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Is Your Side Hustle Tax Compliant? · She's On The Money

0:00
Speaker 1: Hello, my name's Santasha Nabananga Bamblet. I'm a proud your
0:04
Speaker 1: the Order Kerni Whoalbury and a waddery woman. And before
0:08
Speaker 1: we get started on She's on the Money podcast, I
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Speaker 1: would like to acknowledge the traditional custodians of the land
0:14
Speaker 1: of which this podcast is recorded on a wondery country,
0:18
Speaker 1: acknowledging the elders, the ancestors and the next generation coming
0:22
Speaker 1: through as this podcast is about connecting, empowering, knowledge sharing
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Speaker 1: and the storytelling of you to make a difference for
0:30
Speaker 1: today and lasting impact for tomorrow.
0:33
Speaker 2: Let's get into it.
0:34
Speaker 3: She's on the Money. She's on the Money.
0:57
Speaker 4: Hello, and welcome to she is on the Money podcast
1:01
Speaker 4: for millennials who want financial freedom. My name is Georgia King,
1:05
Speaker 4: and joining me as always is Victoria Define.
1:08
Speaker 2: How are and I am well?
1:10
Speaker 4: Today we are talking about a topic so many She's
1:13
Speaker 4: on the Money community members are familiar with side hustles,
1:16
Speaker 4: but more specifically, how we can work out if our
1:19
Speaker 4: side hustle is tax compliant.
1:21
Speaker 2: Important.
1:22
Speaker 4: It makes a lot of sense that over the last
1:24
Speaker 4: couple of years, in living through a pandemic, so many
1:27
Speaker 4: of us have had to adjust the way we work,
1:29
Speaker 4: and I know personally so many people in my life
1:32
Speaker 4: have started their own side hustles to tike couple of
1:35
Speaker 4: income lost.
1:36
Speaker 2: It's very colutely.
1:37
Speaker 4: As it turns out my mates and that she's on
1:39
Speaker 4: the money community, We're not the only ones now. In
1:42
Speaker 4: March this year, a new national report released by IG
1:46
Speaker 4: revealed that nearly half forty eight percent to be presas
1:49
Speaker 4: of Australian surveyed either have or are planning to start
1:53
Speaker 4: a side hustle, which to me, Victoria Devine, is staggering.
1:57
Speaker 2: It is because do you know what we did a
1:59
Speaker 2: couple of years ago. So back in twenty nineteen, when
2:02
Speaker 2: I first did the podcast and our community started to grow,
2:04
Speaker 2: I did a census, and the census will come out
2:06
Speaker 2: again this year. I'm still just pulling all my questions
2:09
Speaker 2: together because I want to survey you guys and like
2:11
Speaker 2: actually see the insights from our community. But I asked
2:14
Speaker 2: in that survey how many of you had a side
2:17
Speaker 2: hustle or we're planning to start, and it was twenty percent.
2:19
Speaker 4: Look at that grow, I wonder what would happen if
2:22
Speaker 4: you did that now in our commisity.
2:24
Speaker 2: I feel like so many people in our community have
2:26
Speaker 2: side hustles because we're learning so much about what that
2:29
Speaker 2: actually means. So it's now no longer like, oh my gosh,
2:32
Speaker 2: I started this jewelry creating business and I registered in
2:34
Speaker 2: ABN and I did this and I did that. To
2:36
Speaker 2: now people going, oh, I just do online surveys as
2:38
Speaker 2: my side hustle on the weekends, and you're like, wow,
2:40
Speaker 2: like there's so many different ways. I remember a couple
2:43
Speaker 2: of months ago we had a money diarist who just
2:44
Speaker 2: did stuff on air tasker, and it's just like, there's
2:47
Speaker 2: so many different ways to have a side hustle. That
2:50
Speaker 2: doesn't mean you have to register in ABN and start
2:53
Speaker 2: an entire business. You can just like literally just hustle
2:56
Speaker 2: on the side for a little bit, go in some
2:57
Speaker 2: extra casholer and you're good.
3:00
Speaker 4: I love it as long as you pay tax on it.
3:01
Speaker 2: Yes, And that's why this whole episode is right.
3:05
Speaker 4: So for anyone who is unfamiliar with the term, what
3:09
Speaker 4: actually is a side hustle, let's break it outside job
3:12
Speaker 4: or side revenue generating exercise.
3:14
Speaker 2: Let's call it that to bring in some extra cash.
3:17
Speaker 2: So it could be as we heard on our money diarist,
3:20
Speaker 2: was it last week or a couple of weeks. It
3:21
Speaker 2: was a couple of weeks ago. She just took the
3:23
Speaker 2: bins in and she got an extra two grand a
3:25
Speaker 2: year for every what was at fortnite or something something
3:28
Speaker 2: like going down picking up the bins taking them out
3:30
Speaker 2: for a body corporate two grand a year. That's a
3:32
Speaker 2: side hustle. We know people who you know need scarves
3:35
Speaker 2: and sell them on Etsy side hustle. Like, there are
3:37
Speaker 2: so many different ways to generate income, whether you are
3:40
Speaker 2: in a more structured side hustle, I guess framework, so
3:44
Speaker 2: something like being an Uber Eats driver or you know,
3:47
Speaker 2: actually doing DD or something like that, all the way
3:50
Speaker 2: to actually having a full blown side business. Like we've
3:53
Speaker 2: seen on money Diaries before where people are like, oh,
3:55
Speaker 2: I have a full time job, but also I have
3:56
Speaker 2: this entire company that I run in my spare time,
3:59
Speaker 2: and I'm like three children, How do you even have
4:01
Speaker 2: spare time? Because I have no children and still no
4:04
Speaker 2: spare time. So it blows my mind how creative our
4:07
Speaker 2: community has been in picking up side hustles. So it
4:10
Speaker 2: could be you driving Uber, or it could be you
4:13
Speaker 2: having a full blown company, or it could be you
4:15
Speaker 2: letting out your spare room on Airbnb to have guests
4:18
Speaker 2: on the weekends when you're maybe either home or not home.
4:21
Speaker 2: I think it's so cool how creative our community has
4:23
Speaker 2: been with finding side hustles that before they were like, oh,
4:26
Speaker 2: I didn't even know that I could have a side hustle.
4:28
Speaker 2: And then I realized that my spare room could literally
4:31
Speaker 2: have an Airbnb guest in there and I could earn
4:33
Speaker 2: some extra cash. How cool is.
4:35
Speaker 4: That My brother has recently learned about Airbnb And let
4:39
Speaker 4: me tell you, ladies, he is making a lot of money.
4:42
Speaker 4: Is he actually always at home and mum is helping
4:44
Speaker 4: him with the laundry, which makes me very mad.
4:47
Speaker 2: Wait, so he's like leasing out here and then stay
4:49
Speaker 2: at mom and dad's house. It's the laundry.
4:52
Speaker 4: I'm like, can you go home even though I don't
4:54
Speaker 4: live there.
4:54
Speaker 2: But does your mum do your laundry?
4:56
Speaker 4: N She helps me with Lynden sometimes. Joh, we don't
5:00
Speaker 4: have a dryer.
5:01
Speaker 2: You know what. The boys need a little bit of help.
5:04
Speaker 4: They do, they do? Anyway, point is he makes a
5:07
Speaker 4: lot of money on Airbnb. Covid really ramped up flexible
5:11
Speaker 4: working arrangements beyond the traditional nine to five office space situation.
5:16
Speaker 2: Which I love to say, I love.
