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  • #970024
    Sh33py
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    • Total posts: 13
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    Hi all,

    I like many of you, I am fed up working for the “man” and have decided to invest a small amount into an online business with EBay. Now I had thought that I had all the tax side worked out when I was told that I would have to pay 45% if i was to continue working full time at my other employment. I roughly earn $40,000 per year but will be cutting back to part time to attend to my business matters. I have read the thresh hold on the ATO website but it does not indicate anything about working in a second job.

    If someone could provide some light on this subject that would be appreciated and now I am glad I have found somewhere I can relate my matters too.

    Perfect!

    Thanks,

    Adam.

    #1042151
    Anonymous
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    ALWAYS use an accountant to check specifics…
    this is very lamens terms and very general
    ALWAYS use an accountant to check specifics

    are you, or will you be operating as a sole-trader?
    by your post i am presuming so.

    a) are your products a GST item?
    b) best way to think of GST is “its not your money” best analogy for this might be a debt collector. GST is money you collect for (or on behalf of ) the government.
    c) find out if a home office is really worth claiming or allowed (example taxi drivers are not allowed to claim home office due to their business being conducted in a vehicle).
    d) minus cost of products from your sale price to get your income, add this to your main gross income and then work out the tax rate.

    ALWAYS use an accountant to check specifics

    hope this may help you a little bit

    #1042152
    Sh33py
    Member
    • Total posts: 13
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    cretsiah, post: 51042 wrote:
    ALWAYS use an accountant to check specifics…
    this is very lamens terms and very general
    ALWAYS use an accountant to check specifics

    are you, or will you be operating as a sole-trader?
    by your post i am presuming so.

    a) are your products a GST item?
    b) best way to think of GST is “its not your money” best analogy for this might be a debt collector. GST is money you collect for (or on behalf of ) the government.
    c) find out if a home office is really worth claiming or allowed (example taxi drivers are not allowed to claim home office due to their business being conducted in a vehicle).
    d) minus cost of products from your sale price to get your income, add this to your main gross income and then work out the tax rate.

    ALWAYS use an accountant to check specifics

    hope this may help you a little bit

    Hi thank you for responding.

    The products I sell are GST items. I am looking into an accountant this week, Would people who deal with BAS be able to clarify all of this for me?. I do consider tax as not my money but I would love to know how much of the money is not mine. I have kept all receipts filed respectfully and all spreadsheets and other documents are accounted for. My concern really is the 45%. I guess if this is true this is a sacrifice I will have to make until my business is firmly rooted in the ground. I was thinking if I were to take a look at where the business is heading after it has paid for itself, would it be a good idea to decide whether I should quit my job and continue pursuing my business. What do you think?.

    I am more than willing to take the plunge right now but I promised my partner as it is a great financial risk, although I am a person that likes to just do things and see how it goes because you won’t know until you have done it.

    #1042153
    wangcg3215
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    • Total posts: 10
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    Sh33py, post: 51044 wrote:
    Hi thank you for responding.

    The products I sell are GST items. I am looking into an accountant this week, Would people who deal with BAS be able to clarify all of this for me?. I do consider tax as not my money but I would love to know how much of the money is not mine. I have kept all receipts filed respectfully and all spreadsheets and other documents are accounted for. My concern really is the 45%. I guess if this is true this is a sacrifice I will have to make until my business is firmly rooted in the ground. I was thinking if I were to take a look at where the business is heading after it has paid for itself, would it be a good idea to decide whether I should quit my job and continue pursuing my business. What do you think?.

    I am more than willing to take the plunge right now but I promised my partner as it is a great financial risk, although I am a person that likes to just do things and see how it goes because you won’t know until you have done it.

    Hi Adam,

    It really depends on your total income (see http://www.ato.gov.au/individuals/content.asp?doc=/content/12333.htm). For example, if your total income from your main job and second job or buisiness is higher than $180,000, you must pay 45% tax. More details, you should consult your accountant. Hope help you.

    Regards,

    Stephen

    Individual income tax rates

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    Residents

    These rates apply to individuals who are residents of Australia for tax purposes (see Residency – overview for more information).

