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Sole Trader Tax
Individual Tax, Realestate, Reconciled Blog, Sole Trader Tax
Rental Income and Expenses
🏠 Rental Income You must declare all income earned from renting out a property, including: What to Include – Rent payments (weekly/monthly)– Bond money retained (e.g. for damages)– Insurance payouts (e.g. loss of rent)– Reimbursement of expenses by the tenant– Booking or service fees (e.g. Airbnb, Stayz)– Government subsidies (e.g. rental assistance)– Lease premiums or lump sum payments– Part-year or short-term rental income 📌 Tip: Even if your property is rented out only for part of the year (e.g. Airbnb), you must apportion income and expenses accordingly. 📄 Rental Expenses You can claim deductions for many expenses related to your rental property. These are categorized as: 1. Immediate Deductions (same income year) – Advertising for tenants– Council rates, water charges– Loan interest– Property agent fees/commissions– Repairs & maintenance (not improvements)– Pest control– Insurance (building, contents, landlord)– Body corporate fees– Cleaning, gardening, and security– Depreciation on assets (under $300 immediate)– Travel for inspection (Note: Limited after July 2017 for individual owners) 2. Depreciable Assets (decline in value) Furniture, appliances, carpet, blinds, hot water systems, etc.Claimed over the effective life 3. Capital Works Deductions Structural improvements (e.g. extensions, renovations)Claimed at 2.5% per year over 40 years 4. Non-Deductible Items – Acquisition costs (e.g. stamp duty, conveyancing)– Borrowing costs over $100 (deductible over 5 years)– Expenses not related to earning rental income 🔍 Common Mistakes – Claiming the full deduction when property is not rented for the full year– Claiming initial repairs (considered capital)– Not apportioning expenses between private and rental use– Forgetting to declare all types of rental income 📅 Record Keeping Keep records for:– Purchase and sale contracts– Loan and interest documents– Receipts for expenses– Tenancy agreements– Property management statements Records must be kept for at least 5 years.
2024 Working From Home Deductions
The ATO has made changes to the way that working from home deductions can be claimedby eligible taxpayers for the 2024 income year. If you have genuinely worked from home at any time from 1 July 2023to 30 June 2024,youmay be eligible to use the ATO’s revised fixed-rate (67 cents per hour) method to claim for: energy expenses (i.e., electricity and gas) for lighting, heating/cooling, and to runelectronic items used for work or business; internet expenses; mobile and home telephone expenses; and stationery and computer consumables (e.g., printing paper and printer cartridges). Under the revised fixed-rate method, a claim for the above running expenses is calculated at a fixed rate of 67 cents for each hour that you worked from home during the 2024 income year. This is an alternative method to claiming for the above running expenses using the actual method, which would require a separate claim for the work/business portion of each expense. Claims for deductible running expenses not covered by the revised fixed-rate method (e.g.,depreciation of a computer used for work or business) can only be made using the actual method. What records do you need to keep when using the ATO’s revised fixed-rate method? You will need to keep some receipts, bills or invoices of the running expenses you haveincurred in order to verify your claim. You need to keep a record of the total number of actual hours worked from home.Thiseffectively means that you will need to make a record (e.g., a diary entry) of thenumber of hours worked from home on each occasion that you worked from home. If you have worked from home during the 2024income year, please contact our office todiscuss your situation further as you are likely to be affected by the above changes, we canprovide templates to assist you with your record keeping.