5:18
Speaker 4: We also mentioned a while back on our episode about
5:20
Speaker 4: having tough conversations with your boss that perhaps your negotiations
5:24
Speaker 4: don't always need to be around pay, but maybe around
5:27
Speaker 4: working for your hours, which could actually give you time
5:30
Speaker 4: to nurture that side.
5:32
Speaker 2: Hustle, which I think is cool.
5:34
Speaker 4: What would you say the main reasons are that people
5:36
Speaker 4: have a side hustle, I mean obviously making money.
5:39
Speaker 2: Look, I feel like that was the number one. Like
5:42
Speaker 2: people have a side hustle because they want to make money.
5:45
Speaker 2: And then it's also one of those things where it
5:46
Speaker 2: can be a little bit more flexible. So maybe you
5:49
Speaker 2: are a stay at home parent and you're like, I
5:51
Speaker 2: just want to do something additional to get maybe some
5:53
Speaker 2: cash in the door, or just be a little bit
5:55
Speaker 2: more engaged. Like I've got a girlfriend who is a
5:58
Speaker 2: stay at home mum at the moment, and she absolutely
6:01
Speaker 2: adores it. But she's gotten to a point where she's
6:03
Speaker 2: just like, all right, I do want my kid to
6:05
Speaker 2: go to daycare a couple of days a week just
6:07
Speaker 2: for like the social interaction. But she's not willing to
6:10
Speaker 2: take on a full time job yet or go back
6:12
Speaker 2: part time into her role. She's doing laundry. Like she's
6:15
Speaker 2: just become kind of like a washing lady for a
6:17
Speaker 2: couple of families around the area, which I think is
6:20
Speaker 2: actually genius. So on her days off, she goes and
6:23
Speaker 2: picks up the washing, takes it back to her house,
6:25
Speaker 2: washes it, folds it, does whatever else, and then just
6:27
Speaker 2: drops it back and makes bank from it. And do
6:28
Speaker 2: you know what. I'm obviously not going to out her
6:30
Speaker 2: on the podcast, but it's a little cash job, so
6:33
Speaker 2: she's maybe not doing the tax thing she should be doing.
6:36
Speaker 2: But like I'm not going to dob on her. And
6:39
Speaker 2: if the ader come knocking, I'm like, I don't know
6:41
Speaker 2: what you're talking about. I made that example up all
6:43
Speaker 2: by myself.
6:43
Speaker 4: Doney. My grandma does the same thing. Have I told
6:46
Speaker 4: you she does mining for people?
6:48
Speaker 2: That's so whole little bit of care. I feel like
6:50
Speaker 2: it's genius because like Grandma's are literally the best at iron.
6:55
Speaker 4: She is talented.
6:57
Speaker 2: Like I can't iron to save my life. If they're
7:00
Speaker 2: a pair of pants that I own that have any
7:02
Speaker 2: form of plate or crease in it, I'm like, all right,
7:04
Speaker 2: it's straight to the right cleaner. And that's so expensive.
7:08
Speaker 2: I think it's genius. Yeah, I gu it's genius anyway.
7:10
Speaker 4: Job.
7:11
Speaker 2: I feel like there are so many different ways you
7:12
Speaker 2: can have a side hustle, and it doesn't necessarily have
7:15
Speaker 2: to always be for income, Like it could just be
7:18
Speaker 2: you wanting to be engaged and do something because I'm
7:20
Speaker 2: sure grandma's like, great, the money's you know, really helpful
7:22
Speaker 2: on the side, but it's a way of, especially as
7:25
Speaker 2: you're getting a bit older, side hustles are a way
7:28
Speaker 2: of staying connected with your community as well, yes, and
7:30
Speaker 2: staying engaged with people who are around you. And like,
7:33
Speaker 2: I'm sure those families that your grandma works for, like
7:36
Speaker 2: she's kind of hard, it's a family, and like she
7:39
Speaker 2: probably doesn't want to lose that either. So I think
7:41
Speaker 2: there are lots of different reasons why people have side hustles,
7:44
Speaker 2: but predominantly, especially if you're listening to she's on the money,
7:47
Speaker 2: it's probably due to cash, which is why we need
7:49
Speaker 2: to be careful about how we generate it so we
7:52
Speaker 2: don't end up with like a hefty tax bill at
7:53
Speaker 2: the end of tax time.
7:55
Speaker 4: How does it differ from a part time job on
7:58
Speaker 4: the side fee.
7:59
Speaker 2: It's all about control. So while a side hustle is
8:01
Speaker 2: usually only done part of the time. It's not actually
8:04
Speaker 2: a consistent part time job, like you don't have an
8:06
Speaker 2: employment contract or a framework around it. And freelancing isn't
8:10
Speaker 2: really considered a side hustle unless it's your secondary job.
8:13
Speaker 2: So a full time freelancer as well. I really want
8:16
Speaker 2: to clarify this, like, that's a legit profession. That is
8:18
Speaker 2: what you do, that is how you do it. That
8:20
Speaker 2: is not a side hustle. A side hustle to me
8:23
Speaker 2: and a side hustle to the ses on the money
8:24
Speaker 2: community is just getting some extra cash on the side.
8:27
Speaker 2: It's not going, oh, I have a full time job
8:29
Speaker 2: and I have a freelance career as well. Like, I
8:31
Speaker 2: think we need to differentiate that because I would hate
8:33
Speaker 2: people to listen to this and be like, oh, Victoria
8:35
Speaker 2: doesn't think it's legit. Ye, no, I do, and you
8:37
Speaker 2: are the biggest hustler of them all. So some people
8:40
Speaker 2: just don't have a main job and then put it
8:42
Speaker 2: all together because they have a whole heap of sid
8:43
Speaker 2: hustles as well, which is kind of cool.
8:45
Speaker 4: What are your hot tips when it comes to like
8:48
Speaker 4: nailing a.
8:48
Speaker 2: Side hustle, all right, I've written down five hot tips.
8:51
Speaker 2: Are you ready for them? Really? So start small and
8:54
Speaker 2: don't invest right away. So the value of starting small,
8:57
Speaker 2: I don't think can be overstated. People often with side
9:01
Speaker 2: hustles bite off more than they can chew and then
9:03
Speaker 2: have to wind back significantly. So make small steps today
9:06
Speaker 2: to put your side hustle together is going to put
9:08
Speaker 2: you ahead of those who are starting tomorrow. But also
9:11
Speaker 2: it's going to put you in a position where you're
9:12
Speaker 2: completely in control of scaling that too. Often, like let's
9:16
Speaker 2: use ironing as an example here, you'll go, oh my god,
9:19
Speaker 2: I can get through like a basket every single night.
9:22
Speaker 2: Is that actually feasible? And like is that actually going
9:24
Speaker 2: to fit into your lifestyle or is that just something
9:27
Speaker 2: you could pick up on a Sunday. So I think
9:28
Speaker 2: it's about starting small, testing the water to see how
9:30
Speaker 2: you go. The next is finding the right side hustle
9:33
Speaker 2: for you. I think there's been a lot of pressure
9:36
Speaker 2: to quote have a side hustle, which shouldn't exist. Like,
9:39
Speaker 2: if you don't want a side hustle and you actually
9:41
Speaker 2: want to enjoy your free time, do that that is
9:45
Speaker 2: a privilege, Like the idea that people have a side
9:48
Speaker 2: hustle for one of two reasons. One extra income, and
9:51
Speaker 2: they are swapping their time for money. That is important.
