It’s tax time, baby. In case you haven’t yet noticed, we’re talking all things tax right now and looking at all the ways to ensure you file a stunning, problem-free return, and that you’re fully informed on the process as you travel through it. One thing that caught our attention recently was a TikTok talking about the ATO’s approach to side hustles and how to know when small projects, like selling items on Facebook Marketplace, might count as something you need to include in your tax return.
So, to help clear up any confusion in this space, we referred to the ATO itself. Here is what it suggests you do when it comes to side hustles come tax time.
From small gigs to Facebook Marketplace, how to approach side hustle tax
Per a recent statement from the ATO regarding side hustles, you can define ‘a business’ as any repeated activity that is completed with the intention of turning a profit. In the case of Facebook Marketplace sales, if you are collating a number of items and selling them on a regular basis – with the goal of making a profit from these sales – then, in theory, this would be considered a business. And yes, that income needs to be declared.
ATO Assistant Commissioner Tim Loh shared in this statement that:
“While there are always new and different ways to make money, the tax obligations remain the same. Don’t fall into the trap of forgetting to include all your income thinking the ATO won’t notice.
“You also need to declare any additional income earned through that side hustle.”
If you’re after examples of the kind of activities that count as side hustles, Loh offered a handful. Here are three cases he pointed to in particular.
Examples of side hustles that count as businesses to the ATO:
- “If your home has become more like a warehouse and is stocked to the hilt with goods to sell, then you may in fact be running a business.”
- “If you’re running bootcamp sessions, in addition to your 9–5 job, well this is a side hustle and you need to declare this income to the ATO.”
- “If you’re an online content creator earning money or receiving gifts, you’re also likely to be running a business and there are tax obligations you need to comply with.”
The ATO shares that even in cases where your activities may not strictly be considered ‘a business,’ you may need to declare your income. Read more on the rules around that here.
It is important to keep in mind, however, that once-off sales (generally speaking) and activities that are not geared towards making a profit are not included, here.
If you do think you might be engaging in activities on Facebook Marketplace or elsewhere that might be considered a business, keep in mind that there are more obligations to keep in mind than just declaring income. You may need to register for an Australian business number, determine a business structure, or even register for goods and services tax (GST). You can find more information from the ATO on businesses here.
And if you want to see what else the ATO is focusing on this tax season, here is a guide to everything you can expect there.
This article has been updated with additional detail since its original publish date.
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