ATO warns it will be focusing on 3 common errors this Tax Time 2024

During ‘Tax Time’ the ATO has warned that it will be taking a close look at the following areas which taxpayers make mistakes with:

• Incorrectly claiming work-related expenses
• Inflating claims for rental properties
• Failing to include all income when lodging

Work-related expenses

Last year, the ATO revised the fixed rate method of calculating a working from home deduction to broaden what is included, increase the rate, and adjust the records you need to keep.

You need:

• To keep records that show the actual number of hours you worked from home (like a calendar, diary or spreadsheet)
• The additional running costs you incurred to claim a deduction (like a copy of your electricity or internet bill)

Remember, there are 3 golden rules for claiming a deduction for any work-related expense:

• you must have spent the money yourself and were not reimbursed
• the expense must directly relate to earning your income, and
• you must have a record (usually a receipt) to prove it.

Rental properties

The ATO states on its website that they will be keeping a close eye on landlords because of mistakes made to repairs and maintenance deductions on rental properties and claims that may have been inflated to offset increases in rental income to get a greater tax benefit.

Carrying out general repairs and maintenance on a rental property can be claimed as an immediate deduction. Examples include replacing a damaged carpet or a broken window.

However, expenses which are capital in nature (like initial repairs/new kitchen on a newly purchased property and any improvements during the time you hold the property) are not deductible as repairs or maintenance. A capital improvement is only deductible over time as capital works.

Rental property income and deductions can be complex. If you are a rental property owner, we can carefully review your records before lodging a return and take care to ensure you are claiming deductions correctly. 

Income from multiple sources

Before you lodge your tax return, you need to ensure that you have included interest from banks, dividend income, payments from other government agencies and private health insurers.

For most people, this information will be automatically pre-filled in their tax return by the end of July.

How we can help

TaxAssist Accountants can help with all of your requirements this Tax Time. Call us on 02 9174 5757 or contact us here.

Date published 19 Jul 2024 | Last updated 26 Jul 2024

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.