9:53
Speaker 2: But I also just think if you don't want a
9:55
Speaker 2: side hustle, don't have one. People put too much pressure
9:58
Speaker 2: on themselves. But it is a really good way of
10:00
Speaker 2: getting ahead, So find the right one for you. So
10:03
Speaker 2: is it making the money that you need it to make,
10:05
Speaker 2: Is it going to do the things that you want
10:07
Speaker 2: it to do. Is it nourishing you in the way
10:09
Speaker 2: that it needs to. I think sometimes people end up
10:12
Speaker 2: again biting off more than they can chew, and they
10:14
Speaker 2: go got this great side a hustle. I'm making like
10:17
Speaker 2: fifty bucks every time I sell X, But then you
10:19
Speaker 2: find out it's taking them fifty hours to make X,
10:23
Speaker 2: and then it's actually not a good trade off for
10:25
Speaker 2: the time that they're sacrificing, and they actually should have
10:27
Speaker 2: just picked up, you know, an extra guest on Airbnb
10:30
Speaker 2: and chucked them in the spare room because they would
10:32
Speaker 2: have made better bank. So I think it's about balancing
10:34
Speaker 2: what is actually feasible when it comes to having a
10:37
Speaker 2: side hustle, Because regardless of how passionate you are, I
10:41
Speaker 2: think your time is absolutely worth money, and if it's not,
10:44
Speaker 2: you know, balancing out, you're going to get burnt out
10:46
Speaker 2: really quickly. The next is understanding your reasoning for starting.
10:51
Speaker 2: So is it actually cash? Is it to pay off
10:54
Speaker 2: a debt? Is it to build an emergency fund? Is
10:55
Speaker 2: it to put yourself ahead when it comes to investing
10:58
Speaker 2: for your retirement? Is it to if your first home deposit?
11:01
Speaker 2: Is because you just want some more engaging work to do, Like,
11:05
Speaker 2: we need to understand why to keep on track because
11:08
Speaker 2: the side hustle can quite quickly become really all consuming.
11:11
Speaker 2: So especially if you have a full time job and
11:13
Speaker 2: then you're taking on a side hustle. Remembering what you're
11:16
Speaker 2: compromising there, like is it actually family time? Is it
11:19
Speaker 2: something that you don't want to be compromising? Is it
11:22
Speaker 2: short term so you can get out of debt? Is
11:24
Speaker 2: it short term so you can afford a europe trip?
11:26
Speaker 1: Haha?
11:26
Speaker 2: Cough Where I am right now? Bye? But it's one
11:28
Speaker 2: of those things that you just really need to be
11:31
Speaker 2: quite clear on that because too many times we get
11:33
Speaker 2: so swept up and caught up in it that you're like,
11:35
Speaker 2: oh my gosh, I didn't even realize two years down
11:37
Speaker 2: the track that I would have done things differently, so
11:40
Speaker 2: I think just being on track again, prioritizing your time.
11:44
Speaker 2: This twenty four seven rising grind hustle culture is a joke,
11:48
Speaker 2: Like nobody gets up at five am and then sleeps,
11:51
Speaker 2: and no one can call it coffees anymore. Guys, it
11:54
Speaker 2: is not sexy. You're not is sexy. Having financial and
11:57
Speaker 2: mental wellness, like being consistent and looking after yourself and
12:02
Speaker 2: picking a side hustle that actually works for your mental
12:04
Speaker 2: health and your mental state is so important, like this
12:07
Speaker 2: idea of rise and grind culture and like always being
12:10
Speaker 2: on the hustle, like, honestly, I was no more girl boss, bullshit, none,
12:15
Speaker 2: just put it in the bin. I just I don't
12:17
Speaker 2: like it. It's so much about wellness and looking after yourself.
12:21
Speaker 2: And please don't get me wrong, there is nothing sexier
12:24
Speaker 2: than a person who knows what they want and is
12:26
Speaker 2: out to get it. I'm all about that, But there's
12:29
Speaker 2: the difference between that and someone who's like, oh my god,
12:32
Speaker 2: I'm a hustler. I'm a cultured hustler, and I do
12:35
Speaker 2: like you're not going just sit down, sir, So really
12:38
Speaker 2: prioritizing your time and making sure that you're sticking to
12:41
Speaker 2: those boundaries from my perspective, is really important because you know,
12:45
Speaker 2: we're all about money at cheese on the money, we're
12:47
Speaker 2: all about generating income, we're all about everything, but over
12:51
Speaker 2: and above all of that, from my perspective, it's actually
12:54
Speaker 2: about you and your journey. Like the tagline of my
12:57
Speaker 2: business seller is it's your journey, And that's the thing
13:01
Speaker 2: that we really want to focus on because it's not
13:03
Speaker 2: necessarily about the destination. From my perspective, it's about enjoying
13:06
Speaker 2: the journey as well and finding balance in your life.
13:09
Speaker 2: And I think that sometimes we forget that, especially when
13:12
Speaker 2: we get swept up in this side hustle culture of
13:14
Speaker 2: like earning money and being a girl boss. Like we're
13:16
Speaker 2: not girl bosses. I'm not a girl boss. No, we're
13:20
Speaker 2: just bosses and we're just doing what we need to
13:22
Speaker 2: for our life and our family and what we want.
13:24
Speaker 2: And then the last one, this is like me directly
13:27
Speaker 2: talking to freelances. Here, you are going to ask for
13:30
Speaker 2: what you are worth. You are going to know your worth,
13:32
Speaker 2: and you are going to add tax to that. We
13:34
Speaker 2: are not anymore going to be afraid to charge people
13:38
Speaker 2: for the services that you are providing. We are not
13:41
Speaker 2: going to undersell. We are not going to under charge.
13:43
Speaker 2: If someone comes to your business and wants a discount,
13:45
Speaker 2: thank you for coming. No, we don't do that. Like
13:48
Speaker 2: we put ourselves first because you are the priority here.
13:52
Speaker 2: You need to be maintained and there is always going
13:55
Speaker 2: to be somebody who wants to pay for your services
13:57
Speaker 2: in full, I promise.
13:58
Speaker 4: Also remember that if you have like a mate who
14:01
Speaker 4: has their own side hustle and you want to support them,
14:03
Speaker 4: but you also want mates rates, don't ask for mates rates.
14:07
Speaker 4: Pay them what there were.
14:08
Speaker 2: Yeah.
14:08
Speaker 4: Thanks, So many people expect that.
14:10
Speaker 2: Oh my gosh, No, Like I just don't understand it. Like,
14:15
Speaker 2: don't do that. If your friend has a small business,
14:17
Speaker 2: respect the small business. If they give you a friend
14:20
Speaker 2: and family discount that is so kind, don't use it.
14:23
Speaker 4: Bye, Yeah love it. Fiza, would you say that work
14:26
Speaker 4: life balance is a unicorn or just like does not
14:29
Speaker 4: exist for people who.
14:31
Speaker 2: Are so pretty? Not pretty?
14:34
Speaker 4: If you're working full time and you have a side hustle,
14:36
Speaker 4: how do you find time for you?
