A simple guide to getting your Airtasker taxes right
Airtasker has changed the way many people earn an income. Whether you’re already doing tasks or you’re ready to get started, there are some important tax implications you need to know. The big message here is, don’t be duped into thinking you can squirrel away that extra income without paying any tax on it. And don’t just go spend it!
Airtasker tax evasion is “on the radar” over at the ATO. They take this seriously – it’s an ATO priority in 2019 to make sure people in the gig economy are paying all the tax they should. Sometimes that might even mean people pay more tax than they had to, unusually from bad record-keeping and not understanding the tax system. Don’t let that happen to you – keep receipts and records (explained below) and think about using a tax agent like Etax to help get the refund you deserve.
Let’s cover a few common questions about tax obligations for Airtasker earnings so you don’t find yourself in hot water.
Airtasker tax FAQs
Do I need to tell the ATO about money I get from Airtasker, even if I only do a couple of gigs?
Yes! You need to declare all your Airtasker earnings, even if you only make a few dollars here and there. The ATO considers cash from Airtasker as income just like the wages you get from your employer or any other freelance work you do.
Remember, all tasks and payments are recorded by Airtasker and the ATO can get those records!
How do I keep track of my Airtasker taxes?
It can be easy to lose track of what tasks you did, especially if you have other jobs and income across the year.
To stay on top of your Airtasker taxes, record the details of each task as soon as possible.
Use a spreadsheet, some form of accounting software or even just a text list on your computer, and record when you did each task, what you did and how much you were paid to do it. That way you can quickly see how much you earned from Airtasker each year.
Also, consider getting a new bank account specifically for income and expenses related to Airtasker. That way, your bank statement becomes a handy source of info at tax time.
Remember to keep all your receipts, every time you buy something that’s related to your Airtasker work.
Do I need an Australian Business Number (ABN) to do Airtasker gigs?
Yes! If you are planning to do work through Airtasker, you should register for an ABN. Having an ABN means you are classed as a sole trader business, which could help you at tax time, especially while the ATO’s $20,000 instant write off for small business expenses is still in play.
It’s also worth knowing that if you undertake any freelance work, including Airtasker gigs, without an ABN your client may withhold the highest level of tax (47%) from the money you earn and pay that to the ATO. If you do have an ABN, clients will not withhold any tax from the money they pay you. You then pay the correct amount of tax yourself at tax time.
- Need an ABN? We can help! Simply register an Etax.com.au account and ask one of our friendly accountants.
Do I need to register for GST?
If you earn less than $75,000 in a year from Airtasker and/or other freelance work (including Uber, AirBNB etc.), then you don’t need to register for GST.
If you earn over $75,000 per year, you have to register for GST. You also need to include GST on your invoices and lodge Business Activity Statements (BAS) quarterly. If you aren’t sure what to do, talk to a tax agent. Getting this wrong can mean tax debts and repayments, which you want to avoid!
How do I pay my Airtasker taxes?
As we mentioned above, any Airtasker earnings are considered to be income by the ATO. Airtasker does not withhold tax for your earnings, so you’ll need to pay the tax owing when you do your tax return. Therefore, it’s important to set aside a minimum of 30% of any Airtasker income during the year. This helps you ensure you have enough money on hand to meet your obligations at tax time.
Enter your Airtasker income, into your annual tax return at the business income section. Remember to include any Airtasker related expenses as tax deductions so your taxable income is as low as it can be. Once your tax return is lodged the ATO will calculate any taxes owing on your Airtasker income and let you know how much you’ll have to pay.
I had to pay for some materials to complete a task, can I claim them as a tax deduction?
If you purchase materials solely to complete Airtasker tasks, you can claim the whole amount as a tax deduction. If you purchase an item or subscription that is partly for personal use, you need to apportion the work and personal use correctly.
For example, if you pay a subscription for software but only use it for Airtasker work about 30% of the time, you can claim 30% of the total cost as your tax deduction.
Other Airtasker tax deductions you might be able to claim include:
- Airtasker fees
- Home office expenses
- Internet expenses
- Computer and software expenses
- Phone expenses
- Materials, tools and equipment
- Protective clothing/items
- Car expenses
- Travel expenses
- Equipment repair and maintenance
Two important points to remember about Airtasker and tax deductions:
1. To claim any Airtasker expense as a tax deduction, you must answer “yes” to all of these three questions:
- Did you pay for the item yourself, with no reimbursement?
- Is the deduction directly related to the work you do?
- Do you have a receipt?
2. If you don’t have a receipt or proof of purchase for your Airtasker expense, do not claim it as a tax deduction. The ATO will be looking closely at gig economy workers like people on Airtasker. (Not sure if you can claim an expense? Keep the receipt and chat to your tax agent.)
Do I need to worry about the ATO?
If you follow the advice above when working Airtasker, or any other share economy gigs, you can stop worrying about the ATO.
But, if you don’t declare your earnings, they will catch up with you. Next, you are forced to repay the tax money, plus fines and interest charges. It really isn’t worth the risk and the trouble.
If you’re not sure, always get in touch with a tax agent. They can help minimise the tax you have to pay, and they can ensure that you are “ATO compliant”.
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