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Tax Blogs

Online Hobby or Business Tax Returns

June 7, 2021

If you sell your products or services online, you will need to know if you are a hobby or a business for tax purposes.

Is your online activities considered a Business or a hobby for income tax return purposes

If your activity is a hobby, then it won’t affect your tax return.

As a business you will need to tell us your income and expenses from the business which may affect your tax refund.

You are most likely running a business if the following are true                     

(the more items you do the more likely you are a business)

  • You set up your online sales with the intention of being a business.

  • You pay for your on-line selling presence/shop.

  • It is your intention to make money (buy items to sell for more)

  • You sell items regularly to one or many customers.

  • You regularly make items and sell them for more than it cost you to make.

  • You manage your online selling like it is a business

    • Organised systems in place

    • Advertise your online space

    • Keep some, or all, of your records

    • Have a business plan

  • If you sell items in the same way as a business in the same industry, then you may be carrying on a business.

  • You sell the same type of goods or services sold in other shops (physical stores)

If you mostly sell household items or possessions you don’t want or need any more, it is unlikely to be a business.

 

Also read our blog on ‘Is it a Hobby or Business’

Still not sure? Drop us a line on (07) 3881 0942 to speak to one of our Business Tax Specialists.

 

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Note that the information provided is general in nature and subject to change, please contact one of our professionals who can evaluate your circumstances and provide more accurate advice to your current situation.

 

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