ATO to tax side jobs this coming tax season. Here's what you should declare soon
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Have you picked up a side hustle in the past year?
Maybe you've been delivering meals, selling your handmade crafts online, renting out a small property, or even trying your hand at content creation.
If so, you're not alone; nearly one million Australians are now juggling more than one job or income stream.
Before you start planning how to spend your extra cash, the Australian Taxation Office (ATO) has a reminder you need to hear.
The ATO has paid closer attention to people earning money outside their main job.
With this, the ATO announced a tax bill for Aussies with side jobs or hustles starting Tuesday, 1 July.
Due to the expanded Sharing Economy Reporting Regime, companies like Airtasker, Doordash, Uber, YouTube, and Airbnb are now required to report earnings directly to the tax office.
These reports could give the ATO a clearer picture of a person's total income.
CPA Australia's tax lead, Jenny Wong, stated that this could come as a 'shock' to many Aussies who have not kept track of their side hustle earnings until today.
'These rules apply to a broad range of services, not just the most well-known,' Ms Wong stated.
'If you use a website to rent out a car parking space or your designer handbag, this income will be recorded, and you'll need to pay tax.'
While anyone with a side hustle should be paying attention, Wong predicted that online content creators could be in for the biggest tax bills.
According to CPA Australia, the money online content creators make could add up quickly.
Their income comes through various forms, like advertising, subscriptions, and even gifts.
The ATO considers all of these as taxable income.
Starting Tuesday, 1 July, Individuals who have received any kind of payment, whether it's cash, a gift, or a gratuity, are required to declare it.
Once the total income from all sources exceeds $18,200, they need to start paying tax.
Some may think side gigs are just for fun or a way to make ends meet, but the ATO sees it differently.
In the ATO's eyes, these side hustles are still a source of income, and it should be declared.
What should side hustlers do now?
Just like any source of income, failing to declare them could land you in hot water.
With good planning and record-keeping, you can stay on the right side of the tax man.
Have you been caught up in a tax bill on your side hustle? Do you have tips for managing multiple income streams? Share your experiences and advice in the comments below.
RELATED: ATO releases new 'hit list' as tax return season looms closer
Maybe you've been delivering meals, selling your handmade crafts online, renting out a small property, or even trying your hand at content creation.
If so, you're not alone; nearly one million Australians are now juggling more than one job or income stream.
Before you start planning how to spend your extra cash, the Australian Taxation Office (ATO) has a reminder you need to hear.
The ATO has paid closer attention to people earning money outside their main job.
With this, the ATO announced a tax bill for Aussies with side jobs or hustles starting Tuesday, 1 July.
Side jobs or sources of income were previously under the Tax Office's radar. Image Credit: Pexels/Kampus Production
Due to the expanded Sharing Economy Reporting Regime, companies like Airtasker, Doordash, Uber, YouTube, and Airbnb are now required to report earnings directly to the tax office.
These reports could give the ATO a clearer picture of a person's total income.
CPA Australia's tax lead, Jenny Wong, stated that this could come as a 'shock' to many Aussies who have not kept track of their side hustle earnings until today.
'These rules apply to a broad range of services, not just the most well-known,' Ms Wong stated.
'If you use a website to rent out a car parking space or your designer handbag, this income will be recorded, and you'll need to pay tax.'
While anyone with a side hustle should be paying attention, Wong predicted that online content creators could be in for the biggest tax bills.
According to CPA Australia, the money online content creators make could add up quickly.
Their income comes through various forms, like advertising, subscriptions, and even gifts.
The ATO considers all of these as taxable income.
Starting Tuesday, 1 July, Individuals who have received any kind of payment, whether it's cash, a gift, or a gratuity, are required to declare it.
Once the total income from all sources exceeds $18,200, they need to start paying tax.
Some may think side gigs are just for fun or a way to make ends meet, but the ATO sees it differently.
In the ATO's eyes, these side hustles are still a source of income, and it should be declared.
What should side hustlers do now?
- Keep good records: Make sure you're tracking all your income and expenses related to your side hustle. This will make tax time much easier and could help you claim legitimate deductions.
- Declare everything: Don't assume the ATO won't notice a few hundred dollars here or there. With new reporting rules, they're more likely than ever to spot undeclared income.
- Understand deductions: You may be able to claim expenses related to your side hustle, such as equipment, internet costs, or even a portion of your home office. Check the ATO website or speak to a tax professional for advice.
- Plan for your tax bill: If you're earning extra income, set aside a portion for tax so you're not caught short when the bill arrives.
Just like any source of income, failing to declare them could land you in hot water.
With good planning and record-keeping, you can stay on the right side of the tax man.
RELATED: ATO releases new 'hit list' as tax return season looms closer
