Forum Moderators: martinibuster
If you earn in excess of $50,000 in a financial year, you need to have a registered business, register for GST, etc. Not that i'm anywhere near that at the moment, but might be next financial year (thinking big :-). But at what point does your hobby become a business? It seems to be a very grey area.
If you're in Australia and have received income from AdSense, how are you handling it tax wise?
AFAIK, if your income from your web sites exceeds your expenses maintaining them then you need to declare it.
The hobby/business issue is mostly about people trying to claim hobby expenses as a tax deduction when they're not actually making a profit.
Better to be sure than sorry. :)
Onya
Woz
I really think its worthwhile to declare your income properly. You might get away with not declaring it for a while, but soon or later the ATO will probably find out. I don't think its worth the risk. Of course, it my depend somewhat on your particular circumstances. It might pay to bite the bullet and get some advice form a professional tax agent.
It might pay to bite the bullet and get some advice form a professional tax agent.
I like direct exchange.
I talked with a good accountant company about my taxes.
He talked with me about his web site.
That equaled out, that nobody had to pay the other side.
According to the tax laws in Australia, any citizen or permanent resident is obligated to pay tax on any income they derive, whether it is derived in Australia or overseas. That is what I was advised by them in a private ruling.
My accountant argued that my website is actually hosted in America and hence I am not carrying on a business in Australia - this means I dont have to worry about ABN or GST and dont have to lodge quarterly activity statements.
When does a hobby become a business? When ever the tax department says so.
I personally think that if you dont declare the income you might be asking for some trouble down the track if they ever want to investigate you - they can check all your bank accounts and will be able to see the checks being deposited into your account. Then you have to prove that you didnt defraud them!
I would rather pay the tax that spend time in jail.
Cobblers. Your accountant I think misunderstood the setup, and probably based his advice on how you described the situation.
Your sites may well be hosted in the U.S, so what?, they are maintained and operated from Australia, and the income generated from the sites is as a direct result of your skill and input.
Further, any activity that results in a profit cannot be called a hobby, so lets not play games please.
My accountant argued that my website is actually hosted in America and hence I am not carrying on a business in Australia - this means I dont have to worry about ABN or GST and dont have to lodge quarterly activity statements.
James:
Cobblers. Your accountant I think misunderstood the setup, and probably based his advice on how you described the situation.
I think there's a misunderstanding. MikeH wasn't suggesting that you don't have to pay tax on your AdSense income, just that you don't have to worry about GST. My accountant has told me the same thing - I do have an ABN, but I'm not lodging quarterly activity statements. I'm certainly paying tax on my web site income, though!
