The Australian Taxation Office (ATO) is to crack down on work-from-home (WFH) expenses, rental deductions and undeclared capital gains this tax time.
Revealing the hit list, ATO Assistant Commissioner, Tim Loh said the Tax Office was continuing to prioritise areas where it often saw mistakes being made.
“We continue to see shifts in the way Aussies are working and it’s important to consider whether your claims reflect your working arrangements this year,” Mr Loh said.
“There have also been some changes in how you calculate things like working from home deductions, so don’t be tempted to just copy and paste your prior year’s claims.
“We know a lot more people are working back in the office compared to last year.”
Mr Loh said that this year the ATO particularly focused on ensuring taxpayers understood the changes to the work from home (WFH) methods and were able to back up their claims.
He said that to claim WFH expenses as a deduction, people could use the actual cost, or the revised fixed-rate method, so long as they met the eligibility and record-keeping requirements.
“Keeping good records will give you flexibility to choose the right method that suits your circumstances and gives you the best deduction this tax time,” the Assistant Commissioner said.
He said the ATO’s review of income tax returns showed that nine in 10 rental property owners were getting their returns wrong. It often saw rental income being left out, or mistakes being made with property-related deductions, like over-claiming expenses or claiming for improvements to private properties.
Mr Loh reminded taxpayers to declare all their income, including assets such as shares, crypto, managed investments or properties.
“Don’t fall into the trap of thinking we won’t notice if you sell an asset for a gain and don’t declare it,” he warned.
“Generally, your main residence is exempt from capital gains tax (CGT). However, if you have used your home to produce income, such as renting out all or part of it through the sharing economy, for example Airbnb or Stayz, or running a business from home, then CGT may apply.”
Mr Loh said fewer people would receive a refund this tax time, or may receive smaller refunds than they were expecting, and more might have tax debts to manage.
He said the ATO was committed to supporting taxpayers to meet their obligations and had a range of resources available to help.
“If you’re feeling overwhelmed or getting behind with your tax, let us know as early as possible or have a chat with your registered tax agent so we can work with you to find a solution,” he said.
“Don’t bury your head in the sand.”
