Your Second Income!

[Hamster]

The sad thing is, your comments about tax just made 1000 guys with ideas drop it like a stone. How sad is that? They didn't even get one foot out the front door.

Fsck off with this Robin Hood rainbow coloured fart crap. Anybody who dropped their business idea at the mere thought of tax just saved themselves a lot if money and heartache. They would never have made it anyway.

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Not aware of the R120k tax free part. That money belongs to the business though and not you as individual. You'll draw a salary from it and the moment you do that, to my knowledge, it counts as income and will fall under income tax.

 

[Hamster]

I'm willing to bet LottaFun is Eks that read an investment blog

 

[LottaFun]

Fsck off with this Robin Hood rainbow coloured fart crap. Anybody who dropped their business idea at the mere thought of tax just saved themselves a lot if money and heartache. They would never have made it anyway.

I rest my case.

 

[LottaFun]

Shalin, I have to ask. Since you know a lot about tax and small business, why don't you open a thread called "Small Business Tax Issues" or " Small Business and the law" or just " The in's and out's of a small business owner"? Why give a long story in "second income"?
When people search for tax info concerning small business they aren't going to search for it in "Your Second Income". They will go to the small business thread. That is what I would do.

I won't even mind if your thread stated, "your second income and how to maximize profits"

 

[Swa]

Not aware of the R120k tax free part. That money belongs to the business though and not you as individual. You'll draw a salary from it and the moment you do that, to my knowledge, it counts as income and will fall under income tax.

Not how it works. You draw a salary up to the mark where you would pay more tax than the business. The rest of the money after tax belongs to both you as the owner and the business as capital and you can withdraw it. It can't be taxed again.

 

[Freaksta]

Not how it works. You draw a salary up to the mark where you would pay more tax than the business. The rest of the money after tax belongs to both you as the owner and the business as capital and you can withdraw it. It can't be taxed again.

It gets taxed on the way out though via dividends tax.... Max personal income tax rate vs company tax + div tax isnt much different.

 

[Swa]

It gets taxed on the way out though via dividends tax.... Max personal income tax rate vs company tax + div tax isnt much different.

It's not a dividend. It's your own capital which is already taxed.

 

[mintydroid]

Whichever way you look at tax needs to be paid in some way so structure it so that it's the most tax efficient.

www.accountingandtaxclub.fspbusines...ibution-of-company-profit-from-a-cc-6006.html

 

[Stefanmuller]

It's not a dividend. It's your own capital which is already taxed.

No its not. Unless the business owes you money or you have put in capital, the after tax profits you take out of the company, will be a dividend taxed at 15%. And if you take it out without declaring a dividend, SARS will deem it to be a dividend unless the company treats it as money lent to you and charge interest on it.

 

[Swa]

No its not. Unless the business owes you money or you have put in capital, the after tax profits you take out of the company, will be a dividend taxed at 15%. And if you take it out without declaring a dividend, SARS will deem it to be a dividend unless the company treats it as money lent to you and charge interest on it.

I looked further into this and it seems we are both correct. A limited company or corporation would pay dividends. A sole proprietor has no concept of dividends but also doesn't get taxed and you pay tax in your personal capacity. Where it becomes an advantage is with additional expenses that can be tax deducted.

 

[MrGray]

Oh no. Why did this thread hit a wall? Are you guys not interested in a second income anymore?

Let me tell you my experience so far.

Took 50k and went to Thailand. Did an investigation and bought some stock. Came back and sold that stock. Went Back. Bought some more stock. Sold it all again. Just came back from my 3 rd trip with my summer stock. Started at 1 market. Now I do 18 market days a month and have two people that help to cover all the markets. What use to be an extra R5000 a month is now an extra 36K per month.
As an extra I do festivals also and just came back from Aardklop at Potchefstroom. It was great! I'm the only person that can say I went on a "holiday" and came back with more money than what I spend.

I didn't listen to other people. I kept my mind open and did not let stumbling blocks prevent me from moving forward. And now on top of everything, I am ready to open other business that are spinoff's from my original business.

Guys please, investigate your idea. Don't let it die. Write it down. Investigate everything that you have written down. Don't listen to the those that are negative. Move forward and good luck.

Interesting, but if you don't mind me asking, what type of products and how are you importing them? And do you have any customs issues?

