2023 ATO’s Key Areas of Interest

The ATO has identified the key areas of your tax return where mistakes are common and has made these areas a priority in the 2023 year for accuracy and reliability.

These areas include:

• Rental Property Deductions
• Work-related expenses
• Capital Gains Tax

Rental Property Deductions

While the ATO is concerned with ensuring that the right amount of income is reported for each rental property. They are particularly concerned with making sure deductions are not being overclaimed.

In this area, they have identified that interest expenses commonly include interest on loans that are used partly for a private purpose. Reiterating that deductions for interest can only be made for the portion that related to producing rental income.

Work Related Expenses

The ATO has recently revised the methodology for claiming work from home expenses. As such, they will be focused on ensuring that the correct records of hours worked from home and receipts for purchases are maintained appropriately.

To be able to claim a deduction using either the revised fixed rate method or the actual cost method, you must have kept accurate records of your expenses, as well as time worked from home. We recommend keeping a personal diary that allows you have worked throughout the year, allowing you to compare the time spent working in the office to at home.

Capital Gains Tax

Capital Gains Tax applies to shares, crypto currencies, managed investments or properties. When these assets are sold, you will be required to declare if you have made a gain or loss for CGT.

Additionally, selling your main residence usually makes you eligible for the main residence exemption, but where the property has been used to make income (through your business or if you have rented out a portion of your home) capital gains tax may apply.

The best way to steer clear of common errors is to speak to your tax agent about maintaining the right records. We can work with you to find a solution and make sure your deductions are claimed correctly. Feel free to contact us at 8333 7300