Most taxpayers in Sydneysuffer from panic attacks and spend sleepless nights when the tax filing season comes each year. This is understandable because tax return filing can be complex,especially to those with diverse incomes or have participated in investing in property. The tax codes and guidelines to comply and the error penalties make it worse. Here are steps to take to make your tax return process go smoothly.Let’s jump in.
File on time
Filing your taxes on time should give you time to prepare your receipts or applicable statements, ensuring you don’t miss out on valuable credits and benefits.Just plan ahead and start to get ready. If you end up owing the government anything,you will not incur any interest or penalties on that amount when you file early. Consequently, filing on time means you will get your refund faster and save stress and headaches.
Use last year’s returns as reference
Keeping good records of your tax returns whether electronic or paper is always important. Comparing this year’s documents with last year’s returnserves as a reminder of your deductions or an item you may have overlooked. Last year’s returns will remind you of interest, dividends, and charitable deductions that could be valid this year.
Plan ahead for any refund
You should claim every tax deduction you are entitled to. If you expect a tax refund, planning ahead will allow you to decide how to handle the refund. You may elect to apply the refund to next year’s taxes or deposit the refund to your saving account in Brisbane; in any case, you have time to prioritize. You can pre-pay for next yearor letyour moneygrow.
You need to collect all your tax documents to do your taxes efficiently. Stay on top of tax-related paperwork throughout the year as it reduces the stress during tax season. Having all those receipts organizedwill also reduce the time it takes to process your taxes and get your refund. This translates to less wastage of time and lower fees for the services of your tax returns preparer if you have one. Furthermore, keep an eye out for the documents mailed to you like income and investment interest.
Hire a professional
Hiring a professional tax expert in Melbournewill give you peace of mind. An expert can help you save money on your tax return by identifying possible deductions. They are on top of current tax rules and can determine any credits you may not be aware of. The complexity involved in the tax filing process results in the risk of committing errors, unlike tax professionals who are experienced and know the ropes. They give you the assurance that your tax returns are correct.
Are you looking for a professional tax preparer? Wading through tax records and filing your tax returns is a daunting tax that eats up more hours than you have to devote to it. At Deppro Pty Ltd, we keep up with the tax code and our expertise ensures you get all the deductions and credits you are eligible to receive. Contact us for all your tax return needs.
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Every year you are required by law to pay your taxes. Investing in propertyis a great way to reduce taxes because it comes with a range of tax benefits.Every property owner wants to save money on their taxes and tax depreciation is one of the many ways. This reduction is due to consistent use or wear and tear; it has the potential to earn you more money in the future. The property market is stable although there are fluctuations in price and demand. Yet the fact remains that everyone needs a roof over their heads. Property depreciation may seem confusing but its benefits will make you happy to spend extra time on bookkeeping. It may be the key to saving more tax dollars.
Different Tax Deductions and their Value
Interest charged for loans can be claimed as a tax deduction if the accounts in question are used for investment purposes. It may include interest accrued through a mortgage, an investment property or other loans related to an investment portfolio. The interest charged for a loan will offset the cost of the investment property when you claim it.
There are all kinds of expenses you can claim as an owner of rental properties in Brisbane that can offset the amount of tax you pay each financial year. Common expenses like advertising for tenants, council rates, and property repairs and maintenance can be claimed as tax deductions. These rental expenses add up to thousands and thousands of dollars over time, thus reducing the amount of tax you need to pay by as much.
Depreciation of a building
Wear and tear of buildings is inevitable and affects the financial value of the building. Property depreciation is one of the best things for your bottom line at tax time. What makes it so beneficial is that it comes built-in with the cost of the property. You don’t pay for it on an ongoing basis because it’s calculated and claimed on your tax return as a non-cash deduction. This will save you thousands of dollars without spending any more money on the property.
Depreciation of fittings
This tax deduction specifically pertains to fittings inside an investment property. This includes things like sinks, fans, showers which are subject to depreciation or wear and tear over time. Professional building surveyors can calculate the cost of the depreciation of fittings and give a detailed outline of how much the asset has decreased over time. This can lead to some significant, ongoing tax deductions.
