3 timely tax tips for investors.

When you’re thinking about investing you mightn’t always be thinking about tax – but it should not be forgotten. Here are 3 timely tips from the Australian Taxation Office (ATO) to help make it easier for Aussie investors to prepare their tax.

1. Rental properties

If you’re thinking of investing in a rental property or already have one, here’s 2 things you can do to prepare for tax time.

1. Declare all income from rent, retained bond money and insurance payouts.
2. Keep good records to ensure you claim all deductions you’re entitled to. When claiming deductions, remember:
   • You can claim interest paid on a rental property loan in the year it’s paid. But if you’ve increased the loan and used funds for personal expenses (like a new car), the loan is now ‘mixed’ and the interest claimed needs to be apportioned for the life of the loan.
   • It’s important to understand the difference between repairs and capital expenses. Repairs and maintenance can be claimed in the year they’re paid. Capital expenses, like depreciating assets and structural updates, need to be claimed over several years.

2. Shares, ETFs and crypto

If you’re holding shares, exchange traded funds (ETFs) or crypto, you need to correctly report your income or credits from these investments. To help, make sure you:

• convert all crypto amounts into Australian dollars when declaring income from staking rewards and airdrops
• declare all dividend and distribution income from shares and ETFs on your tax return even if you reinvest it
• check your pre-filled tax return and statements to correctly claim franking credits from shares and ETFs (not all investment info gets pre-filled on your tax return, so check for any missing or incorrect details and fix them up before submitting it).

3. Capital gains tax 

When you sell investments such as shares, crypto, managed investments and rental properties, capital gains tax (CGT) may apply.

Even if your investments haven’t performed as you had hoped, keeping detailed up-to-date records will help you calculate and report any capital gains or losses in your tax return.

Tip: use capital losses to reduce gains

You can use capital losses to reduce any capital gains you make in the current financial year or future years. Ask your tax adviser for more details.

Check out the investor toolkit

This is a summary only, so for more practical advice and examples to help with reporting your investment income, check out the ATO’s tax time toolkit for investors.