ATO Community

Re: Beginning to earn as a hobby photographer

Newbie

Views 422

Replies 6

Hi,

 

I have a full time job and have been doing photography as a hobby. Now I want to try earning from the photography while keeping my main job. The photography income is expected to be <5k per year at least in the beginning. 

1. I assume I won't need an ABN and will have to register as a sole trader. What is the process for that.

2. If I buy any equipment for photography (professional lights, computer), how much of that can be deducted from taxable income. What if it costs more than the income I have from photography.

3. If I use equipment I have bought in the past, can any of that be deducted.

 

Thanks

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Community Support

Replies 5

Hi @varunbondwal,

 

I will answer your questions in the same order you have asked them.  

 

1. There is no separate registration requirement for running a business as a sole trader. Having an ABN allows your clients to pay you in full, otherwise they must withhold 47% of their payments to you for tax purposes. 

 

2. You can claim tax deduction for the full purchase price of those equipment as they are directly related to earning your business income. When your expenses are more than your income, then you have made a loss. You may be able to use that loss to bring down your current year income or carry forward that loss for future years in your individual tax returns.

 

3. If your equipment is a capital purchase it can be deducted over time. Other running expenses generally has to be claimed for the year you incur them.

 

You can go to the ABR website to apply for an ABN and also have a look at the Business Deductions and Losses on our website for more information.

 

All the Best!

6 REPLIES 6

Most helpful response

ATO Community Support

Replies 5

Hi @varunbondwal,

 

I will answer your questions in the same order you have asked them.  

 

1. There is no separate registration requirement for running a business as a sole trader. Having an ABN allows your clients to pay you in full, otherwise they must withhold 47% of their payments to you for tax purposes. 

 

2. You can claim tax deduction for the full purchase price of those equipment as they are directly related to earning your business income. When your expenses are more than your income, then you have made a loss. You may be able to use that loss to bring down your current year income or carry forward that loss for future years in your individual tax returns.

 

3. If your equipment is a capital purchase it can be deducted over time. Other running expenses generally has to be claimed for the year you incur them.

 

You can go to the ABR website to apply for an ABN and also have a look at the Business Deductions and Losses on our website for more information.

 

All the Best!

Newbie

Replies 1

Thanks for the detailed answers SubiATO. So does that mean that I should get an ABN even if I am earning only a couple of thousand per year from photography (Otherwise clients will have to withhold 47% amount)

ATO Community Support

Replies 0

Hi @varunbondwal,

 

Yes, that's correct. If you are carrying on a business regardless of your level of income you can hold an ABN.

 

Have a look at the ABN entitlement section on the Australia Business Register website for further details.

 

:-)

Newbie

Replies 2

Hello,

RE: point 3, Does this mean you need to apply for an ABN before buying camera equipment/expenses? Or can these be purchased first?

 

ATO Community Support

Replies 1

Hi @JCPPhotography,

 

It is not a requirement to purchase equipment for your business after the ABN is granted.

 

You can find information about Claiming a tax deduction for depreciating assets and other capital expenses.

 

You can claim for a deduction on the camera equipment you purchased pre-ABN under Depreciating Assets.

 

Assets can either be ones you already personally own and bring into your business or ones you purchase in your business to produce assessable income.

 

Links

Claiming a tax deduction for depreciating assets and other capital expenses

 

Newbie

Replies 0

thank you