Uber and rideshare drivers are covered by local taxes, whether they register and submit tax requirements or not. Like all other employed Australians, their work is under the jurisdiction of the Australian Taxation Office and is covered by the Goods and Services Tax (GST).
An organised and detailed record of all financial transactions is important to file proper taxes and receive deductions and exemptions. If possible, use the Rideshare Tax App for the most detailed and error-free tax filings, including claims and exemptions.
These practices are both for good business and proper government obligations. Read up on the importance of keeping track of all your business details for tax purposes.
Sort Out All Government Tax Requirements
Uber and rideshare drivers must apply for the GST as they are classified the same as taxi drivers. They must also have an ABN or an Australian Business Number, which is government-issued and assigned to each person. If you already have a previous ABN, you must reactivate it for use. Only one ABN is assigned per Australian citizen or resident.
Whether or not you register for taxes, the Australian Taxation Office has access to records of Uber and all rideshare drivers, registered or not. If you think you can go on and work without registering for tax payments, you might get into legal trouble. The ATO will ultimately check and know and send you a confirmatory letter for registration and to pay previous and present tax obligations.
GST will cover all other business income you receive, aside from Uber and other rideshare services you work for. It is paid quarterly based on the amount you receive from your rideshare. The less than $75,000 GST registration limit will not apply in this situation as all other extra business earnings are subject to ATO regulations.
GST and Income Tax are different. While Australian taxpayers are required to file tax on their annual income, the GST is a separate type of tax paid for by the consumer but remitted by the business selling goods and services—in this case, rideshare drivers. When completing your tax documents, make sure to consider the GST you have collected from riders that must be remitted to the Australian government, and calculate taxes on personal income based on what remains.
Keep Tabs on All Ride-Related Expenses
Managing your rideshare accounting, taxes, and expenses is much like bookkeeping. You have to keep detailed records of all your expenses in your driving activities. It will help you balance all your financial details for your BAS or business activity statement.
Everything related to your business operation has to be accounted for, from fuel costs, insurance premiums, repairs, toll fees, mobile services, and other operations-related costs, no matter how minimal. If the expense is under $82.50, you don’t need tax invoices, and your bank statements are acceptable; tax invoices are only required for expenses over $82.50.
Keeping all your financial records will help you maximise tax deductibles and exemptions. It would be a great help if you could use a convenient Rideshare Tax App to avoid missing anything.
Similarly, keeping a record of all your driving activities will help with filing tax claims on your GST. It will be based on the recorded expenses incurred while using your vehicle for business only. The same details are also needed when filing tax deductions on your annual tax return.
If you’re an Uber or rideshare driver, you have to take note of your tax obligations on top of your regular income taxes. You have to be detailed all the way through. It will help you file all the correct taxes, and more importantly, you will get back claims, deductions, and exemptions.
You need proper recording and organisation of your business’s financial details. In that case, Rideshare Tax App is your best solution. We launched our dedicated Rideshare Tax App to help with the convenient and accurate detailing of your finances. Download the app today!