Rental Income: What Counts and How to Report It
As a rental property owner, it’s essential to know what counts as rental income for tax purposes. This blog will guide you through the various forms of rental income and related payments you need to include in your tax return.
Declaring Rental Income
What is Rental Income
If you receive an insurance payout to compensate for lost rent, this amount should be included in your rental income. For instance, if your property is damaged and you receive insurance money to cover the lost rent during the repair period, this is considered rental income.
Additional Forms of Rental-Related Income
Keeping Detailed Records
- All rent payments received, including dates and amounts.
- Any goods or services received in lieu of rent, with fair market value estimates.
- Rental bond transactions, including any amounts retained.
- Insurance payouts related to rental income.
- Letting or booking fees charged to tenants.
- Reimbursements or recoupments from tenants for expenses.
Accurately reporting your rental income is crucial for compliance with the Australian Taxation Office (ATO). Failure to report all forms of rental income can lead to penalties and interest charges. It is important to maintain detailed records of all rental-related transactions, including payments received in cash, goods, or services.
At MKG Partners, we understand the importance of both maximising your tax deductions and ensuring compliance with tax regulations. Our team can work with you to review your rental income and ensure that the correct claims are made, maximising your tax savings. Contact us now to see how we can help you with your rental property investments.
