June 11, 2024 • 42 mins
Does tax time send you into a spin? Well don't sweat it because we've got Julian Mauro who is not only a finance guru, but also runs his own accounting firm – Mauro joining us on the show today. He runs us through some of the key things we should be looking at this year, plus after the break, he answers all the questions from the small business owners and side hustlers in our community!
Check out Mauro online and on Instagram!
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Hello.
Speaker 2 (00:01):
My name's Santasha Nabananga Bamblet. I'm a proud your the
Order Kerni Whalbury and a waddery woman. I would like
to acknowledge the traditional custodians of the land of which
this podcast is recorded on a wondery country, acknowledging the elders,
the ancestors and the next generation coming through. As this
podcast is about connecting, empowering, knowledge sharing and the storytelling
(00:25):
of you to make a difference for today and lasting
impactful tomorrow, Let's get into it.
Speaker 1 (00:45):
Hello and welcome back to another episode. I'm Victoria Devine,
the owner of several successful businesses, and I've got a
special treat for you guys today. Not only are we
doubling down on the tax episodes ahead of EO F Y,
but I am joined today by a very special guest
and my friend Julian Morrow, who is not only a
finance guru, but also runs his own very successful accounting
(01:08):
for moro. What do we got the name for that?
Speaker 3 (01:11):
Where I get it from?
Speaker 1 (01:12):
Yeah? Where'd you get the name for that?
Speaker 3 (01:13):
Wild? My surname?
Speaker 1 (01:15):
Really do you think I'm being serious? No, I'm not
testing you. I literally just said your surname and I'm like, wow,
real original Sulian. That's crazy. Well, welcome to the show.
Thank you for making the time for us today. I
am genuinely very excited to get you on the show
because at the end of the day, I've been meaning
(01:35):
to connect with you in person for literal years. We
just haven't made it happen until I was like, hey,
I've got a really good deal. Come on the show
and we get to meet in person.
Speaker 3 (01:44):
Thanks so much for having me V. It was honestly
perfect timing. And the financial view is coming and like
you said, I think we've had this in the mix
for years now, being in touch with each other. So
glad the cards aligned actually in the studio and yeah,
tax is fun.
Speaker 1 (01:58):
I feel like last Instagram DM I saw to you
or from you was like, hey, V, like I can
do coffee on Wednesday, and I clearly missed it yeah
and didn't reply and it was twenty twenty one, and
I was like, God, sorry about that.
Speaker 3 (02:12):
So when you followed me up, I was like, oh, okay, yeah.
Speaker 1 (02:14):
Sure, so you're still keen for that coffee?
Speaker 3 (02:16):
Still keen still here?
Speaker 1 (02:18):
Oh my gosh. All right, Well I'm glad to have
you tell me a little bit about your firm, Like
what sets you guys apart? Why are you not as
boring as all the other accounting firms.
Speaker 3 (02:27):
Yeah, I was explaining this to the team earlier, that
accountants aren't all bad.
Speaker 1 (02:30):
One said they were bad. Well jumped to conclusion by bad.
Speaker 3 (02:33):
Sorry. Now, look, I did start as your traditional accountant,
worked at small firms, big firms, and I kind of,
you know, saw what I didn't like, which was the
super corporate you know, suit and tie vibe, and it
was quite daunting to talk about accounting, taxes and finances
with clients. So I eventually took the step one on
my own and created a firm where we could be
a lot more casual with our approach, educate our clients,
(02:56):
not try and scare them with tax And as a
result of that, a lot of people have aligned with
the brand and it's allowed us to grow to where
we are today.
Speaker 1 (03:04):
I feel like you are super approachable, not only in person,
but also online. Where'd you get the confidence to start
creating content online and start posting? Because I feel like
when you're an accountant and when you're a finance person,
I eat me. I never wanted to put a face
to the name. That's why I started a podcast because
it was really non confrontational at the start. Yes, and
(03:24):
now look where we are, but like, how did you start?
Speaker 3 (03:27):
Yeah? So look, I think everyone used to say that
I wasn't your stereotypical accountant. I've definitely got that introvertedness
in me somewhere. But naturally they were kind of like, look,
you know, you're more personable. You need to kind of,
you know, put your face to it.
Speaker 1 (03:39):
En sure you're meant to be here, Like, are you
sure you're meant to be an accounting If.
Speaker 3 (03:42):
You see me at the office, I'm definitely an accountant
right on my Excel files. I think I was just
pushed kind of like everyone, you've got to take the leap,
put your name out there, put your face out there.
It is a little bit daunting, you know that there's
all these other professionals out there listening to you and
being like, oh, what makes this guy any different to us?
And you know, for me, it's just been that different
approach and seeing people align with it gave me the
(04:04):
confidence to pursue it further. And then you just kind
of double down.
Speaker 1 (04:08):
That's actually so relatable for me because when people say, like,
what overwhelms you the most when it comes to content creation?
You know, is it because millions of people see it?
And I'm always like, no, it's actually because other professionals
see it, like other financial advisors are going to listen
to my content and judge me if I'm not one
hundred percent spot on. So I feel like you've got
to be able to back yourself as well and be like, actually,
(04:29):
I do know what I'm talking about. I am good
at my job, and that's one of the hardest things
to do because the content creation really easy. You're just like, Okay,
I can whack out a video, no worries, But you've
actually got to back yourself. But I'm excited to have
you on the show. I know that the community are
going to love this because today we are giving everyone
the opportunity to kind of talk to an accountant. I mean,
we ask them the questions in advance, so let's pretend
(04:52):
it's live. But we put a call out to our
small business owner community and our side hustlers and we
ask them for all of their questions about tax and
after the break we're going to get to those I
want to talk about you and about tax and about
accounting before that, though, but before we get Julian's thoughts
on all of your very juicy questions. I feel like
the most common question in our community, irrespective of whether
(05:14):
they are a PAYG employee or a big business owner,
is should I be doing my own tax return?
Speaker 3 (05:20):
Controversial?
Speaker 1 (05:21):
No, no, good questionpie sy, Let's go.
Speaker 3 (05:23):
Let's go. Look. I think definitely, as your pay as
you go you don't necessarily need one. It's a little
bit of that you don't know what you don't know,
so there's definitely ato resources. You know, my GAV pre
fills a lot of individual tax return information, but you
might be missing certain deductions because once again, you don't
know what you don't know. So there's always a benefit
even if you're a simple tax return and you've got
(05:46):
some work related costs to have an accountant. When it
comes to a business, I'm pretty inclined to say you
do need one, absolutely, not purely just for tax. But
it's even like, you know, is your structure correct, You're
not going to pick up on that. So you might
be like, look, I've got this great tax return, I'm
getting a refund. I claimed my deductions, but the accountant
might be like, hey, cool, I'll help you with that. Plus,
(06:06):
have you looked at changing your business structure, which is
something you don't even know at that point in time.
Speaker 1 (06:11):
Potentially, let's dive into that for a hot second, because
as an ex financial advisor, I used to see a
lot of clients and they'd come to me and they
were super proud and so was I of what they
were achieving. But they were set up in a sole
trader structure and they would be like, oh, it's so
EASYV like I'm doing ABC and D, but as a
sole trader you get lumped with your marginal tax rate. Right,
(06:33):
So a lot of them were starting to absolutely make
bank and it was shooting them in the foot. At
what point should a sole tradeer go, you know what,
maybe I should talk to an accountant about this company thing.
It's a little bit overwhelming, like how do we make
the shift? Like when should we be doing that?
Speaker 3 (06:49):
Well, it comes off the back of like we said,
if you've got an account you can have those conversations
to regularly, right, so you're in the right place at
the right time. But otherwise, when I talk to people
aut setting up companies, it's kind of this true reasons
why you do it. So one is regardless of what
you're making, it might even be you know, risk and
asset protection. Right. So a lot of people forget to
understand that when you're a sole trader, you are the business. Right,
(07:11):
So if something goes wrong, there's a potential that that
exposes you personally and dramatic.
Speaker 1 (07:16):
But they're coming for your house, right, They're.
Speaker 3 (07:17):
Coming for your house. Got one, They're coming, They're coming
for your cap.
Speaker 1 (07:21):
Like it's kind of low key scary.
Speaker 3 (07:22):
It's scary. So until you're told that, sometimes you don't realize.
Separately to that, obviously there's a tax advantage. So like
you were saying, the if you're a sole trader, U,
let's just say you're making bank you're making three and
a grand for example. Okay, big dog, right, this is
that person out there, regardless of if they're spending all
that money, they're paying the highest tax rate versus if
they were a company. There's the benefit of keeping some
(07:45):
in the company at a lower tax rate. So to
answer your question, the specific dollar amount of correct, you
know you might have a hex stet taxes a little
bit higher than someone without a hex s deet different
factors in there, but once again, having the accountant to
be there to you regularly is going to make sense.
Speaker 1 (08:02):
Yeah, and that's a good time for me to remind
you all that this is general advice only, and obviously
you need to talk to an accountant. It's just stories
like these that help you grasp the concept of moving
forward with one or the other, because you go, oh,
v that makes so much more sense, because if you
read the ATO website, you just go, oh, okay, so
here are the features and benefits. That doesn't make a
(08:23):
lot of sense, that's right. And when I look at
my own situation, having been a financial advisor, I skipped
past soul trader. I was just like absolutely not, Like,
I don't want to have to change my structure later
and kind of double up. And so I set up
my company from the very beginning, knowing full well that
I wanted to make use of the tax advantages of
a company. But I also didn't want to put my
(08:44):
husband at risk. Yes, I didn't want him to be
annoyed at me if like I didn't pay my tax
debt and the ad are like, hey, so your house.
I just wanted to protect my husband as well as
my assets.
Speaker 3 (08:55):
Yeah, so it can be all those different factors. So
once again, even like you said, registration, you don't want
to set up all your business names and change them
down the track can be a little bit of a hasshle.
So some vallid points. Glad you did it right from
the start.
Speaker 1 (09:06):
I feel like I had some solid advice on my side,
and that is one of the things that I always
talk about in this community, right, like, you don't know
what you don't know, and often to get the right advice,
it's really expensive. And I had a lot of privilege
having exposure to that area. And I mean I was
already in finance when I set up a finance business,
So you would hope I would nail the structure, yeap,
Like you'd be a bit, oh, what are you doing
(09:28):
thee if I was a soul trader, yeah, Like shouldn't
you know better? But you don't know what you don't know.
And sometimes when you're a small business, you're a sole trader,
and then you listen to a podcast like this and
you're like, Wow, I feel like I might be in
the wrong structure. I'm so silly, I'm so dumb. That's
not it at all. You did the best that you
could with the tools and resources you had at the time,
and you're a million miles ahead of everyone else anyway,
(09:49):
because you're a business owner, Like you're already putting your
neck out, so like now might be the time to
talk to an account about like, oh, how can we
do this? What can we do? And I promise any
good account is going to make you feel empowered by it,
not overwhelmed, And they're also going to explain it in
terms that you get. They're not just going to sit
down and be like, okay, cool. So if you've got
a discretionary trust or you know, a testimonial trust, what's
(10:11):
the difference here, Like you're going to be so overwhelmed
if they're just talking technical or as if you sit
down with someone like Julian who's like, all right, well
do you want to pay more tax?
Speaker 2 (10:20):
Or no?
Speaker 1 (10:20):
You go, oh, this makes so much more sense. Why
can't everyone talk like this?
