This month we've been talking all things tax, covering topics such as needing an accountant, tax on cryptocurrency, and investing your tax return. Today's topic will be tax for the self employed. If you work for yourself, we have collated a few tips to help you navigate the end of financial year.
As someone who is self employed (or in a business partnership), you do not have to make super contributions. However, you may want to consider making them anyway, so you can cash out after your retirement! Another reason to make super contributions is of course, a tax deduction. You may be able to claim deductions on any superannuation contributions you make.
Hopefully this tip isn't coming to you too late, but it is integral to put aside money each time you have money coming in to pay your tax bills. Many self employed people will set up a tax account and deposit money into it each time a payment comes in. It is safest to put aside more than you anticipate you will have to pay - you can always take the money out after tax time and use it for something else (after you know you have enough to pay your bill!).
When you have a business as a sole trader or are one half of a partnership, there is no division of your business and personal assets. This means you have a personal responsibility for your tax contributions, and avoiding them could mean fines, or, in dire cases, danger to your personal assets.
Deductibles are the main way to reduce your tax payments, and can be claimed on most expenses that you incur to undertake your business. Check with an accountant to be sure which costs are eligible to use as a deduction, as there are different structures for different types of businesses, and it's not something you want to get wrong! You might be tempted to try claiming everything from work outfits to the coffee machine, to pretty (but unnecessary) matching stationery, but the risks far outweigh the benefits!
Getting your head around tax as someone who is self employed, a sole trader, or part of a business partnership can be tricky! We've collected some tools for you to use that will make things a bit easier.
The ATO has a variety of different calculators that can give you answers to your tax questions! Their top 10 are listed on the site, but you can perform a search to find even more calculators for your specific tax needs.
We have published blogs with all the answers to your tax questions this month! Check out our backlog to catch up, and stay tuned for more coming in the next few weeks.
Government funded, Money Smart is a site you can trust to give you all the tips and tricks you need to get through tax time as stress free as possible! Just look through the subheadings or use the search bar to find the information you need.
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