[Question] Tax on CC income

[rfnel]

Hi All

I'm getting into the habit of posting a question a day on TFSA. Today, I would like to find out more about tax - specifically, tax on a CC.

Let's say that I'm a member of a CC. I work on my own computer, I use my own car to drive to clients and I work from home. Optimistically, let's say that I receive R100 000 for a job. How much of that can go into my pocket and how much of it should go to the tax man? Can I claim from the CC for the use of my computer, car and my residence? If so, should those expenses be deducted from the total 'taxable' income?

Thanks for your input.

[rfnel]

Anyone?

[Mark Atkinson]

My tax knowledge is a bit rusty, but here's my bit:

Firstly, remember that a CC is a separate juristic person and is taxed by SARS as such.

You can effectively "charge" the CC for the use of a portion your property and other assets, but you would have to declare that as income in your personal capacity then. Not much advantage either way. (Depending on which tax bracket both you and the CC fall into)

Now the CC would pay you a salary, and this is what you would declare in your personal income tax return.

The CC would be taxed on its taxable income. That is, the income from the job less all deductable expenses incurred in the production of income. (Those expenses would be things like rent, purchases, salaries, etc.)

You can deduct a petrol expense from the CC's taxable income, though. Make sure you keep accurate log books and records of your expenditure in order to claim it, though.

Hope that helps you. As usual, if I'm wrong, please somebody correct me. Haven't done tax work for this whole year so I'm a bit rusty.

[rfnel]

Mark, thank you for the clarification.