australian webmasters and tax

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  • mGreg
    Confirmed User
    • Mar 2002
    • 602
    #1

    australian webmasters and tax

    (i'm pretty sure australian and US laws are different so this is to the aussies) How do handle tax/business structure? I was interested in forming a company to run my web operations under and a couple investments so i woulden't have to take the 48% tax rate. This week i was told by my accountant that since i was the 'item' generating the income it should be paid to me(aka personal tax rate) and that some authority could be on my back if i retain money in a company like that.(that wasn't his exact explanation but this accountant is very good)

    How do you guys handle this? there MUST be a legal(i'm only interested in a legal way) way to do this, 50% tax(over 50 or 60k) seems so stupid..

    any thoughts/discussions welcome
    Tags: None
    • IMP^or^SNiTL.e
      A/S/L .. I don't names.
      • Aug 2003
      • 1177
      #2
      charge GST

      or just dont declare the income

        Comment

        • rowan
          Too lazy to set a custom title
          • Mar 2002
          • 17393
          #3
          mGreg, I'd be interested to hear what you come up with. I'm still a sole trader paying normal income tax rates. My understanding of company tax is fairly limited, but my vague research didn't really suggest a great deal of benefit would be achieved by incorporating. For example, as a sole trader I can't claim my car as a business expense (since it's not actually used for business), and nothing changes with a company structure - it's still not a legal deduction since the car is for private use.

          I know there are other benefits such as salary sacrificing, and splitting income with a partner, so I'd love to hear more.

            Comment

            • invertiga
              Confirmed User
              • Jun 2003
              • 477
              #4
              I tried to work this out with the ITP dude the other day when i did my return. Cause last financial yr wif it i earned under 50k or whatever I don't need a ABN etc, so it counts as hobby income, i showed my cheque stubs, he asked me if they were more than my expenses in a dodgy way, i said of course not, he said "well dont say a word about it".... and that was that, although this year money going to be higher so i dunno wtf to do other than grab a abn and work as a sole trader and pay the normal tax brackets.

                Comment

                • puresexnow
                  Confirmed User
                  • May 2003
                  • 300
                  #5
                  http://swiss-bank-accounts.com/

                    Comment

                    • rowan
                      Too lazy to set a custom title
                      • Mar 2002
                      • 17393
                      #6
                      invertiga - get an ABN, GST is relatively easy to calculate (once you learn how). If you're like me and all of your income is from USA sponsors, then you pay no GST (since you are not collecting any), and you get back the GST portion of deductable costs like internet access. Just remember that you must only claim the portion that is for business use.

                      If you're earning more than $1k per year from non salary sources then you're probably already paying tax installments each quarter?

                        Comment

                        • mGreg
                          Confirmed User
                          • Mar 2002
                          • 602
                          #7
                          What i had origionaly intended to do was operate as a company, pay the company tax(30%) and keep most of the money inside the company, invest under the company and so on. Then when i needed money i would pay out to myself as dividents(and pay the extra tax). It would basicaly mean i could accumulate money faster. I've been informed its not possible(not legal, its possible i would raise some red flag if i did this) so i'm not sure what to do.

                          Paying 50% tax just doesn't seem right, it really makes it tough to keep trying to grow.

                            Comment

                            • mGreg
                              Confirmed User
                              • Mar 2002
                              • 602
                              #8
                              Originally posted by rowan
                              invertiga - get an ABN, GST is relatively easy to calculate (once you learn how). If you're like me and all of your income is from USA sponsors, then you pay no GST (since you are not collecting any), and you get back the GST portion of deductable costs like internet access. Just remember that you must only claim the portion that is for business use.
                              That is exactly what my accountant has told me to do.

                                Comment

                                • BlueDesignStudios
                                  Confirmed User
                                  • Feb 2003
                                  • 9492
                                  #9
                                  The situation with GST may be a little more complicated than that.

                                  When I was doing a lot of search engine traffic (ppc stuff), the tax department suggested that I would have to charge GST to consumers (how the fuck would that work, it's so fucking dumb) - they just wanted me to be a tax collector for them! Since all our clients are overseas though, we're classifed as exporters. We don't do the ppc stuff anymore either.

                                  But this is a complex issue, there are advantages to running a company in AU, but there are other costs, especially administration costs I've found to be quite high, there is so much dumb ass paperwork with this tax system..

                                  Don't get me started on this...

                                  Blue Design Studios - Adult Design Specialists!
                                  Email me for a free quote: [email protected]

                                    Comment

                                    • mGreg
                                      Confirmed User
                                      • Mar 2002
                                      • 602
                                      #10
                                      My accountant told me that it was a bad idea to run a company if i was the only one working under it and it was pretty obvious it was me who was generating the revenue. I don't know what to do, paying the personal tax rate seems so unreasonable, any comments appreciated..

                                      (i'm going to sleep but i'll bump this again in the morning!)

                                        Comment

                                        • PornBroker
                                          Confirmed User
                                          • Sep 2002
                                          • 686
                                          #11
                                          Originally posted by mGreg
                                          My accountant told me that it was a bad idea to run a company if i was the only one working under it and it was pretty obvious it was me who was generating the revenue.
                                          I'd get a new accountant, unless he has come to that conclusion based on other facts that we don't know about.

                                          I suppose a lot depends on the amount you expect to earn, but you can either have a family or unit trust sit under your coy and split the distribution of profit keeping one under $A60k.

                                          or as you say keep the profits in the coy and pay only coy tax.

                                          my advice would be to get another accountants opinion.
                                          please allow me to introduce myself, I'm a man of wealth and taste...I've been around for a long long year stolen many man's soul and faith...I was around when jesus christ had his moment of doubt and pain...made damn sure that pilate washed his hands and sealed his fate...pleased to meet you hope you guess my name...but's what's puzzling you is the nature of my game...

                                            Comment

                                            • invertiga
                                              Confirmed User
                                              • Jun 2003
                                              • 477
                                              #12
                                              rowan - the only tax i currently pay is for my casual hours in a brissy restaurant, and thats pay as you go tax. i've been looking into getting an ABN and will so next week, need to finish my 5000 word paper for tomorow on technology applications in restaurants first

                                                Comment

                                                • mGreg
                                                  Confirmed User
                                                  • Mar 2002
                                                  • 602
                                                  #13
                                                  This accountant is meant to be very good but i agree another opinion would be good. So what do all you other aussie webmasters do about this?

                                                  i'm keen to hear more

                                                    Comment

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