Rental income for Tax Purposes

If you have investment property which is more than once, the rental income from investment property is considered as assessable taxable income. Which means that you must pay tax to Australian Taxation Office (ATO). The tax is counted as the marginal tax rate.  So you must disclose the rental income and need to pay tax when you do a tax return.    

There is a certain income threshold for tax break. If your income is $18,200 or below, you no need to pay tax to ATO. On the other hand, if your income is more than $37,000, you need to pay 19 cents for every single dollar. The rate will change for higher income.   

For Example, Ray has income $80,000 annually and has rental income $20,000. So we can add up ($80,000 + $20,000 =$100,000 before tax). Let’s assume that there were no changes and Ray will pay $24,497 in tax for 2020-21. This is because Ray’s income fell in the $90,001 to $180,000 group and taxed is around $20,797 plus 37 cents for every single dollar.                  

You have to disclose all sources of income in your return. This is because this income is considered as taxable income and you need to pay tax. If you have disposed of the property and made gain that you need to disclose in your return. In addition, if you earn dividend and interest from shares that you need to include in your return. The interest that you earned from a savings account or term deposit from your bank.

It does not matter how much you earn for a particular financial year, but accountants also consider deduction according to your rental income.