Just so you know, this information applies within Australia ONLY.
A special note from H&R Block:
It’s great to see that you’re earning more with Airtasker, well done! While having a little extra income is good, it’s important not to spend it all at once and forget about taxes. Here at H&R Block, we help lots of people who work in the sharing economy. It’s essential to get your taxes right and we’re happy to help.
Here you will find the answers to the below questions:
- Do I need to pay tax on my Airtasker income?
- Can I claim any deductions against my Airtasker income?
- So I have income and deductions. What's next?
- How do I report all of this?
- What if I get it incorrect, wrong or forget?
Do I need to pay tax on my Airtasker income?
Yes, you do!
If you’re earning an income from providing services through Airtasker then you need to pay tax on that income.
You’ll need to keep an accurate record of all your Airtasker activities and the amounts you earn from those tasks and disclose it as business income on your tax return. Remember to record the gross amount (task price) that customers pay you, not the net amount you receive after the Service Fee is removed.
Can I claim any deductions against my Airtasker income?
The good news is, yes you can.
You can claim deductions on your Airtasker income; any expenses you incur in your Airtasker earnings are tax deductible.
Deductions can also be claimed for the business use proportion of the following:
- You can claim an instant tax deduction for all capital assets acquired for use in your business with a cost of $20,000 or less. This relief is available until 30 June 2017. This is great for purchasing items like computers, phones, tablets, tools and even some motor vehicles.
- Deductions can be claimed for the business use proportion of the following:
- Commissions or fees paid to Airtasker e.g. the Service Fee
- Costs of travelling to and from an Airtasker task and between jobs include:
- Public Transport
- Flights and accommodation if the job is interstate
- Mobile phone bills
- Safety equipment (such as hi-vis vests)
- Work-related clothing such as overalls and work boots
- Sunglasses if you work outside
- Tax agent/accountant fee
- Bank fees (if you maintain a separate account for your business)
- Costs of running a home office if your business is operated from home
- Car Specific Expenses. If you use your car as part of your Airtasker pursuits, you can claim a deduction for the business use of your car in one of two ways:
- Cents per kilometre
- Use this method if you travel less than 5,000 business km. If this applies to you, you can claim 72c per kilometre.
- Use this method to claim based on the business use percentage of each car expense. These costs are determined by a logbook that must have been kept for a minimum 12-week period and updated every 5 years.
- Deductions cannot be claimed for the following:
- Fines (parking, speeding, etc)
- Clothing other than safety clothing
- Meals, drinks, etc purchased whilst on the job
For each deduction, you must prove that all expenses are business-related, so remember to keep invoices, receipts, bank statements and logbooks.
So I have income and deductions. What’s next?
If your income exceeds your expenses, the surplus is added to your other taxable income and you pay tax on it.
If your expenses exceed your income, the loss is available to offset against your other taxable income. If you have no other taxable income, the loss is carried forward.
How do I report all this?
Detail your relevant income in your tax return, which, if you’re completing your own, needs to be submitted by 31 October. If you decide to use a tax agent like H&R Block, you’ll have an extended period to lodge which could run as late as 15 May the following year.
What if I get it incorrect, wrong or forget?
The ATO has been keeping a close eye on people earning income from shared economy services like those listed above. With this in mind, it’s essential to accurately disclose all your income and expenses earned through sharing economy platforms. If you don’t, you could face an ATO audit and be liable for interest and penalties on any unpaid or underpaid tax.
Disclaimer: Airtasker is not authorised to give taxation advice. Contact a tax professional for advice on your own individual tax obligations.