The Australian Taxation Office has announced the key focus areas this year and good record keeping will be more important than ever. The three key areas that will be examined in close detail include:

Investment property owners

Landlords are being reminded not to mix business and pleasure. For example, on investment loans for property you may only claim the interest as a tax deduction if that amount directly relates to the rental property. You cannot also claim loan interest on personal items, like family cars or holidays that could inadvertently be mixed in with an investment loan. Likewise, if you are renting a property on Airbnb make sure you declare all the income and keep appropriate records.

Capital Gains

Taxpayers are reminded that a capital gain is incurred when you sell an asset (with the family home usually excluded). Capital gains tax applies to assets including shares, property, and crypto currency. Make sure that you keep records to substantiate your claims, including interest paid on loans or dividend payments earned.

Equipment claimed

Assets claimed or depreciated must be used for work purposes. For example, if you use a car or phone for personal as well as business use, you should keep records and only claim the percentage) hat is fully related to work use.

Work From Home changes in 2022/23

The ATO is warning that there have been changes to how ‘fixed rate’ work from home deductions are calculated. The previous ‘short-cut’ method (brought in during the pandemic) has now ceased. While the fixed amount per hour that can be claimed has increased, record keeping requirements have already been revised so you need to have kept appropriate records from the 2022/23 year.  However, if you are using the ‘actual costs’ method there are no changes. The ATO will be checking carefully to make sure people are not overclaiming in these deductions this year. If you have questions about this topic, please call your dmca adviser to discuss before June 30.