Business Income Overview
Business income refers to the earnings generated from selling goods or services through digital platforms, apps, or personal advertisements. If you have additional income from side hustles or have turned a hobby into a business, it’s essential to declare this income.
Types of Business Income
Business income can take various forms, including cash and non-cash payments. This encompasses:
- Cash payments
- Goods like clothing and jewellery
- Services like flights and vouchers
- Cryptocurrency and other assets
If you receive non-cash benefits for your goods or services, you must report them at their market value on your tax return, reflecting the cash price you would typically pay for them.
You might be able to reduce the reported value of a non-cash benefit by claiming deductions for related business expenses. For example, if you bought an item for business use, this cost could be deducted.
Regular Income Sources to Report
Be sure to report the following types of income:
- Cash and digital payments
- Vouchers or coupons
- Business investments
- Online and overseas business activities
- Personal services income (e.g. Medical Professionals)
- Sharing economy earnings (like ride-sourcing)
- Assessable government grants and payments
- The value of trading stock consumed personally
- Payments from insurance claims
Non-Assessable Income
Certain payments do not count as assessable income and do not need to be included on your tax return, such as:
- Non-assessable non-exempt (NANE) government grants
- Genuine gifts or inheritances
- Collected GST – to be passed on to the ATO through a Business Activity Statement (BAS)
Please remember going forward, If you receive goods, services, tips, gratuities, or other benefits, as full or part payment for goods or services you provide, their market value is included as income in your tax return and you will be taxed on them.