Question by [ J ] a [ Y ]: What is the advantage of registering a business name over running a “profitable hobby”?
Hi all. I’m seriously contemplating registering an online business (not going into too much detail), but I’m a little put-off by the fact that any income my business earns will increase the Income Tax that I pay, whereas the money made from a “hobby” is tax-free. So again, what would be the advantage of actually registering a business, other than the ability to be able to trade under a “business name”?
I should also mention that I’m in NSW Australia
Answer by djhonda247
I assume you pay taxes in Australia, so registering a business and paying your due taxes is part of being patriotic to your country. If you are doing a hobby and selling the items, it can be considered a business if you are in it for profits. Registering a business will give you a tax ID # and then you can buy products from other companies at wholesale. Tax evasion is probably illegal in Australia like it is here in the USA. Hope this helps.
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