If you’ve got a personal loan you might be wondering if there’s anything you need to know when you start to do (or think about doing) your annual tax returns next month.
The best person to ask is, of course, your accountant, but here’s what you might need to consider:
Does my loan count as income?
In short, probably not. This means you wouldn’t need to pay income tax.
Can I claim any money back from my personal loan?
It depends on the purpose of your loan. If you have used a personal loan to invest in shares or other assets, you may be able to claim a deduction on the interest you’ve paid. Check out the ATO’s guide here. In most other cases you won’t be able to claim any money.
What else do I need to know?
A lot! There are excellent resources online to manage your tax or if you need to, see a tax advisor.
We like Money Magazine’s piece on the Australian Taxation Office’s hit list for this year.
Here are three things that we think you should be aware of.
DIY tax: The Government’s MyTax website is designed for those without complicated tax situations. If you have any queries, seek expert advice, but if you’re confident, here’s the Government’s explainer of how to use MyTax.
Tax bill shock: Each year many Australians suffer tax bill shock. With more and more of us doing things on the side to earn money like driving for Uber, renting out a room for Airbnb or chores through Airtasker it’s worth considering what any extra income means come June 30.
MoneyPlace helps people every year who are stung with a tax bill they can’t afford to pay off immediately.
Tax deadlines: If doing tax yourself, lodge your tax return by 31 October to avoid penalties.
If you are using a registered tax agent (like an accountant) you may be able to lodge your return later penalty free, but the Government recommends contacting your adviser before October 31.
Disclaimer: This article has been prepared for informational purposes only. The information in this article is general in nature and has not been prepared with your personal circumstances in mind, so please consider if any advice is appropriate to you before making any financial or taxation decisions.
Money Place AFSL Ltd ACN 601 061 438 holds Australian Financial Services Licence 466327 and Australian Credit Licence 466327.