One needs to declare all his income in the tax return, irrespective whether it is the one from business, interests, dividends, rent earned on an overseas property, Airbnb, Deliveroo delivering or any other such income.
The common inclination in this regard is to skip it, reason being that it might not amount too much or having to figure it out, you’ve snapped it in the too-hard basket.
Contemplation perhaps would be popping the income from your partner’s lower income return, no matter who’s the owner of the asset. Shouldn’t the lower income earner be one declaring the income since he was organizing everything?
Since it’s up to us that what goes into our tax returns, one may come up with the problem of tax assessment. It’s basically when you are unaware of the rules or you are not friendly with the folks of Tax Office. Perhaps if you don’t play by the rules, they have a truckload of cash to spend on benching credits.
Here, the main contention that would be raised is what things need to be glanced at when it comes to extra income you may have earned during the year.
The Tax Office is inbuilt with data matching program capable of pre filling your tax return with income where the tax file number has been supplied. It basically covers all your interests, dividends and managed fund income. One thing to be conscious of is don’t rely solely on the pre filled data as your only source of income, primarily because if ATO doesn’t have such information now, doesn’t mean they won’t have the same in future.
For the individuals who have, or may be engaged in, providing accommodation services through an online platform during the 2017-2020 income year , it has been announced by the Tax Office that it would be collecting informing regarding sharing economy accommodation , comprising of AIRBNB, Stayz and others. You may gradually expect a ‘please explain’ from the Tax Office if you don’t consider such earned income too much to be worthy of declaring it.
The Tax Office has recently come up with their updated website to aid and advice the taxpayers that where they rent, hire or share their car through a ‘peer to peer’ car-sharing platform. They need to declare all their income earned whether such platform is Car Next Door, Carhood or Drivemycar rentals.
The Tax Office has made another declaration that if the car is owned jointly, then the income must be declared and expenses claimed in proportion to taxpayer’s share of income. For instance, partner A enlists the home on Airbnb, looks all after the styling, greets the guests and does all other running around while partner B does nothing. Now if the property is owned by them together, the income needs to be declared on both partner A and partner B’s returns.
There were times when I used to tell the business’ financials about how much cash I believed was running through their businesses merely by glancing at them. If I could figure it out from a look, so can the Tax office. One may almost guarantee an audit while operating outside the guidelines of ATO as certain benchmarks have been set for businesses by ATO. Furthermore, a team of mini-specialists performs the task of peeking into our social media having the sole role of looking for non-compilers online. They look up for the evidence of boats, fancy holidays , private schooling and other such evidences of lavish lifestyle.
The basic crux is that it is crucial to declare all the income earned in your tax returns and most importantly be aware that in whose name it should be declared in .Seeking a help from the great tax accountant could be a safer option in case you have left income out and you could probably be caught out. It’s a good option than waiting for ‘please explain’ notice from ATO.