Speaker 3 (10:24):
And look, I think as well, what your accountant learns
about you is quite personal, right, they see all your finances,
they see behind the scenes, so naturally, aligning with someone
that you're comfortable talking to, all these things about is
going to do great things for you.
Speaker 1 (10:36):
One hundred percent, and you've got to trust them as well,
because if you're a little bit cagey, you're going to
get no value. Like if you're trying to withhold things,
that is no benefit to you at all. I have
said before on the pod, and I do not expect
you to have listened to this, Julian, because it turns
out you're not my target market.
Speaker 3 (10:52):
Okay, I'm really sorry.
Speaker 1 (10:54):
Interesting you only just learned that, so sorry. I've said
it before on the show, and that is that being
a financial advisor I felt like was one of the
most pervy jobs in the world, but also one of
the most trusting jobs because I know more than your GP,
and when your accountant should know more than your GP,
because you've probably done your personal insurances and they're going
to need to know the outcome of that because like
(11:15):
in some situations, your insurances are inside different trusts or
you know, for the business, your account's going to need
to know that. They're going to need to know whether
you want to divorce your wife or not, because obviously
asset protection comes into that. So if you don't trust
your accountant or your financial Advisor, they're not for you,
Like you literally need to move on. And I feel
like if you're getting cold shoulder vibes with somebody that
(11:37):
you can be like, oh, Julian, I'm having the worst
time at the moment, Like I think my partner and
I are going to go through a separation, And you
can't say that to them wrong person from my perspective.
Speaker 3 (11:46):
And I've definitely seen that heaps of times, you know.
I mean you've got business partners that are dating or married, etc.
And then you know things hit the fan and you
know you've got those situations. So yeah, yeah, definitely trust
is key.
Speaker 1 (11:57):
Do you know what my dad said the other day
about business partners? He said, the best number of business
partners is an odd number less than three. And I
was like, oh, cool, Dad, did you get that. It
means one, it means no business partners, it means it's
very terrible idea.
Speaker 3 (12:12):
Yes, an odd number lesson I was in the moment.
Speaker 1 (12:15):
Okay, So we said that Julian was a really good accountant. Julian,
I want to know what are your clients at the
moment finding most concerning. I feel like there's lots flying
around in the industry at the moment, and a lot
of your clients are that she's on the money demographic,
either small business owners or individuals. So what are they
asking you the most questions about tax deductions?
Speaker 3 (12:37):
One hundred percent? But I feel commonly the biggest issue
or differentiation that people struggle with is personal versus business.
Yeah right, and that is also, you know, an ato
thing that they look at, not just this year, but
kind of every year, and it relates to so many things.
So for example, it's your car, it's your working from
home arrangement, it's your phone, it's your internet, it's your subscriptions,
(12:57):
it's so many things. So we've got obviously a lot
of clients new and old, and naturally they might feel
like something is a work relay deduction because they use it,
you know, this much for work. But there's obviously such
a big personal portion as well, So it's going through
all the nitty gritty to actually work out what you
can and can't do, and obviously that's quite difficult to grasp,
especially in your first couple of years of running a business.
(13:19):
So that's an ongoing educational thing that I think, you know,
is kind of prevalent in our client's minds at the moment,
and then naturally it's just kind of optimizing their tax position.
You know, people are still scared of tax, even if
it's lower than what they should have. Let's say it
was meant to be forty percent. We've got them down
to twenty five. They might still be scared of twenty
five percent, which is fine. That's just how they feel.
(13:39):
So it's managing you know, expectations and working out what
we can do best to kind of, you know, make
it as efficient as possible.
Speaker 1 (13:45):
I suppose I always used to tell clients that we
should be excited, obviously because I was trying to reframe
it into something that's really positive. But I would always
say that we need to be excited about the tax
that we pay. And I said this because more tax
means more money. More money means that your business is successful,
and it's good. I feel like often it's more around
(14:05):
having the education to know how to deal with tax
when it comes into your account, and the second that
you're able to go, all right, well, I've found a
structure that works for me. Whenever a payment comes in,
I automatically take thirty percent and chuck it in another account.
And I don't think about it. Those people are a
lot less stressed. Do you talk to your clients as
well about how to structure money coming in so that
(14:26):
tax doesn't feel as painful, because it can feel terrifying.
Speaker 3 (14:30):
Correctly, most of tax is honestly planning, right, so whether
it's done quarterly, yearly, whatever it is, and that includes
your structuring and things like that. So you know, we're
always suggesting having separate bank accounts for the business, having
your tax bank accounts there as well, and whether you're
putting aside GST, you're putting aside your tax. You might
have employees you don't want to fall behind on their
taxes and they're super There's so many things that not
(14:52):
go wrong, but you just need to be on top
of it because obviously the dollars can start to add
up quite quickly if you're not on top of it, and.
Speaker 1 (14:58):
I feel like it can be really overwhelm But at
the end of the day, the structure can also be automated,
which I find very sexy. I mean, the second you
said tax planning, I was like, oh my gosh, it's
nearly tax planning season. Like it's made like I get
to actually sit down with my accountant and do some
tax planning. I get so excited because I'm like, it's
a period of reflection and also planning for the next
(15:19):
year and tax planning. As much as I'm saying I'm
excited about it. In your macov you've got rocks in
your head. It can be really exciting because it's a
time to reflect on what you've done in the business,
where the business is going, with a professional that can
actually guide you through and make sure that you're in
the right position. Like, oh, I was paying double just
to do my tax planning sessions.
Speaker 3 (15:39):
So it's a great Cui, he's going to pay double listening.
Speaker 1 (15:42):
No you're not.
Speaker 3 (15:44):
No, I agree. So I think I take tax planning
and tax time as yes, the process of doing the
compliance and all of that, but also a point of
reflection to look at you know, all your systems, your bookkeeping,
your structure, you know your tax savings. Is that all working?
And then if it's not, you know, putting the changes
in place for the new financial and improving always.
Speaker 1 (16:01):
From there one hundred percent. Now, I was going to
ask you before about the ATO, so we know what
your clients are finding most concerning at the moment, and
I know that every year as well. We talk about
on Shees on the Money, how the ATO released, like
it's like a blog post of what they're targeting this year.
What do you think the ATO are going to have
their eyes peeled for this season.
Speaker 3 (16:22):
I like a little disclaimer on that. I reckon that.
Even though they put that out, sometimes people get confused
and they think or maybe they're not able to target that. No, no,
no's targeting everything, especially that personal versus business. I do
love that because it's such a key thing. Look, I
think I've read a little bit out there around rental
properties for those that do have one right the way
you're claiming deductions and you know what you can and
(16:44):
can't claim. So they're always hot on that. And still
that working from home, even though it's kind of faded,
you know from a couple of years ago, there are
still constant changes to the rules around working from home.
And I think, once again, if you're completing your own
tax return, if I go into a little bit of
the technical side of it for a seton there's a
rate that you can claim per hour your working from home, right,
(17:04):
but if you claim that rate, you can't also claim
a portion of your phone and intoet it's one ear
the other right, So people might be out there thinking, okay, cool,
use my phone for work double up right. So simple
errors like that that you might feel a big thing,
but you know.
Speaker 1 (17:19):
Yes, and they add up. I was reading because I'm
always reading tax articles. It's billions of dollars in a
discrepancy when it comes to even just the work from
home situation. So it is big. And even though you
might see it as like a couple of dollars that
you're skimping on, if everybody does that, it becomes a
really big problem for the ATO. And I feel like
they're on top of everything now. Like historically, I'm sure
(17:42):
when you had your you know, first official job and
you were claiming your three hundred dollars worth of receipts
even though you didn't actually incur those expenses and you
got away with it that old school missing. Yeah, like
it's a massive myth. Just FYI, if you didn't incur
those expenses, you can't claim them. That's just a nice
You don't have to do the admin on this, the ATO,
we're being nice, not you get some free stuff. Now
(18:05):
AI exists and every single year. The ATO is getting
better and better at utilizing that. I think it's going
to get to a point where they will basically in
the future. And please don't quote me on this or
think that you're out of a job, but I think
that for PAYG employees, AI is going to basically be
able to do your entire tax return for you and
there won't be any questions because with data matching and
(18:26):
the information that your employer pays and your bank feeds, like,
we're going to have no privacy basically correct the everything,
They're going to see everything. I agree, and I think
that that's kind of cool too, because it takes pressure
off you for having to try and do the right thing.
Speaker 3 (18:40):
And I think it falls back as well in terms
of another thing that we hear all the time is
you know, I'm just a little fish. They're not going
to come after me. They're always after the big end
of town. That's true to some extent, but at the
same time, if there's you know, hundreds of thousands of
people claiming that three hundred dollars or claiming the maximum
kilometers with no proof, yea, that adds up to big
dollars for the ATO as well. So we can't be
(19:01):
and I even think, you know, we're not a target,
so you do want to make sure you're always you know,
claiming what you can claim and maximizing but still being
legit about it.
Speaker 1 (19:09):
Which is funny because you haven't heard this episode yet
because it hasn't dropped at the time of recording. But
the first tax episode I did with my co host Jess,
who's an employee of mine, Julian, she says she got
audited two years ago, and so she's not, by any
stretch of the imagination, you know, one of the big fish.
She's just doing the right thing. And thankfully when she
got audited, she is like the best, Like she was like, yeah,
(19:33):
here have at it. Like she didn't do a thing wrong,
so she was absolutely fine. But she was shocked at
the time that she got audited. And I remember her
getting the letter in the mail because it's all very official,
and she called me being like, what is going on?
What have I done wrong? And I'm like, look, it
could also be random selection, which is correct, and I
think that that's important to take into consideration too, that
even if you've not done anything wrong, your tax return
(19:55):
could not be flagged. It could just be random selection
and then making sure that they've you know, jotted their
eyes and cross their t's, and they're just doing some
testing correct and you've fallen into the unlucky pile.
Speaker 3 (20:06):
It is quite daunting. When you do get any correspondence
from the ATO. It might even be a nice letter,
but naturally when people see ABO. Anytime I get some
phone calls.
Speaker 1 (20:15):
I see a letter come through and I literally go,
what's this? Like what I I owe? What have I done?
And sometimes it's just a we've updated your contact information.
You're like, oh, okay, interesting story. Why do you have
to be all official about it? I feel like it's
when you drive past the police and you think they're
going to do a massive YWI and pull you over
even though you did not one thing wrong.
Speaker 3 (20:35):
That's the apies, that's the vibe.
Speaker 1 (20:37):
That's the vibe. But the ATO need little hat. All right,
let's go to a really quick break on the flip side.
We're going to be asking Julian a whole heap of
your questions, so don't go anywhere. Welcome back. If you
(20:57):
were listening to the first half of the show, you
know that I am joined by a very special guest,
my friend Julian Morrow of Morow, the very very originally
named firm, and we're talking everything tax. Julian I put
it out to our community a little earlier in the
week and I said, hey, guys, we've obviously got Julian
coming in and we would like to ask some questions.
(21:17):
What are your deepest, darkest tax questions?
Speaker 2 (21:19):
This can be.
Speaker 1 (21:20):
Anonymous, and they jumped on it. So are you ready
to dive in the deep way?
Speaker 3 (21:23):
I'd love to?
Speaker 1 (21:24):
All right, So first things first, Number one, and this
was a common question when starting out. Can I claim
initial costs of starting my business against my taxes if
I'm not gaining sales?
