What you need to know before the October 31 tax deadline

BMT team — Thu, 22 Aug 2024 22:30:10 +0000

If you’re completing your own tax return this year, the deadline for self-lodgement is October 31. With just a couple of months to go, here’s everything you need to know about the October 31 deadline and your tax entitlements. What is the October 31 deadline? The October 31 deadline is only applicable for self-lodge tax returns. The financial year ends on June 30, so this gives you roughly four months to complete and lodge your own tax return. If you’re using a tax agent you have until 15 May 2025 to lodge your tax return. What happens if investors miss the deadline? If you expect to receive a tax refund, you won’t be penalised for lodging your tax return late. Even after October 31, you’ll still be able to self-lodge your tax return via the MyTax website. However, if you owe the tax office money and miss the deadline, you’ll be fined $280 for every 28 days that your tax return is overdue. Even if the deadline has passed, it’s important to lodge as soon as possible. The easiest option to avoid potential penalties is by going through an accountant. Depreciation deductions and self-lodge tax returns Depreciation is one of the most lucrative tax deductions because it’s a non-cash deduction, meaning investors don’t have to spend money to be eligible to claim it. The Australian Taxation Office (ATO) allows owners of any income-producing property to claim depreciation for the building’s structure via capital works deductions and for the plant and equipment assets contained within the property. These deductions reduce taxable income for property investors and therefore reduce tax labilities. Although rare some property investors choose not to seek expert advice and self-assess deductions, putting themselves at risk of using the wrong depreciation rates and classifying items incorrectly. As a result, investors could be missing out on thousands of dollars’ worth of deductions. In residential properties, capital works deductions are claimed at a rate of 2.5 per cent per year for a maximum of forty years, while eligible plant and equipment assets must be depreciated over time using an effective life unique to each asset supplied by the ATO. Quantity surveyors are recognised under Tax Ruling 97/25 as one of the few professionals with the expert knowledge necessary for estimating construction costs for the purposes of calculating property depreciation. A quantity surveyor can assess a property and provide a comprehensive depreciation schedule which outlines depreciation deductions accurately. A tax depreciation schedule can also be used as evidence should the ATO complete an audit of an investor’s claims. Will a tax depreciation schedule increase an investor’s tax refund? A tax depreciation schedule is the best way to ensure you get the biggest tax refund possible. There is no item too small to consider including in a schedule. Low-cost assets and low-value assets all add up to maximise depreciation benefits. If an asset has sufficiently low value, legislation allows it to be written off much faster or even claimed in full immediately. A BMT Tax Depreciation Schedule covers all deductions available over the lifetime of a property (forty years) to ensure you maximise your cash flow. In FY 2023-24, BMT found residential clients an average of over $11,000 in first-year tax deductions. To find out more, Request a Quote or talk to our expert team on 1300 728 726 today.

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Property investors prompted that the tax return deadline is looming

BMT team — Fri, 26 Oct 2018 05:40:16 +0000

While depreciation deductions provide a valuable opportunity for property investors to maximise their cash flow, this could be reduced if you fail to lodge your tax return on time and don’t seek expert advice. A key deadline if you are planning to lodge your 2017/2018 tax return online as a self-assessed claim without the help of an Accountant is the 31st of October. However, by lodging your return online, you could be at risk of missing out on valuable deductions or even put yourself at risk of an Australian Taxation Office (ATO) audit. Property depreciation is a genuine tax deduction that property investors can claim against their income, yet annually, countless Australians miss out on property depreciation. Unlike most tax deductions, property depreciation is a ‘non-cash expense’, meaning you don’t actually need to splash out the cash every year in order to make a claim. However, you do need a valid tax depreciation schedule, which is 100 per cent tax deductible. If you’re preparing your tax return and own an investment property, it’s important to contact a specialist Quantity Surveyor and obtain a comprehensive tax depreciation schedule. Quantity Surveyors are recognised by the ATO as one of a few professionals with the necessary knowledge to calculate construction costs for depreciation purposes. Together with your Accountant, they can provide guidance to steer you on the right path to ensure your claim is correct and you receive the best possible deductions. This also means you’ll have the adequate evidence necessary should the ATO question any of your claims. Legislation changes for property investors As part of the 9th of May 2017 federal budget, the Australian Government proposed changes to rental property depreciation deductions. This has caused some confusion amongst property investors in regard to what can be claimed. It’s important to remember that the change in legislation only affects second hand residential properties. The good news is there has been no change to legislation for capital works (division 43) assets. This means investors can still claim deductions for the irremovable structural elements of a building such as ceilings, foundations, walls, swimming pools, windows and toilets. The changes only apply to plant and equipment (division 40) assets, which includes assets that are not part of the properties structure such as carpets, ovens, dishwashers, blinds and smoke alarms. To read more about the new depreciation legislation and how this applies to a range of property investment scenarios, download BMT Tax Depreciation’s comprehensive white paper document Essential facts: 2017 Budget changes and property depreciation. Self-assessed vs expert assessed schedule It is not uncommon for a property investor to self-assess or estimate costs for their investment property, based on their own judgement, potentially missing out on significant depreciation deductions. A depreciation schedule prepared by a qualified Quantity Surveyor will ensure all depreciation claims are maximised within ATO legislation and that no depreciable assets are overlooked. Following is a real example of a client’s self-assessed depreciation deductions compared to the depreciation deductions identified by a BMT Tax Depreciation expert for an investment property. Example: The client purchased a brand new three bedroom house in an outer Sydney suburb for $689,000. *The depreciation deductions within the example have been calculated using the diminishing value method. In the first full year BMT identified an extra $7,402 in depreciation deductions and an extra $29,612 in deductions in the first five years. When completing a depreciation schedule, BMT Tax Depreciation will inspect the property to ensure no items are missed. The completed schedule can then be shared with your tax agent. For more information on property depreciation and what deductions you can claim from your investment property, visit the residential property depreciation page on the BMT Tax Depreciation website. Alternatively, you can contact the expert team at BMT on 1300 728 726 for obligation free advice.

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» October 31st

What you need to know before the October 31 tax deadline

Property investors prompted that the tax return deadline is looming