The Australian Tax Office has warned it will target three groups of Australians as it clamps down on claims of unreliable tax returns.
Homeowners, residents working from home and Australians who don’t include all their income will be closely scrutinized by the tax office.
“We often see landlords make mistakes when it comes to repairs and maintenance deductions on rental properties, so we are monitoring this closely,” ATO assistant commissioner Rob Thomson said.
“This year, we will especially focus on claims that may have been inflated to offset increases in rental income and obtain a greater tax benefit.”
Millions of Australians will be able to file their own tax returns between July 1 and October 31, as the end of the financial year approaches.
The Australian Tax Office has revealed it will crack down on landlords, home working deductions and income claims this financial year.
According to the ATO, nine in 10 landlords file incorrect tax returns.
“There is some complexity in the law which we think leads to some misunderstandings, and there is also an element around record-keeping,” Mr Thomson said.
However, he accused other owners of “deliberately inflating their claims.”
Homeowners are often arrested for claiming too much interest on investment loans and making mistakes in repairs and maintenance deductions.
The ATO’s data matching and analysis technology analyzes information from lenders, property managers, state revenue offices and insurance companies to detect inconsistencies in claims.
“We educate those we believe have made a mistake and ask some questions of those we believe are turning a blind eye to tax legislation,” Mr Thomson said.
Last year, more than eight million people claimed work-related deductions and at least half were related to work-from-home (WFH) expenses, according to the report. Daily Telegraph reported.
The ATO rules for working from home deductions changed twice in the 2022-2023 financial year.
Accountants had reported increased confusion over the popular flat-rate method for deductions, but Thomson said the error did not show up on tax returns.
“We have not seen any notable increase in errors in work-from-home deductions, but we are still seeing cases of double dipping, where the taxpayer separately claims items that are included under the flat rate method,” he said.
Thompson said the third group, Australians who don’t include all their income, usually make the mistake of filing their tax return too early.
“We see a lot of mistakes in July where people have forgotten to include interest from banks, dividend income, payments from other government agencies and private health insurers,” he said.
“If you file in early July you will double your chances of having your tax return flagged as incorrect by the ATO.”
The ATO adjusted the tax returns of 499,000 taxpayers using data matching alone last financial year.
The ATO is believed to be focusing on work from home claims, landlords and incorrect income claims as this is where you lose the most income.
Daily Mail Australia has compiled a list of top expert tips on how to get the most out of your tax return.
The consensus on making the most of tax season, including work-from-home, clothing and transportation deductibles, is to keep records that support your claim.
Millions of Australians will be able to file their own tax returns between July 1 and October 31
WORKING FROM HOME
Acumen financial planner Cameron McLean said people can claim costs such as electricity when working from home, as long as they have proof.
“The Australian Tax Office needs you to be quite specific,” McLean previously said. 9News.
“They need you to know specifically how many days you are working and what part of the house is used.”
He added that people should keep track of these throughout the year for the next tax return.
The ATO said taxpayers can get deductions for stationery, energy and office equipment used in the home.
The agency said people who want to file a claim should work from home to fulfill their job duties and not simply perform minimal tasks such as occasionally checking emails or taking calls.
Additional ongoing expenses may include electricity or gas bills for heating, cooling and lighting, as well as mobile and home Internet charges and mobile or home phone costs.
In limited circumstances where someone has a dedicated home office, you can also claim rent or mortgage costs and cleaning expenses.
CLOTHES
Mclean said Australians can claim for clothing used for specific occupations.
A chef can claim laundry costs for their checked trousers, for example, as long as they have the receipts on hand in case the ATO asks for them.
The ATO said workers who buy, repair or launder protective or occupation-specific clothing or distinctive uniforms can claim a refund.
But he said “conventional” clothing, such as black pants worn by office workers or waiters, cannot be claimed at tax time.
This includes business suits, a swimming instructor’s swimsuits, and jeans or denim shirts worn by merchants.
GIFTS
Taxpayers can claim deductibles for gifts and donations they offer to charities, as long as the organization is registered.
Donations to crowdfunding platforms such as GoFundMe cannot be claimed, but registered charities such as World Vision Australia can.
The amount you can claim as a deduction depends on the type of gift, for example with gifts of money; You can claim the gift amount if it is more than $2.
In some circumstances, you can claim a deduction for gifts and donations to registered political parties or independent candidates.
The most you can claim in one year’s income is $1,500, the ATO said.
TRANSPORT
You can claim back costs incurred when traveling between workplaces, conferences or client meetings.
For motor vehicle expenses, it is helpful for people to keep a log book for a three-month period that gives an idea of how much they spend during the year.
You can also claim expenses for the same trips when using public transportation and ride-sharing, short-term car rental, road and bridge tolls, and parking fees.
EDUCATION
Australians can get course deductibles if they relate to their current job, but they can’t claim them if it’s to gain new qualifications for another occupation.
The ATO said parents cannot recover money for childcare or school fees.
ATO assistant commissioner Rob Thomson (pictured) warned: “We educate those we believe have made a mistake and ask some questions of those we believe are turning a blind eye to the tax law.”
WHAT AUSSIES CANNOT CLAIM
The ATO said items such as tools and computers used for private purposes cannot be claimed.
McLean said she has come across some strange items that people try and claim, such as socks, trainers and breast augmentation surgery.
One man even tried to get his daughter’s wedding money back by telling her it was for “all the taxes she’s ever paid in her life.”
A complete list of what cannot be claimed is available at the ATO website.
‘DON’T LEAVE IT TO THE LAST MINUTE’
McLean said Australians should start preparing now for the next tax return so they don’t miss out on future tax benefits.
He urged taxpayers not to leave it to the last minute and advised having an accountant or financial advisor.
A financial advisor can take a look at someone’s super to see how much they can recover before the new financial year.