Hey Lifehacker, I'm a bit of a coffee and food connoisseur (snob more like it), and I also use Instagram to let everyone know where I am and what I think of what I'm having. What is stopping me from creating a "business" and a website where I rate food and coffee on Instagram (and my website) and writing the costs of this off against my personal income tax?
I have a trip to the US booked for next year and it sure would be nice to write THAT off against my taxable income. There are plenty of people on Instagram I am following that appear to be doing just this and I'm wondering how they are doing it!
Thanks Taxable Traveller
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For any specific tax issues, it's always best to seek advice from a professional, and that goes double when you're trying to set up a new business. With that said, to have any chance of your claimed travel deductions surviving an audit by the tax office, you would need to demonstrate that you had a clear business plan, and the potential for the site to earn money in the future. Simply saying "I post reviews online" isn't going to be enough, we imagine.
In the case of an Instagram-driven business, you would absolutely need your own web site. Instagram doesn't allow individuals to place ads in their own stream, so you have no way of making money from Instagram itself. Setting up a site that showcases your pictures and comments and also features advertising means you at least have a fighting chance of making money.
One other aspect to be aware of is that the ATO is generally quite strict about apportioning costs. If you take a trip overseas and claim it all against business, the onus will be on you to demonstrate that the entire trip was for work purposes — and merely claiming that you review coffee probably won't cut it.
Bottom line? If you're serious, develop a real business plan and put some time into it. If you want to keep enjoying food and coffee as a hobby, keep doing that. If you end up with a massive audience, you can revisit the idea of it being a business.