As the end of the financial year approaches, taxpayers should be aware that tax season is likely to be different this year, as the ATO warns against using a “copy and paste” approach to previous tax claims due to changes in tax rules. Here are the key points to keep in mind for the 2023 tax season:
1. Work-related expenses will be under scrutiny, as they are considered the largest element in the “tax gap” which is what the ATO expects to collect versus actual results. There are new rules about the set rate for Home Office, with a 67 cents per hour amount and a required logbook. The ATO will also be closely examining deductions for work-related clothing and laundry expenses, overtime meal claims, union fees and subscriptions, motor vehicle claims, and deductions under the $300 threshold without receipts.
2. Investment properties are also expected to be a focus for the ATO, with excessive interest expense claims, incorrect apportionment of rental income and expenses, holiday homes not genuinely available for rent, and incorrect claims for newly purchased rental properties all being closely examined. Taxpayers who own investment properties should keep good records of all related expenses.
3. Cryptocurrency investments will be scrutinized by the ATO, as an increasing number of taxpayers invest in cryptocurrencies and may not properly declare their profits and losses.
4. Sharing economy platforms, such as Uber and Airbnb, will also be under the ATO's microscope due to a new statutory obligation for sharing economy platforms to provide information on participants. Taxpayers who participate in the sharing economy should keep accurate records of all related income and expenses.
The ATO says taxpayers are advised to be honest and not to simply copy and paste their previous year's tax return. They will cross-check claims against those of taxpayers in similar occupations and will be looking for differences in claims made this year due to the pandemic. For everything above, keeping records is the best strategy!