14:37
Speaker 2: Look, it's really hard, and I am preaching this and
14:40
Speaker 2: you've probably picked up in my tone of voice today
14:42
Speaker 2: that I'm quite passionate about this, And the reason I'm
14:45
Speaker 2: passionate about this is because I have been sucked into
14:47
Speaker 2: this and I do this, and I say that in
14:51
Speaker 2: the most loving of ways, that I actually just want
14:54
Speaker 2: you to be in the best possible position. And as
14:56
Speaker 2: somebody who worked full time and then had cheese on
14:58
Speaker 2: the money as a side hustle, and then all of
15:00
Speaker 2: these other businesses that I keep starting because I am
15:02
Speaker 2: a psycho. It is just so important to remember why
15:05
Speaker 2: you are there and prioritize your rest in recovery. Like
15:08
Speaker 2: a couple of weeks ago, Gee, I was completely out,
15:11
Speaker 2: Like I could not podcast. And it wasn't because I
15:13
Speaker 2: had COVID. It wasn't because I had the flu. All
15:15
Speaker 2: of those things were going around. I went to the doctor,
15:17
Speaker 2: I got tested. It was me being burnt out. And
15:21
Speaker 2: that is not something to write home about. Like, that
15:23
Speaker 2: is not something I'm proud of, because if I am
15:26
Speaker 2: going to you know, I would love to think that
15:28
Speaker 2: I'm a leader. You know, I really strive to be
15:31
Speaker 2: a good leader. How can I do that to myself
15:35
Speaker 2: and then expect the rest of the community to follow suit? Yeah, Like,
15:38
Speaker 2: how can I tell you, hey, I think you need
15:41
Speaker 2: to be prioritizing your work life balance and then people
15:43
Speaker 2: looking at me being like, she doesn't, though, yeah exactly,
15:45
Speaker 2: Like so I'm a bit at the time, I was like,
15:47
Speaker 2: oh my gosh, like I'm fine, I'm going to get
15:49
Speaker 2: it done. But even then, I just wanted to do
15:53
Speaker 2: what I said I was going to do and fulfill
15:55
Speaker 2: all of the work requirements I had. But even then
15:57
Speaker 2: I probably should have just taken a SICKI and I didn't,
16:01
Speaker 2: And I like, I'm not proud of that, and I
16:03
Speaker 2: think that a lot of you should learn from that
16:04
Speaker 2: and go gin know what. That put Victoria even further
16:07
Speaker 2: behind because she didn't just stay in bed and sleep
16:09
Speaker 2: like she should have. She put herself further back. And
16:12
Speaker 2: so I think it's it's one of those things where
16:15
Speaker 2: we do really need to prioritize rest and recovery and
16:17
Speaker 2: actually even building buffer time and transport time, Like how
16:21
Speaker 2: many times have we booked meetings back to back and
16:23
Speaker 2: just forgotten that it's going to take half an hour
16:24
Speaker 2: to get from one meeting to another, or that you
16:26
Speaker 2: have to go pick the kids up from school in
16:28
Speaker 2: between that, or that you know you don't just have
16:30
Speaker 2: to pick the kids up from school you have to
16:31
Speaker 2: pick them up, and you have to get them afternoon
16:33
Speaker 2: tea and then drop them somewhere else and like all
16:35
Speaker 2: of that time's written off. Like we need to actually
16:37
Speaker 2: be fully aware of what work life balance looks like.
16:41
Speaker 2: And don't get me wrong, sometimes that balance is out
16:44
Speaker 2: of sync because it is a balance and it floats
16:46
Speaker 2: back and forth. But it's always about trying to find
16:48
Speaker 2: an equilibrium that really works for you. And researchers have
16:52
Speaker 2: recently said that if you're engaging inside hustles immediately after
16:55
Speaker 2: completing your main job, that is a recipe for burnout,
16:58
Speaker 2: so just be aware of it. I think making sure
17:01
Speaker 2: that you're setting really healthy boundaries is also really important.
17:04
Speaker 1: I e.
17:04
Speaker 2: Don't be victory devine and reply to your emails at
17:06
Speaker 2: three am. It's just not healthy. It's just not healthy.
17:09
Speaker 2: I've tested it. You burn yourself out, you give yourself laryngitis,
17:13
Speaker 2: you end up with a secondary infection. It's just not cute.
17:16
Speaker 4: Not cute. So would you say then, like penciling it
17:18
Speaker 4: in your calendar some me time, go to yoga after work,
17:22
Speaker 4: don't compromise on that, don't stay along at the meeting,
17:24
Speaker 4: Like is that how you fitted in.
17:26
Speaker 2: One hundred percent, but it's also about finding what is
17:29
Speaker 2: actually balanced for you. Yeah, So like for you, George,
17:32
Speaker 2: I know you're a runner, and I know that you
17:34
Speaker 2: do yoga. For me, sometimes penciling in time after work
17:39
Speaker 2: where I can sit on the couch scrolling aimlessly through
17:42
Speaker 2: Instagram is my wind down time. So it's going to
17:45
Speaker 2: look different for everybody. And I also think there's this
17:48
Speaker 2: really unrealistic expectation of what work life balance looks like.
17:51
Speaker 2: Right worklay Falons is getting up at seven am and
17:53
Speaker 2: going to a beautiful ballades class and doing this and
17:55
Speaker 2: grabbing a coffee like no, mine's actually sleeping in and
17:59
Speaker 2: sometimes scrolling on in Instagram and that's what keeps me
18:03
Speaker 2: straight for the.
18:03
Speaker 4: Rest of the day, whereas to me it would be
18:05
Speaker 4: the opposite, exactly.
18:06
Speaker 2: Like the coffee exactly. And don't get me wrong, I
18:08
Speaker 2: still love polarates, I still love coffee. But I just
18:10
Speaker 2: think there's this unrealistic expectation of what work life balance
18:14
Speaker 2: looks like because social media, as we've talked about a
18:17
Speaker 2: million times on this podcast, really plays into it because
18:20
Speaker 2: you go, well, this person they're so balanced, how good
18:23
Speaker 2: is that they are going to work and then straight
18:26
Speaker 2: after work they go to Polarates and then they go
18:28
Speaker 2: home and they make this nourishing green bowl for their dinner,
18:30
Speaker 2: and then they have leftovers for lunch the next state.
18:32
Speaker 2: Like for some people that would just burn them out,
18:34
Speaker 2: Like some people just need to go home and crash.
18:37
Speaker 2: I get it, everybody's different, but I think really understanding
18:41
Speaker 2: what your stresses are and what burnout could look like
18:43
Speaker 2: for you is really important.
18:45
Speaker 4: So if we're putting all of these extra hours into
18:47
Speaker 4: our side hustle, v wouldn't follow. The people who do
18:51
Speaker 4: work full time and have that gig on the side
18:53
Speaker 4: are feeling more stressed out.
18:55
Speaker 2: And so we're like telling people to have better work
18:58
Speaker 2: life balance. But interesting, multiple studies have actually shown that
19:02
Speaker 2: side hustles have helped people live more interesting and fulfilling lives,
19:05
Speaker 2: which is kind of cool. So this study was done
19:07
Speaker 2: by Henley Business School and it showed that a sense
19:10
Speaker 2: of fulfillment was achieved from engaging in side hustles and
19:13
Speaker 2: that translated directly into happiness for their both main and
19:16
Speaker 2: side hustle workplaces, which is kind of cool. It also
19:18
Speaker 2: found that side hustles empowered individuals to be in control
19:21
Speaker 2: and in charge of their work, which led them to
19:23
Speaker 2: become more emotionally and cognitively invested in their side hustles
19:27
Speaker 2: and also transmits positive emotions that are associated with this
19:31
Speaker 2: experience to their main job, which obviously subsequently improved job performance,
19:35
Speaker 2: which is kind of cool and interestingly because you know,
19:38
Speaker 2: in so many people's employment contracts it says you can't
19:41
Speaker 2: have another job like taking out. Yeah, absolutely, it says
19:44
Speaker 2: you can't have another job without written like approval and
19:47
Speaker 2: approval or permission from your employer. But that actually might
19:50
Speaker 2: make you a better employee. That's weird, kind of cool,
19:54
Speaker 2: kind of interesting to see how the world is changing
19:57
Speaker 2: as well. But it makes sense if you distill it down, like, gee,
20:00
Speaker 2: if you're having to prioritize your full time work and
20:03
Speaker 2: then this side hustle that you're doing and balance it all,
20:06
Speaker 2: like you probably can find a better equilibrium than just
20:09
Speaker 2: like being on the nine to five Monday to Fridagrant.
