Making Money Online? The ATO Is Paying Attention
Selling products online, creating digital content or earning extra income through side hustles has never been easier.
Whether you’re selling on Facebook Marketplace, Etsy or eBay, freelancing online, creating digital products or earning income through content creation, it’s important to remember one thing: The ATO is becoming increasingly sophisticated when it comes to tracking online income.
Your Online Income May Already be Reported
Many digital platforms now share transaction data with the ATO through its data matching programs. This means income earned through online marketplaces, ride-sharing services, accommodation platforms and other digital services may already be visible to the ATO when you lodge your tax return.
Is It a Hobby or a Business?
One of the most common questions people ask is whether their online activity is simply a hobby or whether it has become a business. While there’s no single test, factors such as regularly making a profit, operating in a business-like manner, advertising your services or intending to generate ongoing income may indicate you’re running a business.
If that’s the case, you may have tax obligations including:
- Declaring your income.
- Registering for GST if required.
- Keeping accurate business records.
- Claiming eligible business deductions.
Good Records Make Tax Time Easier
Whether you’re earning a little extra on the side or building a successful online business, keeping records of your income and expenses is essential. Good record-keeping can help ensure you claim all eligible deductions while avoiding unnecessary issues if the ATO asks questions later.
Not Sure Where You Stand?
Every situation is different. If you’ve started earning income online and aren’t sure what your tax obligations are, speaking with an accountant early can save you time, money and stress.
If you’re earning money online, contact Simmons Livingstone to ensure you’re meeting your tax obligations and making the most of the deductions available to you. Call 1800 618 800 or email admin@simmonslivingstone.com.au.
