ATO on Facebook Marketplace Sales: Tax time is almost here, sweetie. If you haven’t noticed, we are currently discussing everything related to taxes and examining every possible means of guaranteeing that you file an attractive, error-free return and that you are well informed about the procedure as you proceed through it.
A TikTok discussion of the ATO’s stance on side gigs and how to determine whether modest endeavours, like selling goods on Facebook Marketplace, may require you to file a tax return, drew our attention last year.
We thus resorted to the ATO itself to help dispel any uncertainty in this area. This is what it advises you to do when it comes to side projects during tax season.
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ATO on Facebook Marketplace Sales: How to handle side hustle taxes
ATO statements about side gigs state that any consistent activity carried out to make a profit qualifies as “a business.”
Theoretically, in the context of Facebook Marketplace sales, gathering a variety of products and regularly selling them to turn a profit would qualify as a business. Indeed, it is necessary to declare that revenue.
According to Lifehacker, in a statement, ATO Assistant Commissioner Tim Loh revealed that:
“While there are always new and different ways to make money, the tax obligations remain the same. Don’t fall into the trap of forgetting to include all your income thinking the ATO won’t notice.
“You also need to declare any additional income earned through that side hustle.”
Loh provided several examples of the kinds of things that qualify as side gigs. He specifically mentioned these three situations.
Some examples of side projects that the ATO considers businesses are:
- “You might actually be operating a business if your house has turned into more of a warehouse and is fully stocked with merchandise for sale.”
- “If you’re running bootcamp sessions on top of your 9–5 job, this is a side business that you must report to the ATO as income.”
- In addition to being likely to be managing a business, online content creators who are paid or get gifts also have tax duties to meet.
As per the ATO, you could have to register your revenue even if your actions don’t legally qualify as “a business.” For additional information on the regulations pertaining to it, click this link.
However, it is crucial to remember that one-time transactions and operations that aren’t focused on turning a profit are typically excluded from this list.
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If you believe you are involved in activities on Facebook Marketplace or elsewhere that could be deemed business-related, remember that your responsibilities go beyond simply reporting your revenue. It might be necessary for you to choose a business structure, apply for an Australian business number, or even register for goods and services tax (GST). The ATO has further information about businesses available here.
Here’s a guide on what to expect at the ATO during tax season if you want to know what else they’re focusing on.
