Get ready for tax time
Tax time has arrived, and we have put together some practical information to help rental property owners prepare and lodge your tax return this year.
There are helpful resources available for rental property owners to understand what can and cannot be claimed as a deduction, and what income needs to be declared.
Remember three simple steps when preparing your return:
1. Include all the income you receive
This includes income from short term rental arrangements (for example, a holiday home), sharing part of your home, and other rental-related income such as insurance payouts and rental bond money you retain.
2. Get your expenses right
Eligibility – Claim only for expenses incurred for the period your property was rented or when you were actively trying to rent the property on commercial terms.
Timing – Some expenses must be claimed over a number of years.
Apportionment – Apportion your claim where your property was rented out for part of the year or only part of your property was rented out, where you used the property yourself or rented it below market rates. You must also apportion in line with your ownership interest.
3. Keep records to prove it all
You should keep records of both income and expenses relating to your rental property, as well as purchase and sale records.
We understand your tax return can be complex and want to help you get it right this tax time! Visit www.ato.gov.au/rental for some more info
Whether you rent out part of your home or an entire property, make sure that all of your income is included in your tax return.
Rental-related income includes:
rent payments- booking fees you receive
- rental bond money you’re entitled to retain
- some insurance payouts.
Don’t miss out on deductions because of lost receipts or forgotten expenses. Get into the habit of keeping accurate records so you can claim all of the deductions you’re entitled to at tax time.
Some kinds of records include:
- contract of purchase and sale
- proof of all income and expenses
- periods of private use by you, your family, or friends
- loan and refinancing documents
- evidence of steps you took to rent out your property.
Contact us at hello@optimisedaccounting.com.au for our rental spreadsheet that we have created for our clients. It will ensure that nothing is missed this tax time.
