The Australian Taxation Office (ATO) has recently released their 3 key areas of focus for individuals when completing personal tax returns. Read on to find out what you need to focus on with your Tax Return in 2023.
As we are fast approaching the end of another financial year, the Australian Taxation Office (ATO) has recently released their 3 key areas of focus for individuals when completing personal tax returns.
Rental Property Deductions
The ATO is finding that individuals are frequently making errors regarding interest expenses on loans for rental properties. The ATO want to ensure that owners of rental properties understand how to correctly apportion loan interest expenses when a part of the loan was used for private expenses, or the loan has been refinanced for private purposes. Should this have accorded owners must ensure that the private portion of the loan cannot be claimed as a rental property deduction during that financial year.
Work-Related Expenses
During a year where individuals working from home patterns may have certainly changed, the ATO is warning individuals to avoid the “copy and paste” method. The ATO want to ensure that individuals are claiming eligible deductions when they are fulfilling their employment from home. In a bid to assist individuals, the ATO has increased the fixed rate method for claiming working from home deductions to 67 cents per hour. It is important to note that, record keeping will become more important for individuals to substantiate the deduction they intend to claim. Importantly for the short-cut method it’s key a diary is kept for at least a 4-week period to track hours worked from home
Capital Gains Tax
When it comes to the Capital Gains Tax (CGT) rules, the ATO will be focusing on the application of the main residence exemption in situations where the property has been used for income producing purposes. For example, the property has been rented out during a period when it wasn’t being used by the homeowner. If that property is eventually sold, individuals may not be able to access to the full main residence exemption rules, and as such will be exposed to the CGT rules.
The ATO is also focusing on the recognition of the disposal of capital assets such as shares, crypto assets, managed investments, or properties. Record keeping for these disposals will be important in determining correct CGT amounts.
For further information click on the following link to the ATO media release at: (https://www.ato.gov.au/Media-centre/Media-releases/In-the-ATO-s-sights-this-tax-time/)
If you would like to discuss your upcoming tax return further, don't hesitate to contact our office on 02 6260 4994 or email reception@gillespieadvisory.com.au