Is your content making you income?
The ATO has warned content creators that they need to be aware of their income tax and GST obligations. Examples of content creators are individuals who write a blog, post make-up tutorials to social media or streaming gaming for others to see.
If you start making money from your online content, you will have income to declare. You will also need to consider whether you are in business. If you are, or you want to start your own business, it’s important you know what income you need to report, the deductions you can claim and what registrations you may need.
The income you receive could be:
- cash;
- money for advertising or appearance fees; and
- goods like a new gaming console, clothes or make-up.
It doesn’t matter whether the income comes from Australia or overseas. It is all taxable in Australia, as long as you are considered to be a tax resident of Australia.
Some of your supporters may purchase your merchandise or pay a subscription fee to access your content. They may send tips or gratuities (often called gifts). All of these are likely to be income and should be declared.
There are some important things to think about if you’re a content creator.
Can you afford to accept the gifts? A new handbag or a free holiday may be enticing, but because it’s regarded as income, you’ll need to pay tax on it.
Consider how the income you earn will affect your other amounts payable. Sole trader income counts towards your total assessable income, so it could impact your study loans or Medicare calculation.
Make sure you keep your cash flow in mind when it comes to accepting goods or services.
GST
If you’re in business, and you have a GST turnover of $75,000 or more, you’ll need to register for GST. You will be liable to pay GST on your taxable supplies, even if you don’t pass it on to your supporters. However, you can claim input tax credits on what are called “creditable acquisitions”.
Deductions
You will be able to claim deductions for business related expenses. For example, you may be entitled to:
- an immediate deduction for certain prepaid business expenses; and
- an immediate deduction for certain start-up expenses, such as payments for advice or services relating to the business’ structure or operation and government fees or charges relating to the establishment of the business.
You may also be eligible for various small business concessions.
If you work from home and have a dedicated room for work (a home office), you may be able to claim a proportion of your mortgage interest or rent, power bills and cleaning costs.
If you don’t have a home office, the ATO may let you claim a deduction for additional “running expenses” (eg electricity, phone and internet expenses) incurred as a result of working from home.