I work full time and supplement my income trading stock CFDs. So far in this financial year to date I have made around $20,000 how do I deal with this on my tax return?
Your net trading income should be shown in your annual tax return under the question “Net income or loss from business”. It will be added to your other assessable income and taxed at your marginal tax rate. Make sure that you
don’t forget to offset any expenses that you have incurred in gaining this income such as internet, journals, subscriptions, telephone and depreciation on your computer and any other equipment.
If you are using another entity, such as a company or family trust, then any trading income is to be shown in the business income schedule of that entity.
Based on your trading profit to date, expect to have to pay back some tax this year. It might be a good idea to try and look at doing some tax planning and prepaying some of your expenses up to 12 months in advance such as subscriptions or interest on borrowings. It is also a good idea to get on a registered tax agent’s lodgement program so that you get a bit extra time before you need to have to pay back the taxman.
This article first appeared in the Jul/Aug 2011 issue of YTE Magazine www.YTEmagazine.com. Copyright Your Media Edge Pty Ltd 2011.