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I would like to start a small online business I would like to know if this will affect our family benifit , a simple example.
I purchase a product for say $10 I then sell the item for $20 including free delivery which cost me $8 so I have only made $2 profit but I recieved $20 .
when I declare earned income to centerlink is it $20 or $2 ?
Regards
Paul
Responses
Hi Paul
Congratulations on you thinking to start a business. All the best.
On to your question. Yes it will affect your family benefit received if the business makes a profit.
In your example the income you will have to declare to Centrelink will be $2 but don’t forget you will have other business expenses - telephones, internet, etc and this can be claimed against your business income reducing the profit and thus your taxable income.
Hope this helps.
Thank so much I have one more question if I purchase more products to sell with the $2 do I still have to declare it as income
Thank you in advance
Paul
Hi Paul, purchases of stock are deductible, so the PURCHASE is a tax deduction.
Closing stock COULD be assesable income, however I am guessing that you would probably be able to ignore movements in trading stock for tax purposes, and hence you income would be $0. You have another question on this subject to which I have posted a longer answer.......
Best thing you can do is invest some time and money in research on trading stock and income tax.....and get some advice from a good local accounting type
regards
brendan
Hi Paul
Yes you would still have to declare the $2 to centrelink as that is your income. The reinvestement you make to buy more stock is an asset.