Are you ready for tax season? Read our tax tips to find out.
Tax may be one of life’s certainties but there is plenty you can do to quite legitimately minimise your tax bill, or increase your return!
I don’t know about you, but every dollar I can earn back on my tax return is money that I can reinvest… or use to buy something pretty!
There are lots of costs to buying an investment property, so here are five tips that may help you get a bigger tax return. You just might be surprised how much of your investment property costs may be claimed on tax!
There is still time to pay property-related expenses that could boost your tax deductions for the current financial year. Think about undertaking, and paying for, any repairs that could be completed before 30 June. Check if your landlord’s insurance could be renewed and the premium paid before the end of the financial year.
If you don’t have a property depreciation schedule drafted by a qualified quantity surveyor you could be missing out on valuable depreciation claims, and a bigger return! The tax man doesn’t accept depreciation schedules drafted by a real estate agent – you will need to hire a quantity surveyor but the depreciation benefits can be substantial. Did you know for instance that landlords can claim a portion of the depreciation of common property like lifts or swimming pools?
Start gathering the necessary paperwork for your investment property now. Poor record keeping is like a red flag for the tax man, and investors who don’t maintain good records could find themselves the subject of unwanted tax office attention. Ask your property manager, body corporate and other parties to supply end of financial records as soon as possible after 30 June. In the meantime make a point of maintaining comprehensive records yourself.
Check out the property
It can be worth completing an inspection of the property before the end of the financial year. This will allow you to claim for items that may be broken or in need of an upgrade like stoves or hot water systems. Be careful though – any upgrades to the property may be classed as an improvement rather than a repair, and the cost may need to be depreciated over a number of years.
Partner with an expert
Our tax laws are complex and instead of doing your own tax return it may be worth speaking with your accountant or a professional tax adviser before 30 June, and getting their help when it comes time to lodge your tax return. It’s a great way to discover exactly what you can do to prepare for tax time to maximise your tax deductions and make the most of negative gearing. This expense may also be tax deductible next year!
There are plenty of tax deductions you should be aware of when investing in property.
Do you have an investment property? What else do you do to prepare for tax time?
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