I've been doing the odd bit of IT work on the side of my normal work for some time now, family, friends, etc. Always just cash in hand, quite good money ($45 for friends up to much more for businesses, etc).

Recently it's been getting quite busy to the point where I think I should be setting up a business / company / etc.

I have an ABN, just as a sole trader, but what are the different levels to which I can take this, what are the advantages and disadvantages of each, and is it going to be worth the outlay (IE for registering a business name for example) for the tax breaks / deductions I will be able to claim.

Posting here because I want people with personal experience to give me some insight if possible.

TIA Josh

for the tax breaks / deductions I will be able to claim.

You can't get back more in tax than you pay, so obviously not paying tax will get you more money than paying tax.

if you're keeping it between friends and family you should be able to get away with from Cash.

But if you're dealing with business they will likely require an ABN for their accounting and invoicing processes which means you could get f***ed over by the tax department if you don't do it legit.

My suggestion - keep friends/family Cash.

Any business work do through a sole trader ABN.

But surely the ability to tax deduct car / phone / laptop and related expenses would be a weight off, even if it is coming out of money I have to pay

Any business work do through a sole trader ABN.

OK - so if I do this, I am not required to register for GST and do BAS statements and s*** unless I earn over 50k, but what do I do with the income, how do I declare tax etc on it >?

open a business bank account

if you're doing it on the side (that is will be maintaining a day job) keep it cash.

but by becoming legit you can crack the whole SME business market who will be wanting tax invoices to claim their tax deductions for your work.

GST is a buggar but thats life.

But surely the ability to tax deduct car / phone / laptop and related expenses would be a weight off, even if it is coming out of money I have to pay

Friends and family => cash
Businesses => legit

easy...

PS: most businesses will require a legit invoice so they can claim GST and track their cash flow.

Like what most others have said, do cash for friends/family but do legit if dealing with businesses.

Probably easiest just to forget businesses and keep doing the casual stuff (unless the amount of work you get through businesses is worth going through all the effort of doing it legit).

So what are my responsibilities, if I hand out an invoice with my abn on it - what do i do ? Pay nothing until I lodge my tax return ? Or what ?

Stay cash, easier

So what are my responsibilities, if I hand out an invoice with my abn on it - what do i do ? Pay nothing until I lodge my tax return ? Or what ?

pick up the phone, arrange some time with an accountant and show yourself that you're serious about investigating the idea. a good accountant may not charge you for the initial consultation, and can even go as far as flicking you a spreadsheet to fill in so they can help you with your first BAS statement.

Sounds like you're gonna need accountant doode. Running SME is not as easy as it looks especially if you need to lodge BAS every quarter... There's a minimum threshold that you can earn / year before you need to charge GST I think. I used to not charge people GST (same thing as you do, on the side work etc) because I wasn't making enough per year to do so. If you're not charging GST it's easier, then you won't need to do BAS etc just normal return as sole trader not as company.

Of course this could all have changed now so ask your accountant ASAP. If you need a accountant recommendation (for personal and small business) I use this guys for nearly 10 years now:

Specialised Business Solutions

/the usual disclaimer about your mileage may vary, to it as your own risk etc :)

Good luck

Opec speaks wisely. I've been running my own consultancy (IT, process improvement, change management) on and off for close to 20 years, and having a good accountant will make or break you. It broke me early on, and I lost quite a bit. Do your homework, being the director of a pty ltd company has quite a few responsibilities. Get a supportive accountant and good luck!

if you're just doing sole trading for beer money on the side then you don't need to register for gst - as you'll no doubt be making less than 50k. I earnt 8k through my abn last year just through random contracts and just put it on my tax as seperate income and paid tax on it. So yeah expect to get a tax bill unless you start having your employer withold more tax.

A good guide is to keep about 1/4 of whatever you make through your abn for tax time. Thats if you're not registered for gst and doing the 1/4 bas statements.

If you go legit with the business and don't need to register for GST you can make voluntary tax payments to the ATO to offset any debt you may incur as the result of being a sole trader. The info is on their website. The ATO are actually a good source of information, they run free small business seminars etc. A good accountant is also handy.

The tax system now is actually much easier to deal with than it used to be for running small side businesses. When I first went into business for myself (pre GST days) we had to pay provisional tax, they used to make you pay tax a year in advance of what you thought you might earn......quite f***ed really.