how do you do tax?, page-21

  1. 47,086 Posts.
    I got my LOC in the mid '80s and the first thing I did with it was to pay out my mortgage. Since then all my interest and charges (including credit cards and overdrafts) have been debited to the biz.

    DON'T TRY THIS TODAY. THEY'LL SKIN YOU ALIVE.

    Bought a motor bike last year, wrote a cheque and called it "drawings" so I will pay tax on the $15k, but the interest on my OD and LOC are not apportioned. Accountants on another forum were shocked and insisted that I should apportion interest but I defend myself by saying that the ATO does not believe a biz proprietor should repay all loans before they draw a wage. In fact the reverse is true. If you AREN"T drawing a livable wage you will draw attention to yourself.

    As I said earlier, Mrs Hanrahan is the accountant so this is not advice, merely an enecdote.
 
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