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Thread: Business or Personal Loan ???

  1. #1
    God/dess GoldCoastGirl's Avatar
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    Default Business or Personal Loan ???

    Business or Personal Loan ???


    I know that a business loan is tax deductible and that a personal loan is not. Other than that.. I have no idea about the differences and which loan would be best suited if I wanted some cash to do any of the following:

    * Extra money to help cover expenses to travel for work interstate (cover airfare and accommodation only)
    * Money to help me form my own company
    * Money to help me form a SMSF (self managed superannuation fund)
    * Money to help me attend the DancerWealthTraining in Las Vegas (cover airfare, accommodation and the training)

    Whilst I plan on minimising my taxes so I can either pay the bare minimum or get something back (as I've been taxing myself 35% after each shift .. I'm 'over-taxing' myself on purpose).... I just want to consider maybe a loan so I can travel around Australia to dance (instead of locally), form my own company (for investment purposes, tax minimialisation and asset protection), form a SMSF (for the tax breaks it can provide) and attend the DWT (Dancer Wealth Training) in Las Vegas (only have one personal day/night in my time there otherwise I will only have time for the training).

    I really want to attend the training as I feel it will help me immensely. There isn't anything like it available in Australia.

    Would I be better of with a personal loan, business loan or a bit of both ? Which loan would suit each of the above goals ?

    I know I'm Australian and we do have slightly different system down here... yet I feel some of it might be applicable to US people.




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    God/dess montythegeek's Avatar
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    Default Re:Business or Personal Loan ???

    Josh would definitely have a better perspective on this(being a professional) but I would focus very heavily on mking the direct linkage as tight as possible. If your tax advisor, knowing Austalian rules, says the projects you are talking about a considered legitimate business expenses--the link that connects the 2 is a paper chain.

    Example you borrow $3K to go to LV for DW. One way to tighten the business expense is to borrow the money as a business, put the money in a business account, take it out or directly pay the expenses from the business account. I would even go so far as to have the business (your business) make you fill out an expense form (available at stationery stores) just like the person going was an employee. Keep a paper trail that shows tight connections between $'s.

    My rule of thumb is that the more you make yourself look like a business-like organization--the less likely the Tax people are going to believe something suspicious is going on (And the faster it will be for them to recognize your expenses are valid and fully documented).

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    Default Re:Business or Personal Loan ???

    So.. do you think my tax accountant can adequately answer this question ?? I didn't know whether my question would be able to be adequately answered by her or not .. hence I asked it here first.

    Is a tax advisor the same as a tax accountant ?? She's not a 'general' account.. she specialises in tax.


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    God/dess montythegeek's Avatar
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    Default Re:Business or Personal Loan ???

    I was merely suggesting the person on the ground who knows the local rules would know stuff I could not possibly know.

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    Veteran Member NVJosh's Avatar
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    Default Re:Business or Personal Loan ???

    Now, my answer would only apply in the US, I have no idea if your tax laws mirror ours on this. However, here the interest on #1, 2 and 4 on your list would be deductible as business interest. #3 I'm no so sure. I assume this is something like a mutual fund? If so, depending on how its structured it might be business or it might be investment. None of this sounds like personal interest. The actual costs would be deductible for #1 and #4. #3 would probably be capitalized and deducted over time, and #2 would depend on the specific expenses. A tax advisor is probably a step up from a tax accountant. I see a tax accountant as someone with a familiarity with the tax laws who can do an adequate job of preparing your return, while a tax advisor actually uses his/her expertise with the law to help you form a comprehensive tax strategy to optimize your taxes.

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