What is Depreciation and How Can I Claim it On My Taxes?
In Australia, individuals receive the opportunity to claim depreciation on their taxes. The Australian Tax Office provides a set of rules for the process. Companies receive tax breaks and incentives, such as depreciation. The financial incentives encourage business entities to re-invest a portion of their profits. Real estate professionals and investors fall into this category too.
Depreciation and taxes go hand in hand for real estate professionals. Depreciation is the decrease of an asset’s value as it ages. For example, carpet is an investment that decreases in value as it ages. Every time a tenant moves out of a multi-unit complex, property managers replace it. The decrease in the carpet’s value is depreciation you can claim on your taxes.
Adopting tax software helps real estate investors keep track of their depreciating assets. When tax time rolls around, the software links with your accounting software.
Otherwise, to claim depreciation on your taxes, keep meticulous paper records. In case of an audit, it’s important to produce the documentation. Another option is to pass the information to your tax accountant, who handles the details.
To claim Depreciation, fill out the appropriate ATO forms. Entrepreneurs and company representatives know that their tax returns are several pages long.
Depreciation and Taxes Conclusion
To maximise depreciation and taxes in Australia, it’s a good idea to consult with an accounting professional. The rules are straightforward, but special cases always exist. In terms of your financial products, such as a business loan through Mortgage House, our loan specialists provide the necessary paperwork.