Focus areas for the ATO this tax time are rental property deductions, work related expenses and Capital gains tax (CGT) – The ATO will be supporting taxpayers and their registered agents by addressing reoccurring errors. ATO reviews of income tax returns show that a large number of rental property owners are getting their returns wrong. For example overclaiming expenses / not getting initial repairs and capital improvements right, copying and pasting prior years claims. Good records are key.
What’s new or different this tax time – Changes include how common deductions such as working from home and car expenses are calculated. From 1 July 2022, the revised fixed rate method for calculating a working from home deduction has increased from 52 cents to 67 cents per hour worked from home, and no longer requires you to have a dedicated home office space. The expenses covered under the revised fixed rate have also changed, as have the record keeping requirements.
What people need to know about car expenses this year – The two different methods of ‘cents per kilometre’ or ‘logbook method’ available to calculate car expense claims. The cents per kilometre rate has increased from 72 cents to 78 cents for the 2022-23 income year. If you use a motor vehicle for both business and private use, you must be able to correctly identify and justify the percentage that you are claiming as business use.
Reduced refunds – Anticipated impacts as a result of the low and middle income offset (LMITO) ending on 30 June 2022, resumed commencement of credits and refunds paying of debts ‘on hold’. If a client are having trouble meeting tax obligations engage with the ATO as soon as possible about it.
Superannuation this tax time – Perform the ‘Super Health Check’. The Super Health Check consists of five simple things you can do to make sure that you and your clients are on top of their super:
- Check your contact details
- Check your super balance and employer contributions
- Check for lost and unclaimed super
- Check if you have multiple super accounts and consider consolidating
- Check your nominated beneficiary
Side hustles – Increasingly there are many new different ways people make money to supplement income and ATO data matching capabilities are evolving to ensure taxpayers continue to correctly meet their tax obligations - and declare their side hustle income.
