{"id":7732,"date":"2022-11-14T12:01:45","date_gmt":"2022-11-14T01:31:45","guid":{"rendered":"https:\/\/adelaideprivatewealth.com.au\/tax-and-your-online-side-hustle\/"},"modified":"2022-11-14T12:01:45","modified_gmt":"2022-11-14T01:31:45","slug":"tax-and-your-online-side-hustle","status":"publish","type":"post","link":"https:\/\/adelaideprivatewealth.com.au\/tax-and-your-online-side-hustle\/","title":{"rendered":"Tax and your online side hustle"},"content":{"rendered":"<div>\n<p><strong>With money becoming tighter as inflation rises, many people are looking to make some extra income from a \u2018side hustle\u2019. <\/strong><\/p>\n<p> As we move towards a cashless society and transact more online, it\u2019s becoming easier for the ATO to follow the money trail. Whether you rent your caravan on Camplify, or even if you simply sell household items on Gumtree, the tax man will be paying attention. <\/p>\n<p> Not all online income needs to be declared, but it\u2019s important to understand the difference between an online hobby and a business. Otherwise, you could find yourself with an unexpected tax bill.<\/p>\n<p><img decoding=\"async\" loading=\"lazy\" alt=\"\" height=\"300\" src=\"https:\/\/mlcsocialfeed.p2.clientcommunity.com.au\/wp-content\/uploads\/2022\/11\/Tax_and_your_online_side_hustle.png\" width=\"570\"><\/p>\n<h3>Business or a hobby?<\/h3>\n<p>Even with a well-paying day job, many people have an online side hustle for fun or to earn extra cash. <\/p>\n<p> Whether your online activity is just a hobby or a <a href=\"https:\/\/www.ato.gov.au\/Business\/Starting-your-own-business\/Before-you-get-started\/Are-you-in-business-\/\" target=\"_blank\" rel=\"noopener\">business<\/a> makes a big difference. <\/p>\n<p> Income earned from hobby activities is non-assessable for tax purposes, while income from a business is assessable and must be declared in your tax return. This could include revenue from an eBay shop, rental income through platforms such as Stayz, and fees from work sourced from Airtasker. <\/p>\n<p> To check whether the ATO is likely to consider your side hustle a business, you need to think about the issues it looks at when deciding. <\/p>\n<p><strong>Online selling \u2013 hobby or business?<\/strong><\/p>\n<p>If you are selling products or services online, you\u2019ll need to consider whether it\u2019s a hobby or if you are carrying on a business. <\/p>\n<p> Unfortunately, there is no legislative definition of \u2018carrying on a business\u2019, but the ATO provides the following <a href=\"https:\/\/www.ato.gov.au\/Business\/Starting-your-own-business\/In-detail\/Online-selling---hobby-or-business-\/\" target=\"_blank\" rel=\"noopener\">questions<\/a> to help you decide. Every \u2018yes\u2019 means you are more likely to be carrying on a business: <\/p>\n<ul>\n<li>\n<p>Did you set up your online sales with the intention of being a business?<\/p>\n<\/li>\n<li>\n<p>Do you have an online \u2018shop\u2019 and pay fees for your online-selling presence?<\/p>\n<\/li>\n<li>\n<p>Is your main intention to make a profit, or to get rid of items you no longer want?<\/p>\n<\/li>\n<li>\n<p>Do you make regular sales?<\/p>\n<\/li>\n<li>\n<p>If you make the items you sell online, do you charge more than they cost you to make?<\/p>\n<\/li>\n<li>\n<p>Do you manage your online sales activities as if they are a business?<\/p>\n<\/li>\n<li>\n<p>Do you advertise your online space?<\/p>\n<\/li>\n<li>\n<p>Do you keep records and have a business plan?<\/p>\n<\/li>\n<li>\n<p>Is what you are selling online similar to what might be sold in a bricks and mortar business?