Turning a hobby into a business - what can I now claim

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TonyATO · Answer

Hi there Thanks for the suggestion. There is a lot to consider when starting a business (https://www.ato.gov.au/Business/Starting-your-own-business/Are-you-in-business-/), so tax agents are a great help with this. Unfortunately, you can't claim expenses from when your art was a hobby, unless you transfer assets to your business (https://www.ato.gov.au/Business/Income-and-deductions-for-business/Deductions/). If you build a studio in your yard, you could claim it as capital works construction (https://www.ato.gov.au/Business/Income-and-deductions-for-business/Deductions/Tax-deductions-for-depreciating-assets-and-capital-expenses/#Othercapitalexpenses1), but only to the extent you use it for business purposes. You must have records (https://www.ato.gov.au/Business/Record-keeping-for-business/) to prove any claims. You may also want to have a look at income averaging for special professionals (https://www.ato.gov.au/Forms/Income-averaging-for-special-professionals-2023/).

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