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  • #969825
    PoPi
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    Hi,

    Before I start with my question, I wish I had found this place earlier and I have to seriously thank the creation of this site and the community in here as a lot of information provided are what I have been aftering for weeks!

    I am planning to start a small online business (finally with some courage) with a partner soon, so I am planning to do the tax reporting myself, as I reckon it is more economical and also a good experience for me to learn. If you dont mind please help a a newbit as I just have few questions regarding tax:

    After reading all the articles in this site, I have decided not to register GST at the beginning/first year as we honestly thought we will not hit $75k. Also at the beginning we will not hire anyone so it will be only two of us working so we don’t have PAYG & FBT to concern.

    Can you please help or confirm some questions for me:

    1. When it comes to BAS I assume I don’t have to report anything except just my sales & expenses? Anything else?

    2. Is there any accounting software (Afterall I’m planning to get a good accounting software ie.Quicken/MYOB any recommendations?) that will help to lodge directly online or do I use Business Portal from ATO website? Or is there any other methods which will let me lodge the activities statements to ATO.

    3. At the end of financial year, after 4 quarters of BAS and for example it shows that the business is having a net profit of $20k. How does ATO know that we are going to split the $20k equally as our income?

    Does ATO tax on that $20k as business tax? If yes how much? Then do we split the after tax as our income? Will we still get taxed again as income tax?

    Thanks for your help!

    #1041114
    Anonymous
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    Hi PoPi

    Welcome to the forums, and thank you sooooo much for your lovely feedback.

    I’m not the right person to answer your questions, but I’m sure one of our resident accounting experts will be along to help out shortly.

    All the best to you and your new business,
    Jayne

    #1041115
    James Millar
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    If you are using a partnership structure (check that you registered the ABN as a partnership) then the partnership will lodge a tax return each year. You should have received a TFN with the ABN.

    Unless the partnership agreement states otherwise you will be splitting income equally between the partners. Whilst the partnership lodges activity statements and income tax return it’s not an income tax paying entity. Tax is paid in the partners individual income tax returns. If losses distributed you may be eligible to claim those against other income provided you meet non commercial loss requirements. You may also be entitled to the entrepreneur tax offset if the turnover is sufficiently low. Its a daily minor benefit but worth looking at.

    Hope this helps.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1041116
    mark_xpnsit
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    There’s no reason why you can’t do you tax reporting by yourself, although it might be worth having a consultation with your accountant just to check you are going down the right line. They have experience and skills and will be able to show you how to make sure you include everything.

    Also do some research in to expenses and deductions that are allowed now to make sure you keep all the relevant records/logs to claim it back at the end of the year.

    Am sure others here will be in a better position to input to some of your other questions

    Cheers

    Mark

    #1041117
    PoPi
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    Thank you all for the response.

    James – If the partnership lodges tax return each year, then the after tax net profit will be split 50/50 as an income, does that mean we will both get taxed again on income? Won’t that become double tax?

    Also I have read someone staying if I’m not registered for GST, then there is no requirement for me to do BAS every quarter. Is that true? Then what is required for me to report and when?

    Have to admit Australia tax system is really confusing and complicated…whenever I think i’m about to get it then I get confused again

    #1041118
    StellarScott
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    • Total posts: 239
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    Hi Popi

    Partnership pays no tax … only the partners pay tax based on their share of partnership income so no double tax our ATO not that mean

    If not registered for GST and no employees = no BAS only a partnership tax return for the 10/11 year. Then you may have to pay income tax instalments depending your income

    Agree with Mark on finding a trusted accountant/book keeper to help you with set up and keep you on track. They will also give good advice on appropriate software. any cost well off set by the benefits.

    As you point out the Australian Tax system can be confusing .. its often the questions you dont know to ask that catch you out

    #1041119
    PoPi
    Member
    • Total posts: 3
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    Thank Scott for clarifying that, you are right I better start planning what to ask when i see an accountant next week :)

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