Hiring qualified building surveyors
Hiring a professional to manage your tax return will help you pay less tax. It will give you access to professional advice to help you find more ways to reduce your taxes. The fees you pay for your tax affairs are claimable as tax deductions every year. When a professional adds up all your tax-deductible expenses accurately, you inevitably save more money on tax.
Are you lookingfor a professional for your tax depreciation schedulein Brisbane? At Deppro Pty Ltd, we have a knowledgeable team that will increase your property profits. You can depend on us to oversee your tax returns accurately and economically. Lets us offer you our tax-saving strategies.
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Most people focus on cash flow when buying investment properties. They overlook greater benefits like depreciation on investment propertyand tax benefits. One of the biggest benefits of depreciation is that it can reduce reportable net income and therefore your taxes. To help you better understand depreciation, here are some of the most frequently asked questions. Let’s jump right in.
1. What is Depreciation?
As something gets older – for example a building – its structure and the assets contained within wear out. It loses value overtime due to age and deterioration. This loss of value is called depreciation. The owners are allowed to claim it as a tax deduction.
2. Will Claiming Depreciation Help an Investor?
As you use your tax calculator to calculate the tax you owe, claiming depreciation deductions can make a big difference in your cash flow. Deductions cover the lifetime of a property to ensure you maximize your cash flow. They are 100 percent deductible.
3. Who is Qualified to Assess The Depreciation
The purchaser of a building cannot establish the actual cost of a building. The only building cost estimate accepted is from an appropriately qualified person. This qualified person has expertise in the calculation of building construction costs. He or she is also likely to be accepted by a court as an expert witness.
4. What is a Depreciation Schedule?
This is a comprehensive report outlining the depreciation deductions to be claimed by investment property owners. It is based on the property’s building structure, and fixturesand fittings within it. A depreciation schedule prepared by a specialist like DEPPRO Pty ltd will maximize the cash return from your investment property each year, even in Sydney.
5. Why should a Depreciation Schedule Last Forty Years?
The ATO determines any building eligible to claim a write-off allowance. It should have a maximum effective life of forty years from the date the construction was completed. The owner of a brand new building can claim depreciation up to forty years. Consequently, the balance of forty years period is claimable on an older property.
6. How is Building Age Calculated?
Official council documents with dates pertaining to the original application approval date determines the age of a building. The occupancy certificate and final inspection date can also be used. A DEPPRO Pty ltd quantity surveyor conducts the relevant searches and accurately determines the age of your building.
Ask yourself the above questions about depreciation to help you figure out if you are eligible for more tax-saving benefits. It isa great opportunity to put some of your tax money back into your investments.
If you are going to invest money on a rental property, use every tactic in the book to get the most profit from it. Hirea firm like DEPPRO Pty ltd that specializes in this area. It wouldbe awise investment of time and money. We are dedicated to providing you with the knowledge, tools, and support you need – even withproperty report. Contact us to find what we can do for you.
Property is a good choice for an investment as it is less prone to risk. It can be profitable if you take the time and make the effort. You will overcome the rigors of the property investment territory if have a vivid vision of your goals. An investment property calculator will help you to estimate the costs of your property investment and the yields you can expect. It’s important to understand the deductions you are entitled to as it can significantly safeguard your cash flow.
These are four major insights when it comes to depreciation.
1. Itemize all repairs and maintenance expenses
Keep on top of all repairs and maintenance expenditures during the year. You can itemize them on a spreadsheet as they happen to make sure you don’t miss anything. Recording these expenses and the type of repair will make it easy to identify what isdepreciable and which are deductible.
Not all depreciation allowances can be claimed at the same rate or over the same timeframe. It’s dependent on what type of repair was undertaken. Provide detailed information when recording any repair and maintenance expenses to maximize your depreciation claim.
2. Old properties Can also Be Depreciated
Many investors inMelbournethink that a property constructed for 30 years does not warrant a depreciation schedule, but this is not always the case. Properties constructed after July 1985 can claim depreciation. Consequently, older investment properties extended or renovated since that time also claim deductions. Most, even in Brisbane,havebenefitted from new kitchens and bathrooms to bring the property up to modern standards. You can claim something with new fixtures and fittings whether you made them or they were the work of a former owner.
