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Just started own business, little income in the previous year, but a few expenses. Help?

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In the past twelve months I worked two casual jobs, received a small amount of money from being on disability pension, and worked towards my own small business. My total income was around $35k. As part of setting up my small business I spent a few thousand dollars on preparing the product, but I only had about $100 of income from the business (as part of a sample). I'm hoping to recoup those losses over the next 24 months, once my product hits the market, but I'm confused on if I claim those deductions with this years tax return or if I have to wait until I've made a proper income? Any advice would be very appreciated as I'm a bit confused and can't afford a tax accountant at this moment.

Thank You!

=)

 

EDIT: Just a small further bit of information, the product is a manuscript that I'll be publishing and selling (either through traditional publishing labels or self-publishing, both are on the table at the moment). So I guess it's an arts based small business.

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Community Support

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Hi @JDPax ,

Firstly, thank you for your good question and involvement in the ATO Community forum (as this is a community forum, advice is general in nature only).The important thing for you to determine for the 2020 financial year, is which of your expenses for setting up the business are private/capital and which are deductible (without knowing what these 'preparing the product' expenses are). It sounds like you have got to do a tax return anyway to include your work as an employee, and perhaps some business income/expenses as well, depending on the timing of these things occurring (see Item 15 Net income/loss from business). It is possible to have business losses carried forward to future years, but the most important point would be to make sure that these expenses are deductible in the first place.

 

I am going to refer you to a number of places of more information or assistance -

1) for general help and access to a 'Live Chat' (with ATO staff) - you can go to Small Business Assist (you could ask some questions in the Live Chat if you wished - they are a good referral point if they dont have the answers)

2) Depending on your location, there is the National Tax Clinic program , which is a government-funded intiative which involves providing free help to taxpayers, including small businesses

3) There is information here on Depreciation and capital expenses for businesses

4) on the ATO's Small Business webpage, there is a list of learning resources, and there is a link to 'Small business webinars' there as well, on a range of topics

 

All the best with your new business!

1 REPLY 1

Most helpful response

Community Support

Replies 0

Hi @JDPax ,

Firstly, thank you for your good question and involvement in the ATO Community forum (as this is a community forum, advice is general in nature only).The important thing for you to determine for the 2020 financial year, is which of your expenses for setting up the business are private/capital and which are deductible (without knowing what these 'preparing the product' expenses are). It sounds like you have got to do a tax return anyway to include your work as an employee, and perhaps some business income/expenses as well, depending on the timing of these things occurring (see Item 15 Net income/loss from business). It is possible to have business losses carried forward to future years, but the most important point would be to make sure that these expenses are deductible in the first place.

 

I am going to refer you to a number of places of more information or assistance -

1) for general help and access to a 'Live Chat' (with ATO staff) - you can go to Small Business Assist (you could ask some questions in the Live Chat if you wished - they are a good referral point if they dont have the answers)

2) Depending on your location, there is the National Tax Clinic program , which is a government-funded intiative which involves providing free help to taxpayers, including small businesses

3) There is information here on Depreciation and capital expenses for businesses

4) on the ATO's Small Business webpage, there is a list of learning resources, and there is a link to 'Small business webinars' there as well, on a range of topics

 

All the best with your new business!