She's On The Money - Talk To An Accountant

Episode Date: June 11, 2024

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! Acknowledgement of Country By Natarsha Bamblett aka Queen Acknowledgements. The advice shared on She's On The Money is general in 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 Devine and She's On The Money are authorised representatives of Money Sherpa PTY LTD ABN - 321649 27708,  AFSL - 451289.See omnystudio.com/listener for privacy information.

Hello, my name is Natasha Nabanunga-Bamblett. I'm a proud Yorta Yorta, Kernai, Wolperi and Awadjeri woman. And before we get started on She's on the Money podcast, I would like to acknowledge the traditional custodians of the land of which this podcast is recorded on Awadjeri country, acknowledging the elders, the ancestors and the next generation coming through. As this podcast is about connecting, empowering, knowledge sharing and the storytelling of you to make a difference for today and lasting impact for tomorrow. Let's get into it. She's on the money.

She's on the money. 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 EOFY, 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 firm, Morrow. When do I got the name for that? Where'd I get it from? Yeah, where'd you get the name for that? Wild.

My surname. Really? Do you think I'm being serious right now? No, I'm confused. Oh, is she testing me? No, I'm not testing you. I literally just said your surname and I'm like, wow, real original Julian. 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 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. Thanks so much for having me, V. It was honestly perfect timing and a financial year 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. I feel like last Instagram DM I saw to you or from you was like, hey V, I can do coffee on Wednesday and I clearly missed it and didn't reply and it was 2021. And I was like, oh, sorry about that. So when you followed me up, I was like, oh, okay. Yeah, sure. So you're still keen for that coffee? Still keen, still here. 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? Yeah. I was explaining this to the team earlier that accountants aren't all bad. No one said they were bad. Whoa, jump to conclusions.

My bad. Sorry. No, look, I did start as your traditional accountant, worked at small firms, big firms. And I saw what I didn't like, which was the super corporate suit and tie vibe. And it was quite daunting to talk about accounting taxes and finances with clients. So I eventually took the step, went on my own and created a firm where we could be a lot more casual with our approach, educate our clients, 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. 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.e. 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. And now look where we are. But like, how did you start? 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. Are you sure you're meant to be here? Like, are you sure you're meant to be in accounting? If you see me at the office, I'm definitely in accounting, 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 confidence to pursue it further and then you just kind of double down

that's actually so relatable for me because when people say like v 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 a hundred percent spot on. So I feel like you've got to be able to back yourself as well and be like, actually, 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 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 they are a PAYG employee or a big

business owner is, should I be doing my own tax return? Controversial. No, no, good question. Spicy. Let's go. Let's go. Look, I think definitely as you 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, MyGov 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 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, have you looked at changing your business structure, which is something you don't even know at that point in time, 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 easy, V, like I'm doing A, B, C, and D.

but as a sole trader you get lumped with your marginal tax rate right so a lot of them were starting to absolutely make bank and it was shooting them in the foot yeah at what point should a sole trader 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 well it comes off the back of like we said if you've got an accountant you can have those conversations regularly right so you're in the right place at the right time but otherwise when I talk to people about setting up companies, it's kind of, there's two 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? So if something goes wrong, there's a potential that exposes you personally. I'm dramatic, but they're coming for your house, right? They're coming for your house. They're coming for your house. If you've got one, they're coming. And they're coming for your car. Like it's kind of low key scary. 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, V, if you're a sole trader, and let's just say you're making bank, you're making 300 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 in the company at a lower tax rate. So, to answer your question, the specific dollar amount is a little bit tricky. Of course, there's no right or wrong. Correct. You know, you might have a HECS debt, tax is a little bit higher than someone without a HECS debt. Different factors in there. But once again, having the accountant to be there to prompt you regularly is going to make sense. 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 lot of sense. And when I look at my own situation, having been a financial advisor, I skipped past sole 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 husband at risk. I didn't want him to be annoyed at me if like, I didn't pay my tax debt and the ATO were like, hey, so your house. I just wanted to protect my husband as well as my assets. Yeah. So it can be all those different factors. So once again, even like you said, registrations, you don't want to set up all your business names and change them down the track can be a little bit of a hassle. So some valid points. Glad you did it right from the start. 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. Like you'd be a bit, oh, what are you doing Vy? If I was a sole 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, 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