Speaker 3 (21:37):
So you definitely can, and not only can you, you
definitely want to. So with expenses for your business, you
need to claim an expense in the year that it's paid. Right,
So you might think I'm not making anything of start
claiming it in a couple of years. That doesn't work.
So instead, what you need to do is claim it
in the first year, and then what happens is it
creates a loss for your business. So let's just say
(21:59):
you spend ten thousand dollars year one, that ten thousand dollars.
Loss gets carried forward to the next year, so then
when you do start to earn money, you don't have
to pay any tax until you recoup those losses. So
until you make back the ten thousand dollars, you might
have costs for years and years until you're actually making income,
which is fine. That loss just gets bigger and bigger
and gets carried forward. Definitely, you can claim them, but
(22:20):
you're not necessarily going to get tax back. Your business
hasn't actually paid any.
Speaker 1 (22:24):
Taxing to getting a refund for something you didn't pay for.
Speaker 3 (22:27):
That's right. Yeah, so the loss will accumulate, you definitely
want to include it in the year that's incurred, and
then down the track it will, you know, obviously help
you reduce tax because you're not paying any tax until
you make it all back.
Speaker 1 (22:38):
So, very long story short, we should be claiming absolutely
everything and taking our tax super seriously and doing all
of our receipts and absolutely everything even if we're not
making a dollar correct, because it can benefit us in
the future.
Speaker 3 (22:50):
Imagine you spent ten grand and then you found out
down the track that you didn't claim ten grand worth
of costs just because essentially, so.
Speaker 1 (22:57):
For the first couple of years of this podcast and
of She's on the Money, we were running at a
massive loss. And that made sense because like I didn't
even think that She's on the Money would make money.
It was just fun on the side that I thought
this would be a good marketing project for, you know,
my bigger business, Zella, which by the way it worked,
it was going well, we are, but I had all
these losses that I'd banked up, and I was like,
(23:18):
every year I'd look at my attacks. We're trying to
be like, oh, she's a sinking shit and now it's
all good, and now I've got to use those losses
and claim against them. So the first year that we
started making profit, it was very nice. So next question
is actually from a locum pharmacist. They say, I'm a
soul trader. Am I able to contribute to my superanuation
(23:39):
before tax?
Speaker 3 (23:41):
Yes, definitely can, so a few things around that. Naturally
there's limits. So this financial year twenty seven thousand, five
hundred is the current perannum contribution you can make from
the first July goes to thirty.
Speaker 1 (23:52):
K, which is nice because it hasn't changed in a while.
It's been twenty seven thy five hundred for a really
long time, so.
Speaker 3 (23:59):
Nice little why not for the super mine.
Speaker 1 (24:02):
Must be nice if you're contributing that much too, So
like yeah, to take you in and look.
Speaker 3 (24:07):
Super is one of those things where once you've exhausted
all your tax seductions. So sometimes people come to tax
time and they're writing off equipment, buying laptops, doing all
these things, which are great, but you might get to
a point in time where the business doesn't actually need
anything further to do its thing, whereas super is one
of those deductions where at least you're not just wasting
money on equipment that you don't need. You're actually contributing
(24:28):
to obviously your said retirement in the future. That money
is being invested, it's doing its thing. Talk to me
about it. But it's just a good tax seduction to
have when you're running short of tax deductions, when cash
flow works, etc. And even remember you don't need a
pay it in one lump sum, right, so you don't
just need to pay it at the start of June.
You can pay a monthly contribution and then claim that
(24:49):
you know yearly amount as well.
Speaker 1 (24:50):
I always tell people this that it's actually much easier
to make a super contribution than you think. I think
a lot of us think it's really confusing, but it's
actually just like a bee pay.
Speaker 3 (24:59):
Honestly, yeah, transfer, you.
Speaker 1 (25:01):
Just be paid to you super and then you're like, wow,
that was really uneventful. And it can feel a little
bit deflating when you realize how simple it is.
Speaker 3 (25:08):
Especially when you put it off for two years because
you thought it was so hard.
Speaker 1 (25:10):
You were like, oh, this is so overwhelming and so complex,
and then you're like, oh, just be paid to this account.
You're like, and then it's done. I don't have any
other Adminment's like no, no, no, you had your own
Billa code. So like they just allocate it to your
account and you're like, oh okay, why you go away?
You go. You mentioned something before about people purchasing laptops
and stuff. Pre One thing I wanted to touch on
is I feel like small business owners they go, oh
(25:33):
my gosh, it's coming up to interfinancial year. I need
to like get a new print train, I need to
get a new laptop, I need to do all these things.
Speaker 3 (25:38):
Yep.
Speaker 1 (25:38):
And I just wanted to remind you all that stuff's
not free. Yes, I think so many times we go, oh,
I can justify a new laptop, but you're only being
able to claim the tax portion. You're not like getting
a whole free laptop and you claim the whole laptop
and wham bam, that five grand is now, you know,
completely on your deductions list.
Speaker 3 (25:55):
Here's the myth buster it.
Speaker 1 (25:56):
Yeah, I was like, can we touch on this?
Speaker 3 (25:58):
Yes, So the general thing is I'm going to claim
it back on tax. Right. So the way that tax
usually works is, let's say you spend one thousand dollars
on a laptop, and if your tax rate is thirty percent,
it's going to reduce your tax by three hundred dollars.
So you are still out of pocket seven hundred dollars,
which is great if you needed the laptop, because you're.
Speaker 1 (26:16):
Going to buy it anything your math I needed the laptop.
Speaker 3 (26:18):
Needed the laptop, right, you only need a couple of laptops.
So if you didn't need the laptop, you're out of
pocket seven hundred dollars. So it's not always, you know,
beneficial just to spend for tax purposes. I personally, if
I didn't need a laptop, would rather the seven hundred
dollars in my bank account.
Speaker 1 (26:32):
Oh yeah, absolutely, but sometimes I'm a little bit de
Lulu and have you seen the new iPhone? Like maybe I'll.
Speaker 3 (26:38):
Need that time is right? Tax time's coming?
Speaker 1 (26:40):
Yeah, Like at least I can claim it for my
Delulu purchases. But I think it's important to touch on
the fact that doesn't make your stuff free. And how
many times do you talk to people and they're like,
I'm just going to get a new laptop because tax
time is coming up, and you're just like, that's not really.
Speaker 3 (26:55):
It's weekly, but at this time of the year it's
more often than Look, the way I pitch it is,
if you're looking at purchasing things, or even if you're
looking at buying things in the next few months, if
you can bring that purchase forward before the theory of June,
at least you get the tax benefit sooner. So why
wait until July and then you have to wait a
whole other twelve months to get the tax deduction. Get
it on this side of the financial year and happy days?
Speaker 1 (27:17):
Absolutely all right, Next question I have for you, I
hadn't really thought about the maximum number, but how many
abns can I have at the same time?
Speaker 3 (27:26):
So this is an interesting one. So technically as a
sole trader, because it comes back down to the legal
structure of your ABN. So as a sole trader, you
can only actually have one ABN number. You can have
multiple business names registered to that one ABN, so you
can conduct multiple businesses under that one ABN, but you'll
only ever get one. Versus if you're setting up partnerships,
(27:46):
separate companies and things like that, each of those entities
has its own ABN and you can start as many
as you want. Honestly, I don't think any companies you
can have now.
Speaker 1 (27:56):
I was like, are you about to tell me that
there's like a maximum number, because I like got my businesses,
I've got my trust so, I've got a JV, I've
got like a partnership. I've just got a messy tax sittus.
You're watching me very am I about to be in trouble?
Like this is something that I don't know the answer to,
Like is that a.
Speaker 3 (28:12):
Thing everyone's learning? No, So look in summary, as a
soul try to you'll only ever get one. But if
you're setting up separate legal entities, companies, partnerships, et cetera,
it's a new ABN every time.
Speaker 1 (28:22):
Elite all right. Next question, I think I know the
answer to this one, So I'm feeling a little bit
more confident, but I won't be answering that you will be.
The next question is, if I'm doing regular freelance work
for the same company, is it better to use my
tax file number or my ABN?
Speaker 3 (28:37):
Do you want to answer that one because it's quite
a long one.
Speaker 1 (28:39):
It is quite a long one, and I would wonder
if it constitutes like casual work instead of freelance. To me,
this becomes quite complex. It's not actually about the tax
file number or the ABN.
Speaker 3 (28:50):
Correct, and like do you have the option of one
or the other. Because generally when you go to work
for someone, they might force you to be one or
the other. This kind of presents to me that someone
you know can choose that essentially said to them, do
you want to be this? All that? So, other than
the legal technicalities, I suppose there's pros and cons h
to say they could do both naturally if it's through
your ABN. Well, one, you've got to manage your own taxes, yes, right,
(29:14):
do your own invoicing, potentially your own superst is correct,
you'd have to get your own insurances because naturally, you
are a business and you're in charge of everything, right
Versus if you're an employee, you lose a little bit
of the flexibility, but you don't have to potentially provide
your own equipment, insurance, et cetera. Because you're an employee
(29:35):
of this employer and they're going to provide that for you.
They're going to do your own tax make life a
lot easier ideally. But then you've got the idea of
what are the pay rates? Is one significantly higher than
the other because I'm getting paid more for that risk
first reward? So I think it's a few considerations in there.
Speaker 1 (29:53):
For sure, I would be looking at the financial benefit
like I would be kind of doing a pros and
cons list, but also going all right, well, so if
I work for myself and I'm using my ABN and
you're being invoiced by me, am I invoicing at a
higher rate because I'm a freelancer. But if I give
you my TFN and we go down the employee route,
am I looking at a lower rate of pay but
(30:14):
less responsibility which is usually what comes along with that, Right?
So which one? Do you want more money and more
responsibility or do you want less responsibility and probably less money.
I think here's the question, and we can't answer that
because that's val.
Speaker 3 (30:28):
And another angle to even pitch that in is if
you're through your AB and you might have the ability
to pick up other clients and earn more money again, right,
Whereas if you're under a TFN there could be arrangements
where you can't work for.
Speaker 1 (30:39):
Yeah, they might have like a restriction of trade and
they'll say, hey, I know you work for us, but
you can't go and freelance on the side.
Speaker 3 (30:46):
That's right, So allp see.
Speaker 1 (30:47):
I would be like putting everything on the table and
just kind of going which am I most comfortable with
and seeing what happens. But your accountant should be able
to help you there as well, because we get a
really good picture of what you could and couldn't earn specifically.
We're just guessing at this point that that's the stitch, right.
Speaker 3 (31:02):
I agree, hope we help Let's move on.
Speaker 1 (31:05):
I feel like, let's pretend we've been really helpful there.
The next question I have, and I feel like is
a good question. Because some people live on one side
of the train tracks, some people live on the other.
What accounting program do you recommend, Julian.
Speaker 3 (31:19):
This is a hard one without plugging the programs. But look,
I think which.
Speaker 1 (31:23):
One pays you the most?
Speaker 3 (31:24):
Julia, that's a great question. Now, I think in the space.
Speaker 1 (31:28):
At this point, you're paying for the accounting software, so like,
do we want to give them a free promo?
Speaker 3 (31:33):
We'll do it anyway. But I think the three main
plays are kind of like zero my quick books, right,
they're all you know, been there for ages. I don't
know they like me saying this, but they all do
similar things to say.
