The Australian Taxation Office (ATO) has released its priority hit-list for the 2023 tax season, focusing on their specific areas of scrutiny. As the end of the financial year approaches, it is essential for workers and businesses to be aware of these key points to ensure compliance.
Here are the main things the ATO will be looking at when analysing 2023 tax returns:
- Work-Related Expenses and WFH Deductions:
Assistant Commissioner Tim Loh reminds taxpayers of significant changes in work-from-home (WFH) expense deductions. The ATO now offers a ‘fixed rate’ method, allowing taxpayers to claim 67 cents per hour worked from home, covering expenses such as phone bills, internet usage, and electricity. However, it is crucial to maintain detailed records of hours worked from home after March 1 this year (2023). Avoid the temptation to copy previous claims and ensure good record-keeping to choose the most suitable method for your circumstances and maximise your deductions this tax time.
- Capital Gains Tax (CGT) Obligations:
The ATO emphasises the importance of addressing capital gains tax obligations. While the focus is primarily on property disposal through short-term accommodation platforms like Airbnb or Stayz, entrepreneurs running businesses from home should also be vigilant. It is essential not to overlook CGT obligations when selling assets, as the ATO has enhanced data-matching capabilities to detect unreported gains. Stay compliant by declaring all relevant capital gains to avoid potential penalties.
- Rental Property Owners and Tax Returns:
Landlords are another key focus for the ATO, as data-matching techniques will be utilised to cross-check tax returns with residential investment property loan data. This ensures that rental property owners accurately report their income and expenses. The ATO highlights the prevalence of incorrect claims, urging property owners to avoid over claiming and ensuring proper management of their tax returns. By adhering to the regulations and accurately reporting rental income, you can fulfil your tax obligations and avoid potential complications.
Navigating the ATO’s priority areas of scrutiny requires careful attention to detail and adherence to tax regulations. To ensure a seamless tax return process and optimise your returns, it is crucial to engage the services of a trusted accountant, such as the strategic accountants from PTP. With their expertise and up-to-date knowledge of tax laws, a professional accountant from PTP can provide valuable guidance, assist in accurate record-keeping, and help you make informed decisions regarding your tax affairs.
