The Australian Taxation Office (ATO) has people earning money from the sharing economy on its watch list this year and will pay special attention to people claiming deductions for sharing expenses.
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The ATO is cracking down on those who earn income through Uber, Airbnb and Airtasker or who claim they have expenses due to using their car for ride sharing or renting out a spare room in their house.
The ATO’s systems can flag claims that are unusual relative to people with similar jobs and income level or excessive claims in regards to your vocation.
A spokesman for the ATO said that you need receipts for your claims and you need some actual evidence showing the work-related use of your car, phone or home.
“If you use your own phone(s) or internet for work purposes, you may be able to claim a deduction if you paid for these costs and have records to support your claims,” he said.
“However, if you use your phone(s) or internet for both work and private use, you will need to work out the percentage that reasonably relates to your work use, the same with your car.”
Tax expert Simone Gielis said people should not be tempted to hide their earnings.
Whether you rent a room out or use Uber to earn a bit of extra cash on the side or as your primary source of income, it all must be declared on your tax return,” she said.
“Don’t spend all the money, some people are tempted if they rent out a room to use the extra money to pay their mortgage or if they use Uber to use the money as a freebie toward paying off your car.”
Ms Gielis said if you are renting out a room or apartment, you can claim expenses and depreciation for the percentage of your house that was rented, for the duration someone was paying.
“This includes things like internet and phone costs, utility and council rates and deprecation of furniture,” she said.
“Ridesharing drivers can claim work-related expenses including insurance and registration costs, car maintenance and repairs and even car cleaning costs.
“Remember, in the ATO’s eyes, it’s up to you to know your tax obligations, so just ask a professional tax agent if you’re not sure.”
The Glen Innes Examiner advises that these tips are of a general nature only. Individuals who want to maximise the claimable deductions on their personal income tax return should speak to a qualified tax accountant to get advice on the tax breaks relevant to their situation.