When Passion B ecomes…
PROFESSION
ACCOUNTANT
CHARISSE RUSSELL
Director
For those of you who have started a
hobby and have found your passion, I
congratulate you!
For those of you have made the ultimate
decision to turn your hobby into a
business, I say welcome to the world of
Entrepreneurship.
It’s going to be one hell of a ride but with
your determination, passion and drive
you will achieve your goals.
So what’s the difference between a
hobby and business?
How do you know if your income will be
assessed for tax purposes?
or pastime pursued for pleasure or
recreation.
There is no single rule for determining
whether you are running a business,
however the Australian Taxation Office
have provided some guidelines which
may indicate that you are running a
business:
You have made the decision to run a
business
You have sought advice from a
professional such as a Chartered
Accountant
You have registered for an ABN
What are the characteristics of a
business? You have elected to be registered for
GST
What’s the difference between hobby v
business? Your intention is to make a profit or have
made a profit since making the decision
The MAIN difference between a hobby
and a business, is that a business is
run with the INTENTION of making a
profit. A hobby is a spare-time activity If you answer yes to most of the
questions above, then there’s a good
chance that you are running a business.
At the end of the day, the decision to quit
your job and pursuit your passion is not
something that one takes lightly. I made
that conscious decision 4 years ago
when I left a high paying job to pursuit
my dream to become a Business Coach,
Advisor & Mentor. My husband and I
struggled for over a year. We had to
adjust our personal budgets and cut
down on spending. It was tough with two
kids and a mortgage. BUT the rewards
and perks of being your own boss is so
worth it!
Hobby Income Threshold
The amount of income earned from a
Hobby is generally $20K or less. You
should check regularly with your
Accountant to ensure that your activities
still qualify as a hobby. If your activities
are a hobby and you supply goods
or services to businesses, they may
request your ABN when they pay you.
As you don’t have an ABN, you can use
the Statement by a Supplier Form from
the ATO so that they don’t reduce your
income by withholding tax.
Charisse Russell [CA, NTAA, BCom]
1/101 Mulgrave Road, Cairns QLD 4870
P: 07 3177 4120
M: 0417 634 193
E: [email protected]
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