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The ATO has outlined the importance of declaring income derived from the sharing economy and personal services as well as tips for simplifying depreciation.
In a tax tips guide for small business, the ATO reminded business owners to ensure they declare all cash and online sales in their tax return, including money they have earned from participating in the sharing economy.
“If for example, you are renting out a room, a car parking space, doing odd jobs such as delivery or cleaning for a fee, or driving passengers for a fare, remember to include this income in your tax return,” the ATO said.
The ATO also reminded self-employed people to declare personal services income also for any personal efforts, skills or expertise; you may be earning personal services income.
“The new personal services income tool will help you work out if your income is personal services income and if special tax rules apply,” said the ATO.
“If the special tax rules apply to your personal services income they can affect the deductions you can claim and how you report your income.”
The ATO also said it there are simplified depreciation rules for small business that have an aggregated turnover of less $2 million.
“One of the simplified depreciation rules is the instant write-off. The instant asset write-off means you can immediately deduct assets bought for your small business, which cost less than $20,000 in the year that you buy and use them, or install them ready for use,” said the ATO.
The ATO also noted the increased instant asset write-off threshold of $20,000 applies from 12 May 2015 to 30 June 2017.
“Besides the instant asset write-off, another important rule to remember is that if the balance of your pool for depreciating assets is less than $20,000, before applying any other depreciation deduction, you will need to immediately deduct the full amount in your tax return,” said the ATO guide.