How to stay away from the taxman's hit list: ATO reveals what will happen when you submit your return – and warns that claims this year & # 39; very close & # 39; will be viewed
- Dodgy tax return claims will be in the sights of the Australian tax authorities this year
- Workload claims and rental capital deduction under further investigation
- There is a deficit of $ 8.7 billion between taxes that individuals expect and actually pay
- Auditors also warned that they will take a closer look at cryptocurrency income
Work benefit claims, deduction of rental properties and income from cryptocurrency will be viewed more intensively this year by auditors from the Australian tax office.
Dodgy tax return claims will be in the sights of the ATO after more than 2.2 million Australians demanded a total of $ 47 billion in deductions during the 2017-18 financial year.
The ATO will crack down on rental deductions, which this year have top priority with doubling the number of audits investigating claims.
The Australian tax authorities have warned 2018-19 tax returns will be investigated more heavily (inventory)
More than 1.8 million Australians own an investment property, according to the ATO.
& # 39; A random sample of declarations with rent deduction showed that nine out of ten contained an error & # 39 ;, said assistant commissioner Gavin Siebert.
& # 39; We are concerned about the degree of non-compliance in this area and will look very closely at claims this year. & # 39;
H&R Block Director of Tax Communications Mark Chapman warned many more & # 39; explain & # 39; that more letters than ever have been issued this year.
& # 39; I think we will see many more audits and more letters due to incorrect claims related to work-related expenses and property, and we will see much more data matching around cryptocurrency and the sharing economy & # 39 ;, Chapman said. news.com.au.
& # 39; They do a lot of research in this space through technology – they link to data, they have benchmarks, if expenses fall outside the norm, people receive a letter that is not a full audit, but invites them to think again & # 39;
ATO auditors view work-related expenses such as clothing claims (stock)
The ATO discovered that work-related expense allowances are the main cause of the $ 8.7 billion deficit between taxes that individuals should pay and taxes that they actually pay.
Claims that get attention include those for work-related clothing, deductions for home office, claims for overtime meals, union contributions and subscription costs, mobile phone and internet costs and $ 300 or less in claims without receipts.
& # 39; Where we identify delivery requests, ATO employees will investigate and promptly encourage taxpayers to change unfounded claims. If necessary, we will start audits, & # 39; said Mr. Siebert.
& # 39; Too many claims deprive the entire community of essential services and will not be tolerated by the Australian community. & # 39;
More than 2.2 million Australians demanded $ 47 billion in tax relief during the 2017-18 financial year, according to the ATO (stock image)
While taxpayers who adjust their revenues due to real errors are not penalized, intentional attempts to abolish the ATO can collect fines of up to 75 percent of the claim.
In 2017-18, the ATO audited more than 1,500 taxpayers with rental claims and issued $ 1.3 million in fines.
One taxpayer had to repay more than $ 12,000 for demanding deductions for their holiday home, which was not really available for rent.
Another received a $ 5,500 punishment for not dividing their rental interest deduction to account for recounts on their investment loan to pay the cost of living.
& # 39; This tax time, our message to taxpayers, is clear. If you rent a room or a house, all the money you earn must be declared as income and all deductions that you believe should be allocated for private use, & said Mr. Siebert.
Claims about labor costs, deduction of rental properties and income from cryptocurrency will be the focus of auditors at the Australian tax office this year
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