What is Tax Depreciation Schedule

A Tax Depreciation Schedule is simply a document that lists all your investments in various items, the amount of wear left in them and the dollar value you can claim against your assessable income. Tax Depreciation is a legitimate tax deduction available to owners of income producing properties to cover the costs of wear and tear on that property. Introduced as an incentive to encourage people to save for their retirement, it acknowledges that certain items such as carpets, white goods, curtains, etc depreciate in value over time due to daily wear and tear. What is tax depreciation?rnTax Depreciation is a dollar amount that the Australian Taxation Office (ATO) will legitimately allow a Tax Payer to claim on items that decline in value as they age. Depreciation can be claimed on a variety of items from computers and cars to residential and commercial investment properties. How does Tax Depreciation benefit the Tax Payer? • The main purpose of Tax Depreciation is to save you money. Tax Payers can reduce the amount of tax by checking from quantity surveyor of their assets against their taxable income. • Generally, owner of property pay too much tax and do not capitalize on the tax depreciation advantages available to them. In fact, research shows that only 1 in 5 of all property investors fully utilizes the advantages of their investments to maximize their legitimate tax depreciation deductions. • For an investment property you are able to claim depreciation on the building itself and the fixtures and fittings of the property. What is a Tax Depreciation Schedule? Tax Depreciation Schedule is a holistic report, prepared by a licensed qualified Quantity Surveyor, capturing all depreciable apparatus of your investment property. It lists all your investment's various items, the amount of wear left in them and the dollar value you can claim against your assessable income. Why do I need a Tax Depreciation Schedule?rnA depreciation schedule will be necessary to maximize your allowable tax deductions on any property that you own as an investment. When claiming depreciation on the building and fittings the ATO insists that you have a depreciation schedule prepared by a licensed Quantity Surveyor. • In order to produce and certify a legitimate Tax Depreciation Schedule, they are required to conduct a full property inspection. • They are able to identify, and allot a value to, every depreciable part of your investment property. • They are able to identify all improvements and renovations to the property, some of which you may not even be aware of. • They are able to take measurements of your property to accurately calculate things like carpets, window covering, etc, and to produce a systematic floor plan for inclusion in your Tax Depreciation Schedule. • They take photographs of your property for your Tax Depreciation Schedule. Who prepares Tax Depreciation Schedules?rnYour report should be prepared only by a Qualified Quantity Surveyor (QS) and certified by a Full Member of the Australian Institute of Quantity Surveyors (AIQS). Be wear of non-qualified companies and / or individuals offering Tax Depreciation Schedules. Significant legislation was recently passed whereby individuals or companies preparing Tax Depreciation Schedules have to be registered quantity surveyors. The ATO continues to state that Real Estate Agents, Accountants and Solicitors do not generally have the relevant qualifications or experience to calculate Capital Allowance depreciation based upon construction costs. Qualified Quantity Surveyors are specialists in this industry are identified by the ATO as the appropriate professionals to produce Tax Depreciation Schedules.rnSo it is good for every owner who have property and pay high tax by this he/she can save money by evaluate the real cost of his property by prepare his tax depreciation schedule from quantity surveyor and pay the legitimate tax which cost his property.