3 Focus Areas for Tax Time

The ATO has advised that this financial year they will be closely examining three common areas of concern among taxpayers.

1.      Incorrectly claiming work-related expenses

The ATO revised the fixed-rate method when calculating working from home deductions last year to expand on what was included, increase the rate and adjust what records needed to be kept. Taxpayers must have comprehensive records to validate this claim, the same way you would for any other deductions.

This method requires taxpayers to have records that show the actual number of hours that you worked from home as well as the costs incurred while working from home. These forms of records may be diaries or calendars and electricity or data bills.

To be able to claim a deduction for work related expenses you must meet the following criteria;

o   You must have spent the money yourself and not been reimbursed

o   The cost must relate directly to earning your income

o   You must have a record to prove the cost

2.      Inflating claims for rental properties

While performing general repairs and maintenance on a property can be claimed as an immediate deduction, expenses which are capital in nature are not deductible as repairs or maintenance. This can be repairs done initially on a newly purchased property and any improvements made during the time you hold the property.

3.      Failing to include all income when lodging

The ATO is warning taxpayers against lodging your tax return as soon as it hits 1 July.

As most of your income is automatically pre-filled by information reported from your employer, it is key to wait until all of your income sources have been reported and it prefills into your tax return. This information is usually finalized by the end of July.

Take the stress away and avoid these 3 common mistakes - contact our office on 07 5575 1333 or click here to get our help completing your tax return this year!

REF: Australian Taxation Office, Media Center, 10 June 2024