With the new financial year upon us, many people will of course be gathering information to assist with the preparation of their annual tax return.

The Australian Taxation Office (ATO) recently announced four key focus areas for ‘Tax Time 2022’.

The ATO will be focussing on:

• Record-keeping
• Work-related expenses
• Rental property income and deductions
• Capital gains from crypto assets, property, and shares

The ATO is targeting problem areas where they see people commonly making mistakes. There are 3 golden rules that apply to any deductions claimed:

1. You must have spent the money yourself and weren’t reimbursed.
2. If the expense is for a mix of income producing and private use, you can only claim the portion that relates to producing income.
3. You must have a record to prove it.

The focus on work-related expenses means that anyone claiming increased ‘work from home’ expenses due to a change in working arrangements following the pandemic might also expect to claim a reduced amount for items such as motor vehicle expenses, work clothing, parking, and tolls – costs that should in theory diminish to some degree when one works 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.

Each individual’s work-related expenses are unique to their circumstances. If your working arrangements have changed, don’t just copy and paste your prior year’s claims. If your expense was used for both work-related and private use, you can only claim the work-related portion of the expense. For example, you can’t claim 100% of mobile phone expenses if you use your mobile phone to ring mum and dad.

If you are a rental property owner, make sure you include all the income you’ve received from your rental in your tax return, including short-term rental arrangements, insurance payouts and rental bond money you retain.

If you dispose of an asset such as property, shares, or a crypto asset, including non-fungible tokens (NFTs) this financial year, you will need to calculate a 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 of it.

The accounting team at BCV are of course here to assist you at tax time, to answer any of your queries and to ensure you have appropriate records in place to support any deduction you claim. 

Tax return checklists are available on our website for those preparing documentation for their tax return appointment: http://bcvfs.com.au/resources/