You work for yourself and are loving it! Now you can lodge your tax return yourself too.
Now it’s almost time to lodge your tax return and, as someone in the freelance world, you may be a bit confused on how to do it. Here are six easy tips to help you survive lodging your freelance tax return.
#1. Apply for an ABN if You Haven’t Already
This is something that you have probably already done. If not, then this should not be delayed any longer. An Australian Business Number identifies you as a business to your community and government. Without an ABN, you may face a few disadvantages, including:
- almost 50% of your earnings being deducted by the ATO to cover taxes, and
- being ineligible to claim any deductions on your tax return this year
#2. Register for GST in Order to Claim Deductions (IF you NEED to…)
The GST is a 10% tax added onto most sales of your goods and services. If you earn more than $75,000 for your business in a 12-month period, you should register for the goods and services tax (GST). You are responsible for keeping an eye on your earnings. You have 21 days to register once you have hit the threshold mark.
#3. Look into Deductions You Can Claim
As a freelancer, chances are you have a rough idea about the expenses you could incur. Depending on your line of work though, you may rack up expenses that just seem to outweigh your profit altogether. As long as you’ve followed #1 and #2 above, you can definitely report some of these costs on your tax return and put some of that hard earned (and spent) cash back in your wallet. Just to name a few that may apply to you:
- home office expenses
- travel expenses
- sun protection
- tax preparation fees
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