The ATO has advised that it will be focusing on unusually high work-related expense claims and rental property deductions this tax season.
Work-related expense claims
In addition to focusing on work-related expense claims that are significantly higher than those claimed by people with similar occupations and employment income, the ATO will also pay particular attention to claims:
• that have already been reimbursed by employers, and
• for private expenses such as travel from home to work.
The ATO has reminded that when claiming work-related travel expenses, taxpayers cannot claim for a normal trip between home and work, unless:
• they use their car to carry bulky tools or equipment which they use for work and can’t leave on the work premises
• their home is a base for employment or they have shifting places of employment (eg they regularly work at more than one place each day).
Rental property deductions
In particular, the ATO will pay close attention to:
• excessive deductions claimed for holiday homes
• husbands and wives splitting rental income and deductions for jointly owned properties that are not supported
• claims for repairs and maintenance shortly after the property was purchased, and
• interest deductions claimed for the private proportion of loans.
The ATO will also actively educate rental property owners about what they can and cannot claim. For example, the ATO will be writing to rental property owners in popular holiday locations, reminding them to only claim the deductions they are entitled to, for the periods the property is rented out or is genuinely available for rent.
This article is provided as general information only and does not consider your specific situation, objectives or needs. It does not represent accounting advice upon which any person may act. Implementation and suitability requires a detailed analysis of your specific circumstances.