3. Scrapping schedule
When you renovate, you are permitted to write off any unclaimed depreciation on the fittings thrown out. This applies when part of the building is being demolished. All you needto generate taxable income before the renovations is to have used the premises as an investment property. A scrapping schedule is prepared by a quantity surveyor like DEPPRO Pty ltd. It should show the amounts not yet claimed on such items.
4. You may be entitled to a retrospective claim
Failure to make a claim in a particular year does not mean you will never be able to do so. You can access up to two years’ worth of deductions, but it’s important not to let it go too long. This will help you not miss out on some significant depreciation benefits.
Depreciation on an investment property will help you to maximize your returns. The above issues will ensure your cash flow is boosted significantly. You will have set your priorities right and created a sound long-term financial strategy.
At DEPPRO PTY ltd, we remove ownership anxiety by simplifying the complexity of depreciation. We offer stress-free services that help you maximize your property returns. We also advise on the rewards of claiming depreciation and how to do it. Contact us today so we can offer support when you need it.
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What makes property investment affordable for the average Australian is tax allowances, and one of the best allowances is depreciation. Rental property depreciation is an essential tax allowance to claim. But you need to understand the tax consequences and how to claim the deductions. You also need to know how this choice will affect your investment returns. Here is a simple guide on how to claim tax allowances for your depreciating rentals.
1. Prime Cost Method
The deduction for each year is calculated as a percentage of the cost when you use the prime cost method. The prime cost method returns a straight-line depreciation amount until the total value of assets is claimed. Greater deductions are returned in the prime cost method in the latter years of the depreciation plan. As an investor, you rely on a more consistent depreciation claim each year. If you are looking to maximize your depreciation claim later, the prime cost method is the best option.
When investors select the prime cost method, they claim a lower but more constant proportion of the available deductions over an extensive period.
2. Diminishing Value Method
The deduction in the diminishing value method is calculated as a percentage of the balance you have left to deduct. In the first few years, this method will return higher depreciation deductions to the property owner. The diminishing value method uses a low value and low costpooling to increase claims on items under $1,000. As an investor, you will claim 100 percent of the value of items worth less than $300. However, depreciation claims drop because the method decreases in value each year until assets run out.
When an investor claimsbased on the diminishing value method, they claim a greater proportion of the asset cost in earlier years of the asset’s life. The investor receives greater deductions in the earlier years of owning the property, and that amount tapers off in later years.
The total depreciation value available over the property’s life is claimed both in the diminishing value and prime cost method. However, the two methods use different formulas to calculate depreciation deductions. They achieve different short-term and long-term cash flow positions for the rental investor. Both ways claim the same total value over forty years. However, different rules are used to achieveeither an aggressive upfront claim or a consistent claim each year.
Seek professional advice before deciding whichmethod is best for your financial situation and investments. A professional will be able to provide a capital allowance and tax depreciation schedule. The tax depreciation schedule will outline the depreciation deductions available to claim using both methods for comparison.
Just as you can claim wear and tear on a car, you can also claim the depreciation of your rental properties. A property investor that produces income is entitled to depreciate the building and the items within it. To ensure that thousands of dollars don’t go unclaimed, hire a qualified quantity surveyor. To avail substantial savings, contact DEPPRO Pty Ltd for a depreciation report on your rental property.
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The closing of a financial year means it’s time to start planning for tax season. This time can seem complicated, but tax time does not have to be a burden. Earning an income during a financial year means you must lodge a tax return. The tax return determines whether you have a net tax debt or are entitled to a tax refund. Spending a little time looking over your finances can go a long way in helping you save money because you can reap the benefits of deductions. Here are five essential tips to keep filing your tax return as painless as possible.
1. Make a Choice on How to Lodge Your Return
During tax season, you can choose between lodging them yourself or using a tax agent. An agent completes your return quickly and accurately. Although there is a fee involved, it’s the most stress-free option. All you need to do is make an appointment. When you choose to self-lodge, a registered tax agent checks your return for accuracy before it’s submitted.
2. Get Your Paperwork Ready
Gather the sorts of documents you need before you start the tax return process. Use labelled folders and save relevant receipts throughout the year to avoid spending hours tracking down receipts. Folders will save time and can help you get more money through tax refunds.
