29 May ATO issues warning ahead of tax season
The Australian Taxation Office (ATO) has revealed it will be paying close attention to three key things on tax returns for this financial year.
The first relates to property investors making mistakes when it comes to repairs and maintenance deductions.
“You can claim an immediate deduction for general repairs like replacing damaged carpet or a broken window,” ATO Assistant Commissioner Rob Thomson said. “But if you rip out an old kitchen and put in a new and improved one, this is a capital improvement and is only deductible over time as capital works.”
The second area of attention is people incorrectly claiming work-related expenses.
If you make claims based on the fixed-rate method, you need records (like a calendar, diary or spreadsheet) that show the actual number of hours you worked from home and the additional running costs you incurred (like a copy of your electricity or internet bill) to claim a deduction.
The third focus area is failing to include all income when lodging, which can happen if you hurry to lodge your tax return.
“We see lots of mistakes in July where people have forgotten to include interest from banks, dividend income, payments from other government agencies and private health insurers,” Mr Thomson said.