ATO’s Tax Time Focus: What You Need to Know

As Tax Time approaches, the Australian Taxation Office (ATO) has highlighted three key areas to focus on: rental property deductions, work-related expenses, and capital gains tax. Here’s what you need to know to avoid common mistakes and get your claims right.

Rental Property Deductions: Tips for Landlords

The ATO found that 90% of rental property owners make mistakes on their tax returns, such as missing rental income or overclaiming deductions. Landlords, make sure to double-check your records before filing.

Be careful with interest expenses: you can only claim the interest on a loan used to buy a rental property. If part of the loan was used for personal expenses, like a car or a vacation, you can only claim the interest related to the rental property.

The ATO uses advanced data matching to check claims, including a new program for residential investment property loans. For more details, visit ato.gov.au/rental.

Work-Related Expenses: Update Your Claims

If your work situation has changed, your tax claims should reflect this. The rules for claiming working-from-home expenses have changed, so don’t just copy last year’s claims.

You can claim working-from-home expenses using either the actual cost method or a fixed rate method, as long as you meet the record-keeping requirements. Keeping detailed records helps you choose the best method. For more information, visit ato.gov.au/home.

Capital Gains Tax: Don’t Forget Any Assets

Capital gains tax (CGT) applies when you sell assets like shares, cryptocurrency, managed investments, or properties. You need to report any profit (capital gain) or loss for each asset sold, unless it’s exempt. Your main home is usually exempt, but if you’ve rented it out or run a business from it, CGT may apply.

Keep accurate records of how long and what part of the property was used to earn income. Report all gains from asset sales. For more information on CGT, visit ato.gov.au.

Staying informed and diligent can help you avoid common mistakes and ensure a smooth tax filing process. If you need assistance, HarvestWise Accounting is here to help. Feel free to call us at 03 9566 7212 or email us at admin@harvestwiseaccounting.com.au with any questions.