Small Business $20k Tax deduction

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  whooah1979 on 04/06/2016 - 19:56

  And also my understanding is, I can get 35% back because of the tax return

  where did you get this information from?

  10% for GST.

  are you registered for gst? are you required to be registered for gst? you can only get an input tax credit if you're registered for gst.

  This means 45% off the price so if I pay $1000.0 for an iphone, I actually paid $550.

  that sound like a dodgy scheme.

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    mb5802002 on 04/06/2016 - 19:58

    Thanks for reply,
    I'm is the 35% tax bracket and registered for GST, also I want to buy something that is require with my business, so I can claim it on the tax time.

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    mrtin on 04/06/2016 - 19:59

    I eouldnt call it dodgy as it is just a normal tax deductible item (assuming it is for work etc etc.
    You spend $100 on expense, you claim tax get back eg 38.5% meaning you only really spend 61.5 on it.

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  mrtin on 04/06/2016 - 19:57

  Not sure where you get 35% from but yes you sre on right track. Also technically you dont get 45% in your example as its 10% gst back then tax back on the net of gst amoubt :p

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    mb5802002 on 04/06/2016 - 20:01

    Your right it should be %38.5.

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  mb5802002 on 04/06/2016 - 20:08

  How about if I buy a small car (less than $20K) for business, can I get deducted all of them this year or a portion of it will come back and the rest will remain for next year or two ?

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    plmko on 04/06/2016 - 20:13

    Yes you can do the whole car, assuming you made enough profit to cover the deduction from the car. Otherwise if you made a loss (majority of new businesses do In the first year) best to claim it over the next few years.

    Also make sure you aren't a PSI business, will disqualify you from those deductions.

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      mb5802002 on 04/06/2016 - 20:17

      I'm not sure about the PSI, Is this the same as %20-%80 role?
      I've worked full time for the first 6 month ($80K income) and the next 6 month I'm working as a self employee (earn about $80K including tax and GST, I haven't paid any GST and Tax as I was registered for GST on 1st of April).

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  spackbace on 04/06/2016 - 21:08

  +2

  Talk to your accountant, it's what they're paid for.

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  bemybubble on 06/06/2016 - 12:15

  Rule number one. Remove the question of 'is it tax deductible?' from any business decision and it will always be the best answer.

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    mb5802002 on 07/06/2016 - 21:28

    Nice respond, and is true

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  penting on 20/06/2016 - 10:12

  If you're a sole trader or an individual partner in a partnership and you make a net loss from your business activity, you may be able to claim that loss by offsetting it against your other income (such as salary or investment income) for that year.

  You may be able to offset the loss against your other income if one of the following applies:

  -your business is a primary production business or a professional arts business and you make less than $40,000 (excluding any net capital gains) in an income year from other sources

  -your income for non-commercial business loss purposes is less than $250,000, and either:
  your assessable business income is at least $20,000 in the income year
  your business has produced a profit in three out of the past five years (including the current year)
  your business uses, or has an interest in, real property worth at least $500,000, and that property is used on a continuing basis in a business activity (this excludes your private residence and adjacent land)
  your business uses certain other assets (excluding motor vehicles) worth at least $100,000 on a continuing basis.

  you have been granted a Commissioner's discretion allowing you to offset the loss.
  If you do not meet any of these requirements, you cannot offset your business loss against any of your other assessable income for that income year. However, you can defer the loss or carry it forward to future years. If your business makes a profit in a following year, you can offset the deferred loss against this profit.

  Source https://www.ato.gov.au/Business/Income-and-deductions-for-bu…

  Please do talk to your accountant before you go on shopping spree.