Money made through selling secondhand goods on platforms isn’t something that everyday consumers think about when it comes to their tax return. However, if you’re a heavy user of platforms like Facebook Marketplace and Gumtree, that might need to change.
Speaking to nestegg, CPA Australia’s tax expert, Elinor Kasapidis, acknowledged that “a growing number of Australian taxpayers earn income from the bartering or sharing economies and must include this in their tax return”.
Ms Kasapidis said that the ATO is “well aware” of such side hustles.
According to her, “The ATO matches data from platforms like eBay and Amazon against individuals’ tax returns, looking for inconsistencies. Under its information-gathering powers, the ATO can also request data from online platforms such as Gumtree or Facebook Marketplace.”
“You don’t need to declare income from activities that are little more than hobbies or not intended to make a profit, but you can’t claim a deduction for them either. So, the hundred bucks you earned from selling your designer handbag on Facebook doesn’t need to be reported.”
However, “this starts to change when you begin selling a lot more of them and make a profit”, she said.
“A critical question is whether you’re running a business. Your digital footprint will show if you’re a regular, high-volume user earning income from online selling,” she said.
Ms Kasapidis also noted that while it is legal for those who earn an income from an online marketplace to receive payments in cash, they do need to report it on their tax return.
While Facebook’s most recent quarterly earnings report didn’t break out specific data for their Australian user base, it did reveal that Facebook Marketplace now boasts 1 billion users and 1 million online shops globally.
Facebook CEO Mark Zuckerberg said, “Commerce has been growing on our services for a while, but it has become a lot more important as the pandemic has accelerated a broader shift towards businesses moving online. In the last year, we’ve seen online storefronts stay open even when physical stores closed. And going forward, online commerce will continue to offer an increasingly personalized and convenient experience.”
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