Speaker 1 (31:43):
I know they don't like that. But also the ATO
asks for things to be exact, so like, at the
end of the day, they can't reinvent the wheel too much.
Speaker 3 (31:52):
Correct, So look, naturally I do use zero more often,
and when I'm.
Speaker 1 (31:57):
Training after clients like you are zero practice yet, so
you don't really use anything else.
Speaker 3 (32:02):
Correct, Our clients could use something else, so we definitely
can work with anything. But look, I do find it
simpler in terms of the way it looks, the way
it feels, et cetera. And when we train clients up
and they get a glimpse of it themselves, they're usually
feeling the same as well. Obviously it's still scary. It's
a new program. That's what accounting programs are, but it's
miles ahead of doing an Excel spreadsheet. So any of
(32:23):
these are going to be an improvement on the Excel format.
Speaker 1 (32:26):
Yeah, I totally understand that. And I'm going to hit
up zero after this for some sponsorship because this is free,
and I'm about to agree that. I am a zero girlie,
Like my accountant uses zero and I really like it.
I find it very simple, very easy. I was also
the treasurer for a charity for a long time and
they used zero, and I found it so simple to
(32:47):
be able to kind of jump in, jump out, look
at my balance sheet, look at my p and L,
look at everything, and it just made sense. Like and
I'm not saying that other softwares didn't. They were just
like a little bit easier, yes, kind of like an
apic spec.
Speaker 3 (32:59):
Yeah, another one might be a little bit clunkier to
get the yeah that thing.
Speaker 1 (33:03):
And like I like that I can save all my
favorites and stuff, and I just like recreate the wheel.
I'm like, I've just done this whole balance sheet, but
I've actually just clicked one button with the star on
it and I'm like, wow, I'm a genius.
Speaker 3 (33:14):
Feeling very formal.
Speaker 1 (33:15):
Yeah, And sometimes I get my accountant to set those
favorites up so it runs a specific like outcome. I
don't even have to do it, It just lives in
my favorites and then I can do it. So yeah, zero,
hit me up for some sponsorship because I feel like
we would work. Yeah, hit us up, we'll collab.
Speaker 3 (33:29):
I feel like we would be.
Speaker 1 (33:30):
Good for you. So moving on, but also only a
little bit of a side note, Julian, at what point
should I be considering an accounting software and not my
very very well loved spreadsheet.
Speaker 3 (33:43):
Great question, because once again, it's not a dollar figure amount.
I think if you look at the benefits of an
accounting program, it's things like making your invoicing easy. It
can send automatic invoice reminders, get you paid easier. So
someone might just say, look, I don't want to deal
with the extra time that I'm spending manually chasing up
in voices doing Excel, and go straight to one from
the start.
Speaker 1 (34:03):
Yeah.
Speaker 3 (34:03):
So honestly, I just think once you're at a point
in time where you feel administratively you're suffering from doing
it in an old school approach, weigh it up. You know,
these programs cost anywhere between I don't know, twenty five
to fifty dollars a month at maximum, depending on what
level you get, if you can justify that cost, which
is tax deductible, but you don't get it all back,
like we said before.
Speaker 1 (34:23):
But also that's a good tax deductively correct.
Speaker 3 (34:26):
It's a valid one. You need it, and it's helping
the business. So if you can justify those things, I'd
look at doing it sooner rather than later.
Speaker 1 (34:33):
To be honest, I was in a very committed relationship
with my Excel spreadsheet when I started, because.
Speaker 3 (34:38):
I didn't know where that was going. Oh thank you
zero some I don't noticed.
Speaker 1 (34:42):
Yeah, yeah, I mean I feel like I am now,
but that's not where this was going. But I was
in a very committed relationship with my spreadsheet, and I
remember just being like, should I be spending the money?
Like shouldn't I Like I knew it existed, I worked
in a practice that used it. I was just being stingy,
and I started to track how many hours my spreadsheet
was taking me. So if you're wondering whether you should
or shouldn't track how many hours you're spending in putting data,
(35:06):
checking off the data because it's all manual, right, Like
you have to triple check to make sure that there's
no human error. And how many hours you're doing manual invoicing,
I promise you'll probably be like, Oh, the actual fifty
bucks a month works out because you're getting that many
hours back to work on your business.
Speaker 3 (35:22):
Which is actually creating well for sales or whatever.
Speaker 1 (35:24):
It may be exactly. So I feel like sometimes we
don't know, but it's working, and like it's an additional
fee and I'm like, at what cost? Yes, So let's
move on. I want to know should I make a
separate bank account if I'm running a side hustle or
a small business.
Speaker 3 (35:39):
So when clients come to us, this is definitely one
of the first things we get them to do with
a new business. It's more of an admin thing. It's
not necessarily a tax issue. If you're a soul trader,
like you can have it in your person and that's fine.
It's more so about getting all your personal transactions mixed
up with your business mes.
Speaker 1 (35:53):
See why would you want to do that?
Speaker 3 (35:55):
Yeah? Think about how much you know you spend throughout
the years.
Speaker 1 (35:58):
Coffee coffee, coffee, and then you have to go through
it and find out one invoice from office works to
be like, oh, remember when I bought Staples. I probably
should be claiming that because Victoria says the little things.
Speaker 3 (36:09):
Add up, So make life easier. Do it from the start,
Get your invoices paid into there, get a card for
that account, tap away as you go.
Speaker 1 (36:16):
Sorry sidetrack, but I feel like someone might go but
I don't have any money coming into my business, and
my answer would be good. It means you can transfer
personal money and track it better if that's how you're
starting your business. Would you agree with this?
Speaker 3 (36:30):
Correct? Going back to what we said before, AA, you
always want to claim those expenses from the get go
and be at least as a clear definition. Now money's
come in and you can track all your contributions from
the start and then eventually pay yourself back as well.
Speaker 1 (36:42):
Yeah, that's actually quite important, all right. The next and
the last question I have for you is a bit
spicy because I don't think you can put your finger
on it, like there's no actual answer, So sorry about
this in advance, But Julian, what should I expect to
pay an accountant to help me? With my bass or
my end of financial year taxes, Like, what's that going to?
Speaker 3 (37:00):
Interesting question? A look at it from a I know
it's just generic like you said, but like it's a
value perspective as well. Right, So you might go to
the most basic accountant. It's super quick, but are they
maximizing your tax structions? Do they really care what you're saying?
Are they giving you advice for the future? All that
kind of stuff? And then separately, you know, what do
you provide with your accountant? So you might go to
(37:21):
your accountant with you know, twelve months worth of PDF
bank statements and say to them, hey, can you sort
this for me?
Speaker 1 (37:27):
Oh, a shoe box full of receipts that are half
faded and scrunched up, that's what I'm going to give you.
Speaker 3 (37:32):
Yeah, versus great client a over here that says, you know,
here's my zero file. It's reconcile, my invoices are attached,
receipts are there.
Speaker 1 (37:40):
Very sexy, Yeah, very sick.
Speaker 2 (37:41):
Yeah.
Speaker 1 (37:42):
When someone says it's fully reconciled, I'm.
Speaker 3 (37:43):
Like, yes, insert So yeah, naturally the price is going
to vary a lot based on that. And that's the
same with BASS as well as Indo Financial, yet it's
just done more regularly. So I think you've got to
get a few quotes, you know, make it as cheap
for yourself as possible, being as organized as you can.
What are your thoughts on.
Speaker 1 (38:02):
That being I feel like I'm going to piss a
few people off here, but that's okay. I just think
pay peanuts, get monkeys. Like, if you're looking for the
cheapest accountant on the block, you're probably not going to
get someone who values their time, their energy and knows
their worth and knows what value they bring to your business.
So do I have the cheapest accountant ever? No, I
(38:24):
would say that my accountant's pretty expensive nowadays, and that
was scaled so way back when I wasn't earning that
much and my businesses were quite simple, it was quite cheap.
But now I would say that I have a more
complex structure, and I've spoken about it on the podcast before.
And this might mean absolutely nothing to you, or you
might go, oh, that's interesting, But I essentially have a
trust that owns my businesses and that's how I operate,
(38:47):
and that to me makes the most sense. But because
of that structure, I'm now paying multiple tax returns. So
I'm paying for a tax return for my trust and
for each of my businesses, and that is good for
me because ultimately I'm in a better financial position, But
that can feel overwhelming as well. Like I said, oh,
like just one tax return, No, we have multiple. Every
(39:08):
business has a tax return, my trust has a tax return.
Like there's personal stuff I need to do. Like it's
actually a little bit wild, but that's Louis's problem, my accountant.
Speaker 3 (39:18):
I think when you're talking to friends and you're like, oh,
how much do you pay for tax? Once again, these
are all things that you don't know, like, so you
might think they've got a business, why are they only
paying this much? I'm paying that, But you might have
more structures than them. So there's a lot of different
components to keep in mind.
Speaker 1 (39:31):
And I think that that's yeah, really important. But then
also if you're worried about paying an accountant too much,
sorry about this, you can work with a bookkeeper as well,
and an accountant actually usually loves that. So like, I know,
my accountant adores my bookkeeper because she does all the admin.
She reconciles all my accounts, she does my bass, she
pays all of my tax. She makes sure I'm on
(39:52):
top of my GST and any changes throughout the year,
so that when I am seeing my accountant, who's arguably
more expensive per hour, I'm sitting down and going, all right, well,
I already know where we are, let's do tax planning.
What does the future look like? What can we actually do?
And he's the more technical that I rely on. Right,
So I have a bookkeeper for day to day and
(40:13):
then I have an accountant for those bigger questions. And
I think that for me that works really well financially
because it's less expensive than getting my accountant to do
those things.
Speaker 3 (40:23):
Yep.
Speaker 1 (40:23):
But also he loves it because he's not doing all
of those things.
Speaker 3 (40:26):
Yeah, so there is definitely a differentiation between the two.
Funnily enough, we do bookkeeping on accounting in your run
for not you personally. Are you doing the bookkeep We
love the benefits of it, like you said.
Speaker 1 (40:38):
Being able to shift it. You know, it's made it
more affordable for me. But then on the flip side,
I really like the delineation of knowing who to talk
to about what instead of overwhelming my accountant. And I
also know when I go to him, I'm like all right.
These are the big hitting questions. What are you doing
for me, sir? He can pay for lunch? Yes, all right.
I feel like that is all we have time for
unfortunately today. So I'm going to invite you back on
(41:00):
the show at some point because I feel like I
haven't got enough value out of you yet. But in
the introim Julian, where can we find you if we
want to either work with you or watch your content
or just hang out or ask you for a coffee.
Speaker 3 (41:11):
Yeah, we'd love a coffee. Hit us up on socials.
It's moo dot au, m a U R dot au,
Google whatever it is. We're everywhere. We're very contactable, and
naturally we'd like to apply pretty quickly.
Speaker 1 (41:23):
You're so contactable that the link to your website and
your Instagram is in our show notes. So you welcome, guys.
But that is it from us today. Have a great week,
and we will see you on Friday. Bye guys, Thanks guys.
Buy shared on She's on the Money is general in
(41:45):
nature and does not consider your individual circumstances. She's on
the Money exists purely for educational purposes and should not
be relied upon to make an investment or financial decision.
