Tax & postage

[decoretrocollectables]

I'm confused..

The postage I charge buyers - which is exactly what Aus Post charges me... Is this considered a profit to me? This doesn't make sense.. Is this just for this financial year or the previous one as well..

[decoretrocollectables]

This is a hobby at the moment, looking forward to my retirement in a few years... all this tax stuff is new to me, but ive just realised I not only have to submit to ATO for the end of this financial year but the previous one also..

Confused at the moment

WIll contact ATO

CHeers

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@ejholden1963 wrote:

As your ebay invoices are going to show FVF on shipping which is calculatable by the ATO, I would suggest you look at developing a better business model.

I would recommend building the cost of the FVF into your shipping fee.

As for the ATO, this is a basic reporting model that I have been using with several SOHO businesses I have run over the last 15 years.

Declared income = ALL income recieved.

Declared Deductions = outgoings:

Rent. Calculated on % dedicated space used for the gerneration of income. (Do  NOT include this if operating from a home you have money invested in unless you need a capital gains issue when you sell it)

Overheads = Electricity, insurances, storage space costs, internet. Usually these are a calculated % of the total.

Capital equipment: Computers, printers, modems, desks, fining cabinets, chairs, storage shelves, cupboards, packaging machines, etc. Usually a calculated depreciation schedule based on %/PA.

Consumables = Printer ink, packaging tape, satchels, boxes, packing material, stamps, pens, staplers, reporting books, petty cash etc ....

Fees & Charges = Site joining fees, site FVF, Paypal fees, ..... and now, the FVF on shipping.

Motor Vehicle use = This is a fixed per Klm rate determined by the ATO based on the vehicle used which has to be fit for the purpose.

You are required to keep a log book detailing date, Klm's, purpose.

You are allowed to claim travel milage used to collect supplies, stock, ship, etc, but only if the trip is for that express business purpose. If you stop to get milk, bread, pick up kids, etc .... FORGET IT!

Wages = If you pay yourself or staff a wage. This must include superannuation contributions & leave entitlements.

Drawings = Any sum taken from the business by the owner at any time during the year. IE: You have some $$ profit you use to buy your kid's birthday present, etc ..... This must also be shown on your Personal Gross Income line.

Reimbusement of time = You are entitled to claim a reasonable amount each month for the time taken to compile records for reporting purposes. Not available if you pay yourself or someone else a wage to do this.

Reimbursement of time = Compilation of reporting data & preparation of returns for submission to the ATO or your tax accountant.

Same parameter as above but only applicable once per annum.

Claim for last years Tax Accountant fees if applicable.

Disclaimer: While this model was prepared for me by the ATO & has operated without flaw for many years, your personal circumstances (centrelink payments such as part A/B, childcare, etc ...) & needs may differ as may ATO rules change. Please consult with the ATO or your personal Tax Advisor.

While this information is provided in good faith, the poster accepts no liability implied or expressed.

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[chameleon54]

I think I,ve worked it out. My stores only sell, they dont buy anything. The only money other than withdrawals I do, that come from my paypal account is Paypal fees, refunds to clients etc. all of which are tax deductable. If I keep a record of all withdrawals from my paypal account to my linked bank account for the year, this will be my gross income including postage but minus paypal fees. This gives the Gross income figure I need. I then deduct costs as per normal including the postage costs recorded on my postage only, dedicated credit card. Include all the other costs such as depreciation on stock, original stock purchase costs, shed rental, internet connection fees etc. etc. and we have our nett income figure. It should be very simple. Can anyone see a problem with this ?

[jensmanchester-australia]

If you want an easy way to keep your records for the ATO consider an online accounting service such as Xero. It takes me about 10 minutes a week to do my bookkeeping and the amount of time it saves me is well worth the money it costs (which is a tax deduction as well). I have the ebay side of the business, a website and a retail outlet so it is a reasonable size business.

Come tax time or BAS time (for those who are registered for GST) it only takes a few minutes to generate the reports you need for the ATO  or your accountant.