FY24 ATO Tax Time Focus
As ‘tax time’ is here, the Australian Taxation Office (ATO) has announced it will be taking a close look at three common errors being made by taxpayers:
- Incorrectly claiming work-related expenses
- Inflating claims for rental properties
- Failing to include all income when lodging
ATO Assistant Commissioner Rob Thomson said the ATO is focused on supporting taxpayers to get their lodgement right the first time.
Work-related Expenses
In 2023 more than 8 million people claimed a work-related deduction, and around half of those claimed a deduction related to working from home. Last year, the ATO revised the fixed rate method of calculating a working from home deduction to broaden what is included, increase the rate, and adjust the records you need to keep. These changes are now in full effect this financial year, meaning you must have comprehensive records to substantiate your claims as you would for any other deduction.
Remember, there are 3 golden rules for claiming a deduction for any work-related expense:
- you must have spent the money yourself and weren’t reimbursed,
- the expense must directly relate to earning your income, and
- you must have a record (usually a receipt) to prove it.
Inflating Claims for Rental Properties
Rental properties continue to remain in the ATO’s sights. Their data shows 9 out of 10 rental property owners are getting their income tax returns wrong.
‘We often see landlords making mistakes when it comes to repairs and maintenance deductions on rental properties, so we’re keeping a close eye on this.’
Performing general repairs and maintenance on your rental property can be claimed as an immediate deduction. However, expenses which are capital in nature (like initial repairs on a newly purchased property and any improvements during the time you hold the property) are not deductible as repairs or maintenance.
Including all Income
If you have received income from multiple sources, it’s best to wait until this is pre-filled in your tax return before lodging.
To save you time and to help you get your tax return right, the ATO partially complete your tax return with financial information they receive from third parties. This includes health funds, financial institutions, employers, and government agencies. Although pre-filled data is available from 1 July, most data is finalised by the end of July. Some data maybe received later, like partnership or trust distributions.
If you have any further questions about submitting your Tax Return with STS Accounting Group please don’t hesitate to get in touch.