20:11
Speaker 4: I actually definitely agree with that. I of a story hustle. Yeah,
20:15
Speaker 4: but I love having a full time job and then
20:17
Speaker 4: doing shese on the money and then having copywriting like
20:20
Speaker 4: you're busy, but it keeps things interesting.
20:22
Speaker 2: Yeah, And I think it's really important find those things that,
20:25
Speaker 2: as I said before, nurish you, yeah, and actually align
20:28
Speaker 2: to your values and keep you engaged, like that's what
20:31
Speaker 2: life's about.
20:31
Speaker 4: Right on that inspirational note, V, let's head to a
20:35
Speaker 4: little break. But on the other side, we are going
20:37
Speaker 4: to be talking about all the tax implications. So don't
20:40
Speaker 4: go anywhere, guys. Already, guys, we are back. But before
20:48
Speaker 4: we go any further, we're actually going to have a
20:50
Speaker 4: little listen to a chat V that you had with
20:53
Speaker 4: your mate Tiffany.
20:54
Speaker 2: All right, we are going to talk about TIF the
20:57
Speaker 2: time you found yourself in a bit of a tax pickle. Yes,
21:00
Speaker 2: can you tell us about what happened? Well, I was
21:04
Speaker 2: Uber driving. I had lost my job. I needed a
21:07
Speaker 2: new job. Uber seemed like the way to go. It's
21:10
Speaker 2: pretty convenient.
21:10
Speaker 5: It is very convenient.
21:12
Speaker 6: I had just got myself a new car, so I'm like, oh,
21:14
Speaker 6: this will be a really great way.
21:15
Speaker 5: To also help pay off my car.
21:17
Speaker 6: So I was Uber driving probably full time for about
21:23
Speaker 6: four or five months. And when I say full time,
21:26
Speaker 6: I mean I was doing it as a nine to five.
21:29
Speaker 6: So I would get up, I will jump in my
21:31
Speaker 6: Uber and I will drive from nine and full five.
21:33
Speaker 2: Well I didn't realize it was that much.
21:35
Speaker 6: Yeah, Well, because I wanted it to substitute a full
21:39
Speaker 6: time job, you can make sense. Also then got the option,
21:42
Speaker 6: I guess, of doing on the weekends or after hours.
21:44
Speaker 2: All we can do whenever you want, right, Yeah.
21:46
Speaker 6: I wanted it to kind of fit in with my
21:49
Speaker 6: day and then also I could like go to interviews
21:51
Speaker 6: and do all of those kind of things in order
21:53
Speaker 6: to get myself an actual job which wasn't.
21:56
Speaker 2: Hustle material driving.
21:57
Speaker 6: I love it, yeah, yeah, but in order to make
22:00
Speaker 6: money from me, but you also need to work the hours.
22:02
Speaker 6: Like you can't just jump on for a couple of
22:05
Speaker 6: hours and expect to make bank. Yeah, Like I was
22:08
Speaker 6: working twelve hour days in order to make like six hundred.
22:12
Speaker 2: Dollars a week. Oh my gosh, So it is yeah, right,
22:16
Speaker 2: So it was a bit of a pickle.
22:18
Speaker 5: It was a bit of a pickle.
22:19
Speaker 6: So I was doing it, yeah, for full time for
22:22
Speaker 6: about four or five months, and then I got a job,
22:26
Speaker 6: so then I stopped doing it full time, and then
22:28
Speaker 6: I was just doing it on the weekend to make
22:30
Speaker 6: a little bit of extra cash, which is helpful, Which
22:33
Speaker 6: is helpful.
22:33
Speaker 2: Yeah, but that wasn't the pickle. That was a dream experience.
22:36
Speaker 2: That was that was great. Look I've got a side hustle.
22:38
Speaker 2: I've made money in the interim. It was the taxi
22:42
Speaker 2: past guy. You went and got an accountant.
22:45
Speaker 6: Yes, who my partner was seeing and seen before, so
22:49
Speaker 6: I assumed that they were legitimate.
22:50
Speaker 2: Yep.
22:51
Speaker 6: Great, And I told them that I was uber driving
22:56
Speaker 6: and she was like, how much money have you made?
22:58
Speaker 6: And I was like, oh, about four five thousand dollars,
23:01
Speaker 6: not a lot. Yeah, And she's like, oh, okay, no
23:04
Speaker 6: need to worry. I'm like, what do you mean, no
23:06
Speaker 6: need to worry. She's like, oh, it's less than ten
23:09
Speaker 6: thousand dollars, so we can mark it down as a
23:12
Speaker 6: hobby activity.
23:13
Speaker 5: I'm like, oh, hang on.
23:15
Speaker 2: You that sounds like a good money. This sounds great.
23:18
Speaker 6: I'm like, oh, so I've just made five thousand dollars
23:20
Speaker 6: that I don't have to declare that I don't have
23:22
Speaker 6: to pay tax on because it's less than ten thousand
23:25
Speaker 6: dollars and I can claim it as a hobby. I
23:28
Speaker 6: was really nervous about that because I had not heard
23:30
Speaker 6: about that happening at all.
23:31
Speaker 5: Yeah, I didn't know anyone else who was in that situation.
23:35
Speaker 6: So I asked the tax agent repeatedly, maybe four or
23:38
Speaker 6: five times during our PU stock together, are you sure
23:41
Speaker 6: I don't have to claim this? I planned to exactly,
23:44
Speaker 6: and she's like, no, no, no, it's fine, you don't
23:46
Speaker 6: have to claim it at all. I'm like, great, Okay,
23:49
Speaker 6: five thousand dollars in my pocket.
23:51
Speaker 2: Money win claim form went through time, went through ELDR.
23:57
Speaker 6: Not a money win, not a money win. And it
24:00
Speaker 6: wasn't until twelve months later. I think it was that
24:03
Speaker 6: the ATO got in contact with me and you got
24:06
Speaker 6: udited to No, I did get audited, and they're like,
24:09
Speaker 6: you've been uber driving and you didn't declare any extra
24:12
Speaker 6: earnings that you received whilst uber driving, and I panicked
24:17
Speaker 6: you did.
24:17
Speaker 2: And that's where I got to learn about this situation.
24:20
Speaker 2: And I was like, Tiffany, what have you done? And
24:24
Speaker 2: it wasn't a bad thing, especially once you'd explained it
24:27
Speaker 2: to me. It was actually just bad advice that you'd
24:29
Speaker 2: been given.
24:30
Speaker 5: Because I wasn't in the wrong.
24:31
Speaker 2: No. But at the end of the day, the thing
24:34
Speaker 2: that was really frustrating was you got your tax returned
24:38
Speaker 2: down and you signed off on it, and when We
24:40
Speaker 2: went back to that accountant because I said, look, let
24:42
Speaker 2: me help you sort this out. I sat you down,
24:44
Speaker 2: we went through it all. I had to look at
24:45
Speaker 2: your bass and you know, worked out what tax you
24:47
Speaker 2: should have paid, because the ATO was obviously wanting you
24:50
Speaker 2: to pay that. We had a chat with the ATO
24:52
Speaker 2: and negotiated our way out of it. We didn't have
24:55
Speaker 2: to pay any penalties, which was a money win. We
24:57
Speaker 2: did have to pay the tax though. Went back to
25:00
Speaker 2: the tax agent. She was like, not my circus, not
25:02
Speaker 2: my monkeys. You signed your tax return. It is your problem.
25:05
Speaker 2: It is not my problem.
25:07
Speaker 6: Now she's no longer in business, surprise rising.
