Every tax year, the Australian Tax Office (ATO) focuses on specific areas where taxpayers tend to make errors, either intentionally or unintentionally. This year, the ATO will be focusing on two primary areas: work-related expenses and claims made by investment property owners.

Work-related Expenses

In terms of work-related expenses, the ATO will be looking closely at;

• deductions for working from home
• mobile phone and internet costs
• claims for work-related clothing, e.g. dry cleaning, and laundry expenses
• overtime meal claims,
• union fees and subscriptions,
• motor vehicle claims, and
• incorrectly claiming deductions.

Property-related Deductions

Property-related deductions that the ATO will focus on include;

• excessive interest expense claims,
• Incorrectly dividing rental income and expenses between owners.
• Holiday homes that are not legitimately available for rent.
• incorrect claims for newly purchased rental properties.

To maintain accurate records, property owners should retain documents such as invoices, receipts, and bank statements for all property-related expenses. Additionally, they should provide evidence that their property was genuinely available for rent, such as rental listings.

The ATO will also be keeping a close eye on those who invest in cryptocurrencies such as Bitcoin and the sharing economy (such as ride-sourcing and renting a room out via platforms such as Airbnb). It is essential to ensure that you have the necessary proof of your expenses and that you are aware of what you can and cannot claim.

By being proactive and ensuring you have the necessary proof of your expenses and claims, you can avoid any potential issues with the ATO. If you have any concerns or questions about your tax obligations, it's always best to seek advice from a qualified professional.

If you’d also like to benefit from our tax planning advice, please contact one of our team at admin@wrightsca.com.au.

Important notice: This article provides information rather than financial advice. The content of this article, including any information contained in it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, before you act on any information.