A special note from H&R Block:
It’s great to see that you’re earning more with Airtasker, well done! While it’s good to have a little extra income, it’s important not to spend it all at once and forget about tax. Here at H&R Block we help lots of people who work in the sharing economy and it’s essential to get your taxes right and we’re happy to help.
Do I need to pay tax on my Airtasker income?
Yes you do!
Each year, you probably earn money from a number of sources, of which Airtasker might be one. Others might include income from employment, income from other businesses you run and investment income from things like bank interest, share dividends or rental income from property.
All of this income is taxable.
So, you need to keep a record of all the tasks you do using Airtasker and the amounts you earn from those tasks. That income needs to be disclosed as business income on your tax return. You need to record the gross amount (task price) that customers (Job Posters) 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.
Any expenses which you incur in generating your Airtasker income are deductible.
Here are some examples of what you could be looking to deduct:
- 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 traveling to and from an Airtasker task and between jobs including:
- 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/accountants 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 expenses. If you use your car as part of your Airtasker business, there are two ways to claim a deduction for business use of your car:
- Cents per kilometre:
- Claim 66c per kilometre
- This method is only available for distances up to 5,000km. You can’t use it if you cover more than 5,000 business km’s
- This method incorporates all car expenses including petrol, servicing, depreciation, etc. You can make no further claim
- Your claim is based on the business use percentage of each car expense, which is determined by a log book that must have been kept for a minimum 12 week period.
- This log book must be updated every 5 years.
- You can claim all expenses that relate to the operation of the car, at your percentage of business use, as established from your logbook.
- Deductions cannot be claimed for
- Fines (parking, speeding, etc)
- Clothing other than safety clothing
- Meals, drinks, etc purchased whilst on the job
In order to claim a deduction, you must be able to prove that you spent the money and that the purchase relates to your business, 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?
In your income tax return. This needs to be submitted by 31 October 2016 if you do your tax return yourself. If you use a tax agent like H&R Block, you have an extended period to lodge which could run as late as 15 May 2017.
What if I get it incorrect, wrong or forget?
The ATO has been keeping a closer eye on people earning income from shared economy services like Airtasker, Uber & Airbnb. So it’s essential that you fully and accurately disclose all your Airtasker income (and expenses!). If you don’t, you could find yourself being audited by the ATO. They will charge interest and penalties on any unpaid or underpaid tax.