Dodgy work-from-home deductions, rental property errors, and miscalculated income continue to vex the Australian Taxation Office (ATO), which has warned taxpayers to pay special attention to this year’s claims.
On Monday, the ATO revealed its three priority areas for the upcoming tax season, with incorrect work-related expenses taking the top spot.
The method for calculating fixed rate work-from-home deductions changed last year, requiring taxpayers to keep a detailed log of every day they actually work outside the job site, instead of rough estimations.
Around four million Australians claimed a WFH-related deduction last financial year.
Those taxpayers have now been warned not to replicate last year’s claims.
“Copying and pasting your working from home claim from last year may be tempting, but this will likely mean we will be contacting you for a ‘please explain’,” ATO assistant commissioner Rob Thomsen said in a statement.
“Your deductions will be disallowed if you’re not eligible or you don’t keep the right records.”
Nine in ten landlords miscalculated their rental income, the ATO added, with Thomsen pointing to a poor understanding of eligible deductions linked to property maintenance.
“This year, we’re particularly focused on claims that may have been inflated to offset increases in rental income to get a greater tax benefit,” he said.
The tax office is asking landlords to recognise the difference between repairs, which are immediately deductible, and major capital improvements, like a kitchen renovation, which are deductible over time.
Thomsen encouraged property owners to consider the services of a registered tax agent to ensure they only claim what they are entitled to.
Finally, the tax office is urging taxpayers to wait some time after July 1 to actually file their returns.
For many taxpayers, income information will automatically pre-fill by the end of July, eliminating the need to scramble for interest statements and dividend filings.
“We know some prefer to tick their tax return off the to-do list early and not have to think about it for another 12 months, but the best way to ensure you get it right is to wait for just a few weeks to lodge,” Thomsen said.
The ATO’s call-out to taxpayers comes months after it revealed its focus on small business compliance.
Unpaid superannuation, audit-raised liabilities, refund fraud, aging debts, and self-assessed debts are all on its radar.
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Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
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