When you start earning money from your online content, it’s important to understand your tax obligations and business considerations. Here are some key points to keep in mind:
1. Income: Any money you receive, whether it’s cash, payments for advertising or appearances, or goods like gaming consoles or clothes, is considered taxable income in Australia. It doesn’t matter if the income is from Australia or overseas, as long as you are a tax resident of Australia.
2. Supporter Contributions: If your supporters purchase merchandise, pay subscription fees, or give you tips or gratuities, these amounts are also considered income and should be declared for taxation purposes.
3. Gifts and Tax: While accepting gifts like a handbag or a free holiday may seem appealing, it’s important to remember that they are considered income and will be subject to taxation.
4. Impact on Other Payments: The income you earn as a content creator can affect other amounts payable, such as study loans or Medicare calculations. Consider how your earnings may impact these obligations.
5. GST Registration: If you are in business and your GST turnover reaches $75,000 or more, you will need to register for Goods and Services Tax (GST). This means you will have to pay GST on your taxable supplies, even if you don’t pass the GST onto your supporters. However, you can claim input tax credits for eligible business expenses.
6. Deductions: As a content creator, you can claim deductions for business-related expenses. This may include immediate deductions for certain prepaid business expenses and start-up expenses. If you have a dedicated home office, you may be able to claim a proportion of mortgage interest or rent, power bills, and cleaning costs. If you don’t have a home office, you may still be eligible to claim deductions for additional running expenses like electricity, phone, and internet expenses incurred as a result of working from home.
It’s important to stay informed about your tax obligations and seek professional advice to ensure compliance with the tax laws relevant to your situation.