HOBBY v BUSINESS

Making money from your photos can be perplexing from a tax perspective. You must identify whether you’re a hobbyist or are conducting a business as your tax and reporting obligations and benefits will be quite different.

“The amount you are paid through selling photography on online sites may not be assessable income,” says a tax office spokesperson. “However, income-earning hobbies can sometimes grow into businesses, so it’s important to keep an eye on any change in income or practices so that you’re aware of your obligations before they happen.”

The ATO defines a hobby as a spare-time activity pursued for pleasure. A business is run with the sole intention of making a profit and has basic reporting requirements, such as declaring income and claiming expenses.

If the latter applies to you, you may need to consider the following issues: Declaring your online sales income. Money you receive will generally be assessable income.

Expenses incurred (cameras, software) may be deductible.

You must record all expenses and sales. You may need an ABN.

You may need to register for GST.

“If your activity results in a loss, you may be entitled to offset this loss against other income or carry it forward to offset against future income, and therefore reduce the income tax you might have to pay in the future,” says the ATO.

Check out the “hobby or business?” tool at business.gov.au for more information.