A few questions regarding tax and centrelink

[andrew0123]

Hi guys. I am starting to make a profit over what i'm allowed to earn on my DSP; i'm on a centrelink disability pension and am preparing to hand in all the relevant forms. I am going to get an ABN, report every 3 months, fill in a tax return and centrelink forms. Do you guys have any general advice? 

An accountant is a possibility but I also have some questions - I have receipts from online banking for petrol from 2014 when i found items in hard rubbish. These items were listed online from mid 2019. Some have sold and some are still listed online. Can I claim petrol deductions from online bank receipts and do i have to wait for each item to sell before I can claim? How do i calculate deductions when i have thousands of vastly different items and different travel times? I also buy and sell from op shops, cash converters and never kept physical receipts, but payed for most with online banking? I had never tracked any of this stuff until 2019 when i decided to sell it. 

Also, how do i value these items? Can i value the stock based on how much i got it for? (cost of petrol/ car expenses only?) - how far back can i claim deductions? Can i value this at market price and claim a deduction based on it's value or cost to find or buy? 

I also have plenty of childhood football cards I want to sell which I payed quite a bit for as a kid - all my pocket money and I may not make a profit (no evidence or receipts of these purchases other than my brother/ parents vouching for it).  Can I claim any of this?

Do deductions have to directly relate to a sold item. for example. If i found 100 items in hard rubbish and spent $4500 in petrol, can i claim all the petrol in the first year's profit and loss? 

Also, with the balance sheet for inventory - I have my stock at very inflated prices because I’m not really ready to sell it. My overall inventory price is much higher than what it is actually valued at. Do I have to put on the balance sheet the price I have items online or can i do a retail value of item or can I include it as 0 (for the items i didn't pay for). 

Thanks.

[daydreams_12]

You need to contact an accountant asap to get this all sorted.

[glenbankloel]

You Need to contact an accountant and pay for an hour or two of their time and get some advice. Try to talk to a couple and then make a decision to work with one of them, and let them handle your affairs.

Sounds like you are way out of your league and if sales are going gang busters (congrats) then you need to get ahead and do something now. You are paying for their skills, training, and knowledge- skills that you don't have.

So, Focus on what you do best, and let them do what they do best. Make sure that you add % to your listings to cover costs.  

Good Luck

[rocket2retro]

I can help a bit with claiming car expenses. I doubt you'll be able to claim for previous years however.

You do not claim petrol alone.

There are 3 ways to claim (but only one of the above ie whichever is highest)

1 Depreciation on vehicle (probably not for you as you probaly use your car for personal and business). eg If you had a $100k truck solely for business the depreciation might be considerable.

2 Percantage of total costs. This would be the sum of your total costs incl Registration, Insurance, Petrol, Repairs etc. You would need to allocate what % is business v personal eg if your total costs were $5000 & you used yourr car for 50% business you could claim $2500

3 Mileage. You need to keep a log book of every trip and its purpose. You can claim up to 5000km per year. For each kilometre there is a set claimable amount $0.65 per km (or thereabouts).

As you can see it is rather complicated. I think for the first year you should see an accountant. Once you've done that & worked out what you claim you might be able to manage it yourself (as I now do).

[ozheatwave]

report every 3months is when you do your Business Activity Statement (BAS), you report your GST, doesn't matter you are in profit or loss at that period, because GST is not your money, you are helping the government to collect on their behalf

you only have to declare GST if your turnover is over $75k a year, while you may get reduce in your DSP, but you may not need to register for GST, that is you get your 100% net profit

tax department only requires you to keep your records for 5years, i am not an expert in tax to a extend on claiming expenses six years ago, you will need consultation on that

personal / sole trader accounting fees are not that expensive if you say you are making profit

[jellybirddesigns]

I doubt you need an ABN unless you are earning over 75K a year and have to charge GST. You won't have to worry about BAS statement at this point, unless you earn over that figure.

The main issue is that you have been buying or foraging for a number of years with the intention of making a profit, so in effect, you are conducting a business. Whilst the threshold for filing a tax return is about $18,200, the onus is on the seller to report ALL income to the ATO. Ebay will automatically inform the ATO if you earn over $10,000, but again, the responibility lies with you to stay compliant.

There are many sellers who make less than the tax threshold, but unless you file a return, you cannot claim deductions regardless.

If you have not filed a tax return prior to the 2019-2020 tax year, then anything you've kept prior to this year will be useless, unless you intend to file back taxes and admit to the ATO that you have been running a business. 

In terms of mileage, I just write down my kilometers travelled in the tax year and submit that figure. The agent then uses a certain formula which involves a flat figure of about 66c per km travelled and which covers all vehicle running costs and maintenance.

If you found an item in the dumpster, anything you sold it for would be pure profit as you did not incur an upfront expense.

You sound over your head in this, so I highly suggest you talk to an accountant.

[lyndal1838]

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@jellybirddesigns wrote:

I doubt you need an ABN unless you are earning over 75K a year and have to charge GST. You won't have to worry about BAS statement at this point, unless you earn over that figure.

The OP's actions all point to running a business so I think the ABN is a good idea....but no GST registration needed just yet.  Not until absolutely necessary.  There is no point in giving the ATO your hard earned money if it is not necessary.

It costs nothing to get an ABN.

The main issue is that you have been buying or foraging for a number of years with the intention of making a profit, so in effect, you are conducting a business. Whilst the threshold for filing a tax return is about $18,200, the onus is on the seller to report ALL income to the ATO. Ebay will automatically inform the ATO if you earn over $10,000, but again, the responibility lies with you to stay compliant.

You have to file a tax return and declare ALL income.  Only when your taxable income is $18200 (after deductions) do you have to pay any tax.

There are many sellers who make less than the tax threshold, but unless you file a return, you cannot claim deductions regardless.

If you have not filed a tax return prior to the 2019-2020 tax year, then anything you've kept prior to this year will be useless, unless you intend to file back taxes and admit to the ATO that you have been running a business. 

In terms of mileage, I just write down my kilometers travelled in the tax year and submit that figure. The agent then uses a certain formula which involves a flat figure of about 66c per km travelled and which covers all vehicle running costs and maintenance.

If you found an item in the dumpster, anything you sold it for would be pure profit as you did not incur an upfront expense.

You sound over your head in this, so I highly suggest you talk to an accountant.

I agree wholeheartedly.....the sooner the better.

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[andrew0123]

Hi there is a glitch on here that means I am not able to log in and out of my accounts and I have 3 accounts - cdsbooksdvds, moov-auction and andrew0123. Therefore, I am not able to tell which account I am logged into and I may be responding from either of these 3 accounts. Sorry about that. 

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@jellybirddesigns wrote:

I doubt you need an ABN unless you are earning over 75K a year and have to charge GST. You won't have to worry about BAS statement at this point, unless you earn over that figure.

There are many sellers who make less than the tax threshold, but unless you file a return, you cannot claim deductions regardless.

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Being on a centrelink payment I was led to believe that if i don't get an ABN I will need to lodge a form every 2 weeks and with an ABN i need to lodge just every 3 months, is this correct? 

I am under the threshold. Can I claim deductions even if i am not paying tax?

[wide-world-of-stamps]

Please talk to an accountant.

We can only give general advice, and not all will apply to your situation.