accountant about like, oh, how can we do this? What can we do? And I promise any good accountant 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 the difference here? like you're going to be so overwhelmed if they're just talking technical whereas if you sit down with someone like julian who's like all right well do you want to pay more tax or nah yeah you go this makes so much more sense why can't everyone talk like this 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 100 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. Okay. I'm really sorry. 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 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 in some situations your insurances are inside different trusts or you know for the business your accountant'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 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. And I've definitely seen that heaps of times. You know what I mean? You've got business partners that are dating or married, et cetera. And then, you know, things hit the fan and, you know, you've got those situations. So yeah, definitely trust is key. 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 business partners are a terrible idea yes an odd number less than three Julian I was in the moment 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 the she's on the money demographic, either small business owners or individuals. So what are they asking you the most questions about? Tax deductions, 100%. But I feel commonly the biggest issue or differentiation that people struggle with is personal versus business. And that is also 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 working from home arrangement, it's your phone, it's your internet, it's your subscriptions, 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-related deduction because they use it 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. So that's an ongoing educational thing that I think is kind of prevalent in our clients' 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 40%. We got them down to 25. They might still be scared

of 25%, which is fine. That's just how they feel. 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, I suppose. I always used to tell clients that we should be excited, obviously, because I was trying to reframe it into something 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 and the more money means that your business is successful and it's good. I feel like often it's more around 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 found a structure that works for me. Whenever a payment comes in, I

automatically take 30% 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 tax doesn't feel as painful? Because it can feel terrifying, right? Definitely. 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 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 their super. There's so many things that, you know,

not 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 I feel like it can be really overwhelming, 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 May. 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 year and tax planning as much as I'm saying I'm excited about it. You might go, V, 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 would pay double just to do my tax planning sessions because I get so much out of them. It's a great client. He's going to pay double. Louis, if you're listening, no, you're not. 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 year and improving always from there. 100%. 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 She's On The Money, how the ATO release, 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? I like a little disclaimer on that. I reckon that even though they put that out, sometimes people get confused and they think, oh, maybe they're not going to target that. Or no, no, no, they're looking for everything. They're always 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, the way you're claiming deductions and what you can and can't claim. So, they're always hot on that. And still that working from home, even though it's kind of faded 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 second, there's a rate that you can claim per hour for your working from home, right? But if you claim that rate, you can't also claim a portion of your phone and internet. Yeah, it's one or the other. It's built in, right? So people might be out there thinking, okay, cool. I use my phone for work. Double up, right? So simple errors like

that, that you might feel aren't a big thing, but you know, that's a potential. Yes. And they add up. I was reading, because I am 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 when you had your, you know, first official job and you were claiming your $300 worth of receipts, even though you didn't actually incur those expenses and you got away with it. That old school myth. 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, oh, you don't have to do the admin on this the ATO were being nice not you get some free stuff now 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 the information that your employer pays and your bank feeds, like, we're going to have no privacy, basically. Correct. They'll see everything.

They're going to see everything. Agreed. 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. Yep. 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 $300 or claiming the maximum kilometres with

no proof, that adds up to big dollars for the ATO as well. So we can't be naive and think we're not a target. So you do want to make sure you're always claiming what you can claim and maximizing, but still being legit about it. 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 record like she was like yeah 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 a thing 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 could not be flagged. It could just be random selection and then making sure that they've dotted their eyes and crossed their T's and they're just doing some testing. Correct. And you've fallen into the unlucky pile. 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 ATO on a letterhead, I get some phone

calls. I see a letter come through and I literally go, oh, what's this? Like, what do 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'd 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 Yui and pull you over, even though you did not one thing wrong. That's the ATO. That's the vibe. That's the vibe. The ATO need little hats. Yeah. 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 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 Morrow, 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. What are your deepest, darkest tax questions? This can be anonymous. And they jumped on it. So are you ready to dive in the deep end? Would love to. 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? 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. I'll 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 you spend $10,000 in year one, that $10,000 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 $10,000. 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 you're not necessarily going to get tax back.

