As end of financial year (or EOFY) is fast-approaching, investors can prepare by getting one step of the tax man!
Investors and landlords are currently under the spotlight from the Australia Tax Office, meaning they need to take precautions to ensure they are doing everything by the book and not cutting any corners at tax time.
Being an investor, your financial return on your property investment should be represented as accurately as possible to ensure you are making the most out of your investment.
Here are 5 tips to consider as an investor at tax time:
1. Make sure you have a good accountant on your side
An Accountant can give investors clarity on each aspect of tax to take the pressure off during end of financial year. An Accountant will ensure that your return is always maximised and provide professional advice on what can and can't be claimed.
2. Keep everything together!
It sounds quite basic but keeping all tax-related documents in the one place rather than scattered around the place, will elevate any extra stress at this already stressful time!
3. Know your landlord's insurance inside-out
You may be able to claim your landlord's insurance, so it's always important to double check this on your premium, which will outline whether this can be claimed at tax time as a deduction.
4. Repairs vs. Improvements?
It's paramount to know the difference between a “repair” and an “improvement” when you are an investor as it will result in saving money at tax time. A repair can be entirely claimed as an expensive if it is a 'one-off' fix. Whereas, an improvement is classified as a 'capital expense', which only allows a small amount of the expense to be claimed. This is also where a good Accountant comes in as they are able to differentiate between repairs and improvements.
5. Don't underclaim!
If you are able to make a claim, claim! Don't let claims pass you by, as you are entitled to this money! Some of these rebates can be quite significant, and can improve your ROI. Other expenses that can be claimed include running costs, council rates and land taxes so be sure to look into these expenses additionally.
If you need some independent advice on growing your portfolio or finding an investment property, please call Peter today on 0419 200 018 or (+61)2 9960 1066.