If you do choose to buy a financial product, read
the PDS TMD and obtain appropriate financial advice tailored towards
your needs. Victoria, Divine and She's on the Money are
(42:06):
authorized representatives of money sherper P T y L t
D A b N three two one six four nine
two seven seven zero eight a f s L four
five one two eight nine
Hello.
Speaker 2 (00:01):
My name's Santasha Nabananga Bamblet. I'm a proud your the
Order Kerni Whalbury and a waddery woman. I would like
to acknowledge the traditional custodians of the land of which
this podcast is recorded on a wondery country, acknowledging the elders,
the ancestors and the next generation coming through. As this
podcast is about connecting, empowering, knowledge sharing and the storytelling
(00:25):
of you to make a difference for today and lasting
impactful tomorrow, Let's get into it.
Speaker 1 (00:45):
Hello and welcome back to another episode. I'm Victoria Devine,
the owner of several successful businesses, and I've got a
special treat for you guys today. Not only are we
doubling down on the tax episodes ahead of EO F Y,
but I am joined today by a very special guest
and my friend Julian Morrow, who is not only a
finance guru, but also runs his own very successful accounting
(01:08):
for moro. What do we got the name for that?
Speaker 3 (01:11):
Where I get it from?
Speaker 1 (01:12):
Yeah? Where'd you get the name for that?
Speaker 3 (01:13):
Wild? My surname?
Speaker 1 (01:15):
Really do you think I'm being serious? No, I'm not
testing you. I literally just said your surname and I'm like, wow,
real original Sulian. That's crazy. Well, welcome to the show.
Thank you for making the time for us today. I
am genuinely very excited to get you on the show
because at the end of the day, I've been meaning
(01:35):
to connect with you in person for literal years. We
just haven't made it happen until I was like, hey,
I've got a really good deal. Come on the show
and we get to meet in person.
Speaker 3 (01:44):
Thanks so much for having me V. It was honestly
perfect timing. And the financial view is coming and like
you said, I think we've had this in the mix
for years now, being in touch with each other. So
glad the cards aligned actually in the studio and yeah,
tax is fun.
Speaker 1 (01:58):
I feel like last Instagram DM I saw to you
or from you was like, hey, V, like I can
do coffee on Wednesday, and I clearly missed it yeah
and didn't reply and it was twenty twenty one, and
I was like, God, sorry about that.
Speaker 3 (02:12):
So when you followed me up, I was like, oh, okay, yeah.
Speaker 1 (02:14):
Sure, so you're still keen for that coffee?
Speaker 3 (02:16):
Still keen still here?
Speaker 1 (02:18):
Oh my gosh. All right, Well I'm glad to have
you tell me a little bit about your firm, Like
what sets you guys apart? Why are you not as
boring as all the other accounting firms.
Speaker 3 (02:27):
Yeah, I was explaining this to the team earlier, that
accountants aren't all bad.
Speaker 1 (02:30):
One said they were bad. Well jumped to conclusion by bad.
Speaker 3 (02:33):
Sorry. Now, look, I did start as your traditional accountant,
worked at small firms, big firms, and I kind of,
you know, saw what I didn't like, which was the
super corporate you know, suit and tie vibe, and it
was quite daunting to talk about accounting, taxes and finances
with clients. So I eventually took the step one on
my own and created a firm where we could be
a lot more casual with our approach, educate our clients,
(02:56):
not try and scare them with tax And as a
result of that, a lot of people have aligned with
the brand and it's allowed us to grow to where
we are today.
Speaker 1 (03:04):
I feel like you are super approachable, not only in person,
but also online. Where'd you get the confidence to start
creating content online and start posting? Because I feel like
when you're an accountant and when you're a finance person,
I eat me. I never wanted to put a face
to the name. That's why I started a podcast because
it was really non confrontational at the start. Yes, and
(03:24):
now look where we are, but like, how did you start?
Speaker 3 (03:27):
Yeah? So look, I think everyone used to say that
I wasn't your stereotypical accountant. I've definitely got that introvertedness
in me somewhere. But naturally they were kind of like, look,
you know, you're more personable. You need to kind of,
you know, put your face to it.
Speaker 1 (03:39):
En sure you're meant to be here, Like, are you
sure you're meant to be an accounting If.
Speaker 3 (03:42):
You see me at the office, I'm definitely an accountant
right on my Excel files. I think I was just
pushed kind of like everyone, you've got to take the leap,
put your name out there, put your face out there.
It is a little bit daunting, you know that there's
all these other professionals out there listening to you and
being like, oh, what makes this guy any different to us?
And you know, for me, it's just been that different
approach and seeing people align with it gave me the
(04:04):
confidence to pursue it further. And then you just kind
of double down.
Speaker 1 (04:08):
That's actually so relatable for me because when people say, like,
what overwhelms you the most when it comes to content creation?
You know, is it because millions of people see it?
And I'm always like, no, it's actually because other professionals
see it, like other financial advisors are going to listen
to my content and judge me if I'm not one
hundred percent spot on. So I feel like you've got
to be able to back yourself as well and be like, actually,
(04:29):
I do know what I'm talking about. I am good
at my job, and that's one of the hardest things
to do because the content creation really easy. You're just like, Okay,
I can whack out a video, no worries, But you've
actually got to back yourself. But I'm excited to have
you on the show. I know that the community are
going to love this because today we are giving everyone
the opportunity to kind of talk to an accountant. I mean,
we ask them the questions in advance, so let's pretend
(04:52):
it's live. But we put a call out to our
small business owner community and our side hustlers and we
ask them for all of their questions about tax and
after the break we're going to get to those I
want to talk about you and about tax and about
accounting before that, though, but before we get Julian's thoughts
on all of your very juicy questions. I feel like
the most common question in our community, irrespective of whether
(05:14):
they are a PAYG employee or a big business owner,
is should I be doing my own tax return?
Speaker 3 (05:20):
Controversial?
Speaker 1 (05:21):
No, no, good questionpie sy, Let's go.
Speaker 3 (05:23):
Let's go. Look. I think definitely, as your pay as
you go you don't necessarily need one. It's a little
bit of that you don't know what you don't know,
so there's definitely ato resources. You know, my GAV pre
fills a lot of individual tax return information, but you
might be missing certain deductions because once again, you don't
know what you don't know. So there's always a benefit
even if you're a simple tax return and you've got
(05:46):
some work related costs to have an accountant. When it
comes to a business, I'm pretty inclined to say you
do need one, absolutely, not purely just for tax. But
it's even like, you know, is your structure correct, You're
not going to pick up on that. So you might
be like, look, I've got this great tax return, I'm
getting a refund. I claimed my deductions, but the accountant
might be like, hey, cool, I'll help you with that. Plus,
(06:06):
have you looked at changing your business structure, which is
something you don't even know at that point in time.
Speaker 1 (06:11):
Potentially, let's dive into that for a hot second, because
as an ex financial advisor, I used to see a
lot of clients and they'd come to me and they
were super proud and so was I of what they
were achieving. But they were set up in a sole
trader structure and they would be like, oh, it's so
EASYV like I'm doing ABC and D, but as a
sole trader you get lumped with your marginal tax rate. Right,
(06:33):
So a lot of them were starting to absolutely make
bank and it was shooting them in the foot. At
what point should a sole tradeer go, you know what,
maybe I should talk to an accountant about this company thing.
It's a little bit overwhelming, like how do we make
the shift? Like when should we be doing that?
Speaker 3 (06:49):
Well, it comes off the back of like we said,
if you've got an account you can have those conversations
to regularly, right, so you're in the right place at
the right time. But otherwise, when I talk to people
aut setting up companies, it's kind of this true reasons
why you do it. So one is regardless of what
you're making, it might even be you know, risk and
asset protection. Right. So a lot of people forget to
understand that when you're a sole trader, you are the business. Right,
(07:11):
So if something goes wrong, there's a potential that that
exposes you personally and dramatic.
Speaker 1 (07:16):
But they're coming for your house, right, They're.
Speaker 3 (07:17):
Coming for your house. Got one, They're coming, They're coming
for your cap.
Speaker 1 (07:21):
Like it's kind of low key scary.
Speaker 3 (07:22):
It's scary. So until you're told that, sometimes you don't realize.
Separately to that, obviously there's a tax advantage. So like
you were saying, the if you're a sole trader, U,
let's just say you're making bank you're making three and
a grand for example. Okay, big dog, right, this is
that person out there, regardless of if they're spending all
that money, they're paying the highest tax rate versus if
they were a company. There's the benefit of keeping some
(07:45):
in the company at a lower tax rate. So to
answer your question, the specific dollar amount of correct, you
know you might have a hex stet taxes a little
bit higher than someone without a hex s deet different
factors in there, but once again, having the accountant to
be there to you regularly is going to make sense.
Speaker 1 (08:02):
Yeah, and that's a good time for me to remind
you all that this is general advice only, and obviously
you need to talk to an accountant. It's just stories
like these that help you grasp the concept of moving
forward with one or the other, because you go, oh,
v that makes so much more sense, because if you
read the ATO website, you just go, oh, okay, so
here are the features and benefits. That doesn't make a
(08:23):
lot of sense, that's right. And when I look at
my own situation, having been a financial advisor, I skipped
past soul trader. I was just like absolutely not, Like,
I don't want to have to change my structure later
and kind of double up. And so I set up
my company from the very beginning, knowing full well that
I wanted to make use of the tax advantages of
a company. But I also didn't want to put my
(08:44):
husband at risk. Yes, I didn't want him to be
annoyed at me if like I didn't pay my tax
debt and the ad are like, hey, so your house.
I just wanted to protect my husband as well as
my assets.
Speaker 3 (08:55):
Yeah, so it can be all those different factors. So
once again, even like you said, registration, you don't want
to set up all your business names and change them
down the track can be a little bit of a hasshle.
So some vallid points. Glad you did it right from
the start.
Speaker 1 (09:06):
I feel like I had some solid advice on my side,
and that is one of the things that I always
talk about in this community, right, like, you don't know
what you don't know, and often to get the right advice,
it's really expensive. And I had a lot of privilege
having exposure to that area. And I mean I was
already in finance when I set up a finance business,
So you would hope I would nail the structure, yeap,
Like you'd be a bit, oh, what are you doing
(09:28):
thee if I was a soul trader, yeah, Like shouldn't
you know better? But you don't know what you don't know.
And sometimes when you're a small business, you're a sole trader,
and then you listen to a podcast like this and
you're like, Wow, I feel like I might be in
the wrong structure. I'm so silly, I'm so dumb. That's
not it at all. You did the best that you
could with the tools and resources you had at the time,
and you're a million miles ahead of everyone else anyway,
(09:49):
because you're a business owner, Like you're already putting your
neck out, so like now might be the time to
talk to an account about like, oh, how can we
do this? What can we do? And I promise any
good account is going to make you feel empowered by it,
not overwhelmed, And they're also going to explain it in
terms that you get. They're not just going to sit
down and be like, okay, cool. So if you've got
a discretionary trust or you know, a testimonial trust, what's
(10:11):
the difference here, Like you're going to be so overwhelmed
if they're just talking technical or as if you sit
down with someone like Julian who's like, all right, well
do you want to pay more tax?
Speaker 2 (10:20):
Or no?
Speaker 1 (10:20):
You go, oh, this makes so much more sense. Why
can't everyone talk like this?
Speaker 3 (10:24):
And look, I think as well, what your accountant learns
about you is quite personal, right, they see all your finances,
they see behind the scenes, so naturally, aligning with someone
that you're comfortable talking to, all these things about is
going to do great things for you.
