The Australian Taxation Office (ATO) has indicated the four key focus areas for the 2021/2022 Financial Year.
The ATO will be focusing on:
- record-keeping
- work-related expenses
- rental property income and deductions, and
- capital gains from crypto assets, property, and shares.
These ATO priority areas will ensure that there is an appropriate level of scrutiny on correct reporting of deductions and income, so that Australia continues to have a strong tax system that can support the Australian community.
Record Keeping
Records are evidence of both income & expenses that are kept via written or electronic receipt. You need to keep records for 5 years (in most cases) from the date you lodge your tax return. You need to keep specific records that support the claims and declarations you make as the ATO may request them to verify all information recorded on the lodged tax return.
Work-related Expenses
Expenses that are incurred by you during your activities as an employee, that where required to fulfil your duties as a paid employee. A common one is expense related to working from home.
To claim a deduction for your working from home expenses, there are three methods available depending on your circumstances. You can choose from the shortcut (all-inclusive), fixed rate and actual cost methods, so long as you meet the eligibility and record-keeping requirements.
Rental income & deductions
If you are a rental property owner (houses, apartments, units, factories), make sure you include all the income you’ve received from your rental in your tax return. Also, including short-term rental arrangements, insurance payouts and rental bond money you retain. Records will also need to be kept as with other claims & deductions.
Capital gains from crypto assets, property, and shares
If you dispose(sell) of an asset such as shares, property, or a crypto asset, including non-fungible tokens (NFTs), you will need to calculate the capital gain or capital loss and record it in your tax return.
Generally, a capital gain or capital loss is the difference between what an asset cost you and what you receive when you dispose(sell) of it.
If you have any questions, you can contact us with your query and we’ll get to you as soon as possible.