Sep 5, 2022 Matthew Hung

ATO’s Four Priorities for 2022

The ATO has announced the four areas that will be its focus of attention this tax season.  Let’s take a look.

Focus Area 1: Record- keeping

• Double claiming of expenses already reimbursed by employers
• Unsubstantiated claims and falsified records

Focus Area 2: Work Related Expenses

• For those in a hybrid working environment since the beginning of the pandemic, the expectation is to see a corresponding reduction in car, clothing, toll, and parking expenses
• Claiming an excessively high percentage of certain type of expenses which are used for a mix of income producing and private use such as mobile phones
• ‘Copy and paste’ work expenses from the prior year tax return!

Focus Area 3: Rental Income and Deductions

• Has all income received in the year been declared including short-term rental arrangements, insurance pay-outs or any rental bond money you retained
• Any discrepancies in the manually completed rental schedules

Focus Area 4: Capital Gains from crypto assets (including NFTs), property and shares

• Through its data collection process, the ATO has been tracking many buy, sells and exchanges of digital coins and assets and will be checking if individuals are correctly reporting their capital gains
• Crypto losses being incorrectly claimed as a deduction against income instead of being reported as a capital loss

Incorrect claims in these areas tend to stem from poor record-keeping or a misunderstanding of the tax rules. Often we find that clients are either unaware that some income (especially on digital platforms and apps) have to be reported or were confused by the eligibility criteria for the deductions they want to claim.

We are here to assist clients make sure that all these areas have been covered properly in their tax return. Keep good records (log books, receipts, travel diaries, etc.) and we will take care of the rest.