Your business hasn't actually paid any tax necessarily. Yeah, you're not going to be getting a refund for something you didn't pay for. That's right. Yeah. So the loss will accumulate. You definitely want to include it in the year that it's incurred. And then down the track, it will obviously help you reduce tax because you're not paying any tax until you make it all back.

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. Imagine you spent 10 grand and then you found out down the track that you didn't claim 10 grand worth of costs just because, essentially. So 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 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 my bigger business, Zella, which, by the way, it worked. It was going well. Here we are. But I had all these losses that I'd banked up and I was like, every year I'd look at my tax return and be like, oh, she's a sinking ship.

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 sole trader. Am I able to contribute to my superannuation before tax? Yes, definitely can. So a few things around that.

Naturally, there's limits. So, this financial year, $27,500 is the current per annum contribution you can make. From the 1st of July, it goes to $30,000. Which is nice because it hasn't changed in a while. That's right. It's been $27,500 for a really long time. So, that's nice. Nice little bump there. Why not for the super? I mean, it must be nice if you're contributing that much too. So, yeah, take your wins. And look, super is one of those things where once you've exhausted all your tax deductions. So sometimes people come to us at 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 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 deduction to have when you're running short of tax deductions, when cash flow works, et cetera. And even remember, you don't need to 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 yearly amount as well. 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 BPAY

number. It's honestly, yeah, a bank transfer BPAY. You just BPAY to your 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. Especially when you've put it off for two years because you thought it was so hard. You were like, oh, this is so overwhelming and so complex. And then you're like, oh, just BPAY it to this account. And you're like, and then it's done. I don't have any other admin. It's like, no, no, no, you had your own bill of code. So like they just allocate it to your account and you're like, oh, okay. Away 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, my gosh, it's coming up to end of financial year. I need to, like, get a new printer. I need to get a new laptop. I need to do all these things. I just wanted to remind you all that 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 $5,000 is now, you know, completely on your deductions list. He's the myth bastard. Yeah, I was like, can we touch on this? 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 $1,000 on a laptop

and if your tax rate is 30%, it's going to reduce your tax by $300. So, you are still out of pocket $700, which is great if you needed the laptop because you're going to buy it anyway. Girl, math, I needed the laptop. Needed the laptop, right? You only need a couple of laptops. So, if you didn't need the laptop, you're out of pocket $700. 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 $700 in my bank account. Oh, yeah, absolutely. But sometimes I'm a little bit DeLulu. And have you seen the new iPhone? Like, maybe I'll need that. Timing's right. Tax time's coming. Yeah, like at least I can claim it for my DeLulu purchases.

But I think it's important to touch on the fact that it 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 how it works. It's weekly. but at this time of the year, it's more often than not. Look, the way I picture 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 30th of June, at least you get the tax benefit sooner. So why wait until July and then you have to wait a whole nother 12 months to get the tax

deduction. Get it on this side of the financial year and happy days. 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? 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, 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 I've ever seen a limit on

how many companies you can have. I was like, are you about to tell me that there's like a maximum number? Cause I've like got my businesses, I've got my trust, I've got a JV, I've got like a partnership. I've just got a messy tax situation. You were watching me very intently. I was like, am I about to be in trouble? Like, this is something that I don't know the answer to. Like, is that a thing? Everyone's learning. No. So look, in summary, as a sole trader, 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. 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 it. 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? Do you want to answer that one? Because that's quite a long one. 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. Correct. And like, do you have the option of one or the other? Because generally when you go to work for someone, they might, you know, force you to be one or the other. This kind of presents to me that someone, you know, can choose. They've essentially said to them, do you want to be this or that? So, other than the legal technicalities, I suppose there's pros and cons.

