If you or someone you know started an side business (or “side business”) in the past fiscal year, you should meet the tax liabilities associated with that business, along with the tax liabilities of your primary business.

Any income earned through a side business is taxable. That means that every sale you make counts toward your taxable sales (the total business income from your sales) and must be declared on your income tax return. In addition, suppose your revenue is above $ 75,000 or looks like it is above $ 75,000. In that case, you must register for GST and pay the 10% tax added to all your taxable sales, payable to the ATO every 15 minutes.

If you have to spend money on purchases or expenses related to the side issues, those expenses can be deducted from the profit you make. Essentially, you only have to pay tax on the difference between your income and your deductions. Here are a few things to consider when claiming a deduction for your business.

The costs you claim must have been incurred by the company.

The expense must be related to the business and should not be anything like your weekly shopping (household or private expenses in nature are generally not eligible for reimbursement).

If an expense has been incurred that is partly private / household and partly business, that expense must be appropriately distributed. This is especially helpful if you run your side business from home and are claiming home office expenses.

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Always make sure that your records are kept and there is evidence that it was the company that issued the money. An invoice or receipt is sufficient proof in this case, but a bank or credit card statement can also be used.

Other deductible expenses can occur during the initial start and structuring of the business. These deductions may include costs incurred in seeking professional advice on structuring the business, examining the viability of the business, or developing a business plan.

Some of the items you may qualify for on your side business include:

If the business is run from home, the business parts of bills such as utilities, phone or internet can be claimed.

Business skills or retraining may be tax-deductible when it comes to the cost of courses, training, seminars, or conferences (as long as it is related to business income).

Any preparatory work that took place during the start-up of the business before the official start of the business can be claimed by the company.

Always make sure to declare all business expenses that may apply to your business.

Keeping good records will help you keep track of all income and potential deductions that come in through the side business, and hiring an accountant can be one way to make sure this is done correctly. Remember, accountants are always there to help you with your tax return.

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