abn and djing

[Skank]

if i use my ABN to buy dj gear can i claim it back at tax time or a portion of it ?

anyone know any bonuses i can claim for tax being a dj

[eggssell]

the tax deductibility is not based on whether you have an ABN. its tax deductible if you have used it to gain the income you put in taxable income. so that goes for anything that helped you get income: music, travel, insurance, admin fees, etc.

in terms of gear you need to depreciate it over a period (i.e. cant claim it all at once), though there are some small business benefits that allows you to claim at an accelerated period, id need to relook at it.

with an abn i guess you have a registered business? do you invoice via a company structure??

as DJing will be viewed as personal services income, any surplus profit from what the business earns will be counted towards your own taxable income (this was to prevent people paying just company tax rates!)

anywho i can post up what i came up with when i was doing my business case, which used the model of creating a company to invoice and pay for expenses.

[Skank]

lol thaks dude but im lost already i might just have to go into an accountant and let them work their magic

[eggssell]

ha ha. i am an accountant but the myth is we all know tax, when actually tax legislation are government rules, and differ greatly from accounting rules. so a lot of accountants dont actually know tax!...

i know a little bit about a little bit. but no worries see a tax proffessional.

i did check out the tax deductibility of gear, and basically for a small business (i.e. not personal return); you can claim in full in the year the gear is bought 100% of the cost as a deduction for all items less than $1K. if it costs more then $1K; it goes to a pool where 15% can be claimed in the first year, then 30% each year after that.

[Skank]

ah noice so over 3 years you would get the full price back

[eggssell]

well dependent on when you bought it, but it will actually be over 4 tax returns (i.e 1-15%, 2-30%, 3-30%, 4-balance).

NOTE: this is only for a company's tax return, and a small business eligible for simplified tax rules at that

Decline in value for a personal tax return is different (in summary write off straight away if under $300, otherwise over its life).

And the final note in Tax 101: do not be mistaken that you are getting in your return the cost of th gear, what you are getting is savings in tax equal to your marginal tax rate! i.e if your marginal tax rate is 20%, and you spend $1,500 then you are saving $300 in tax over the number of years you depreciate it (not each year).

Next week we will talk about Fringe Benefits Tax

[Skank]

fuck me my head hurts, thanks man

[Psycho-Delic]

im not an accountant or a tax officer, but my dad is a tax fraud so i know a couple off tricks

my very unprofessional opinion would be, just forget it if your getting paid cash, and don't claim the cash either. if your useing your abn and making a decent salary off djing just give it a shot, whats the worst that can happen there only gonna make you pay it back. or if you already gots to see an accountant for other work and tax stuff, just slip it in there and there service should be tax deductible

[christianfloyd]

scratches heads......

[eggssell]

aiight im a bust it a little simpler:

* in regards to OP question, ABN has nothing to do with whether you can claim it as a deduction

* if you have some sort of business structure and are lodging a business tax return:

- gear costing less than $1,000 can claim in the year bought

- gear costing more than $1,000 claim 15% in first year, and then 30% in next two years, and then 15% in the fourth year

* if you have earnt any income from using your gear but will not be submitting a business return:

- you must claim the cost of the gear over the life of the equipment (the guide for mixers and speakers is 6.66 years, so i guess everything else kind of fits in here except laptops, so that will mean you can claim about 15% a year)

clear as mudd. heh

[eggssell]

one way the ABN does help is if you register for the GST system, you can get the gst back for anything bought.

of course theres lots of little other rules (about a book shelf worth) of how this all works.

[Funky_Steve]

But remember, if you register for GST to claim back GST on anything you have purchased, you must also include GST in what you charge for your services. So either your fees will need to go up, or your actual income will be less.