Yes. Let's just say they could do both. Naturally, if it's through your ABN, well, one, you've got to manage your own taxes. Yes. Right. Do your own invoicing, potentially your own super. GST is going to be payable if you're above. 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 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 versus reward. So I think there's a few considerations in there 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, 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 a rate of pay, but 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 that's the question and we can't answer that because

that's a personal values thing. And another angle to even pitch that in is if you're through your ABN, 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 any other business. 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. That's right. So all considerations. 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 they're going to get a really good picture of what you could and couldn't earn specifically. Whereas we're just guessing at this point that that's the sitch, right? Agree. Hope we helped. Let's move on. 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? This is a hard one without plugging the programs, but look, I think... Which one pays you the most, Julian? That's a great question, but no, look, I think in the space... At this point, you're paying for the accounting software, so do we want to give them a free promo? We'll do it anyway. We'll go nuts. I think the three main players are kind of like zero my up QuickBooks, right? They're all, you know, been there for ages. I don't know if they like

me saying this, but they all do similar things to some extent. Oh no, 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. Correct. So look, naturally I do use zero more often. And when I'm training up clients. Like are you a zero practice? I am a zero practice. Yeah. So you don't really use anything else. 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, etc. 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 these are going to be an improvement on the Excel format. Yeah, I totally understand that. And I'm going to hit up Xero after this for some sponsorship because this is free and I'm about to agree that I am a zero girly 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 be able to kind of jump in jump out look at my like balance sheet look at my P&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 app experience. Yeah. Another one might be a little bit clunkier

to get that thing. 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. You're feeling very formal. 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.

I feel like we would be good for you. 100%. 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? 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 invoices, doing Excel and go straight to one from the start. 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. These programs cost anywhere between, I don't know, $25 to $50 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. But also that's a good tax deductible.

Correct. 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, to be honest. I was in a very committed relationship with my Excel spreadsheet when I started because- I didn't know where that was going. Oh, thank you. I thought you were going to say with zero or something. I don't know. 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 inputting data, 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 50 bucks a month yes works out because you're getting that many hours back to work on your business which is actually creating wealth or sales or whatever it may be exactly so I feel like sometimes we go no but it's working and

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 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 sole trader, like you can have it in your personal name, that's fine. It's more so about getting all your personal transactions mixed up with your business ones. It's so messy. Why would you want to do that? Yeah. Think about how much you spend throughout the year. It's like coffee, coffee, coffee. And then you have to like go through it and find that

one invoice from Officeworks to be like, oh, remember when I bought staples? I probably should be claiming that because Victoria says the little things add up. 100%. 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. 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? Correct. Going back to what we said before, A, you always want to claim those expenses from the get-go and B, at least there's 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. 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 like my BAS or my end of financial year taxes? Like what's that going to cost us? Interesting question. I 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 deductions? Do they really care what you're saying? Are they

giving you advice for the future? All that kind of stuff. And then separately, what do you provide with your accountant? So you might go to your accountant with 12 months worth of PDF bank statements and say to them, hey, can you sort this for me? Oh, a shoebox full of receipts that are half faded and scrunched up. That's what I'm going to give you. Yeah. Versus great client A over here that says, here's my Xero file. It's reconciled. My invoices are attached. Receipts are there. That's very sexy. Yeah. Very sexy. Yeah. When someone says it's fully reconciled, I'm like, yes. Insert queer noise. So yeah, naturally the price is going to vary a lot based on that. And that's the same with BAS as well as end of financial year. 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 by being as organized as you can. What are your thoughts on that, V? 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 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. 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 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' problem, my accountant. A hundred percent. 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. 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 BAS, she pays all of my tax, she makes sure I'm on 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 here's the more technical that I rely on, right? So I have a bookkeeper for day to day, and 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. But also he loves it because he's not doing all of those things. Correct. Yeah. So there is definitely a differentiation between the two. Funnily enough, we do bookkeeping and accounting in the one firm. Not you personally. Not me personally. Correct. I was like, are you doing the bookkeeping? We love the benefits of it. Like you said, most accountants do.

Being able to shift it, 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 the show at some point because I feel like I haven't got enough value out of you yet. But in the interim, 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.

Yeah, we'd love a coffee. Hit us up on socials. It's mauro.au, M-A-U-R-O.A-U. Google, whatever it is. We're everywhere. We're very contactable and naturally we like to reply pretty quickly. You're so contactable

that the link to your website and your Instagram is in our show notes. So you're welcome, guys. But that is it from us today. Have a great week and we will see you on Friday. Bye, guys. Thanks, guys.

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