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ATO AUDITS - ARE YOU IN THE FIRING LINE?

13
Jun

ATO AUDITS - ARE YOU IN THE FIRING LINE?

Thursday, June 13, 2019

Hundreds, if not thousands of Aussies receive 'please explain' letters from the ATO - this year be no different.

Facing a so-called $8.7 billion “tax gap” spurious work-related claims like dry cleaning, home office and car expenses will once again scrutinised, along with investment property deductions and earning from crytocurrencies along with those who make a living from platforms like Uber.

With data-matching and cross checking now fundamentally easier than ever before, anything outside the 'norm' will generally be flagged.

Deliberate attempts to over-claim can attract penalties of up to 75 per cent of the claim.

The ATO says it audited more than 1500 taxpayers last year over rental claims and handed out penalties totalling $1.3 million.

Claims for work-related clothing, dry cleaning and laundry expenses will again be front and centre, with the organisation indicating it will be checking taxpayers who take advantage of the exemption from keeping receipts for people who spend less than $150 on laundry expenses.

Other areas include:

• Deductions for home office use, including claiming for “occupation” costs like rent, rates and mortgage interest, which are not allowable unless you’re actually running a business from home.

• Overtime meal claims

• Union fees and subscriptions

• Mobile phone and internet costs.

• Motor vehicle claims where taxpayers take advantage of the 68-cent-per-kilometre flat rate available for journeys up to 5000km.

• Incorrectly claiming deductions under the rule that allows taxpayers who have incurred work-related expenses of $300 or less in total to make a claim without receipts.

It will also be looking at the incorrect apportionment of rental income and expenses between owners & holiday homes that are not genuinely available for rent plus incorrect claims for newly purchased rental properties.

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