What claims the ATO will be targeting this tax season (2024)
The Australian Taxation Office (ATO) announced three key focus areas for Tax Time 2024.
The ATO will be focusing on:
work-related expenses
rental property income and deductions, and
capital gains from crypto assets, property, and shares.
These ATO priority areas will ensure that there is an appropriate level of scrutiny on correct reporting of deductions and income, so that Australia continues to have a strong tax system that can support the Australian community. Taxpayers can take steps to lodge right the first time.
To claim an expense:
You must have spent the money yourself and weren’t reimbursed.
If the expense is for a mix of income producing and private use, you can only claim the portion that relates to producing income.
You must have a record to prove it.
The ATO advised taxpayers who deliberately try to increase their refund, falsify records or cannot substantiate their claims, the ATO will be taking firm action.
Wait until the end of July
In July each year people rush to lodge their tax returns. They forget bank interest, dividend income, payments from other government agencies and private health insurers. For most people, this information will be automatically pre-filled in their tax return by the end of July. This makes the tax return process smoother, saves you time, and helps get your tax return right. If you want to lodge earlier, you must take extra time to manually add all your income.
Check if your employer has marked your income statement as ‘tax ready’ as well as if your pre-fill is available in myTax before you lodge. That way, an amendment doesn’t need to be made later.
Available pre-fill information and readiness to lodge can be easily checked in the ATO app this tax time.
Work-related expenses
To claim a deduction for your working from home expenses, there are two methods available depending on your circumstances. You can choose from the shortcut (all-inclusive) or actual cost methods, so long as you meet the eligibility and record-keeping requirements.
If your working arrangements have changed, don’t just copy and paste your prior year’s claims. If your expense was used for both work-related and private use, you can only claim the work-related portion of the expense. For example, you can’t claim 100% of mobile phone expenses if you use your mobile phone to ring mum and dad.
For more information visit ato.gov.au/deductions
Rental income and deductions
If you are a rental property owner, make sure you include all the income you’ve received from your rental in your tax return, including short-term rental arrangements, insurance payouts and rental bond money you retain.
A lot of rental property owners use a registered tax agent to help with their tax affairs. Keep good records for all rental income and deductions. The ATO advised 9 out 10 rental property schedules lodged contained an error. If you’re unsure of what you can claim, book an appointment with us today.
For more information visit ato.gov.au/rental
Capital gains from crypto assets, property and shares
If you dispose of an asset such as property, shares, or a crypto asset, including non-fungible tokens (NFTs), you will need to calculate a capital gain or capital loss and record it in your tax return.
Generally, a capital gain or capital loss is the difference between what an asset cost you and what you receive when you dispose of it.
Remember you can’t offset your crypto losses against your salary and wages. Capital gains and capital losses can only be offset against each other.
The ATO’s data collection processes improve substantially each year and they know which taxpayers are buying, selling or exchanging digital coins and assets.
For more information visit ato.gov.au/crypto