Hello Chasers,
The ATO’s Small Business Newsroom recently released an article, accompanied by a media statement, emphasising the ATO’s growing efforts to encompass “new and emerging ways to make money” within the tax system. Over the past few years, the concept of ‘side hustles’ has witnessed significant growth, encompassing various avenues such as the gig economy, drop shippers, content creators, and influencers.
Recognising the challenges individuals face when determining how to handle income generated from side hustles, particularly when juggling multiple sources, the ATO has compiled some useful tips. The first step involves determining whether an individual is considered ‘in business.’ If they fall under this category, they need to consider registration requirements and tax obligations. On the other hand, if they are not currently in business but aspire to start one, it is crucial to understand how to establish a foundation for success.
ATO Assistant Commissioner Tim Loh emphasised that if someone consistently engages in activities with the intention of making a profit, it is likely they are running a business. For instance, if their home resembles a fully stocked warehouse for selling goods, it suggests a business operation. Similarly, conducting bootcamp sessions alongside a regular 9-5 job qualifies as a side hustle, necessitating the declaration of income to the ATO.
Furthermore, individuals who earn money or receive gifts as online content creators are also considered to be running a business and must fulfill their associated tax obligations.
The ATO’s web content serves as a valuable resource for starting points, offering assistance with registrations, income and deductions (including real-life examples to ensure accurate tax reporting), as well as information on concessions, offsets, and rebates that may apply to the business.
Additionally, if a side hustle leads to an individual becoming a company director, they must remember to apply for a free director ID to fulfill their obligations.
The ATO aims to support individuals engaged in side hustles by providing guidance and resources to ensure compliance with tax requirements. By embracing the evolving landscape of income generation, the ATO aims to create a fair and equitable tax system for all.
Unsure about whether your side hustle is now caught?
Contact our Team on 55612643 for more information and clarity on your tax obligations.
Have a great day!
Read more of our daily blogs for valuable insights and stay up-to-date with the latest industry news – click here to access the full article on our blog page.
