Australian Artists – Hobby Vs Business Highland Accounting Services

Australian Artists – Hobby Vs Business Highland Accounting Services

I recently Googled to see what was out there on the subject, and was shocked at what I found. There seemed to be a lot of information, but many of the facts are so often lost in the stories told.

Lets dispell a myth first: there is no dollar threshold that constitutes being in business as an artist.
(e.g at $5,999 its a hobby and at $6,000 you are conducting a business)

So how do you determine that you are conducting a business?

The following indicators must be considered when determining whether you are carrying on a business;

Whether the activity has a significant commercial purpose or character; this indicator comprises many aspects of the other indicators;
An amatuer will undertake their activities for personal pleasure, a professional on the other hand will use their abilities towards a commercail end.
Whether the artist has more than just an intention to engage in business;
If it is your intention to carry on a business, do the following apply?
Regular activity, systematic, organised, business like approach to the activity, attempts to bring the art work or services to the public, actual sales of art work or services to the public and so on.
Whether the artist has a purpose of profit as well as a prospect of profit from the activity;
Is your motive to make a profit? Are you marketing your art, creating industry contacts, offering and selling your work to the public, doing commissions and consulting, publically exhibiting your art, entering competitions and building your reputation?
Even if you are doing all of these and no profit is made, that doesn’t exclude your motives.
Whether there is repetition and regularity of the activity;
As the artist are you producing regular work and participating in regular activities to promote and enhance your standing as an artist?
Whether the activity is of the same kind and carried on in a similar manner to that of the ordinary trade in that line of business;
Are you carrying on your business like a recognised industry peer, do you have qualifications, recieve public recognition, becoming eligible for Government Grants, been offered positions on a board or as a teacher?
Whether the activity is planned, organised and carried on in a business like manner such that it is directed at making a profit;
As an artist, do you keep good records of income and expenses, use contracts to record agreements, use business professionals, have a business plan, rent exibition space?
The size, scale and permanency of the activity.
The activity must be beyond your personal needs and the volume of output must be sufficient enough to provide your work to the relevant markets.
So if you are in the business of being an artist you would be attempting to build public recognition, and awareness of your work, find suitable markets to sell your work so you can gain a profit from your abilities.

On the other hand if you are creating art for your pleasure and the sales that are made are to family and friends. The costs involved far outweight any income received and there is no intent to make a profit, then your creative work is considered a hobby.

I have attached a link to taxation ruling TR 2005/1, it contains about 45 pages of reading, with examples and cases.

Oil Addiction | Geoff's Blog - Day to day happenings.

Oil Addiction

The dictionary meaning of Addiction:

Habitual psychological and physiological dependence on a substance or practice beyond one’s voluntary control.

Do we have that habitual dependence, both psychological and physiological on oil. YES

I am going to run you through a typical morning routine just to demonstrate how dependent we are on oil and the products made from oil. The alarm sounds, wake up and get out of bed, have breakfast and enjoy a cup of coffee. Shower, wash hair, shave, brush teeth, get dressed for work, jump in the car and head to work. I am guessing this is a fairly typical morning for most.

For most I will go through the list of products that are oil based that we encounter during the morning ritual. That blasted digital alarm, mattress, pillows, bed clothes and furniture.
Making breakfast there will be utensils, fridges, containers, cabinets and bench tops. Sitting down having breakfast it could be your chair, table, placemats.
Into the bathroom and there is the sink, bath, towels, toothbrushes, tooth paste, shaving cream (I am a male, worse for females with cosmetics), shampoo, soap, body wash and razors.

As you can see just in that morning ritual we have used a copious amounts of oil products. Just recently we have watched 92 Million Gallons (348 Million Litres) of oil spew into the Gulf of Mexico, a huge environmental disaster. We need to feel anger at BP for letting one of the worlds worst oil spills happen.

Unfortunately BP are supplying the world a product for which there is a colossal demand, I would be surprised if a single human could live a day without using directly or indirectly a product which has been made from oil.

If you were saddened by the effects of the Gulf Oil Spill, don’t just blame BP, take time and examine your own contribution to the Gulf Oil Spill. We all know what we should do,javascript:void(0) but are we being accountable for our own actions?