Speaker 1 (10:36):
One hundred percent, and you've got to trust them as well,
because if you're a little bit cagey, you're going to
get no value. Like if you're trying to withhold things,
that is no benefit to you at all. I have
said before on the pod, and I do not expect
you to have listened to this, Julian, because it turns
out you're not my target market.
Speaker 3 (10:52):
Okay, I'm really sorry.
Speaker 1 (10:54):
Interesting you only just learned that, so sorry. I've said
it before on the show, and that is that being
a financial advisor I felt like was one of the
most pervy jobs in the world, but also one of
the most trusting jobs because I know more than your GP,
and when your accountant should know more than your GP,
because you've probably done your personal insurances and they're going
to need to know the outcome of that because like
(11:15):
in some situations, your insurances are inside different trusts or
you know, for the business, your account's going to need
to know that. They're going to need to know whether
you want to divorce your wife or not, because obviously
asset protection comes into that. So if you don't trust
your accountant or your financial Advisor, they're not for you,
Like you literally need to move on. And I feel
like if you're getting cold shoulder vibes with somebody that
(11:37):
you can be like, oh, Julian, I'm having the worst
time at the moment, Like I think my partner and
I are going to go through a separation, And you
can't say that to them wrong person from my perspective.
Speaker 3 (11:46):
And I've definitely seen that heaps of times, you know.
I mean you've got business partners that are dating or married, etc.
And then you know things hit the fan and you
know you've got those situations. So yeah, yeah, definitely trust
is key.
Speaker 1 (11:57):
Do you know what my dad said the other day
about business partners? He said, the best number of business
partners is an odd number less than three. And I
was like, oh, cool, Dad, did you get that. It
means one, it means no business partners, it means it's
very terrible idea.
Speaker 3 (12:12):
Yes, an odd number lesson I was in the moment.
Speaker 1 (12:15):
Okay, So we said that Julian was a really good accountant. Julian,
I want to know what are your clients at the
moment finding most concerning. I feel like there's lots flying
around in the industry at the moment, and a lot
of your clients are that she's on the money demographic,
either small business owners or individuals. So what are they
asking you the most questions about tax deductions?
Speaker 3 (12:37):
One hundred percent? But I feel commonly the biggest issue
or differentiation that people struggle with is personal versus business.
Yeah right, and that is also, you know, an ato
thing that they look at, not just this year, but
kind of every year, and it relates to so many things.
So for example, it's your car, it's your working from
home arrangement, it's your phone, it's your internet, it's your subscriptions,
(12:57):
it's so many things. So we've got obviously a lot
of clients new and old, and naturally they might feel
like something is a work relay deduction because they use it,
you know, this much for work. But there's obviously such
a big personal portion as well, So it's going through
all the nitty gritty to actually work out what you
can and can't do, and obviously that's quite difficult to grasp,
especially in your first couple of years of running a business.
(13:19):
So that's an ongoing educational thing that I think, you know,
is kind of prevalent in our client's minds at the moment,
and then naturally it's just kind of optimizing their tax position.
You know, people are still scared of tax, even if
it's lower than what they should have. Let's say it
was meant to be forty percent. We've got them down
to twenty five. They might still be scared of twenty
five percent, which is fine. That's just how they feel.
(13:39):
So it's managing you know, expectations and working out what
we can do best to kind of, you know, make
it as efficient as possible.
Speaker 1 (13:45):
I suppose I always used to tell clients that we
should be excited, obviously because I was trying to reframe
it into something that's really positive. But I would always
say that we need to be excited about the tax
that we pay. And I said this because more tax
means more money. More money means that your business is successful,
and it's good. I feel like often it's more around
(14:05):
having the education to know how to deal with tax
when it comes into your account, and the second that
you're able to go, all right, well, I've found a
structure that works for me. Whenever a payment comes in,
I automatically take thirty percent and chuck it in another account.
And I don't think about it. Those people are a
lot less stressed. Do you talk to your clients as
well about how to structure money coming in so that
(14:26):
tax doesn't feel as painful, because it can feel terrifying.
Speaker 3 (14:30):
Correctly, most of tax is honestly planning, right, so whether
it's done quarterly, yearly, whatever it is, and that includes
your structuring and things like that. So you know, we're
always suggesting having separate bank accounts for the business, having
your tax bank accounts there as well, and whether you're
putting aside GST, you're putting aside your tax. You might
have employees you don't want to fall behind on their
taxes and they're super There's so many things that not
(14:52):
go wrong, but you just need to be on top
of it because obviously the dollars can start to add
up quite quickly if you're not on top of it, and.
Speaker 1 (14:58):
I feel like it can be really overwhelm But at
the end of the day, the structure can also be automated,
which I find very sexy. I mean, the second you
said tax planning, I was like, oh my gosh, it's
nearly tax planning season. Like it's made like I get
to actually sit down with my accountant and do some
tax planning. I get so excited because I'm like, it's
a period of reflection and also planning for the next
(15:19):
year and tax planning. As much as I'm saying I'm
excited about it. In your macov you've got rocks in
your head. It can be really exciting because it's a
time to reflect on what you've done in the business,
where the business is going, with a professional that can
actually guide you through and make sure that you're in
the right position. Like, oh, I was paying double just
to do my tax planning sessions.
Speaker 3 (15:39):
So it's a great Cui, he's going to pay double listening.
Speaker 1 (15:42):
No you're not.
Speaker 3 (15:44):
No, I agree. So I think I take tax planning
and tax time as yes, the process of doing the
compliance and all of that, but also a point of
reflection to look at you know, all your systems, your bookkeeping,
your structure, you know your tax savings. Is that all working?
And then if it's not, you know, putting the changes
in place for the new financial and improving always.
Speaker 1 (16:01):
From there one hundred percent. Now, I was going to
ask you before about the ATO, so we know what
your clients are finding most concerning at the moment, and
I know that every year as well. We talk about
on Shees on the Money, how the ATO released, like
it's like a blog post of what they're targeting this year.
What do you think the ATO are going to have
their eyes peeled for this season.
Speaker 3 (16:22):
I like a little disclaimer on that. I reckon that.
Even though they put that out, sometimes people get confused
and they think or maybe they're not able to target that. No, no,
no's targeting everything, especially that personal versus business. I do
love that because it's such a key thing. Look, I
think I've read a little bit out there around rental
properties for those that do have one right the way
you're claiming deductions and you know what you can and
(16:44):
can't claim. So they're always hot on that. And still
that working from home, even though it's kind of faded,
you know from a couple of years ago, there are
still constant changes to the rules around working from home.
And I think, once again, if you're completing your own
tax return, if I go into a little bit of
the technical side of it for a seton there's a
rate that you can claim per hour your working from home, right,
(17:04):
but if you claim that rate, you can't also claim
a portion of your phone and intoet it's one ear
the other right, So people might be out there thinking, okay, cool,
use my phone for work double up right. So simple
errors like that that you might feel a big thing,
but you know.
Speaker 1 (17:19):
Yes, and they add up. I was reading because I'm
always reading tax articles. It's billions of dollars in a
discrepancy when it comes to even just the work from
home situation. So it is big. And even though you
might see it as like a couple of dollars that
you're skimping on, if everybody does that, it becomes a
really big problem for the ATO. And I feel like
they're on top of everything now. Like historically, I'm sure
(17:42):
when you had your you know, first official job and
you were claiming your three hundred dollars worth of receipts
even though you didn't actually incur those expenses and you
got away with it that old school missing. Yeah, like
it's a massive myth. Just FYI, if you didn't incur
those expenses, you can't claim them. That's just a nice
You don't have to do the admin on this, the ATO,
we're being nice, not you get some free stuff. Now
(18:05):
AI exists and every single year. The ATO is getting
better and better at utilizing that. I think it's going
to get to a point where they will basically in
the future. And please don't quote me on this or
think that you're out of a job, but I think
that for PAYG employees, AI is going to basically be
able to do your entire tax return for you and
there won't be any questions because with data matching and
(18:26):
the information that your employer pays and your bank feeds, like,
we're going to have no privacy basically correct the everything,
They're going to see everything. I agree, and I think
that that's kind of cool too, because it takes pressure
off you for having to try and do the right thing.
Speaker 3 (18:40):
And I think it falls back as well in terms
of another thing that we hear all the time is
you know, I'm just a little fish. They're not going
to come after me. They're always after the big end
of town. That's true to some extent, but at the
same time, if there's you know, hundreds of thousands of
people claiming that three hundred dollars or claiming the maximum
kilometers with no proof, yea, that adds up to big
dollars for the ATO as well. So we can't be
(19:01):
and I even think, you know, we're not a target,
so you do want to make sure you're always you know,
claiming what you can claim and maximizing but still being
legit about it.
Speaker 1 (19:09):
Which is funny because you haven't heard this episode yet
because it hasn't dropped at the time of recording. But
the first tax episode I did with my co host Jess,
who's an employee of mine, Julian, she says she got
audited two years ago, and so she's not, by any
stretch of the imagination, you know, one of the big fish.
She's just doing the right thing. And thankfully when she
got audited, she is like the best, Like she was like, yeah,
(19:33):
here have at it. Like she didn't do a thing wrong,
so she was absolutely fine. But she was shocked at
the time that she got audited. And I remember her
getting the letter in the mail because it's all very official,
and she called me being like, what is going on?
What have I done wrong? And I'm like, look, it
could also be random selection, which is correct, and I
think that that's important to take into consideration too, that
even if you've not done anything wrong, your tax return
(19:55):
could not be flagged. It could just be random selection
and then making sure that they've you know, jotted their
eyes and cross their t's, and they're just doing some
testing correct and you've fallen into the unlucky pile.
Speaker 3 (20:06):
It is quite daunting. When you do get any correspondence
from the ATO. It might even be a nice letter,
but naturally when people see ABO. Anytime I get some
phone calls.
Speaker 1 (20:15):
I see a letter come through and I literally go,
what's this? Like what I I owe? What have I done?
And sometimes it's just a we've updated your contact information.
You're like, oh, okay, interesting story. Why do you have
to be all official about it? I feel like it's
when you drive past the police and you think they're
going to do a massive YWI and pull you over
even though you did not one thing wrong.
Speaker 3 (20:35):
That's the apies, that's the vibe.
Speaker 1 (20:37):
That's the vibe. But the ATO need little hat. All right,
let's go to a really quick break on the flip side.
We're going to be asking Julian a whole heap of
your questions, so don't go anywhere. Welcome back. If you
(20:57):
were listening to the first half of the show, you
know that I am joined by a very special guest,
my friend Julian Morrow of Morow, the very very originally
named firm, and we're talking everything tax. Julian I put
it out to our community a little earlier in the
week and I said, hey, guys, we've obviously got Julian
coming in and we would like to ask some questions.
(21:17):
What are your deepest, darkest tax questions?
Speaker 2 (21:19):
This can be.
Speaker 1 (21:20):
Anonymous, and they jumped on it. So are you ready
to dive in the deep way?
Speaker 3 (21:23):
I'd love to?
Speaker 1 (21:24):
All right, So first things first, Number one, and this
was a common question when starting out. Can I claim
initial costs of starting my business against my taxes if
I'm not gaining sales?
