Doing business through online platforms or social media?
The Australian Taxation Office (ATO) is warning Australians about the need to declare income from side businesses or freelance work during tax time. As more people take on additional jobs to meet the rising cost of living, it's crucial to understand the tax implications and fulfill the necessary obligations.
The ATO employs advanced data-matching tools to identify underreported income, and starting July 1, they will have access to a wider range of electronic distribution platforms for cross-referencing.
It’s quite often thought that such activities do not constitute a business and therefore the income is private money. This is generally not the case. Whether a business exists in pursuit of these activities is pretty much resolved and the ATO will use data matching to ascertain the source of income.
Engaging in repeated activities with the goal of making a profit likely qualifies as running a business. Examples include animal breeding, ride-sharing, food delivery, online content creation, and conducting fitness boot camps alongside a full-time job.
What you should be doing or need to do.
Maintain accurate records. For these types of business, all that is required is a simple cashbook system that will effectively record your income and expenses. eCashbooks.com.au provides such a system that can be learnt within minutes and comes with a handy app that records transactions when you’re not at your desk.
Register for an Australian business number (ABN), and
File the appropriate tax return.
Depending on the circumstances, registration for the goods and services tax (GST) may also be required.
The ATO emphasizes that misconceptions regarding income declaration can lead to penalties and legal issues.
Get your records under control with eCashbooks, it's simple, it's easy, it's cheap and it's perfect for online businesses to record their Income and Expense transactions. And best of all, you don't need to be an accountant to use it.