Tax Time Tips
Tax Time Tips from BMT Tax Depreciation!1. If you have an investment property, make sure you obtain a tax depreciation report.
- There can be thousands of dollars available, which can improve your cash flow
- If you are unsure about the deductions because of the age of the property, speak to someone and ask the question – don’t just assume you won’t be entitled to anything! Depreciation deductions can be found in the majority of properties, regardless of age.
2. When obtaining your report, make sure you use a specialist
- There are a lot of providers of tax depreciation reports in the market place
- Use someone who is a member of the AIQS and has the necessary qualifications and experience to complete your report.
- Don’t sacrifice quality for a cheaper fee – saving $200 on a report might mean you miss out on thousands in the long run.
3. Don’t forget to claim the fee in your tax return
- All fees associated with the preparation of a tax depreciation report are 100% tax deductible.
- Don’t forget to claim the fee! If you have paid for your report before June 30 this year, you will be able to claim it straight back in your 2010/11 tax return!
4. Know the difference between repairs and improvements
- Deductible Repair: Returning items or property to their original state; an exercise in retaining the value of the item or property. Repairs attract an immediate 100% deduction in the yearof expense.
- Improvement: Improving the condition of an item or property beyond that of when it waspurchased. Improvements are capital in nature and as such, must be depreciated overtime.
When completing repairs, they should be carried out when the property is tenanted. The ATO will allow repairs as a deduction only if the property is being used for income producing purposes at that time. However, if tenants have recently moved out and repairs need to be made due to damage caused by those tenants, the repairs will also be allowed as a deduction as the damage occurred when the property was income producing. It is also important to consult your accountant when making a repair claim, as it becomes a 100% immediate deduction.Contact BMT Tax Depreciation is you require any further information on 1300 728 726.
