Tips To Minimise Your Tax In The Gig Economy
What you should consider when thinking about tax
We are getting close to the end of financial year and this means you will need to start preparing your returns. It’s not necessary a fun job but everyone has to do it, so best get prepared and make it easy on yourself.
We hope the following information is helpful but please consult a qualified accountant or tax adviser to ensure you get the best advice for your circumstances.
1. One of the first things on-demand workers need to understand is that they are predominately considered independent contractors. This means you will be responsible for your own tax obligations.
2. Are your registered for Goods & Services Tax (GST)? According to the Australian Tax Office (ATO) you must register for GST if your business has turnover of $75,000 or more. This means you will have to get into the habit of lodging BAS statements and pay GST on a regular basis. Please don’t try and avoid this obligation as huge fines and penalties apply.
3. If you drive for Uber you are required to be registered for GST and unfortunately have additional obligations to pay the Uber Service Fee.
4. In some cases, on-demand workers have a full-time employment and work in the gig economy to top up their earnings. Gig earnings will need to be declared on your tax returns
5. There are a range of expenses which can be claim on your tax return but these are not exclusive, so you will need to do some homework in relation to your own circumstances. Also remember, limits apply to how much you can claim.
a. Insurance. You may also be able to claim a deduction insurance held in your superannuation fund.
b. Registration, repairs, and car maintenance if you use your vehicle for work purposes such as a rideshare driver or courier
c. Tools and equipment that helps you earn you income
d. Home office expenses
e. Mobile phones (but make sure you can correctly estimate the work usage)
f. Tax accounting fees if you use a professional service
g. Donations to a recognised charity – make sure you keep the receipts
h. Follow this link to the ATO for information about Deductions you may be able to claim for specific industries and occupations.