3. Understand the Tax Rules and Deadlines
There is countless amounts of0 online information to guide you through lodging your tax return. Although your return covers the financial year from 1 July to 30 June, you can lodge it up through 31 October of that year. If you don’t have the money to pay on time, ATO can design a payment plan to suit your circumstances.
4. Get Professional Advice
Aregistered agent can help you understand expenses you are eligible to claim on your tax return. Many peoplecan lodgetheir returns by themselves, but some sound professional advice can be beneficial. A professional will help you prepare your return well in advance and advise you on howto reduce your taxable income. They reduce stress and save you time. Also, the costs related to professional tax services are tax-deductible.
5. Know Your Deductions
When completing your tax return, you are entitled to claim a deduction of expenses related to earning your income. The easiest way to get a higher tax refund is to claim deductions for work-related expenses that the employer has not reimbursed. These costs may include vehicle and travel expenses, a mobile phone, phone services, internet, and home phone expenses. You are legally entitled to these.
When you delay asking the professionals for help, you can get into trouble or run out of time to deal with your taxes. You could lose hundreds or thousands of dollars in potential tax refunds. The best option is to hire a professional when you have more to consider than just your work income. Choose DEPPRO Pty Ltd to handle your taxation needs to make tax season stress-free. Contact us today.
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Investing in property is a smart way to maximize your cash flow and save for the future. However, navigating through the world of property investments can be overwhelming. There is a lot to learn when trying to grow your business. A property investor should know the different rental yield factors, be knowledgeable about tax breaks, and understand property depreciation. These are essential steps in building an investment property portfolio. Unfortunately, tax laws are not written to be understood easily. Therefore, the process of investing in property comes with a bit of a learning curve.
In this post, we feature beneficial property investment tips.
1. Find Out If You Qualify for Tax Depreciation
Property depreciation is an important factor for rental property investors. Generally, the tax depreciation allows investors to deduct the costs from the taxes of buying and improving a property over its useful life. The Rental Property Depreciation lowers the taxable income, increasing your rental income. In 2017, the Federal Budget introduced some changes that affect property investors. The new tax depreciation laws apply for the properties bought after May 9th, 2017 and touches the plant and equipment categories in residential homes. The government has introduced a limit on plant and equipment deductions.
Under the new regulations, property investors can claim tax depreciation if they meet the following requirements:
You signed the property purchase contract before May 9th, 2017.
The purchase of the new property was after May 9th, 2017.
You hired a property builder to build a new home for investment purposes, and the property remains in your portfolio.
The property is renovated, and you have installed new plant and equipment.
Note that you will not be able to claim depreciation on plant and equipment.
2. Hire a Professional to Prepare the Property Depreciation Report
To determine which items are depreciable, you should prepare the property depreciation report. The report must cover all the depreciable items to avoid losing your income. We suggest you hire the services of a professional to help you prepare the property depreciation report. Qualified property inspectors have the knowledge and experience to know which items are depreciable. Besides, experts understand the rate at which the items are depreciable, and they will advise you on how to get more savings.
3. Save through Capital Gains Tax Exemptions and Discount
The Capital Gains Tax (CGT) is the tax you pay on your property capital gain upon selling the investment. The CGT is part of your income tax, and it is not calculated as a separate tax. However, if you made a capital loss, you cannot claim it against your other income. However, you can declare the loss to reduce the capital gain. There are four legal ways to reduce the CGT on an investment property. These are:
Take advantage of being an owner-occupier if the property serves as your primary place of residence. That way, the property is exempted from CGT.
Wait for up to a year to receive a 50% tax discount on the gain you make on the property.
Get the property reassessed before renting it out.
Take advantage of exemptions like the six-year rule.
Using these tips, you can save on Capital Gains Tax.
4. Ensure Best Property Maintenance Practices
Property maintenance is the secret to ensuring your property is attractive to renters. The property must be put into some profitable use, like renting, to get the property depreciation. In that regard, it is helpful if you engage a professional property management company to manage your property. That way, your property remains attractive to the renters.
