The Australian Tax Office announced its key focus areas for tax returns this year will include rental properties, work related expenses and capital gains tax. Source: Australian Tax Office.
The Australian Tax Office (ATO) announced this week that its three key focuses for your tax return on June 30, 2023 are rental property deductions, work-related expenses and capital gains tax (CGT).
According to ATO Assistant Commissioner Tim Loh, the ATO is prioritising areas that it often sees mistakes.
“Within these areas, we have identified common mistakes, and are particularly focused on addressing these and supporting taxpayers and registered tax agents to get their claims right this year,” said Loh.
Rental property deductions have become a focus after recent review found almost nine out of 10 landlords made mistakes on their annual returns, resulting in incorrectly claimed expenses.
Announced in last week’s for the Federal budget, the ATO will receive $86.9 million for its crackdown, with the Treasury to also receive $1.2 million. According to the budget papers, the extra funding is expected to increase the ATO’s receipts by nearly $475 million over the next five years.
According to Loh, rental incomes are often left out, or mistakes made with property-related reductions, such as over-claiming expenses or claiming improvements to private properties.
“We encourage rental property owners and their registered tax agents to take extra care this tax time and review their records before lodging their return,” said Loh.
Loh also warned against the ‘copy-paste’ when it comes to work-related expenses.
“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,” Loh says.
“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 of people are working back in the office more compared to last year.”
CGT, which is incurred at the disposal of assets such as shares, cryptocurrency and other digital assets, managed investments or properties, is the ATO’s final focus area.
“Generally, your main residence is exempt from 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,” Loh said.
The ATO is reminding Australian taxpayers of the necessity to keep records of the income-producing period, and the portion of the property used to produce income when calculating capital gains.
“If you used your property to earn income, and qualify for an exemption, make the election in your tax return,” notes the ATO on its website.
The Australian tax return deadline for 2023 is Friday, October 31.
You can find more information about the ATO’s key focus areas via the media release on its website.
