Author Topic: Tax for Australians. (Read 5220 times)

crazychristina · « **on:** February 10, 2013, 01:21 »

I know this question has come up before but I've never been able to quite get my head around how to proceed. I live in Australia. I'm a hobbyist who makes a loss on my photography and my turnover is less than $20,000. The Australian Tax Office doesn't want me claiming my hobby losses against my main income so at the moment I don't declare my stock income/losses and everyone's happy.

I'm currently an istock exclusive and they don't issue any forms, don't withhold any tax, and all is simple. However if I go indie I need to deal with SS (and others). They withhold 30% and issue forms and put me in a position I don't want (or need to be in) - dealing with tax as a business when I the ATO would rather I don't. The advice I've seen involves sending my passport off to the US or something and I really don't want to do that.

Are there any Australians here who have found a sensible solution to this state of affairs?

Poncke · « **Reply #1 on:** February 10, 2013, 01:28 »

http://submit.shutterstock.com/forum/viewtopic.php?t=62469

crazychristina · « **Reply #2 on:** February 10, 2013, 01:47 »

Thanks for that. I might just stay where I am. Pity they don't like my renders.

Poncke · « **Reply #3 on:** February 10, 2013, 02:10 »

I know a few shooters from Australia are active on the SS forum, post your question here and someone might give you a better answer.

http://submit.shutterstock.com/forum/viewforum.php?f=8

leaf · « **Reply #4 on:** February 10, 2013, 08:56 »

Quote from: crazychristina on February 10, 2013, 01:21

I know this question has come up before but I've never been able to quite get my head around how to proceed. I live in Australia. I'm a hobbyist who makes a loss on my photography and my turnover is less than $20,000. The Australian Tax Office doesn't want me claiming my hobby losses against my main income so at the moment I don't declare my stock income/losses and everyone's happy.

I'm currently an istock exclusive and they don't issue any forms, don't withhold any tax, and all is simple. However if I go indie I need to deal with SS (and others). They withhold 30% and issue forms and put me in a position I don't want (or need to be in) - dealing with tax as a business when I the ATO would rather I don't. The advice I've seen involves sending my passport off to the US or something and I really don't want to do that.

Are there any Australians here who have found a sensible solution to this state of affairs?

Really does Australia not have a tax agreement with the US to put you in the 0% bracket?

ShadySue · « **Reply #5 on:** February 10, 2013, 09:35 »

Don't know if this is of any help:
http://www.irs.gov/Businesses/International-Businesses/Australia-Tax-Treaty-Documents
or maybe this:
http://www.microstockgroup.com/shutterstock-com/tax-thing-for-non-us-contributors

Phil · « **Reply #6 on:** February 10, 2013, 15:05 »

Hi,

You dont have to physically post anything for the tax side of things. Only 3dstudio require an itin number (so I haven't joined them) all the others you only fill out the form and submit electronically leaving the itin blank. After each site got it sorted that we dont need the itin number it was reasonably basic and painless.
Withholding then goes to 5%.

SS, DT, DP, maybe one or two others send me tax statements, which I promptly file and ignore

I use etax and nothing from stock comes up for auto fill. I keep records of expenditure etc anyway just in case I ever have to prove being a hobby (my accountant said dont worry until over $50000?)

Photodune payout says are you australian for tax and I put 'no' in the thinking of being a hobby (dont know if thats a good idea, but its what I do)

gillian vann · « **Reply #7 on:** February 10, 2013, 18:38 »

Quote from: leaf on February 10, 2013, 08:56

Quote from: crazychristina on February 10, 2013, 01:21
I know this question has come up before but I've never been able to quite get my head around how to proceed. I live in Australia. I'm a hobbyist who makes a loss on my photography and my turnover is less than $20,000. The Australian Tax Office doesn't want me claiming my hobby losses against my main income so at the moment I don't declare my stock income/losses and everyone's happy.

I'm currently an istock exclusive and they don't issue any forms, don't withhold any tax, and all is simple. However if I go indie I need to deal with SS (and others). They withhold 30% and issue forms and put me in a position I don't want (or need to be in) - dealing with tax as a business when I the ATO would rather I don't. The advice I've seen involves sending my passport off to the US or something and I really don't want to do that.

Are there any Australians here who have found a sensible solution to this state of affairs?

Really does Australia not have a tax agreement with the US to put you in the 0% bracket?

yes it does, or something very small anyway, not 30%. there's some form I filled in with all of them, sent over a scan of ID and it's all good.

markrhiggins · « **Reply #8 on:** February 11, 2013, 01:36 »

I am also in Australia. SS tax is 5% on sales from the US. All other sales o%.

Personally I feel empathy and sympathy for what is happening to contributors on IS. I stopped (for quite a while ago ) uploading there but I think it would be better if all exclusives stayed there. Do not go to SS. I think the exclusive contract should take at least two years to terminate. Maybe I can suggest it on IS forums (I haven't been banned) lol.

qwerty · « **Reply #9 on:** February 11, 2013, 01:49 »

5% tax treaty with the US.

definitely keep some records to prove that your operating as a hobby.

A figure of $50k quoted by someone umm I'd make sure I had some good records to defend that one.

km's are a good thing to show the costs associated with microstock

crazychristina · « **Reply #10 on:** February 11, 2013, 01:56 »

I'd probably stay with IS (after having deleted my more sensitive images) but for the fact that I really want to move ahead with 3D renders and they're rejecting just about everything I send them. I've been told that other sites are a bit more accepting of 3D work, and they do sell. Seems like the tax situation is manageable - thanks for advice people. I've got a few more renders in the queue and I'm anticipating giving them notice very soon.