25:11
Speaker 2: But I wanted to have this conversation because it's one
25:14
Speaker 2: thing for me to do a podcast and go, hey guys,
25:17
Speaker 2: this is really important. But from your perspective, you thought
25:20
Speaker 2: you did absolutely everything right.
25:22
Speaker 6: And on that, how do we know, Like if we
25:25
Speaker 6: are going to somebody and we are trusting that they
25:27
Speaker 6: have the right information because we're paying them for a service,
25:31
Speaker 6: they're the person that has the knowledge what happens. Because
25:34
Speaker 6: we can't trust them, who can we trust? Where do
25:36
Speaker 6: we get this information from?
25:38
Speaker 2: And I think that that's the big question here And
25:40
Speaker 2: It's not necessarily about not trusting your accountant. That's not
25:44
Speaker 2: this segment at all. But I really would urge you
25:46
Speaker 2: to make sure that whatever accountant you're using, you're making
25:48
Speaker 2: sure that they're a CPA or a CA and that
25:51
Speaker 2: they are qualified to do what they do. But also
25:54
Speaker 2: knowing that your gut feeling, because TI if you were
25:56
Speaker 2: telling me, like you knew you shouldn't have been doing this,
25:58
Speaker 2: but you were like, no, she's a rational she did it.
26:01
Speaker 2: You signed off on it, and it was all good.
26:03
Speaker 2: You told me that you're second guessing the situation.
26:06
Speaker 6: You're obviously second guessing for a reason, aren't you, And
26:09
Speaker 6: you probably should maybe get a second opinion then.
26:11
Speaker 2: Exactly, and we don't have to pay for that second opinion.
26:13
Speaker 2: You can actually call the ATO and ask them any question.
26:16
Speaker 2: You can call them and be like, hey, I'm doing
26:18
Speaker 2: my tax return. I'm so sorry to annoy you. I
26:21
Speaker 2: did some uber driving. Do I need to declare it?
26:23
Speaker 2: And they will say hard and fast yes, because that's
26:26
Speaker 2: actually a job whereas there is and I'm not giving
26:29
Speaker 2: tax advice here. You do need to talk to your
26:31
Speaker 2: tax accountant. But when you do declare things, sometimes they
26:35
Speaker 2: feel like doing some crochet blankets. You made fifty bucks
26:37
Speaker 2: here and there by selling them to your friends. The
26:39
Speaker 2: eater is like, no, keep that money, like that's actually
26:42
Speaker 2: a hobby, that's just you doing it. So there is
26:44
Speaker 2: actually there is actually clause. There is actually a hobby
26:47
Speaker 2: clause in your tax return where you don't have to
26:50
Speaker 2: declare some earnings from genuine hobbies. But I think that's
26:53
Speaker 2: very different than going and trying to earn an income
26:56
Speaker 2: and actually setting yourself up because you would have had
26:59
Speaker 2: to set yourself up with the TFN through Uber.
27:01
Speaker 6: Right, yes, yes, and I need to register myself to
27:04
Speaker 6: as a sole trader, so I had an abnyah that
27:08
Speaker 6: I had to input in. So I was working for
27:12
Speaker 6: myself for self employed, I guess.
27:14
Speaker 2: But deep down you knew that you shouldn't have been
27:16
Speaker 2: doing it, and it was just something where you trusted
27:19
Speaker 2: the person to do the right thing. And from my perspective,
27:22
Speaker 2: I think the important thing here isn't about going, oh
27:24
Speaker 2: my god, here we are to talk about Uber. It's
27:26
Speaker 2: actually just trust your gut, like, do the right thing,
27:29
Speaker 2: declare the things that you have to declare, and if
27:32
Speaker 2: you're in a bit of a pickle over declare yes
27:35
Speaker 2: over toclaire. You would much prefer to say, hey, I
27:38
Speaker 2: made fifty bucks from crocheting some blankets or selling some
27:42
Speaker 2: doll house furniture I made and put on Facebook marketplace
27:46
Speaker 2: during lockdown, which I had a friend do. I got
27:48
Speaker 2: wildly successful. By the way, I think that borderline might
27:52
Speaker 2: not actually be a hobby for her.
27:53
Speaker 5: It's now it's now her job.
27:54
Speaker 2: It's now a full blown job. But it's about trusting
27:57
Speaker 2: your judgment and trusting your gut and noting that there
28:00
Speaker 2: are other resources to look at, Like the ATO posts
28:04
Speaker 2: so much information about what you can and can't declare
28:07
Speaker 2: every year. Smarter Money puts some information on their website
28:11
Speaker 2: about what you can and can't claim, Like there's so
28:13
Speaker 2: much stuff out there. So regardless of whether you're using
28:16
Speaker 2: a tax agent to do your tax return this year
28:19
Speaker 2: or you are doing it yourself, I think it's just
28:21
Speaker 2: hard and fast. Be truthful. They don't lie, don't claim
28:24
Speaker 2: things that you aren't meant to claim, because nowadays, it's
28:28
Speaker 2: not the nineteen sixties anymore, where they just can't prove it.
28:31
Speaker 2: And if they order you, you've got to go find
28:32
Speaker 2: all your paper receipt to have receipts for everything. Now
28:35
Speaker 2: in twenty twenty two, everything's data matched. The ATO knows
28:39
Speaker 2: they have access to your bank accounts. It's kind of
28:42
Speaker 2: worderline terrifying. At the same time, As for me as
28:45
Speaker 2: a financial advice I kind of love it because I'm like,
28:47
Speaker 2: how easy the data matching here is absolutely fantastic.
28:50
Speaker 5: If you're a PERV anyway with all money pack.
28:52
Speaker 2: Yeah, and I don't mind. And I mean I have
28:55
Speaker 2: a legitimate business, so I'm like, what am I hiding?
28:57
Speaker 2: What are you going to see that I do some
29:00
Speaker 2: financial advice? Wow? Revolutionary. So I'm not worried about it.
29:05
Speaker 2: But I think the real question here is if you
29:08
Speaker 2: are worried about it, like be doing the right thing
29:10
Speaker 2: or ah. Anyway, Tiff, let's go have coffee because we
29:14
Speaker 2: should get back to the actual show.
29:15
Speaker 5: Sounds amazing. V.
29:18
Speaker 4: That was a horror show, Mate.
29:19
Speaker 2: It was a little bit of a mess, a little
29:21
Speaker 2: bit of a night mare. I feel really bad because
29:25
Speaker 2: Tiff is one of my greatest friends. Yeah, but also
29:28
Speaker 2: just that she puts so much trust in an accountant
29:31
Speaker 2: that did the wrong thing by her.
29:33
Speaker 4: How can they give you the wrong advice?
29:34
Speaker 2: Look, I think she just you don't know what you
29:36
Speaker 2: don't know, and that's why it's really important to kind
29:38
Speaker 2: of second guess things and go with your gut and understand.
29:41
Speaker 2: You know that you can seek a second opinion or
29:43
Speaker 2: a third opinion or whatever you want to do. And
29:45
Speaker 2: at the end of the day, she did end up
29:47
Speaker 2: in a better position. We were able to liaise with
29:50
Speaker 2: the ATO and talk to them about it and they
29:52
Speaker 2: were like, Okay, cool, no problems, we can see how
29:54
Speaker 2: this went wrong. Let's just clean it all up. And
29:56
Speaker 2: we did and it was fine. But it's one of
29:58
Speaker 2: those things that it's just really stressful and I really
30:00
Speaker 2: wanted to include that in today's show because it's not
30:04
Speaker 2: just me going this is important. It's me going, hey,
30:06
Speaker 2: here's a very real, very true example from someone who
30:09
Speaker 2: is very deeply ingrained in Now she's on the money community.
