Need help regarding tax

Janine replied:

Hi Smiles65,

My accountant has told me that I should put aside 20% of gross commissions aside for tax. She said doing this covers me if I have to pay out any tax. So if I did a party with Saucy Fish and the sales were $600 this would mean that m commission would be $210 before expenses. Tax amount to keep aside would then be approx $40 from that one party.

I know this sounds alot but she said it is better safe than sorry and having to pay back the taxman at the end of the year. She said to think of it as a savings account and it is a huge bonus come the end of the f/year if I have that in the bank and it is all mine.

I would say that you would need to show your whole commission to Centrelink but I have no idea there so check with them again.

Hope this helps a little.

Cheers

Janine

ExMember148 replied:

Well you didn't hear it from me.  But my tax agent WOULD NEVER do a tax return with anything to do with party plan consultants.  He would laugh at me and say not to waste his time.  It's a hobby.  You NEVER make money on a hobby.  There is so much expense to claim.  Whoops did I just buy a packet of fantales - keep that receipt they are great prizes.  And oh a new tableclothe, yep I need that for my display too.  Well, keep asking for advice.  Again with centrelink, its basically the same, as long as you keep all your receipts.  And when they ask well why do you do it if your not making any money - its for the discounts you get for yourself.  Well, thats what I have always had to do.  It's not until you are making serious money from it.

Janine replied:

My accountant said that if I earned a tonne doing parties then she would sign up and quite her day job. Her concern was in regards to over payments from the family payment I receive. She said not to declare unless I went over my $6000 in commissions as this is were having put aside the tax amount would come in handy to pay the over payment from Centrelink. 

ExMember148 replied:

 Sounds like you have a way switched on accountant there Janine!!! 

JanesHandmadeGifts replied:

So what do i do? do i tell centrelink i am doing party plan and receiving commissions and do i claim for tax or if it is a hobby do i just keep all commissions and then ONLY just declare things i need to buy.  Do you all have an ABN NUMBER? 

JanesHandmadeGifts replied:

Julie, ([ExMember148])

Having problems sending you pms as it says your pms are full and wont accept. can you please pm me again please so i can reply to your other pms you sent me please.

Whataheart replied:

I totally agree with you [ExMember148].  Party Plan is the best HOBBY around! How you manage things is what makes it your BUSINESS!  Not only do you get a discount on products that you love, you also get to hang out with people generally chatting over coffee, cake and catalogues. 

The 20% commision you receive as a consultant should just about cover the costs associated with your HOBBY.  These would probably include petrol costs, car registration costs, insurance costs, internet connection costs, telephone costs, stationery costs, cost of  host and guest bonus gifts, magazine costs, catalogue costs, delivery costs, packaging costs, the cost of the cake and coffee if you like to supply these on occasions for your hostesses and of course any other costs that you know were directly related to you sharing with others what your HOBBY is all about.   For some of us that may be batteries, book coverings, food to be stored in plastic containers, soap, purfume, make-up, shampoo, toys, jewellery boxes, book shelves... the list goes on....

The amazing thing about becoming a consultant for whatever party plan company sells the products you love so much is that before you were involved you probably had to pay out money for most of these costs anyway (for me it all came out of my other halfs income).  At least as a consultant these costs are now considered expenses should my HOBBY ever become so financially self sufficient that I start to earn more than what I SEEM TO BE currently spending on maintaining my HOBBY (which is building my family's library).

I suppose if I started to make a noticeable profit after all of these expenses then I would just have to look around for a new HOBBY that might tickle my fancy. 

kathymollie replied:

Hi Jane,
I was on a single parent pension....until 6 months ago,....my party plan jewellery business- fifthavenuecollection... has taken off...so well that l no longer need or have to worry about centrelink.....it's fabulous...l do 2-3 shows a week, each show about $800- therefore putting $400- straight into my pocket for 2 hours work....x 3= $1200-/wk............it's fantastic and who needs to answer to centrelink....not me anymore.............this 50% Commission is hot...and l am having so much fun.........HOORAY FOR FIFTH AVENUE COLLECTION..........
Good luck with all that you do....
cheers...
Kathy