ETA: Done.

Phil · « **Reply #11 on:** February 11, 2013, 02:10 »

Quote from: qwerty on February 11, 2013, 01:49

5% tax treaty with the US.

definitely keep some records to prove that your operating as a hobby.

A figure of $50k quoted by someone umm I'd make sure I had some good records to defend that one.

km's are a good thing to show the costs associated with microstock

yes, I travel a lot but I'm dubious of the $50k too, dont know what other people have been told. I haven't reached that much, but when I also spoke to her about it I was buying a lot of gear, which I dont do anymore.

markrhiggins · « **Reply #12 on:** February 11, 2013, 06:16 »

In Australia you have to have an ABN (Australian Business Number) and charge 10% GST on sales (in Australia) if over $50,000 income. Less than that you do not have to charge GST but you still have to pay tax. The hobby thing is anything you have not made money on. As a book author I know you can not claim expenses on writing a book until you prove you will make revenue . Lots of stock photographers could claim a loss but as a hobby tough luck. Images of world travels would be extremely problematic to tax (consider the expenses inherent in taking them if it not a hobby).

audiogate · « **Reply #13 on:** February 11, 2013, 20:58 »

$15,000 income in a year (in one year in the past 3) are the earnings you need to make to claim losses (or have assessts over $50k but I think that has gone up too). It has changed over the years to make it harder and harder to claim losses (I think it's the ebay seller situation that has changed this).

Mars · « **Reply #14 on:** February 12, 2013, 01:35 »

Quote from: markrhiggins on February 11, 2013, 06:16

In Australia you have to have an ABN (Australian Business Number) and charge 10% GST on sales (in Australia) if over $50,000 income. Less than that you do not have to charge GST but you still have to pay tax. The hobby thing is anything you have not made money on. As a book author I know you can not claim expenses on writing a book until you prove you will make revenue . Lots of stock photographers could claim a loss but as a hobby tough luck. Images of world travels would be extremely problematic to tax (consider the expenses inherent in taking them if it not a hobby).

You pay GST if your turnover is over $75K and there's no GST on royalties.

Mars · « **Reply #15 on:** February 12, 2013, 01:39 »

Quote from: Phil on February 11, 2013, 02:10

Quote from: qwerty on February 11, 2013, 01:49
5% tax treaty with the US.

definitely keep some records to prove that your operating as a hobby.

A figure of $50k quoted by someone umm I'd make sure I had some good records to defend that one.

km's are a good thing to show the costs associated with microstock

yes, I travel a lot but I'm dubious of the $50k too, dont know what other people have been told. I haven't reached that much, but when I also spoke to her about it I was buying a lot of gear, which I dont do anymore.

I would get a new tax accountant if I were you. He doesn't seem to know what he's talking about. If you're making any sort of profit you may be deemed a business rather than a hobby and would have to pay tax.

To determine if you're a hobby or business, you have to ask yourself these:

Quote

Does your activity have a significant commercial purpose or character?
Do you have more than just an intention to engage in business?
Do you have a purpose of profit as well as a prospect of profit?
Is there repetition and regularity to your activity?
Is your activity carried on in a similar manner to other businesses in your industry?
Is your activity planned, organised and carried on in a business-like manner?
Does your activity have characteristics of size, scale and permanency?
Would it be true to say your activity is really better described as a business, rather than a hobby, recreation or sporting activity?

http://www.ato.gov.au/content/66884.htm

If you're a business, you would have to register as one and fill out an income tax return, even if your income is less than the tax free threshold ($18,000 this year... jumped from $6000 last year - thanks to Gillard).

qwerty · « **Reply #16 on:** February 15, 2013, 03:43 »

You can operate as a sole trader without forming a business.

Mars · « **Reply #17 on:** February 15, 2013, 04:08 »

Quote from: qwerty on February 15, 2013, 03:43

You can operate as a sole trader without forming a business.

A sole trader is a business.

qwerty · « **Reply #18 on:** February 15, 2013, 04:29 »

Quote from: qwerty on February 15, 2013, 03:43

You can operate as a sole trader without forming a business.

Ok I'm not a tax agent or anything. Sorry if I have mixed terms.

What I meant by not forming "a business" I think I should have said "forming an incorporated company"

My point was that you can operate as a sole trader without registering for GST or obtaining a ABN and report the income on your personal income return.

From ATO website.
"Reporting and paying income tax
As a sole trader, you need to report the business
income you earn (after expenses) on your personal
income tax return, along with any other income
you earn."

Phil · « **Reply #19 on:** February 15, 2013, 05:51 »

At the time (about 5 years ago) I was spending a lot on gear and travelling a lot and it was some quick calculations over dinner.

What I had got from the tax office a year or so before was them saying that it boils down to when do I expect to make a profit? if there was no foreseeable time when I would be making a ongoing profit, then it would be ruled a hobby. If it was expected that I would make a profit on a regular basis then it was a hobby. They gave an example of a melbourne race horse owner had made a couple of hundred thousand dollars one year and was still a hobby. He'd had a good / lucky year, it was expected that after that year he would be back to 'making a loss' and was still considered a hobby.

Yes I am due to check it all out again.

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Author Topic: Tax for Australians. (Read 5220 times)

crazychristina

Poncke

crazychristina

Poncke

leaf

ShadySue

Phil

gillian vann

markrhiggins

qwerty

crazychristina

Phil

markrhiggins

audiogate

Mars

Mars

qwerty

Mars

qwerty

Phil

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