30:12
Speaker 2: You've probably sent on every money win thread ever because
30:14
Speaker 2: she always has great money wins and it's so rude.
30:17
Speaker 2: But it's one of those things where just listen to Tiff,
30:19
Speaker 2: this is her story, this is how it works. These
30:21
Speaker 2: are real people from our real community who are going
30:24
Speaker 2: through things that you could avoid just by listening to
30:27
Speaker 2: a podcast.
30:29
Speaker 4: Does the accountant, coop anything or are they covered by
30:34
Speaker 4: an insurance?
30:34
Speaker 1: No?
30:35
Speaker 2: No, no, no. So when you sign off on your tax
30:38
Speaker 2: return g you're taking responsibility. So even though your accountant
30:43
Speaker 2: prepared it in full and is being paid and is
30:45
Speaker 2: being paid for that service, you then got given your
30:48
Speaker 2: tax return paper, you would have reviewed it and signed it,
30:51
Speaker 2: and that's then you taking complete responsibility for it. So
30:54
Speaker 2: there's no responsibility on that accountant. From my understanding, that
30:57
Speaker 2: accountant is no longer an accountant, So don't worry you, guys.
31:00
Speaker 2: We were completely safe from that one. But it's just
31:03
Speaker 2: so important to remember that at the end of the day,
31:05
Speaker 2: the buck actually stops with you. You can't just outsource
31:07
Speaker 2: it to an account and be like whatever, it'll be fine,
31:10
Speaker 2: Like yes, it usually ninety nine point nine five percent
31:12
Speaker 2: of the time is. But it's always about trusting your
31:14
Speaker 2: gut and if you don't feel right about something, which
31:16
Speaker 2: you heard from Ti. If she didn't feel right, but
31:18
Speaker 2: she was like, oh, she would know, like she's an accountant.
31:21
Speaker 2: When it finally came back to bite her, thankfully she
31:24
Speaker 2: had me, who's not an accountant but knows. Okay, let's
31:27
Speaker 2: just deal with this, and we did end up getting
31:29
Speaker 2: another account involved and getting it all cleaned up, and
31:31
Speaker 2: it was so fine. But it's one of those things
31:34
Speaker 2: where that was really stressful and you can avoid that.
31:36
Speaker 4: Yeah, brilliant. Okay, Phee, Let's move on and talk about
31:39
Speaker 4: some intimidating things. I'm talking bass, I'm talking GST, sexy.
31:45
Speaker 4: What point in our journey do we need to register
31:47
Speaker 4: for GST and how much should we be putting aside?
31:50
Speaker 2: All right, let's start with how much you should be
31:51
Speaker 2: putting aside, And a general goal or rule of thumb
31:54
Speaker 2: is usually between twenty and thirty percent of your income
31:57
Speaker 2: to a second bank account for tax in GST. So
32:01
Speaker 2: GST is ten percent. It is goods and services tax,
32:05
Speaker 2: And from my perspective, it's very left pocket right pocket,
32:08
Speaker 2: Like if you are charging GST, you just put that
32:11
Speaker 2: money aside and then it goes and gets paid. And
32:13
Speaker 2: then if you are paying GST, you put that aside
32:16
Speaker 2: and it gets reclaimed. So it's very left pocket, right pocket.
32:19
Speaker 2: But it can feel like a lot. But a lot
32:21
Speaker 2: of small businesses don't register for GST up front. They
32:24
Speaker 2: actually register for it once they hit that seventy five
32:27
Speaker 2: thousand dollars turnover point. So that's the point at which
32:30
Speaker 2: you need to register for GST, but you can actually
32:33
Speaker 2: charge GST from day dot if you register and you
32:35
Speaker 2: want to start charging it, which for a lot of
32:38
Speaker 2: small businesses they do lean into that because then there's
32:40
Speaker 2: no like, once you hit a certain amount of revenue,
32:43
Speaker 2: they don't have to reset expectations. With excietly and with freelancers.
32:47
Speaker 2: This can actually lean into being quite a good way
32:51
Speaker 2: to like establish reliability in a way like if you're
32:55
Speaker 2: charging GST, your client's automatically going to assume you earn
32:58
Speaker 2: more than seventy five thousand. Yes, it also means that
33:01
Speaker 2: once you do hit that mark, you don't have to
33:03
Speaker 2: re establish with a client and be like, hey, client,
33:05
Speaker 2: just so you know, next month's invoice is going to
33:08
Speaker 2: have an additional ten percent on it, because to the
33:10
Speaker 2: client that just feels like they're paying an extra ten
33:12
Speaker 2: percent and they're being like negatively impacted, Whereas sometimes people
33:17
Speaker 2: might want to set that expectation from the very beginning
33:19
Speaker 2: and it's all very easy. So I think it's about
33:22
Speaker 2: understanding what that means. I would also here plug my
33:26
Speaker 2: other podcast to the Business Bible if you haven't already
33:29
Speaker 2: listened to that, and you are a side hustler, or
33:30
Speaker 2: a small business owner or even a big business owner,
33:33
Speaker 2: I would say that that's a very good place to start,
33:35
Speaker 2: because not only do we go through all of those
33:38
Speaker 2: structures and what your obligations are, but there is a
33:40
Speaker 2: specific episode where I actually go through my personal banking
33:44
Speaker 2: structure and explain which bank accounts I have, why and
33:48
Speaker 2: how much are money I put in each of those.
33:50
Speaker 2: And I think that that can be quite powerful, because
33:53
Speaker 2: if you have the right structure set up, your business
33:55
Speaker 2: flows so much easier. George, Like, if you're a small
33:58
Speaker 2: business owner and you only have one account and all
34:01
Speaker 2: your money comes in there, and you're paying your GST
34:03
Speaker 2: and your BASS, and you're paying your salaries and you're
34:06
Speaker 2: paying for all your expenses from that, it can get
34:08
Speaker 2: quite murky. Whereas if we have a few different accounts
34:11
Speaker 2: and we're actually putting thirty percent of our income into
34:13
Speaker 2: there for tax. When tax time comes, not only do
34:15
Speaker 2: we have enough money to pay tax and we don't
34:18
Speaker 2: have to blink an eye, but usually there are refunds
34:20
Speaker 2: on top of that, so we end up in a
34:22
Speaker 2: better position where tax time comes and it's not as
34:24
Speaker 2: painful as it could be. In fact, you're kind of
34:26
Speaker 2: looking forward to tax time because you know there's probably
34:28
Speaker 2: a bit of a refund there and you're like, oh,
34:29
Speaker 2: if I get that done, like everything will be much
34:32
Speaker 2: easier and I'll probably have a few grand in my
34:33
Speaker 2: back pocket that I could spend on something else. So
34:36
Speaker 2: I think it's important to understand what that means and
34:40
Speaker 2: how it works. But to add to that, if you're
34:42
Speaker 2: a taxi driver or an uber driver, you actually charge
34:45
Speaker 2: GST the entire way, regardless of what you have ever earned.
34:48
Speaker 2: And then if you're a nonprofit organization with an annual
34:51
Speaker 2: turnover of more than one hundred and fifty thousand, that's
34:53
Speaker 2: your GST thresholds instead of the seventy five. And then
34:56
Speaker 2: if you're a business and you are a bit smaller
34:58
Speaker 2: and you're like, yes, but v I also want to
35:00
Speaker 2: claim fuel tax credits, you do have to be registered
35:02
Speaker 2: for GST. And then international retailers with Australian sales of
35:06
Speaker 2: more than seventy five thousand also fall into that bucket
35:09
Speaker 2: as well. So as I said before, if your annual
35:11
Speaker 2: turnover is under that threshold, you can still register if
35:14
Speaker 2: you want. There are obviously benefits for it. But the
35:16
Speaker 2: thing I would do is actually just chat to your
35:18
Speaker 2: accountant about what structure would work for you. And if
35:21
Speaker 2: you are a small business owner, even just sitting down
35:24
Speaker 2: with an accountant as a big one, so off like,
35:26
Speaker 2: how do I do this? What does this look like?