Speaker 3 (21:37):
So you definitely can, and not only can you, you
definitely want to. So with expenses for your business, you
need to claim an expense in the year that it's paid. Right,
So you might think I'm not making anything of start
claiming it in a couple of years. That doesn't work.
So instead, what you need to do is claim it
in the first year, and then what happens is it
creates a loss for your business. So let's just say
(21:59):
you spend ten thousand dollars year one, that ten thousand dollars.
Loss gets carried forward to the next year, so then
when you do start to earn money, you don't have
to pay any tax until you recoup those losses. So
until you make back the ten thousand dollars, you might
have costs for years and years until you're actually making income,
which is fine. That loss just gets bigger and bigger
and gets carried forward. Definitely, you can claim them, but
(22:20):
you're not necessarily going to get tax back. Your business
hasn't actually paid any.
Speaker 1 (22:24):
Taxing to getting a refund for something you didn't pay for.
Speaker 3 (22:27):
That's right. Yeah, so the loss will accumulate, you definitely
want to include it in the year that's incurred, and
then down the track it will, you know, obviously help
you reduce tax because you're not paying any tax until
you make it all back.
Speaker 1 (22:38):
So, very long story short, we should be claiming absolutely
everything and taking our tax super seriously and doing all
of our receipts and absolutely everything even if we're not
making a dollar correct, because it can benefit us in
the future.
Speaker 3 (22:50):
Imagine you spent ten grand and then you found out
down the track that you didn't claim ten grand worth
of costs just because essentially, so.
Speaker 1 (22:57):
For the first couple of years of this podcast and
of She's on the Money, we were running at a
massive loss. And that made sense because like I didn't
even think that She's on the Money would make money.
It was just fun on the side that I thought
this would be a good marketing project for, you know,
my bigger business, Zella, which by the way it worked,
it was going well, we are, but I had all
these losses that I'd banked up, and I was like,
(23:18):
every year I'd look at my attacks. We're trying to
be like, oh, she's a sinking shit and now it's
all good, and now I've got to use those losses
and claim against them. So the first year that we
started making profit, it was very nice. So next question
is actually from a locum pharmacist. They say, I'm a
soul trader. Am I able to contribute to my superanuation
(23:39):
before tax?
Speaker 3 (23:41):
Yes, definitely can, so a few things around that. Naturally
there's limits. So this financial year twenty seven thousand, five
hundred is the current perannum contribution you can make from
the first July goes to thirty.
Speaker 1 (23:52):
K, which is nice because it hasn't changed in a while.
It's been twenty seven thy five hundred for a really
long time, so.
Speaker 3 (23:59):
Nice little why not for the super mine.
Speaker 1 (24:02):
Must be nice if you're contributing that much too, So
like yeah, to take you in and look.
Speaker 3 (24:07):
Super is one of those things where once you've exhausted
all your tax seductions. So sometimes people come to tax
time and they're writing off equipment, buying laptops, doing all
these things, which are great, but you might get to
a point in time where the business doesn't actually need
anything further to do its thing, whereas super is one
of those deductions where at least you're not just wasting
money on equipment that you don't need. You're actually contributing
(24:28):
to obviously your said retirement in the future. That money
is being invested, it's doing its thing. Talk to me
about it. But it's just a good tax seduction to
have when you're running short of tax deductions, when cash
flow works, etc. And even remember you don't need a
pay it in one lump sum, right, so you don't
just need to pay it at the start of June.
You can pay a monthly contribution and then claim that
(24:49):
you know yearly amount as well.
Speaker 1 (24:50):
I always tell people this that it's actually much easier
to make a super contribution than you think. I think
a lot of us think it's really confusing, but it's
actually just like a bee pay.
Speaker 3 (24:59):
Honestly, yeah, transfer, you.
Speaker 1 (25:01):
Just be paid to you super and then you're like, wow,
that was really uneventful. And it can feel a little
bit deflating when you realize how simple it is.
Speaker 3 (25:08):
Especially when you put it off for two years because
you thought it was so hard.
Speaker 1 (25:10):
You were like, oh, this is so overwhelming and so complex,
and then you're like, oh, just be paid to this account.
You're like, and then it's done. I don't have any
other Adminment's like no, no, no, you had your own
Billa code. So like they just allocate it to your
account and you're like, oh okay, why you go away?
You go. You mentioned something before about people purchasing laptops
and stuff. Pre One thing I wanted to touch on
is I feel like small business owners they go, oh
(25:33):
my gosh, it's coming up to interfinancial year. I need
to like get a new print train, I need to
get a new laptop, I need to do all these things.
Speaker 3 (25:38):
Yep.
Speaker 1 (25:38):
And I just wanted to remind you all that stuff's
not free. Yes, I think so many times we go, oh,
I can justify a new laptop, but you're only being
able to claim the tax portion. You're not like getting
a whole free laptop and you claim the whole laptop
and wham bam, that five grand is now, you know,
completely on your deductions list.
Speaker 3 (25:55):
Here's the myth buster it.
Speaker 1 (25:56):
Yeah, I was like, can we touch on this?
Speaker 3 (25:58):
Yes, So the general thing is I'm going to claim
it back on tax. Right. So the way that tax
usually works is, let's say you spend one thousand dollars
on a laptop, and if your tax rate is thirty percent,
it's going to reduce your tax by three hundred dollars.
So you are still out of pocket seven hundred dollars,
which is great if you needed the laptop, because you're.
Speaker 1 (26:16):
Going to buy it anything your math I needed the laptop.
Speaker 3 (26:18):
Needed the laptop, right, you only need a couple of laptops.
So if you didn't need the laptop, you're out of
pocket seven hundred dollars. So it's not always, you know,
beneficial just to spend for tax purposes. I personally, if
I didn't need a laptop, would rather the seven hundred
dollars in my bank account.
Speaker 1 (26:32):
Oh yeah, absolutely, but sometimes I'm a little bit de
Lulu and have you seen the new iPhone? Like maybe I'll.
Speaker 3 (26:38):
Need that time is right? Tax time's coming?
Speaker 1 (26:40):
Yeah, Like at least I can claim it for my
Delulu purchases. But I think it's important to touch on
the fact that doesn't make your stuff free. And how
many times do you talk to people and they're like,
I'm just going to get a new laptop because tax
time is coming up, and you're just like, that's not really.
Speaker 3 (26:55):
It's weekly, but at this time of the year it's
more often than Look, the way I pitch it is,
if you're looking at purchasing things, or even if you're
looking at buying things in the next few months, if
you can bring that purchase forward before the theory of June,
at least you get the tax benefit sooner. So why
wait until July and then you have to wait a
whole other twelve months to get the tax deduction. Get
it on this side of the financial year and happy days?
Speaker 1 (27:17):
Absolutely all right, Next question I have for you, I
hadn't really thought about the maximum number, but how many
abns can I have at the same time?
Speaker 3 (27:26):
So this is an interesting one. So technically as a
sole trader, because it comes back down to the legal
structure of your ABN. So as a sole trader, you
can only actually have one ABN number. You can have
multiple business names registered to that one ABN, so you
can conduct multiple businesses under that one ABN, but you'll
only ever get one. Versus if you're setting up partnerships,
(27:46):
separate companies and things like that, each of those entities
has its own ABN and you can start as many
as you want. Honestly, I don't think any companies you
can have now.
Speaker 1 (27:56):
I was like, are you about to tell me that
there's like a maximum number, because I like got my businesses,
I've got my trust so, I've got a JV, I've
got like a partnership. I've just got a messy tax sittus.
You're watching me very am I about to be in trouble?
Like this is something that I don't know the answer to,
Like is that a.
Speaker 3 (28:12):
Thing everyone's learning? No, So look in summary, as a
soul try to you'll only ever get one. But if
you're setting up separate legal entities, companies, partnerships, et cetera,
it's a new ABN every time.
Speaker 1 (28:22):
Elite all right. Next question, I think I know the
answer to this one, So I'm feeling a little bit
more confident, but I won't be answering that you will be.
The next question is, if I'm doing regular freelance work
for the same company, is it better to use my
tax file number or my ABN?
Speaker 3 (28:37):
Do you want to answer that one because it's quite
a long one.
Speaker 1 (28:39):
It is quite a long one, and I would wonder
if it constitutes like casual work instead of freelance. To me,
this becomes quite complex. It's not actually about the tax
file number or the ABN.
Speaker 3 (28:50):
Correct, and like do you have the option of one
or the other. Because generally when you go to work
for someone, they might force you to be one or
the other. This kind of presents to me that someone
you know can choose that essentially said to them, do
you want to be this? All that? So, other than
the legal technicalities, I suppose there's pros and cons h
to say they could do both naturally if it's through
your ABN. Well, one, you've got to manage your own taxes, yes, right,
(29:14):
do your own invoicing, potentially your own superst is correct,
you'd have to get your own insurances because naturally, you
are a business and you're in charge of everything, right
Versus if you're an employee, you lose a little bit
of the flexibility, but you don't have to potentially provide
your own equipment, insurance, et cetera. Because you're an employee
(29:35):
of this employer and they're going to provide that for you.
They're going to do your own tax make life a
lot easier ideally. But then you've got the idea of
what are the pay rates? Is one significantly higher than
the other because I'm getting paid more for that risk
first reward? So I think it's a few considerations in there.
Speaker 1 (29:53):
For sure, I would be looking at the financial benefit
like I would be kind of doing a pros and
cons list, but also going all right, well, so if
I work for myself and I'm using my ABN and
you're being invoiced by me, am I invoicing at a
higher rate because I'm a freelancer. But if I give
you my TFN and we go down the employee route,
am I looking at a lower rate of pay but
(30:14):
less responsibility which is usually what comes along with that, Right?
So which one? Do you want more money and more
responsibility or do you want less responsibility and probably less money.
I think here's the question, and we can't answer that
because that's val.
Speaker 3 (30:28):
And another angle to even pitch that in is if
you're through your AB and you might have the ability
to pick up other clients and earn more money again, right,
Whereas if you're under a TFN there could be arrangements
where you can't work for.
Speaker 1 (30:39):
Yeah, they might have like a restriction of trade and
they'll say, hey, I know you work for us, but
you can't go and freelance on the side.
Speaker 3 (30:46):
That's right, So allp see.
Speaker 1 (30:47):
I would be like putting everything on the table and
just kind of going which am I most comfortable with
and seeing what happens. But your accountant should be able
to help you there as well, because we get a
really good picture of what you could and couldn't earn specifically.
We're just guessing at this point that that's the stitch, right.
Speaker 3 (31:02):
I agree, hope we help Let's move on.
Speaker 1 (31:05):
I feel like, let's pretend we've been really helpful there.
The next question I have, and I feel like is
a good question. Because some people live on one side
of the train tracks, some people live on the other.
What accounting program do you recommend, Julian.
Speaker 3 (31:19):
This is a hard one without plugging the programs. But look,
I think which.
Speaker 1 (31:23):
One pays you the most?
Speaker 3 (31:24):
Julia, that's a great question. Now, I think in the space.
Speaker 1 (31:28):
At this point, you're paying for the accounting software, so like,
do we want to give them a free promo?
Speaker 3 (31:33):
We'll do it anyway. But I think the three main
plays are kind of like zero my quick books, right,
they're all you know, been there for ages. I don't
know they like me saying this, but they all do
similar things to say.
Speaker 1 (31:43):
I know they don't like that. But also the ATO
asks for things to be exact, so like, at the
end of the day, they can't reinvent the wheel too much.
