We have once again reached Tax Time and the ATO has released a ‘Hit List’ outlining its compliance target areas for this year.

Uber & Airbnb

Special attention will be directed toward those who earn income through sharing economy platforms, such as Uber & Airbnb. The popularity of these platforms has increased dramatically in recent years and the ATO is concerned that tax payers are not declaring all of their income.

Investment Properties & Holiday Homes

• Investment properties and holiday homes will also be on the radar this year with a particular focus on the following common issues:
• Over claiming of general rental property deductions;
• Rental property is not genuinely rented out or available for rent;
• No adjustment made for private use of holiday homes;
• Renting a property to family or friends at less than market value (i.e. reduced rent).

Work-Related Deductions

1. Motor Vehicle Deductions

• Trips between home and work – generally these trips are considered private travel and cannot be claimed as a tax deduction.
• Transporting bulky tools & equipment – you must be required by your employer to use the tools and equipment to do your job. There must also be no secure place to store the tools and equipment at your workplace.

2. Travel

• Private Travel – often work related trips will include a private component. You can only claim the portion of the trip that is work-related.
• Meal Expenses – these cannot be claimed unless you were required to work away from home.

3. Uniform Costs & Laundry

• Uniform costs – everyday clothes are not considered to be a uniform for tax purposes, even if you are required to wear them by your employer.
• Laundry Costs – you must show how you calculate a deduction for laundry costs. The laundry costs must relate to the cleaning of a uniform for tax purposes.

4. Self-education costs

• There must be a direct connection to your current employment – future employment doesn’t count.

5. Phone & Internet Costs

• Only the work-related portion of your phone & internet costs can be claimed.

A good way to ensure that you reduce your risk with the ATO is to follow their ‘Tax Deduction Golden Rules’:

1. Did you PAY the expense?
2. Does it RELATE to earning your income?
3. Do you have a RECORD to prove it?

We also recommend that you review our comprehensive income tax return checklist to ensure that you are maximising your tax deductions – please refer to our recent blog post.

If you need help working out what you are eligible to claim give us a call on (07) 3831 1055.

DISCLAIMER: The information on this website and the links provided are for general information only and should not be taken as constituting professional advice from Hall Browns Accountants. You should consider seeking the appropriate legal, financial, or taxation advice to check how the website information relates to your unique circumstances.