joshua
Me and my friend buy cars from auctions and sell them through a wholesaler. Im the money so i pay for all of it and my friend is the mechanic/salesman. We sell the car and the check is made out to the wholesale dealer then the dealer takes 100$ and gives me a check for the rest. I deposit my check and pay my friend his half of the profits. Question is what kind of trouble am i going to get in taxwise. Am i going to get a trouble or get a huge bill for this later and what precautions should i take. Thanks.
Answer
Hello
Precautions you should take:
*go to a registered tax agent (now, it is mostly accountants who qualify for that registration). I don't recommend going to a mass-production individual tax return agent like ITP or H&R Block simply because the person at the desk may not be an accountant. Such a person likely didn't study law and yours is a capital gains tax offense at the least; at worst the ATO could view it as tax evasion (that's why it isn't a good idea in this particular case to phone their customer service line). You could go to a tax solicitor but won't need a tax lawyer so early - or at all - if you show you are making an effort to fix your problem. The tax accountant will have studied law and can help you lodge what is called a "voluntary disclosure" to help minimise the severity of consequences for you. (Sorry, I won't give you clues on how you can defend this but maybe a tax accountant or lawyer can help depending on what you tell them. If you consult a solicitor you will have confidentiality).
* The other precautions are to think about telling/not telling your mechanic friend what you intend to do in coming clean as this will affect him too. If you do, I advise talking to him with family members or friends around in case it gets ugly or violent. A good idea is for both of you to share expenses in paying for a tax accountant to help you out in explaining it to the Tax Office and working out how much you owe, and negotiating whether you could avoid paying the interest owed plus what affordable instalments you can make. A few hundred dollars for a few consultations with a CPA tax agent versus unknown legal fees, a fine, and/or maybe a jail sentence - that's not hard to choose.
Don't wait and do nothing because the Tax Office has a sophisticated "data matching" computer program: it is a matter of time before they ask you about it because they have the power to access records from the retailer (not 'wholesaler' as you call him) and from your bank. The longer you avoid paying back what you owe the worse it can get if you wait to find out whether they will ever detect what you've done. It's probably because your gains were only small amounts that you haven't been on their priority generated list yet. It all adds up depending on how many years this has been going on
Hello
Precautions you should take:
*go to a registered tax agent (now, it is mostly accountants who qualify for that registration). I don't recommend going to a mass-production individual tax return agent like ITP or H&R Block simply because the person at the desk may not be an accountant. Such a person likely didn't study law and yours is a capital gains tax offense at the least; at worst the ATO could view it as tax evasion (that's why it isn't a good idea in this particular case to phone their customer service line). You could go to a tax solicitor but won't need a tax lawyer so early - or at all - if you show you are making an effort to fix your problem. The tax accountant will have studied law and can help you lodge what is called a "voluntary disclosure" to help minimise the severity of consequences for you. (Sorry, I won't give you clues on how you can defend this but maybe a tax accountant or lawyer can help depending on what you tell them. If you consult a solicitor you will have confidentiality).
* The other precautions are to think about telling/not telling your mechanic friend what you intend to do in coming clean as this will affect him too. If you do, I advise talking to him with family members or friends around in case it gets ugly or violent. A good idea is for both of you to share expenses in paying for a tax accountant to help you out in explaining it to the Tax Office and working out how much you owe, and negotiating whether you could avoid paying the interest owed plus what affordable instalments you can make. A few hundred dollars for a few consultations with a CPA tax agent versus unknown legal fees, a fine, and/or maybe a jail sentence - that's not hard to choose.
Don't wait and do nothing because the Tax Office has a sophisticated "data matching" computer program: it is a matter of time before they ask you about it because they have the power to access records from the retailer (not 'wholesaler' as you call him) and from your bank. The longer you avoid paying back what you owe the worse it can get if you wait to find out whether they will ever detect what you've done. It's probably because your gains were only small amounts that you haven't been on their priority generated list yet. It all adds up depending on how many years this has been going on
Can you help me figure out car taxes and other extra costs?
Danimal
I am about to graduate from college and I am wanting to purchase a car in the $13-16 grand price range. I am getting a loan from a bank with great rates by using bankrate.com. I am a Texas resident. I am buying online after test driving the car. How much can I expect to pay in fees including sales tax of the car, title, etc. Thanks for the help. Does anyone recommend buying in a different state to save money? I am basically wanting to know how much will I owe after the msrp cost of the car.
Answer
average about 10% for fees and taxes. So if the car is 13000, then expect to pay 14,300 for the car. This is pretty reliable info - my dad is a car dealer, and I used to work in a dealership. This is what we would tell our customers to anticipate, and it's pretty accurate.
Shameless self-promotion: my dad buys cars at wholesale and sells them for a flat fee over the wholesale value. If you're interested, he might be able to save you a lot of money. I bought a BMW for 4K less than the average selling price in my area, including a fee to him...call him at 619-254-2940 and see if he can help you with your car purchase. Good luck! :)
average about 10% for fees and taxes. So if the car is 13000, then expect to pay 14,300 for the car. This is pretty reliable info - my dad is a car dealer, and I used to work in a dealership. This is what we would tell our customers to anticipate, and it's pretty accurate.
Shameless self-promotion: my dad buys cars at wholesale and sells them for a flat fee over the wholesale value. If you're interested, he might be able to save you a lot of money. I bought a BMW for 4K less than the average selling price in my area, including a fee to him...call him at 619-254-2940 and see if he can help you with your car purchase. Good luck! :)
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