We have looked at some smart property investment tips. If you are planning to invest in properties, make sure you factor in these tips. For assistance with property depreciation, talk to DEPPRO. We are the leading property depreciation experts serving Australians. We provide reliable and professional services when it comes to the management of your property.
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Are you a small business owner who is struggling to save money? Did you know that you could save with property depreciation? Ideally, real estate depreciation on a rental property can lower your taxable income. Consider that annually the government deducts your assets depreciation amount from the assessable income to determine the taxable income. If you invest in properties, property depreciation allows you to deduct the property’s cost from the taxes required to buy and improve the property over its useful life. As such, tax depreciation enables property owners to lower the taxable income in the process.
What Type of Property is Depreciable?
Rental property owners use depreciation to deduct the purchase price and the cost of property improvement from the tax returns. However, it is worth noting that the depreciation happens as soon as the property is ready for use as a rental. Also, you can only depreciate the value of the building and not the value of the land. In that regard, you have to separate the value of land from the value of the depreciable property.
Rented properties can be a depreciation expense, as can the improvements made to the property. However, property maintenance does not count towards the annual depreciation, so you cannot write off regular maintenance.
Here are important factors to keep in mind when determining the rental property depreciation:
You must be the property owner. This is regardless of whether you borrowed a loan to purchase the property or you are still repaying the loan.
The property should be put into income-generating use and not be your primary residence.
The useful life of the property should be determinable.
The property should exist for more than 12 months.
Note that you will not qualify for the property depreciation if you got rid of the property in the same year you purchased it. In that regard, wholesaling and house flipping does not qualify for property depreciation.
Tips to Maximize Cash Flow Through Property Depreciation
A smart way of investing in property is not just about capital growth and high rental yields but also maximizing cash flows. One of the strategies through which property investors can maximize the cash flow is through tax depreciation. Tax depreciation is the only deduction that can be subjective. Here are some essential tax depreciation tips to help property investors.
Maximizing the Cost of Property Construction
When calculating the depreciation on a property, you must use the cost of constructing the property. Owing to the current economic status, many property buyers are buying buildings at reduced prices nearer the original cost of constructing the property. Therefore, the idea is making the most of the current market conditions and searching for properties where the actual construction cost is close to the current purchasing price.
Do Not Assume You Do Not Qualify to Depreciate the Property Based on Its Age
Even properties built in the 80s may qualify for tax depreciation. Talk to depreciation professionals near you to break down the different categories and qualifications. You may be surprised to find more than 40% of the items or equipment qualify as tax-deductible expenses.
Claim the Small Items and Low-Value Items
Experts advise that property owners deduct as many items as they can. Ifit falls under the set maximum value, you can write it off. Claiming all the items is a great asset pooling strategy for your business.
Use an Experienced Depreciation Professional
For first-time property owners, preparing the depreciation schedulecan be a nightmare. It helps if you engaged experienced professionals. The move will save you time and effort, so you can focus on growing your business. It is helpful you hire a company that has years of experience in calculating property depreciation.
Do not bother with DIY property depreciation. Contact DEPPRO for professional solutions. We have experienced experts who can ensure you earn maximum income through property depreciation. Call us today for an on-site consultation.
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Are you contemplating if building a new structure on your piece of land is the right choice? Going for this approach gives you many benefits as an investor. You get your own builder and do some research about what the trends in real estate are, what people are willing to pay for. You want to do everything right to ensure that investing in property would give you a higher ROI from the tenants you wish to attract. Your newly-built property should be perfect for your intended market.
What Is the Process of Building on an Investment Property?
It starts when you purchase a piece of land with the intent of building a house on it with a specific design in mind. In involves finding a builder who will work on a contract for a period of several months. Usually, the construction company oversees the building process, while a bank pays them for their work. Other people ensure the building structure is done to specifications, such as building inspectors, building certifiers, and bank value’s. You also need the Council approval of your plans.
Your builder will update you on the progress of the construction of your investment property. The entire process is easy and exciting, creating new opportunities to invest in other locations. A smart real estate investor acknowledges the importance of diversity in locations, which is also beneficial in the investment portfolio.
What Are the Benefits?