<\/p>\n<\/li>\n<\/ul>\n<h3>Side businesses and tax<\/h3>\n<p>Where your side activities are a business, you must declare all your secondary income, regardless of how much or how little you make each year. <\/p>\n<p> If your side hustle is considered a business for tax purposes, it means your <a href=\"https:\/\/www.ato.gov.au\/Media-centre\/Media-releases\/Side-hustles-are-front-of-mind-this-tax-season\/\" target=\"_blank\" rel=\"noopener\">business-related costs<\/a> are tax deductible and you may be able to access the various business tax concessions on offer. <\/p>\n<p> With online activities that remain a hobby the income is non-assessable and you do not have compliance obligations, but you can\u2019t claim a deduction for your costs. <\/p>\n<p> For side businesses where your annual turnover <a href=\"https:\/\/www.ato.gov.au\/Business\/GST\/Registering-for-GST\/\" target=\"_blank\" rel=\"noopener\">exceeds $75,000<\/a>, you need to register for GST. This tax needs to be added to all your taxable sales and paid to the ATO every quarter. <\/p>\n<h3>ATO surveillance and data-matching<\/h3>\n<p>Although some taxpayers think their online hustle will go unnoticed, the ATO has vast data-matching powers to help it identify any unreported income \u2013 wherever it is earnt. <\/p>\n<p> In recent years the tax regulator has made it clear, online generated revenue is an important <a href=\"https:\/\/www.ato.gov.au\/Media-centre\/Media-releases\/Side-hustles-are-front-of-mind-this-tax-season\/\" target=\"_blank\" rel=\"noopener\">target<\/a> for its non-compliance surveillance activities. <\/p>\n<p> The ATO receives and collates information from a wide range of third-party sources, including banks, payment systems and online selling platforms providers such as eBay, Amazon Commercial Services, Airbnb and Uber. More than <a href=\"https:\/\/www.ato.gov.au\/about-ato\/commitments-and-reporting\/in-detail\/privacy-and-information-gathering\/how-we-use-data-matching\/?page=2\" target=\"_blank\" rel=\"noopener\">600 million transactions<\/a> are reported to the tax office each year. <\/p>\n<p> The ATO also has the power to collect information for its data-matching projects to address concerns about specific industries, issues or tax risks, and one of its \u2018special purpose acquisition data\u2019 programs covers online selling. <\/p>\n<p> Under its <a href=\"https:\/\/www.ato.gov.au\/General\/Gen\/Online-selling---2014-15-to-2022-23-financial-years\/\" target=\"_blank\" rel=\"noopener\">online selling data-matching<\/a> program, the ATO tracks the activity of registered online sellers and obtains details of businesses with annual trading activity in goods and services of $12,000 or more. <\/p>\n<h3>Get professional assistance<\/h3>\n<p>If your side hustle is successful and becomes more than a spare time activity, it makes sense to talk to an accounting professional well before tax time. We can help you decide whether your activities will be considered a hobby or a business. <\/p>\n<p> A business must substantiate any tax deductions it claims, so you need to keep detailed records of all your business-related activities and ensure you lodge your business activity statements (BAS) and tax returns. <\/p>\n<p> We can also help you work through your tax obligations such applying for an ABN, registering for GST, and establishing a proper recordkeeping system for your income and expenses. You may also need help with preparing and lodging your quarterly BAS. <\/p>\n<p><em>If you need assistance with your growing online side business or meeting your tax obligations, call our office today on [phone].<\/em><\/p>\n<p><strong><a href=\"https:\/\/www.ato.gov.au\/Business\/Starting-your-own-business\/In-detail\/Online-selling---hobby-or-business-\/\" target=\"_blank\" rel=\"noopener\">ATO<\/a> case study \u2013 Selling online as a hobby<\/strong><\/p>\n<p>Marika wants to get rid of some of the excess clothing in her wardrobe, so she lists the items on the internet for individual sale. <\/p>\n<p> Some of the items sell for more than the price she paid, some for less. Marika charges buyers postage and receives a total of $2,075. <\/p>\n<p> Marika is not carrying on a business as she: <\/p>\n<ul>\n<li>\n<p>did nothing to improve the value of the items<\/p>\n<\/li>\n<li>\n<p>does not sell any more items for a long time<\/p>\n<\/li>\n<li>\n<p>does not pay the online auction site for a \u2018shop\u2019 space<\/p>\n<\/li>\n<li>\n<p>generally receives less than the original purchase price of the clothes<\/p>\n<\/li>\n<li>\n<p>has no intention to sell clothes online as a business.