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I am about to open a ebay store rather the just my general account and I was wondering do i have to declare my earning??
They will be very minimal and will obviuosly vary with demand.
But i dont want to get into trouble.
You dont even need a ABN to open a store and I highly doubt that anyone out of the millions of sellers declare.
I have tried goggling it and found nothing.
what do you think??
i dont reckon you need to delcare it ... only if you need to use an abn to buy your goods , then it would be a business ..
For a business you only need to declare earnings once they hit around $15-20,000 so you should be ok. Before that it's classed as a hobby.
That is actually not correct. The ATO definition of a hobby is not so simple as amount of earnings. Each person's business circumstances are different and as such all aspects of the business need to be looked to determine if the business is a hobby or not. As usual it is best to talk to the ATO or chat to your accountant.:
Here is what the ATO has to say about hobbies/businesses:
:
Am I in business?
How do I tell whether I am in business?
There is no simple answer to whether you are in business or not, it depends upon the facts in each case. However, you can use the following questions to help you determine whether your activity is actually a business:
Each time you answered ?yes? to the questions above, it increases the probability that you are in business though no one indicator is decisive, they must be considered in combination and as a whole.
- Does your activity have a significant commercial purpose or character?
- Do you have more than just an intention to engage in business?
- Do you have a purpose of profit as well as a prospect of profit?
- Is there repetition and regularity to your activity?
- Is your activity carried on in a similar manner to other businesses in your industry?
- Is your activity planned, organised and carried on in a business-like manner?
- Does your activity have characteristics of size, scale and permanency?
- Would it be true to say your activity is really better described as a hobby, recreation or sporting activity?
Why does it matter whether my activity is a business?
It matters because it may affect whether:
- any money you receive from the activity is assessable income
- you are entitled to an Australian business number (ABN), and
- you can or must register for goods and services tax (GST).
- How does the question of whether my activity is a business affect my tax?
- There are numerous areas in which people carry out activities, often in a small way, which may constitute a business. These include, for example, gardeners, tradesmen, and couriers.
If you are carrying on a business:
any money you earn from this activity is generally assessable for income tax
you are generally entitled to claim tax deductions for any allowable expenses you incur in earning this income, and
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.
Common areas where people carry out activities which may be a hobby rather than a business include hobby farming, motor car/bike racing, and hobby ceramics.
If your activity constitutes a hobby or recreation:
any money you earn from this activity is generally not assessable income
you are not entitled to claim tax deductions for any expenses you incur in carrying out this activity, and
if your activity results in a loss, you are not entitled to offset this loss against other income or carry the loss forward.
Apportionment of expenses
It may be necessary to consider whether your expenses were incurred solely for business purposes, or for a `dual purpose' (for example, partly for business purposes and partly for private purposes).
Generally, if your expenses were not incurred purely for business purposes, it is necessary to apportion your expenses between the different purposes.
What evidence might I have to show that my activity is a business?
These are examples of questions that the Tax Office may consider in determining whether your activity constitutes a business:
What to read/do next
- Do you have a business plan?
- Do you use specialised knowledge or skills?
- Have you had prior experience in this area?
- How much capital have you invested in the activity?
- Have you done market research?
- How much time do you spend on the activity?
- Is the activity a part-time `side-line' or your main income earning activity?
- Do you give quotes and supply invoices?
- Do you advertise?
If you are still unsure whether or not you are in business, please phone the Small Business Infoline
When i rang them i was basically told if you consider it a biz, then you must declare regardless of the amount.
So if you make blankets to sell at a craft stall and you have a business card, or keep a profit and loss sheet, then that is basically considered a business and you should declare it.
If you are just selling junk from around your home then you don't need to, but if you are buying and selling stuff then you should.
I would always err on the side of caution with the ATO......far better to declare your earnings/intention rather than get caught with a tax bill later........