Here are four reasons why building your investment property can give you financial gains even though there are many other attractive houses for sale out there:
You have the opportunity to get instant equity. It means, after buying land and building a property, you may have it re-valued to your lender. If you get a great deal acquiring your property and do an excellent job of building the right property, you can immediately add value to the place and obtain instant equity. You may be able to use that equity for other investments such as leveraging more properties.
Create a dual property. You can build an investment property that accommodates more than one tenant. You may also opt for a granny flat on your property. It is one of the benefits of building an investment property compared to buying an already-established property. You can construct a house anywhere you want on the property and decide on the architecture that will allow you possibilities in the future.
You qualify for depreciation. You can depreciate the construction cost of your newly built property for a period of years. The good thing about property depreciation Sydney is that you can also include the fittings and fixtures in your claim considering that everything is brand new. Also, if you have a positively geared property, you can maximize your tax benefits.
As the value of your investment property increase over time, it is inevitable that the building structure also experiences normal wear and tear. You can apply for depreciation deductions for this natural damage and be able to claim it under plant and equipment as well as capital works deductions.
Plant and equipment refer to the assets that you can remove from your investment property such as blinds, carpets, hot water systems, etc. On the other hand, capital works deductions include the building structure and permanently fixed items like doors, cupboards, sinks, and many others. Note that although most investors may apply for depreciation on investment property, the ones who construct a new house often receive higher deductions.
Attract many tenants. Besides depreciation, another benefit of building an investment property is you will attract a lot of tenants. Make sure your property is clean, stylish, convenient, and low-maintenance. Depending on the current market and your location, your property should give you a low vacancy rate and a steady rental yield.
When investing in property and building a new structure on it, there are many crucial factors to consider, ensuring you reap financial rewards. Learn everything about this type of property investment, including property taxes, market trends, potential risks, returns, depreciation, price, and so on. Also, the builders you choose contribute to how long your property can weather many years of use from renters, as this impact your rent revenue.
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Investors in Australia like to invest their hard-earned money in something that gives a good return. For this reason, a large number of people in the country invest in shares and other investment while others have invested in securities exchanges. People in Australia prefer to invest in on-exchange investments.
Investment in property has also emerged as a popular investment. The ATO permits property owners to claim ATO property depreciation as a tax deduction. Property owners can claim depreciation if they earn income from their property. The deduction helps in declining property owners’ taxable income and consequently, they pay less tax.
Here are the types of income that investors must declare:
The interest that you earn from your bank accounts like term deposits is treated as an investment income. If you have earnings from other sources such as penalties from any of your investments, these should be declared. Also, if you get interest from your children’s saving account, you must declare it. It may include interest credited or paid by the government. Meanwhile, if you received bonuses from your life insurance, it will also be treated as an investment. You will be allowed a 30% tax offset out of such bonuses. You can hire experts to get your property valuation done effectively.
Shares can be described as yet another form of a dividend. When you declare your bonus shares and the company from which they came, you should provide a statement that will validate that these shares are a dividend. The company may be either a public trading trust, corporate unit trust, or listed investment business. There will be dividends with imputation credits in some scenarios and you must declare them on your tax return. It is worth mentioning that a share trader will be taxed differently from other investors. If you happen to be a share trader, you will be permitted to claim your losses as a tax deduction. For regular investors, the deductions shall be made on their capital gains. You should always hire an expert quantity surveyor to prepare your ATO tax depreciation schedule.
Managed investment trust
You must always specify any income generated from a trust investment product on your tax return. Some instances include money market, unit trust, cash management, and mortgage trust, among others. These kinds of trusts are considered investment income.
Many people struggle with this. Capital gains can be described as the difference between the amount you paid for a particular asset and the amount you sold it for. There will be some scenarios where you make a capital gain for a managed fund such as share trust, equity trust, or growth trust if it provides you a capital gain. Capital gains are usually included in your entire income and aren’t considered as an individual income, they will be taxed similarly.
Your return for all kinds of investments must be an integral part of your regular tax return. The process may be different depending on the kind of investments you have. If you have earned dividends, they will get added to your taxable income automatically. You can hire Deppro quantity surveyors to calculate your taxable income. You will also get a tax statement from your broker at the end of every financial year. The statement will include the total profits you have earned during that period. If you have filed your own tax return, make sure to include your entire profits in the report.
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