<\/p>\n<\/li>\n<\/ul>\n<p><span style=\"font-size: 10px\">Important: This provides general information and hasn\u2019t taken your circumstances into account. It\u2019s important to consider your particular circumstances before deciding what\u2019s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person. <\/span><\/p>\n<p><span style=\"font-size: 10px\">Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents\/information contained within the linked site(s) accessible from this page.<\/span><\/p>\n<p>The post <a rel=\"nofollow\" href=\"https:\/\/mlcsocialfeed.p2.clientcommunity.com.au\/latest-articles\/tax-and-your-online-side-hustle\">Tax and your online side hustle<\/a> appeared first on <a rel=\"nofollow\" href=\"https:\/\/mlcsocialfeed.p2.clientcommunity.com.au\/\">MLC Contemporary<\/a>.<\/p>\n<\/div>\n<p class=\"wpematico_credit\"><small>Powered by <a href=\"http:\/\/www.wpematico.com\" target=\"_blank\" rel=\"noopener\">WPeMatico<\/a><\/small><\/p>\n","protected":false},"excerpt":{"rendered":"<p>With money becoming tighter as inflation rises, many people are looking to make some extra income from a \u2018side hustle\u2019&#8230;.<\/p>\n","protected":false},"author":4,"featured_media":7733,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[15],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Tax and your online side hustle - Adelaide Private Wealth<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/adelaideprivatewealth.com.au\/tax-and-your-online-side-hustle\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"asim_stellar\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/adelaideprivatewealth.com.au\/tax-and-your-online-side-hustle\/\",\"url\":\"https:\/\/adelaideprivatewealth.com.au\/tax-and-your-online-side-hustle\/\",\"name\":\"Tax and your online side hustle - Adelaide Private Wealth\",\"isPartOf\":{\"@id\":\"https:\/\/adelaideprivatewealth.com.au\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/adelaideprivatewealth.com.au\/tax-and-your-online-side-hustle\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/adelaideprivatewealth.com.au\/tax-and-your-online-side-hustle\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/mlcsocialfeed.p2.clientcommunity.com.au\/wp-content\/uploads\/2022\/11\/Tax_and_your_online_side_hustle.png\",\"datePublished\":\"2022-11-14T01:31:45+00:00\",\"dateModified\":\"2022-11-14T01:31:45+00:00\",\"author\":{\"@id\":\"https:\/\/adelaideprivatewealth.com.au\/#\/schema\/person\/02f75799402d10c888b3ab8c40331acc\"},\"breadcrumb\":{\"@id\":\"https:\/\/adelaideprivatewealth.com.au\/tax-and-your-online-side-hustle\/#breadcrumb\"},\"inLanguage\":\"en-AU\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/adelaideprivatewealth.com.au\/tax-and-your-online-side-hustle\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-AU\",\"@id\":\"https:\/\/adelaideprivatewealth.com.au\/tax-and-your-online-side-hustle\/#primaryimage\",\"url\":\"https:\/\/mlcsocialfeed.p2.clientcommunity.com.au\/wp-content\/uploads\/2022\/11\/Tax_and_your_online_side_hustle.png\",\"contentUrl\":\"https:\/\/mlcsocialfeed.p2.clientcommunity.com.au\/wp-content\/uploads\/2022\/11\/Tax_and_your_online_side_hustle.png\",\"caption\":\"Tax and your online side hustle\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/adelaideprivatewealth.com.au\/tax-and-your-online-side-hustle\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/adelaideprivatewealth.com.au\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Tax and your online side hustle\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/adelaideprivatewealth.com.au\/#website\",\"url\":\"https:\/\/adelaideprivatewealth.com.au\/\",\"name\":\"Adelaide Private Wealth\",\"description\":\"Some things in life are worth protecting.\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/adelaideprivatewealth.com.au\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-AU\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/adelaideprivatewealth.com.au\/#\/schema\/person\/02f75799402d10c888b3ab8c40331acc\",\"name\":\"asim_stellar\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-AU\",\"@id\":\"https:\/\/adelaideprivatewealth.com.au\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/7ba8f73828ce50634c032858872e267c?