How Do I Get Prepared For Tax Time?
5 Simple Tips To Getting Ready For Tax Time
Owning an investment property is an excellent opportunity to take advantage of tax benefits. We are heading towards Tax time, and it pays to be organized. We have put together 5 top tips to assist you with preparing for Tax time this year.
1. Understand what you can claim.
The easiest way to maximize your tax refund is to have an understanding what is a deductible expense and what isn’t. The most important thing you need to do is to keep a clear and concise record of these. If a property management specialist manages your property, then they will be able to provide you with a complete end of financial year report for your accountant. However, if you are paying for items directly, you will need to ensure your records and receipts are in order. The most important tip that we can give you is to make sure you have an accountant.
2. What can you claim?
- Council and Water rates
- Strata levies
- Real Estate fee’s
- Bank fees
- Borrowed costs
- Repairs and Maintenance
- Interest on loans
- Depreciation and Special building write off
- Travel expenses
- Renovations or improvements you have made to the property
- Land Tax
*Some of these items are not eligible for outright tax deduction but may be depreciated over a period. We always suggest seeking financial advice before making any claims.
3. Be organised
Your accountant should be able to provide you with a checklist and if they do it will enable you to prepare and deliver your information in an orderly way. If you only provide a folder full of receipts, then deductions will be missed. If you don’t have a checklist, then the easiest way to get organized is to sort your documentation into categories.
4. What is a Tax Deprecation schedule? And why do you need one?
Depreciation is the natural wear and tear that occurs to a building and the asset within it over time. A depreciation schedule is required to maximize the depreciation claims available and substantiate these claims in a tax return.
5. What do I do when my tax return is finalised?
Make sure you check your tax return before signing it! Take the time to read through it and ensure you have claimed everything you can.