 

[Thor]

Do you know of anybody that generates a second income under their own name so they can pay max tax and fall in a higher tax bracket? Guys surely nobody is that dumb. Everybody knows that companies pay far less tax than the individual and that you can subtract every possible expenditure that you have in generating that income.

No. Just no.

 

[Swa]

Do you know of anybody that generates a second income under their own name so they can pay max tax and fall in a higher tax bracket? Guys surely nobody is that dumb. Everybody knows that companies pay far less tax than the individual and that you can subtract every possible expenditure that you have in generating that income.

This depends. Company tax plus dividend tax can work out quite a bit more over individual tax up to a rather high tax bracket. Unless you're earning more there's no use in registering a company under a separate name. You'll also be surprised how much can be claimed as work expenditure as a sole proprietor or working for yourself.

 

[alqassam]

Fsck off with this Robin Hood rainbow coloured fart crap. Anybody who dropped their business idea at the mere thought of tax just saved themselves a lot if money and heartache. They would never have made it anyway.

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Not aware of the R120k tax free part. That money belongs to the business though and not you as individual. You'll draw a salary from it and the moment you do that, to my knowledge, it counts as income and will fall under income tax.

Its called buisness expenses.

 

[naeem]

Appreciate some input here.

I freelance and build websites for people. Like any second income, its part time, at times very quiet and at times rather hectic.

I signed up with http://2checkout.com/ - purely for 1) customers can pay via credit card (especially overseas based ones), 2) it supports recurring billing and rather easy to get going. Great for retainers.

2checkout offers the option to either withdraw funds to your za based bank account. OR you can sign up with Payoneer.com

Payoneer then sends you a Mastercard debit card. Not those electron ones, but a proper chip/pin Mastercard (able to use it online or event at an ATM)

From a tax point, am i correct to say that as long as this money stays in payoneer.com and not in your local account, or withdrawn locally. There is no need to pay tax on it?

My aim is to use funds in this account as an overseas travel slush fund. Maybe later look at opening a savings account abroad and send funds to that.

 

[Swa]

Appreciate some input here.

I freelance and build websites for people. Like any second income, its part time, at times very quiet and at times rather hectic.

I signed up with http://2checkout.com/ - purely for 1) customers can pay via credit card (especially overseas based ones), 2) it supports recurring billing and rather easy to get going. Great for retainers.

2checkout offers the option to either withdraw funds to your za based bank account. OR you can sign up with Payoneer.com

Payoneer then sends you a Mastercard debit card. Not those electron ones, but a proper chip/pin Mastercard (able to use it online or event at an ATM)

From a tax point, am i correct to say that as long as this money stays in payoneer.com and not in your local account, or withdrawn locally. There is no need to pay tax on it?

My aim is to use funds in this account as an overseas travel slush fund. Maybe later look at opening a savings account abroad and send funds to that.

Nope. South African tax law requires all residents to pay tax on foreign income. Further more any funds in the form of a foreign currency has to be converted into rands within 30 days.

 

[charlieharper]

Nope. South African tax law requires all residents to pay tax on foreign income. Further more any funds in the form of a foreign currency has to be converted into rands within 30 days.

Loophole though.... Earn enough foreign currency and spend more than 6 months a year OUTSIDE of SA then you won't be regarded as a South African Resident - no need for tax then. AS FAR AS I KNOW - Correct me if I'm wrong.

 

[charlieharper]

Anyway, so lets revamp this awesome thread!

How are we dealing with 2016?

We've seen the downfall of the South African Rand, meaning when you bring in USD/GBP/EUR and spend it in ZAR, you'll be scoring big time.

Big Opportunities!

 

[cguy]

Anyway, so lets revamp this awesome thread!

How are we dealing with 2016?

We've seen the downfall of the South African Rand, meaning when you bring in USD/GBP/EUR and spend it in ZAR, you'll be scoring big time.

Big Opportunities!

My $2500/m apartment I rent out is now technically R~40k gross. It did occur to me that this could provide a permanent and sufficient income back in SA, although I have no intent to leave any time soon. I'm actually thinking of buying a multi-unit block in a few months (3-4 flats) as my next venture.

 

[Thor]

My $2500/m apartment I rent out is now technically R~40k gross. It did occur to me that this could provide a permanent and sufficient income back in SA, although I have no intent to leave any time soon. I'm actually thinking of buying a multi-unit block in a few months (3-4 flats) as my next venture.

I am jealous