Hi there
This year is my first year submitting a tax return as a sole trader.
I started a Mechanical Repair shop and have quite a few different "categories" of purchases and i'm not sure what gets claimed and where.
For instance, i have the following items ive sort of categorised
1: My total income
2: All the parts specifically related to repairing cars (ie, Oils and filters for oil changes)
3: All the general expenses of the business (ie, phone bills, internet bills, rent costs, electricity etc. Basically things that reoccur monthly/quarters, or even external services that i make use of that may occur multiple times one month and not at all the next.)
4: One off items i purchased for the business (ie, A computer, tables, eftpos machine, etc)
5: Tools and Items purchased for specific jobs (ie a special tool to perform a specific job on a car, or replacement lost or broken tools like sockets and spanners)
Now obviously previously as an employee, i really only had no:5, tools i bought to work, that'd i'd claim as a deduction on my personal tax return.
How do i categorize all these as a sole trader.
I assume items 1 and 2 would go against my BAS for the business (thus left completely off my individual tax return. Income, and expenses - with a gst calculation).
Would category 3 go into my BAS also? Would certain items in that category go against the BAS whilst others don't?
Would 4 and 5 go into my individual tax return as deductions?
With the GST component removed, which is then put against the BAS for GST Credits
It was mentioned too me, things "required" to run the business would go on my expenses on the BAS wheres those that aren't specifically would go against my individual return. How do i categorize them though?
For instance, It was mentioned that say an eftpos machine is not "required" to run the business so it'd be a deduction and not against my BAS expenses, and yet i would honestly say 99% of my sales have been through eftpos (i've taken very little cash in 8 months), same as my phone (most appointments are made by it), i do all my invoicing on the computer (without it i couldn't invoice) and much of my regular parts purchases is done through only trade websites (so internet is "needed" for that, otherwise i'd have to ring....so i'd need a phone.....) and obviously i "need" electricity. Are these all business expenses then?
In that vein though, wouldn't all my "tool costs" (that used to be deductions) now be business expenses? As for instance, i can not do a timing belt on a specific engine without the specific special tool required for the job.
So would only "some" of category 4 fall into individual tax return deductions? (for instance an office table), or do it all just collectively go under business expenses?
Any help on this would be much appreciated
Thanks!
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