Forums / Property Investing / Help Needed! / Stupid Tax Question – Sorry

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  • Profile photo of IntrigueIntrigue
    Member
    @intrigue
    Join Date: 2010
    Post Count: 208

    Hello, I have a (well a few) stupid tax questions to ask and I cant work out where to find the answers without having to give a local accountant hundreds of dollars. Its not so much about the $100's of dollars I would have to pay out but rather the look on his face when I ask that bothers me. hee hee  So I am starting my own business as sole proprietor, but I am a little confused as my first job will be just prior to the end of financial year. so from a tax perspective is earnings considered when you do the work i.e. June or when you get paid i.e. July? Sorry I'm an idiot I know

    Profile photo of FreckleFreckle
    Blocked
    @freckle
    Join Date: 2012
    Post Count: 1,681

    Do the work but start your tax records from a fresh new tax year and bill it out in the new tax year. 

    Profile photo of Joel.MacdonaldJoel.Macdonald
    Member
    @joel.macdonald
    Join Date: 2012
    Post Count: 52

    Hi intrigue,

    From my understanding it is when you get paid the income. So I would invoice to get paid for July.

    You would be better off delaying payment until July. Save you a full year of tax accountant fees etc.

    Profile photo of IntrigueIntrigue
    Member
    @intrigue
    Join Date: 2010
    Post Count: 208

    So I do the work in June… and I invoice in early July. On the invoice do I state the invoice is for works carried out in June? (just so I'm clear)

    Profile photo of FreckleFreckle
    Blocked
    @freckle
    Join Date: 2012
    Post Count: 1,681

    There are 2 book keeping methods with regard to the ATO. At time of invoice or at time of payment. I've always worked on time of payment. Send your invoice out at the end of Jun for Jul payment. 

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,190

    Cash basis or accruals? It is generally when you get paid, but not always.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of FreckleFreckle
    Blocked
    @freckle
    Join Date: 2012
    Post Count: 1,681
    Terryw wrote:
    Cash basis or accruals? It is generally when you get paid, but not always.

    Yep. When you set up a set of accounts on MYOB for example it will ask you this when you configure the preferences/settings

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