Online Business - how does tax, income and business registrations work?

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adamwydeman

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We have just started an online Business. Fair Trading have advised that we do not have to have a business name, but I would like to know the following, please, if someone could assist:

1. If the business runs at a loss in the first year, can this loss be deducted from the individual income tax return if we DO NOT have a business name or ABN.

2. Do we need to have an ABN to operate an online business?

3. What is the minimum amount that the business needs to make before paying GST?

4. If we buy items such as a server or samples, can we deduct these costs from personal income tax, as business expenses?

5. Is it better to have a business name for tax purposes?

Thanks a lot!

Regards

Adam Wydeman
 
I'll attempt to answer what questions i can:

1. You can deduct the loss off your income provided you pass 1 of 4 tests. These tests are: You have a gross turnover of over $20,000. Your business has been profitable for 3 years in the last 5 years. Your business has property worth at least $500,000 or assets worth $100,000. Obviously only the $20,000 turnover test will apply to you.

2. You need an ABN if you issue and invoice, so yes you will require one to make money, since you must give your clients a receipt when they give you money.

3. You only need to register for GST if your TURNOVER is over $75,000. Turnover is income before expenses.

4. If its a business cost it can come off the business income. The server may have to be depreciated though, so you may have to enter it into a 30% SBE pool.

5. Yes, register a name.

Applying for an ABN and registering a business name is not very expensive.
 
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