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/7ba8f73828ce50634c032858872e267c?s=96&d=mm&r=g\",\"caption\":\"asim_stellar\"}}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Tax and your online side hustle - Adelaide Private Wealth","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/adelaideprivatewealth.com.au\/tax-and-your-online-side-hustle\/","twitter_misc":{"Written by":"asim_stellar","Est. reading time":"6 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/adelaideprivatewealth.com.au\/tax-and-your-online-side-hustle\/","url":"https:\/\/adelaideprivatewealth.com.au\/tax-and-your-online-side-hustle\/","name":"Tax and your online side hustle - Adelaide Private Wealth","isPartOf":{"@id":"https:\/\/adelaideprivatewealth.com.au\/#website"},"primaryImageOfPage":{"@id":"https:\/\/adelaideprivatewealth.com.au\/tax-and-your-online-side-hustle\/#primaryimage"},"image":{"@id":"https:\/\/adelaideprivatewealth.com.au\/tax-and-your-online-side-hustle\/#primaryimage"},"thumbnailUrl":"https:\/\/mlcsocialfeed.p2.clientcommunity.com.au\/wp-content\/uploads\/2022\/11\/Tax_and_your_online_side_hustle.png","datePublished":"2022-11-14T01:31:45+00:00","dateModified":"2022-11-14T01:31:45+00:00","author":{"@id":"https:\/\/adelaideprivatewealth.com.au\/#\/schema\/person\/02f75799402d10c888b3ab8c40331acc"},"breadcrumb":{"@id":"https:\/\/adelaideprivatewealth.com.au\/tax-and-your-online-side-hustle\/#breadcrumb"},"inLanguage":"en-AU","potentialAction":[{"@type":"ReadAction","target":["https:\/\/adelaideprivatewealth.com.au\/tax-and-your-online-side-hustle\/"]}]},{"@type":"ImageObject","inLanguage":"en-AU","@id":"https:\/\/adelaideprivatewealth.com.au\/tax-and-your-online-side-hustle\/#primaryimage","url":"https:\/\/mlcsocialfeed.p2.clientcommunity.com.au\/wp-content\/uploads\/2022\/11\/Tax_and_your_online_side_hustle.png","contentUrl":"https:\/\/mlcsocialfeed.p2.clientcommunity.com.au\/wp-content\/uploads\/2022\/11\/Tax_and_your_online_side_hustle.png","caption":"Tax and your online side hustle"},{"@type":"BreadcrumbList","@id":"https:\/\/adelaideprivatewealth.com.au\/tax-and-your-online-side-hustle\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/adelaideprivatewealth.com.au\/"},{"@type":"ListItem","position":2,"name":"Tax and your online side hustle"}]},{"@type":"WebSite","@id":"https:\/\/adelaideprivatewealth.com.au\/#website","url":"https:\/\/adelaideprivatewealth.com.au\/","name":"Adelaide Private Wealth","description":"Some things in life are worth protecting.","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/adelaideprivatewealth.com.au\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-AU"},{"@type":"Person","@id":"https:\/\/adelaideprivatewealth.com.au\/#\/schema\/person\/02f75799402d10c888b3ab8c40331acc","name":"asim_stellar","image":{"@type":"ImageObject","inLanguage":"en-AU","@id":"https:\/\/adelaideprivatewealth.com.au\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/7ba8f73828ce50634c032858872e267c?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/7ba8f73828ce50634c032858872e267c?s=96&d=mm&r=g","caption":"asim_stellar"}}]}},"_links":{"self":[{"href":"https:\/\/adelaideprivatewealth.com.au\/wp-json\/wp\/v2\/posts\/7732"}],"collection":[{"href":"https:\/\/adelaideprivatewealth.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/adelaideprivatewealth.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/adelaideprivatewealth.com.au\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/adelaideprivatewealth.com.au\/wp-json\/wp\/v2\/comments?post=7732"}],"version-history":[{"count":0,"href":"https:\/\/adelaideprivatewealth.com.au\/wp-json\/wp\/v2\/posts\/7732\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/adelaideprivatewealth.com.au\/wp-json\/wp\/v2\/media\/7733"}],"wp:attachment":[{"href":"https:\/\/adelaideprivatewealth.com.au\/wp-json\/wp\/v2\/media?parent=7732"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/adelaideprivatewealth.com.au\/wp-json\/wp\/v2\/categories?post=7732"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/adelaideprivatewealth.com.au\/wp-json\/wp\/v2\/tags?post=7732"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}