Speaker 3 (31:52):
Correct, So look, naturally I do use zero more often,
and when I'm.
Speaker 1 (31:57):
Training after clients like you are zero practice yet, so
you don't really use anything else.
Speaker 3 (32:02):
Correct, Our clients could use something else, so we definitely
can work with anything. But look, I do find it
simpler in terms of the way it looks, the way
it feels, et cetera. And when we train clients up
and they get a glimpse of it themselves, they're usually
feeling the same as well. Obviously it's still scary. It's
a new program. That's what accounting programs are, but it's
miles ahead of doing an Excel spreadsheet. So any of
(32:23):
these are going to be an improvement on the Excel format.
Speaker 1 (32:26):
Yeah, I totally understand that. And I'm going to hit
up zero after this for some sponsorship because this is free,
and I'm about to agree that. I am a zero girlie,
Like my accountant uses zero and I really like it.
I find it very simple, very easy. I was also
the treasurer for a charity for a long time and
they used zero, and I found it so simple to
(32:47):
be able to kind of jump in, jump out, look
at my balance sheet, look at my p and L,
look at everything, and it just made sense. Like and
I'm not saying that other softwares didn't. They were just
like a little bit easier, yes, kind of like an
apic spec.
Speaker 3 (32:59):
Yeah, another one might be a little bit clunkier to
get the yeah that thing.
Speaker 1 (33:03):
And like I like that I can save all my
favorites and stuff, and I just like recreate the wheel.
I'm like, I've just done this whole balance sheet, but
I've actually just clicked one button with the star on
it and I'm like, wow, I'm a genius.
Speaker 3 (33:14):
Feeling very formal.
Speaker 1 (33:15):
Yeah, And sometimes I get my accountant to set those
favorites up so it runs a specific like outcome. I
don't even have to do it, It just lives in
my favorites and then I can do it. So yeah, zero,
hit me up for some sponsorship because I feel like
we would work. Yeah, hit us up, we'll collab.
Speaker 3 (33:29):
I feel like we would be.
Speaker 1 (33:30):
Good for you. So moving on, but also only a
little bit of a side note, Julian, at what point
should I be considering an accounting software and not my
very very well loved spreadsheet.
Speaker 3 (33:43):
Great question, because once again, it's not a dollar figure amount.
I think if you look at the benefits of an
accounting program, it's things like making your invoicing easy. It
can send automatic invoice reminders, get you paid easier. So
someone might just say, look, I don't want to deal
with the extra time that I'm spending manually chasing up
in voices doing Excel, and go straight to one from
the start.
Speaker 1 (34:03):
Yeah.
Speaker 3 (34:03):
So honestly, I just think once you're at a point
in time where you feel administratively you're suffering from doing
it in an old school approach, weigh it up. You know,
these programs cost anywhere between I don't know, twenty five
to fifty dollars a month at maximum, depending on what
level you get, if you can justify that cost, which
is tax deductible, but you don't get it all back,
like we said before.
Speaker 1 (34:23):
But also that's a good tax deductively correct.
Speaker 3 (34:26):
It's a valid one. You need it, and it's helping
the business. So if you can justify those things, I'd
look at doing it sooner rather than later.
Speaker 1 (34:33):
To be honest, I was in a very committed relationship
with my Excel spreadsheet when I started, because.
Speaker 3 (34:38):
I didn't know where that was going. Oh thank you
zero some I don't noticed.
Speaker 1 (34:42):
Yeah, yeah, I mean I feel like I am now,
but that's not where this was going. But I was
in a very committed relationship with my spreadsheet, and I
remember just being like, should I be spending the money?
Like shouldn't I Like I knew it existed, I worked
in a practice that used it. I was just being stingy,
and I started to track how many hours my spreadsheet
was taking me. So if you're wondering whether you should
or shouldn't track how many hours you're spending in putting data,
(35:06):
checking off the data because it's all manual, right, Like
you have to triple check to make sure that there's
no human error. And how many hours you're doing manual invoicing,
I promise you'll probably be like, Oh, the actual fifty
bucks a month works out because you're getting that many
hours back to work on your business.
Speaker 3 (35:22):
Which is actually creating well for sales or whatever.
Speaker 1 (35:24):
It may be exactly. So I feel like sometimes we
don't know, but it's working, and like it's an additional
fee and I'm like, at what cost? Yes, So let's
move on. I want to know should I make a
separate bank account if I'm running a side hustle or
a small business.
Speaker 3 (35:39):
So when clients come to us, this is definitely one
of the first things we get them to do with
a new business. It's more of an admin thing. It's
not necessarily a tax issue. If you're a soul trader,
like you can have it in your person and that's fine.
It's more so about getting all your personal transactions mixed
up with your business mes.
Speaker 1 (35:53):
See why would you want to do that?
Speaker 3 (35:55):
Yeah? Think about how much you know you spend throughout
the years.
Speaker 1 (35:58):
Coffee coffee, coffee, and then you have to go through
it and find out one invoice from office works to
be like, oh, remember when I bought Staples. I probably
should be claiming that because Victoria says the little things.
Speaker 3 (36:09):
Add up, So make life easier. Do it from the start,
Get your invoices paid into there, get a card for
that account, tap away as you go.
Speaker 1 (36:16):
Sorry sidetrack, but I feel like someone might go but
I don't have any money coming into my business, and
my answer would be good. It means you can transfer
personal money and track it better if that's how you're
starting your business. Would you agree with this?
Speaker 3 (36:30):
Correct? Going back to what we said before, AA, you
always want to claim those expenses from the get go
and be at least as a clear definition. Now money's
come in and you can track all your contributions from
the start and then eventually pay yourself back as well.
Speaker 1 (36:42):
Yeah, that's actually quite important, all right. The next and
the last question I have for you is a bit
spicy because I don't think you can put your finger
on it, like there's no actual answer, So sorry about
this in advance, But Julian, what should I expect to
pay an accountant to help me? With my bass or
my end of financial year taxes, Like, what's that going to?
Speaker 3 (37:00):
Interesting question? A look at it from a I know
it's just generic like you said, but like it's a
value perspective as well. Right, So you might go to
the most basic accountant. It's super quick, but are they
maximizing your tax structions? Do they really care what you're saying?
Are they giving you advice for the future? All that
kind of stuff? And then separately, you know, what do
you provide with your accountant? So you might go to
(37:21):
your accountant with you know, twelve months worth of PDF
bank statements and say to them, hey, can you sort
this for me?
Speaker 1 (37:27):
Oh, a shoe box full of receipts that are half
faded and scrunched up, that's what I'm going to give you.
Speaker 3 (37:32):
Yeah, versus great client a over here that says, you know,
here's my zero file. It's reconcile, my invoices are attached,
receipts are there.
Speaker 1 (37:40):
Very sexy, Yeah, very sick.
Speaker 2 (37:41):
Yeah.
Speaker 1 (37:42):
When someone says it's fully reconciled, I'm.
Speaker 3 (37:43):
Like, yes, insert So yeah, naturally the price is going
to vary a lot based on that. And that's the
same with BASS as well as Indo Financial, yet it's
just done more regularly. So I think you've got to
get a few quotes, you know, make it as cheap
for yourself as possible, being as organized as you can.
What are your thoughts on.
Speaker 1 (38:02):
That being I feel like I'm going to piss a
few people off here, but that's okay. I just think
pay peanuts, get monkeys. Like, if you're looking for the
cheapest accountant on the block, you're probably not going to
get someone who values their time, their energy and knows
their worth and knows what value they bring to your business.
So do I have the cheapest accountant ever? No, I
(38:24):
would say that my accountant's pretty expensive nowadays, and that
was scaled so way back when I wasn't earning that
much and my businesses were quite simple, it was quite cheap.
But now I would say that I have a more
complex structure, and I've spoken about it on the podcast before.
And this might mean absolutely nothing to you, or you
might go, oh, that's interesting, But I essentially have a
trust that owns my businesses and that's how I operate,
(38:47):
and that to me makes the most sense. But because
of that structure, I'm now paying multiple tax returns. So
I'm paying for a tax return for my trust and
for each of my businesses, and that is good for
me because ultimately I'm in a better financial position, But
that can feel overwhelming as well. Like I said, oh,
like just one tax return, No, we have multiple. Every
(39:08):
business has a tax return, my trust has a tax return.
Like there's personal stuff I need to do. Like it's
actually a little bit wild, but that's Louis's problem, my accountant.
Speaker 3 (39:18):
I think when you're talking to friends and you're like, oh,
how much do you pay for tax? Once again, these
are all things that you don't know, like, so you
might think they've got a business, why are they only
paying this much? I'm paying that, But you might have
more structures than them. So there's a lot of different
components to keep in mind.
Speaker 1 (39:31):
And I think that that's yeah, really important. But then
also if you're worried about paying an accountant too much,
sorry about this, you can work with a bookkeeper as well,
and an accountant actually usually loves that. So like, I know,
my accountant adores my bookkeeper because she does all the admin.
She reconciles all my accounts, she does my bass, she
pays all of my tax. She makes sure I'm on
(39:52):
top of my GST and any changes throughout the year,
so that when I am seeing my accountant, who's arguably
more expensive per hour, I'm sitting down and going, all right, well,
I already know where we are, let's do tax planning.
What does the future look like? What can we actually do?
And he's the more technical that I rely on. Right,
So I have a bookkeeper for day to day and
(40:13):
then I have an accountant for those bigger questions. And
I think that for me that works really well financially
because it's less expensive than getting my accountant to do
those things.
Speaker 3 (40:23):
Yep.
Speaker 1 (40:23):
But also he loves it because he's not doing all
of those things.
Speaker 3 (40:26):
Yeah, so there is definitely a differentiation between the two.
Funnily enough, we do bookkeeping on accounting in your run
for not you personally. Are you doing the bookkeep We
love the benefits of it, like you said.
Speaker 1 (40:38):
Being able to shift it. You know, it's made it
more affordable for me. But then on the flip side,
I really like the delineation of knowing who to talk
to about what instead of overwhelming my accountant. And I
also know when I go to him, I'm like all right.
These are the big hitting questions. What are you doing
for me, sir? He can pay for lunch? Yes, all right.
I feel like that is all we have time for
unfortunately today. So I'm going to invite you back on
(41:00):
the show at some point because I feel like I
haven't got enough value out of you yet. But in
the introim Julian, where can we find you if we
want to either work with you or watch your content
or just hang out or ask you for a coffee.
Speaker 3 (41:11):
Yeah, we'd love a coffee. Hit us up on socials.
It's moo dot au, m a U R dot au,
Google whatever it is. We're everywhere. We're very contactable, and
naturally we'd like to apply pretty quickly.
Speaker 1 (41:23):
You're so contactable that the link to your website and
your Instagram is in our show notes. So you welcome, guys.
But that is it from us today. Have a great week,
and we will see you on Friday. Bye guys, Thanks guys.
Buy shared on She's on the Money is general in
(41:45):
nature and does not consider your individual circumstances. She's on
the Money exists purely for educational purposes and should not
be relied upon to make an investment or financial decision.
If you do choose to buy a financial product, read
the PDS TMD and obtain appropriate financial advice tailored towards
your needs. Victoria, Divine and She's on the Money are
(42:06):
authorized representatives of money sherper P T y L t
D A b N three two one six four nine
two seven seven zero eight a f s L four
five one two eight nine
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