artistcareer.com.au is a joint initiative of the Australia Business Arts Foundation and the National Association for the Visual Arts.
In general, businesses must be able to pass one of five tests to be able to claim business expenses against other forms of income.
The criteria are:
1. you must earn more than $20,000 from the business, or
2. you must make a profit from the business in three out of five years (however small), or
3. you must own plant and equipment for the business worth more than $100,000, or
4. you must own real property devoted to the business worth more than $500,000, or
5. the income from other activities must be less than $40,000.
The appropriateness of the $40,000 cap in criterion 5 is being challenged by the sector, and representations continue to be made to the ATO regarding it, i.e. many in the sector, including NAVA, believe that a cap should not be necessary at all, and the only criterion should be whether the artist is carrying on a business.
