What’s on the ATO hit list in 2021…

Happy New Financial Year.
Today is the first day of the 2021 tax year. so we thought we would put togather a quick overview on what the ATO are targeting this year.

Work from home and work-related expense claims

More than 4.4 million individuals claimed a working from home expense in their 2019-20 return; compared to about 3.16 million in 2018-19.

Whilst the ATO expected a jump in home office expenses, they are expecting certain deductions, such as travel and car expenses, laundering uniforms and business trips, to reduce.

The ATO will be paying close attention to how people apportion items such as internet and telephone costs between private and business use, and expect people to keep good records of the number of hours worked at home.

And further to the compliance burden, the ATO has almost 40 occupation and industry guides outlining the work-related expenses people working in these occupations can and cannot claim deductions for.

Illegitimate claims on rental properties under fire

ATO taxation statistics show that fewer landlords have been making losses on renting out their properties, largely because of lower interest rates.

Of almost 14.7 million people who lodged tax returns in 2018-19, there were 2.24 million landlords (almost 59%) continued to lose money (excluding potential capital gains), on average declaring a net rental loss of $1,352. This loss shrank from $1,623 in the previous year.

Nonetheless, this year the ATO will be focusing on property loans to ensure any private use components are excluded from interest claims.

The gig economy is also in the firing line as the ATO ramps up substantiation requirements through audit to ensure the correct apportionment of expenses are claimed for properties let through platforms like Airbnb and Stayz. 

Cryptocurrency traders urged to report capital gains

The ATO claim to have found more than 600,000 taxpayers trading crypto assets such as Bitcoin. The latest campaign is set to prompt most taxpayers (550,000) as they lodge their 2021 tax return to report their cryptocurrency capital gains or losses.

It is also writing to about 100,000 taxpayers with cryptocurrency assets explaining their tax obligations and urging them to review their previously lodged returns.

Share on facebook
Share on twitter
Share on linkedin
Share on telegram
Share on pinterest

Looking for a business opportunity? Request for a call today!