Tax Alert for Uber Drivers – Uber Tax Refund
Uber has become one of the easiest and convenient way to earn extra money for the car owners. It also has made travelling convenient for the Uber customers as it is also much more cheaper and easily accessible for the users.
With income also comes the responsibility to pay the tax to the government, and Uber income is considered as assessable income and if not managed properly or try to hide any of your income, you might end up paying ATO penalty.
There are few things you need to remember if you are an Uber driver and if you want to manage your accounts properly.
- First thing if you are driving an Uber you are yourself a contractor and not working under anyone else, so you need to manage your tax return yourself as ATO is not withholding any taxes for you.
- Any money you earn from Uber, even minimum amount needs to be declared.
- Even if your income is less than $75000, you must be registered for GST and charge GST on all your fares. You can claim GST credit on your work-related purchases.
- Try saving 30 to 40 % of your Uber income especially if you also have another job, because your tax bills are going to be high as your income will increase due to additional income earned from Uber.
- You are also required to prepare a business activity statement and lodge it.
There are some benefits that you can claim to reduce your tax payable. You can claim some expense that you had to bear during your working period. Only the business portion of following can be deducted from your tax.
- As Uber driver ATO considers you as small business owner and self-employed, because of this you get all the benefits that small business gets including 20,000 instant asset write-offs for capital assets which is able until 30 June 2017.
- Cost of becoming the Uber driver like medical bills, training, registration fees can be deducted, but remember if the cost has incurred before your application of being Uber drihen you cannot claim it.
- Insurance, repairs and maintained of car, cleaning, but only the percentage of car you use for your work can be claimed.
- Parking fees, toll fee, safety equipment, cleaning costs can be claimed.
- If you have lodged your tax through agent before, cost of that can also be deducted.
- If maintain different account for maintaining the income of Uber than the charges of than bank account can be claimed under deduction.
- Expenses for mobile phones, internet on phone used to communicate with customers can also be claimed.
- Expenses on Meals, drinks that occurs when you are on your shift cannot be claimed.
To claim deduction there are two type of methods that you can follow:
- In first method, if your car has only travelled for 5000 km then you can claim 66cents per km from 2016 and years before that 65 to 75 c per km. This is the maximum you can claim under this method, other expenses like cleaning, maintenance, depreciation all comes under it.
- Second method is maintaining a log book for 12 weeks showing all the business-related expenses of your car. This log book needs to be updated every 5 years. You can claim and justify your deduction using this logbook.
After reading this you should be able to understand the benefits of Uber drivers while claiming taxes and consequences you face if you don’t.
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