    Tax rates 2009–10

    Taxable income

    Tax on this income

    0 – $6,000

    Nil

    $6,001 – $35,000

    15c for each $1 over $6,000

    $35,001 – $80,000

    $4,350 plus 30c for each $1 over $35,000

    $80,001 – $180,000

    $17,850 plus 38c for each $1 over $80,000

    $180,001 and over

    $55,850 plus 45c for each $1 over $180,000

    The above rates do not include the Medicare levy of 1.5% (read Medicare levy reduction or exemption for more information).

    Tax offsets reduce the tax payable. Tax offsets based on taxable income levels apply to a range of circumstances. For more information read About tax offsets.

    Attention icon

    The following rates for 2010–11 apply from 1 July 2010.

    Tax rates 2010–11

    Taxable income

    Tax on this income

    0 – $6,000

    Nil

    $6,001 – $37,000

    15c for each $1 over $6,000

    $37,001 – $80,000

    $4,650 plus 30c for each $1 over $37,000

    $80,001 – $180,000

    $17,550 plus 37c for each $1 over $80,000

    $180,001 and over

    $54,550 plus 45c for each $1 over $180,000

    #1042154
    Sh33py
    Member
    • Total posts: 13
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    wangcg3215, post: 51047 wrote:
    Hi Adam,

    It really depends on your total income (see http://www.ato.gov.au/individuals/content.asp?doc=/content/12333.htm). For example, if your total income from your main job and second job or buisiness is higher than $180,000, you must pay 45% tax. More details, you should consult your accountant. Hope help you.

    Regards,

    Stephen

    Individual income tax rates

    Email to a friend
    Printer friendly format
    Residents

    These rates apply to individuals who are residents of Australia for tax purposes (see Residency – overview for more information).

    Tax rates 2009–10

    Taxable income

    Tax on this income

    0 – $6,000

    Nil

    $6,001 – $35,000

    15c for each $1 over $6,000

    $35,001 – $80,000

    $4,350 plus 30c for each $1 over $35,000

    $80,001 – $180,000

    $17,850 plus 38c for each $1 over $80,000

    $180,001 and over

    $55,850 plus 45c for each $1 over $180,000

    The above rates do not include the Medicare levy of 1.5% (read Medicare levy reduction or exemption for more information).

    Tax offsets reduce the tax payable. Tax offsets based on taxable income levels apply to a range of circumstances. For more information read About tax offsets.

    Attention icon

    The following rates for 2010–11 apply from 1 July 2010.

    Tax rates 2010–11

    Taxable income

    Tax on this income

    0 – $6,000

    Nil

    $6,001 – $37,000

    15c for each $1 over $6,000

    $37,001 – $80,000

    $4,650 plus 30c for each $1 over $37,000

    $80,001 – $180,000

    $17,550 plus 37c for each $1 over $80,000

    $180,001 and over

    $54,550 plus 45c for each $1 over $180,000

    Hey Stephen,

    Thanks, that put it into perspective for me that it is based on the combined amount, however I will talk to an accountant but this at least takes a bit off my mind.

    #1042155
    mark_xpnsit
    Member
    • Total posts: 140
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    Not sure if you’ve spoken with your accountant yet or not but as a sole trader the ATO would be interested in your total taxable income.

    Income from job minus expenses and deductions (of which there are many)

    +

    Profit from business after all deductions and expenses

    = taxable income

    Deductions and allowances are slightly different as a sole trader (work in your favour)

    Hope that helps!

    Cheers, Mark!

    #1042156
    Sh33py
    Member
    • Total posts: 13
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    mark_xpnsit, post: 51131 wrote:
    Not sure if you’ve spoken with your accountant yet or not but as a sole trader the ATO would be interested in your total taxable income.

    Income from job minus expenses and deductions (of which there are many)

    +

    Profit from business after all deductions and expenses

    = taxable income

    Deductions and allowances are slightly different as a sole trader (work in your favour)

    Hope that helps!

    Cheers, Mark!

    Very to the point, thank you and I am going to organize someone from the ATO to come and fill my mind with all different numbers and variables. Saw about the free service they provide through the website. Where would I be without you guys!.

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