Get a gym membership, start a diet, drink less, and travel more. Every year we make plenty of new year’s resolutions that we try valiantly to uphold.
Why not make one about keeping on top of your tax obligations in 2023?
Know if you’re in business or not! Are you earning an increasing income from a hobby? You might already be in business for tax purposes. To work out if you’re in a business, identify all relevant, related activities you may be conducting already.
Examples of these can include:
Then, determine whether or not the activities are considered a business by answering the following questions.
The more of the following questions you answer yes to, the more likely it is your activities are a business:
If you’re the director of an Aussie company, you need to apply for a director ID. Keep your ABN details up to date as emergency services and government agencies use this information to support businesses during disasters. Also, if you’re going to earn over $75,000 this financial year, you’ll need to register for GST.
Good record-keeping helps you manage your business and its cash flow.
PSI is income produced mainly (more than half) from your skills or efforts as an individual. If you’re earning PSI, you’ll need to work out if you’re a personal services business to determine whether the PSI rules apply to your income. The rules affect how you report your income and the deductions you can claim.
The last few years have thrown some curve balls at small businesses, so it’s good to be prepared. Consult with your advisers, take heed of the advice given and if necessary, look into grants and programs that can assist your endeavours.
We wish you all the best and hope you’re on track to thrive in 2023. When the fireworks have faded, know that we’re always available to support businesses just like yours.