: 199926 wrote:Congratulations on starting your business. I certainly would not have had the courage to do so at 21. In reply to your question, it depends on your company setup to an extant. The simplest way is to buy it using your company bank account. If you do buy it using your own money, then it becomes part of the owners/shareholders equity in the business.
You won’t pay tax on purchases, they can generally be claimed as deductions or depreciated, although if you are registered for GST you can claim back the GST credits.
Have you registered for GST? If you expect your sales to exceed $75k /yr you will need to register.
I would speak with an accountant about what expenses you can claim for your business.
Good luckhttp://www.ShellysBookkeeping.com.au
Shelly@shellysbookkeepingHi Shelly
Thank you so much for replying, just one question Shelly so I can get my head around owners/stockholders equity,
so if a) I buy the juicer machine with my own money it would count as owners/stockholders equity? would this scenario be the same as,
b) If I was to deposit my own money (capital) into the business account and than pay for the juicer machine through the business account ?
What is the difference between doing a) and b) is it basically the same thing ?
Thank you so much
GerrySeptember 21, 2014 at 9:01 pm #1172183Up::0Hi Gerry,
It is basically the same, it is easier to keep track if you deposit a sum of money into your business account and make purchases from there. Option b would be the preferred method, but most small business make occasional purchases with their own money.
ShellySeptember 22, 2014 at 1:37 am #1172184Up::0ShellysBookkeeping, post: 199942 wrote:Hi Gerry,
It is basically the same, it is easier to keep track if you deposit a sum of money into your business account and make purchases from there. Option b would be the preferred method, but most small business make occasional purchases with their own money.
Shellyhttp://www.ShellysBookkeeping.com.au
Shelly@shellysbookkeepingHi Shelly,
Thank you now I understand, if I did make the purchase under my own pocket how do I apply it to the business at the end of the financial year do I just keep the receipt?
In response to the GST no I havn’t applied yet. I need to some serious number crunching
I have only received my ACN at this stage and still have to apply for ABN and TFN. I have not started trading yet so if I apply for ABN & TFN now and I deposit capital into the business account will I get taxed on the capital amount? Or does tax and gst only apply once i begin making my first dollar?
Sorry if these a dumb questions, I really appreciate your help.
Thank you
Gerry -
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