The Australian Tax Office (ATO) says there are four key areas under scrutiny this tax time: record keeping, work-related expenses, rental property income/deductions and capital gains from crypto assets, property and shares.
Speaking to The Sydney Morning Herald, senior manager of tax policy at CPA Australia, Elinor Kasapidis, said the tax office will also be scrutinising tax returns and the rental schedules.
“They’ll also be looking for things like undeclared income from renting out rooms or homes on a part-time basis,” Kasapidis said.
“That is because people have been overclaiming or they’ve not been claiming correctly in the past.”
According to the most recent ATO data, over 2.2 million Australians hold an investment property and they claim as much as $50 billion in deductions each year, which exceeds the $48 billion reported as rental income.
Kasapidis said that permissible deductible expenses include repairs and maintenance costs, as well as interest payments.
“Where sometimes landlords get into trouble, for example, is a holiday house where they or their close family might actually use it for parts of the year,” she said.
“So, the ATO is really big on landlords making sure that properties were genuinely available for rent, they were on the market, before people can start to claim those costs.
“People are claiming expenses for periods when they’re actually using their house for themselves, or their friends or family are using the house. That’s not OK.”
As a general rule, Kasapidis said if investors received relief in the form of grants or government support, it is taxable and should be declared as income.
This comes as earlier in the year Kasapidis suggested Australians should adopt a conservative approach when claiming working from home (WFH) expenses.
In a media release titled “Yeah nah:” Six things you can’t claim this tax time, the Greek Australian provided six WFH expenses that “won’t fly with the ATO.”
On the list were: pet daycare, WFH wear (e.g. ugg boots and track pants), certain accessories, zoom-ready home décor, wellness activities/classes and mid-day snacks.
Source: The Sydney Morning Herald.
