Australians looking to earn some extra money in 2025 could be exposed to an unwanted tax bill, an expert has warned.
Side hustles are gaining popularity as Australians continue to battle the cost of living crisis.
But H&R Block Australia tax communications director Mark Chapman has reminded Australians that any income they receive, even from a side job, is taxable and must be reported on their tax return.
“You might think your sideline is just a hobby, but the ATO would disagree,” Chapman wrote in a column for Yahoo Finance.
‘Especially if you’re leaving paid work, you’re probably used to your employer deducting your taxes directly from your paycheck.
‘But now that you’re in business for yourself, you need to proactively manage your cash flow to set aside money for future tax bills.
“This may seem obvious, but unfortunately not setting aside money to pay taxes is one of the most common mistakes startups make.”
Chapman’s top tip for keeping taxes stress-free was to hire an accountant.
Australians looking to launch a side business in 2025 could face an unwanted tax bill (stocks)
Side jobs are gaining popularity as Australians continue to battle the cost of living crisis.
“Most people find it much less stressful to simply pass all their information to a tax agent and let the agent complete their BAS and tax return, safe in the knowledge that the work done will be accurate and complete,” he said. . .
“An experienced agent will usually be good at spotting those obscure tax deductions you didn’t know you could claim, so they can often be written off several times over.”
Chapman added that if you start a side business, you can claim deductions on any expenses incurred as part of running the business, including internet bills, landline or mobile phone bills and the cost of office furniture.
The expert said Australians would only be able to claim the business-related element when the expenses relate to a combination of commercial and private use.
In March, 6.7 per cent of the workforce or 974,000 people held multiple jobs, according to data from the Australian Bureau of Statistics.
Some of them are turning to jobs on the Airtasker job market to earn extra money.
Baker and single mother Brittany Davidson told Daily Mail Australia she could earn $4,000 a month finding rental properties for wealthy investors, mystery shopping for large corporations and even writing funeral eulogies.