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ATO Focus Areas for FY 2024

Updated: May 8

As the Tax Time approaches the ATO has released its list of focus areas.  Expect them to be looking at the following in no particular order: Record keeping, work related expenses, rental property income and deductions, the sharing economy & capital gains from crypto, property & shares.


Work-Related Expenses

The ATO is closely examining claims for work-related expenses, a significant factor contributing to the $8.7 billion tax gap. Here's what they'll be scrutinising:


  • Home office expenses

  • Occupational costs

  • Mobile and internet expenses

  • Clothing

  • Overtime meal allowance

  • Union fees & subscriptions

  • Motor vehicle claims

 

Ensure you understand what can and can’t be claimed and that you have the necessary proof (invoices, receipts, diaries) and that you actually incurred the expenditure, and it was work or business related.

 

Property Focus

With audits revealing errors in 90% of returns, deductions related to property investments are under intense scrutiny. Look out for:

  •    Overstated interest claims

  •    Proper allocation of income and expenses

  •    Tax implications of holiday homes

  •    Claims for newly acquired properties


Property owners should ensure they keep good records for all property expenditure as well as proof of rental.

 

Sharing Economy

The ATO is concerned that many people in the sharing economy are not correctly declaring their profits and gains.  So if you obtain work through sharing economy platforms such as Uber, Airtasker or AirBNB you will attract ATO attention. Accurate reporting of profits is crucial, as discrepancies with third-party data can raise flags.

 

Cryptocurrency Concerns

The ATO is monitoring the surging cryptocurrency market.  Failing to disclose profits could result in Capital Gains Tax (CGT) obligations, tracked through data-matching programs and digital service provider (DSP) records.


Shares

When you dispose of shares, assuming you are an investor, not a trader, you will normally have to pay CGT on any profits.  If you regularly buy and sell shares you may be deemed a share trader and the tax you pay could look very different.  Make sure you have the necessary information about all your share sales so you can report accurately to the ATO.


With Tax Time looming, understanding the ATO's compliance focus is essential.   Adhering to regulations, maintaining records, and ensuring accurate reporting are the keys to avoid ATO scrutiny.


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