What will ATO really focus on your 2022 Tax Returns?

With only a few weeks left for your tax return in 2022, it is important, you rethink organising your income and deductions records to ensure maximum tax returns. Today we talk about the key focus areas of the ATO:

1. How do you organise your records on expenses that are tax-deductible?
2. Claiming work-related deductions in a hybrid or non-hybrid working environment.
3. Any capital gains from your assets, digital currencies, and shares.
4. Deductions on income and expenses of the rental properties

Remember if you cannot justify your claim, you are inviting trouble. As accountants, our duty is to ensure maximum refund but NOT by false claims.

*Remember you MUST have a record to prove it and that you have spent the money by yourself.

Organising your records on expenses.

The records are usually a receipt on your purchase of goods or services from a supplier. The receipt of your record must include:

1. The name of the supplier
2. The amount of the expense you are claiming
3. Date of the receipt or the document
4. Date of the expense being paid
5. Nature of the goods or services you purchased. For example, claiming a working related expense to

According to Madeeha Usman, the senior accountant of The Kalculators, “If you are unable to keep a record, there are exceptions available to keep it simple – however that needs to be justified by showing YOU spent the money, and how the claim was calculated.”

In certain circumstances, if you do not have documentation and have paid cash to a supplier. You will not be able to claim a deduction due to insufficient evidence on your claim. According to the ATO’s discretion on record-keeping – if an individual is unable to claim a receipt, you can still claim a deduction based on the quality and nature of the evidence provided:

1. The individual spent the money
2. The individual is entitled to claim a deduction

An evidence could be the bank or credit card statement, showing – Who it was paid, when was it paid, and the amount that was paid.

Important Tip:?Always keep your records for 5 years, from the date of your tax lodgement.

Claiming deductions for individuals in a hybrid working environment.

Be it a hybrid or working from home environment, to claim you work-related expenses, you must:

1. You must have spent the money yourself, and you weren’t reimbursed.
2. The expense must relate directly to earning your income.
3. You MUST have a record to prove it.

You must apportion your expenses in such a way, to claim only work-related expenses. For example, Chris is working from home 3 days a week and travels to work 2 days a week.?He wants to calculate his phone bill, which he also used for making work calls. For example, if he is claiming $50 or less:

1. For the landline phone used by Chris – 25 cents for each work call made.
2. For using his personal phone – 75 cents for each call made from his mobile.
3. Text message – 10 cents for every text message sent.

If Chris is claiming more than $50, he should:

1. Keep all his Internet and phone bills for the year
2. Show much is work-related

What about capital gains, assets or digital currencies?

Any disposable of a crypto-asset, NFT (Non-fungible tokens), shares or property. You are required to calculate your capital gain or loss and record it in your tax return. Any capital loss or gain is the difference between how much you purchased it for? And how much you dispose of it for?

*Remember you cannot offset your capital losses against your income and wages.

Important Tip, ATO takes their data collection process very seriously so any unfair deductions or claims can be penalised heavily.

Be mindful of the deductions claimed as a rental property owner.

Keep records of all the rental property income you may have received from insurance payouts, retained rental bond money, and even short–term rental arrangements. As all your rental property deductions are entered manually, please avoid complications or discrepancies. Seek help from a professional, to avoid delays or even correct your refunds.

Have questions?

Speak to our friendly team of accountants for understanding your claims and deductions. With over 8 office locations in Adelaide, you can also book an appointment at our nearest office to your location.

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Why not book an online consultation with us! We also provide phone, skype and zoom based appointments to value your time and convenience.?To book an appointment simply give us a call on??08 7480 2593?or simply click on “book an appointment”