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Many clients will need reminding by their accountants that they have to declare secondary sources of income, including gifts and gratuities.
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Social media side hustles all count as income, ATO warns
14 April 2023
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Accountants and tax agents must ensure their clients declare all secondary income from social media posts, tutorial videos or even online streams, the ATO warns.
Money for advertising or appearance fees, as well as goods like gaming consoles, clothes or make-up, all constituted income, the Tax Office said.
Other declarable income sources included merchandise purchased by supporters, subscription fees paid to access content, or tips and gratuities often misleadingly described as gifts.
Tax agents have been told to ensure their clients understand that while they can accept gifts such as handbags or holidays, they had to pay tax on them.
That meant accountants needed to remind clients about the importance of cash flow when accepting goods or services.
The ATO said some clients would also need to be informed that gifts counted towards sole trader earnings and hence total assessable income, which could impact study loans or Medicare calculations.
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Once a client’s turnover exceeded $75,000, they also had to register for GST.
The ATO said accountants should also prompt clients about possible deductions for business-related expenses or even small business concessions due to the secondary income sources outside of their primary job.
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