35:27
Speaker 2: It's going to pay dividends? I promise it will be
35:30
Speaker 2: a very important meeting.
35:31
Speaker 4: Are there any other benefits to registering v lord?
35:34
Speaker 2: Look, once you're registered for GST, you don't actually pay
35:37
Speaker 2: GST on business expenses. So that's where I said, it's
35:40
Speaker 2: like left pocket, right pocket. If you're registered for it,
35:43
Speaker 2: you can claim it, which is kind of cool. So
35:44
Speaker 2: you'll still get charge GST on invoices and you'll still
35:48
Speaker 2: have to pay it. But when tax time comes and
35:51
Speaker 2: you file your tax return with the ATO, you get
35:53
Speaker 2: that back, so that's kind of cool.
35:54
Speaker 4: And what do I need to register?
35:56
Speaker 2: You need an ABN, my friend to an Australian business number. However,
36:00
Speaker 2: if you're registering as company, then you'll need an Australian
36:02
Speaker 2: company number, which is called an ACN before you apply
36:05
Speaker 2: for an ABN, and then after GST registration, all you
36:08
Speaker 2: need to do is add GST to the prices that
36:10
Speaker 2: you are charging, issue tax invoices to your customers, keep
36:13
Speaker 2: receipts and invoices to claim back all the GST that
36:16
Speaker 2: you've paid on business expenses that year, and then submit
36:18
Speaker 2: a business act. We're going pretty deep into the Business
36:21
Speaker 2: Bible side of things, so let's move to the next
36:23
Speaker 2: question again. If you haven't listened to the Business Bible,
36:26
Speaker 2: I absolutely would because I'm really biased. I thought it
36:29
Speaker 2: was great. It certainly was also coming back. So is
36:32
Speaker 2: it when probably later this year, wonderful once I've got
36:34
Speaker 2: the property playbook under control and that one's back perfect.
36:36
Speaker 2: Just a few things the Queen of biting off more
36:39
Speaker 2: than I can say.
36:41
Speaker 4: I mentioned bass earlier, but I didn't know what it meant.
36:44
Speaker 2: Bass is sexy.
36:45
Speaker 4: What is it?
36:46
Speaker 2: It is a business activity statement. So a business activity
36:49
Speaker 2: statement is a form that you fill out between one
36:51
Speaker 2: and twelve times a year. So it completely depends I
36:54
Speaker 2: do bass and I do bam bass quarterly, so that
36:56
Speaker 2: means that I do four bass statements each and every
36:59
Speaker 2: single Yeah, And it really depends on your business side
37:02
Speaker 2: as to how often you do this and when you
37:04
Speaker 2: do this. But basically the ATO uses the information that
37:07
Speaker 2: you provide on your bas to work out how much
37:10
Speaker 2: GST you might have to pay or how much or
37:12
Speaker 2: of a refund you might get. And it's also used
37:15
Speaker 2: for like pay as you go tax. So for all
37:17
Speaker 2: of my employees, it means that I get to say
37:20
Speaker 2: to the ATO a few times a year, this is
37:23
Speaker 2: what I've done, this is how much money I'm earning,
37:24
Speaker 2: this is how much money is coming in and out
37:26
Speaker 2: and how it works, which means I can be more
37:29
Speaker 2: on top of my tax. So I don't just wait
37:32
Speaker 2: until June thirty to do a big tax refund or
37:34
Speaker 2: a big tax submission. I actually do it throughout the year,
37:38
Speaker 2: and it means I actually pre pay a lot of
37:40
Speaker 2: my tax and then we do a big kind of
37:42
Speaker 2: audit at June thirty and go did I pay the
37:44
Speaker 2: right amount? Is there anything I need to make up?
37:46
Speaker 2: Or do I get a refund? So for me, I
37:49
Speaker 2: personally quite enjoy a bus and I enjoy it because
37:53
Speaker 2: I feel like I'm on top of my business consistently.
37:55
Speaker 2: But I also really enjoy it because it means that
37:58
Speaker 2: I don't just get a really big tax bility the
38:00
Speaker 2: end of the year.
38:00
Speaker 4: I just realized that I do use bass. I pay quarterly,
38:05
Speaker 4: you pay quarter go she's on the money. Check you out,
38:09
Speaker 4: lordy lord, So what information do I need for my bass?
38:12
Speaker 2: So you'll need to collect a record of how much
38:14
Speaker 2: GST you collected on sales and how much was paid
38:17
Speaker 2: on purchases. You won't need to submit your taxing voices
38:20
Speaker 2: when you lodge your bus. You just need to kind
38:21
Speaker 2: of like have them on hand, so it's not as
38:23
Speaker 2: official as a tax return. It's not like you're doing
38:26
Speaker 2: that all the time. You're just letting them know how
38:28
Speaker 2: many dollars you've made and vice versa, and the ATO
38:31
Speaker 2: might us to see them later. As we said, don't
38:33
Speaker 2: claim things that you haven't actually done. But because your
38:35
Speaker 2: bus is usually used for other tax reasons, you're probably
38:38
Speaker 2: going to need to pride extra information on your business.
38:40
Speaker 2: You income, any employees, and it's linked to the ATO
38:42
Speaker 2: and stuff. So it's actually, I think it's pretty cool.
38:44
Speaker 2: I think it's pretty sexy. This is pretty business focused.
38:47
Speaker 2: But I hope that even if you're not a business owner,
38:49
Speaker 2: you listen to this and you're like, oh, that's kind
38:50
Speaker 2: of cool that businesses have that flexibility to like pay
38:54
Speaker 2: tax more consistently, so that they don't end up really
38:57
Speaker 2: overwhelmed at tax tax And it's kind.
38:59
Speaker 4: Of cool, absolutely and just really important to remember that
39:01
Speaker 4: if you are starting a side hustle that you need
39:03
Speaker 4: to pay tax on it.
39:04
Speaker 2: Yeah, and there's lots of different structures that can actually
39:06
Speaker 2: help you and support you and make sure that it's
39:08
Speaker 2: not all overwhelming at tax time, like the business Bible,
39:11
Speaker 2: Go Go go, my.
39:12
Speaker 4: Friends, stunning faith. Let's leave it there.
39:14
Speaker 2: Oh my god. Well, I guess that's all we have
39:16
Speaker 2: time for today, So can you wrap the boring but
39:17
Speaker 2: important stuff?
39:18
Speaker 4: The advice shared on She's on the Money is general
39:20
Speaker 4: in nature and does not consider your individual circumstances. She's
39:24
Speaker 4: on the Money exists purely for educational purposes and should
39:27
Speaker 4: not be relied upon to make an investment or a
39:29
Speaker 4: financial decision. Never and we promise Victoria Divine and She's
39:33
Speaker 4: on the Money are authorized representatives of in Focused Securities
39:36
Speaker 4: Australia Before Limited ABN four seven zero nine seven seven
39:41
Speaker 4: nine seven zero four nine AFSL two three six five
39:43
Speaker 4: two three. We'll see you on Friday, guy.
39:45
Speaker 2: I'd see Lady j Sorriah wasn't paying attention to that.
39:47
Speaker 2: I just realized I had food on my top to
39:50
Speaker 2: see it A Friday bye