Sorting through piles of receipts to figure out your allowable deductions is never easy. Property investments can be lucrative, but they also come with responsibilities, particularly during tax season. To simplify the sometimes-daunting task of navigating tax deductions, we have compiled a checklist for property investors.
Here are some steps to make this year’s tax season less stressful:
1) Get organised
Make it easier on yourself by starting early and organising all necessary documents like rental income statements, property management reports and insurance information.
Try using digitising tools and apps to streamline the process while keeping in mind that having backup records for digital copies is still recommended by the ATO.
2) Know your allowable deductions
As a property investor, there are numerous tax deductions available. These include advertising costs for tenants, council rates, water bills, maintenance expenses and asset depreciation.
For a comprehensive understanding of allowable tax deductions for property investors, check out the ATO’s Rental Properties 2022 guide.
3) Determine your assessable income
Determining your assessable income is an essential step in managing your finances. This income could come from a variety of sources such as salary and wages, interest from bank accounts, dividends, commissions, pensions, rent, and more. For easy access by your accountant, record all of your assessable income and allowable deductions on a spreadsheet or online tool.
4) Make an appointment with your accountant
Be sure to book an appointment with your accountant well in advance to avoid any disappointment during this busy season. Although you may be tempted to manage your taxes yourself, seeking the help of a professional tax accountant can save significant time and money.
5) Plan for the future and beyond
Now that you’re diving deep into your finances anyway, why not take advantage of the opportunity to plan for the year ahead?
Review financial goals and consider refinancing a mortgage or consolidating debts.
