YouTube, how does it impact my Tax?
Have you ever wanted to be like one of the many YouTube sensations that become seemingly rich over night? Just remember that any income you receive as a result of your success may be considered as income if the Australian Taxation Office (ATO) determines you are carrying on a business. While your posting of YouTube videos may have started off as a hobby, there is a chance that it may have crossed a line and become a business.
How is being a YouTube star Going to effect your income tax?
A relatively new means of generating an income for many individuals is through the uploading of videos on YouTube. The video sharing website allows individuals who post original content to elect to have advertising run across their videos. Allowing the advertising entitles the individual to a portion of the advertising revenue. Revenue is split between YouTube and the account holder on a 45/55 split. You are only required to declare your YouTube income if you are considered to be operating a business.
Hobby or Business
You may be unsure as to whether creating your YouTube videos has gone from being a hobby or crossed the line to being a business. A hobby is seen as a spare time activity or past time pursued for pleasure or recreation, while a business differs in the sense that it is run with the intention of making a profit and consequently has a basic reporting obligation to declare income and claim expenses.
If you are creating YouTube videos as a hobby you are not required to declare any amount you make to the ATO. Consequently any expenses you incur as a result of producing your video are not eligible for deduction.
Special Tax Rate for ‘Special Professionals’
A recent case was important for YouTube up loaders in many respects. The ATO made reference to film being seen as an aggregation of images and sounds embodied in any material. In their decision the ATO considered that the definition of a film was broad enough to include YouTube videos.
As the ATO considered YouTube videos as a film, individuals who generated revenue via YouTube fall under the category of special professionals as performing artists and production associates for tax purposes. This ruling may prove to be beneficial for YouTube performers who may be concerned that their success may be short lived or that their earnings will fluctuate significantly from year to year.
If you have received income as a result of uploading videos on YouTube or you are unsure if you should be declaring your income contact us here at the Quinn Group on (02) 9223 9166 or submit an online enquiry form today . Our team of accountants and lawyers will be able to assist with all your YouTube related tax concerns.