Australian Taxation Office (ATO) target areas for tax time 2023
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The ATO has provided some insights to the areas it will be focusing on consisting of rental property deductions, work-related expenses, and capital gains tax.
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Specifically, the ATO will be targeting loan interest expenses, working from home deductions, and possible capital gains tax where a main residence is also used for income producing purposes. Overall this tax time, the ATO expects fewer individuals to receive refunds or to receive smaller refunds, and more individuals perhaps with tax debts.
A recent ATO review indicated that nine out of 10 rental property owners are getting their returns wrong, so it is no surprise that this area remains as one of the main tax time targets. Common mistakes of taxpayers include rental income not being reported, overclaiming expenses, or claiming improvements to private properties. However, this tax time, the ATO is particularly focused on interest expenses.
Further, the ATO reminds taxpayers of the recent commencement of the residential investment property loan data matching program that spans the income years of 2021–2022 to 2025–2026. Data such as amounts of interest charged and loan repayments from various financial institutions will be used to identify discrepancies in returns lodged.
The other focus area the ATO will be enforcing is work-related expenses. There have been changes to the methods to work out working from home deductions from 1 July 2022. From that date, you can either choose the actual cost method or the fixed rate method, with the 80 cents per hour “shortcut” method no longer available. To use either of the available methods, you’ll need to keep appropriate records, including the total number of hours worked from home.
The ATO’s last area of focus for tax time 2023 is CGT. In addition to the usual disposal of assets such as shares, crypto-assets, managed investments and properties, the ATO will be looking at situations where a main residence or part of a main residence is used to produce income and is then subsequently sold. This applies where you have rented out all or part of your main residence through traditional means or through the sharing economy (using Airbnb, Stayz, etc), or where a business is run from home.
Born in Mansfield in the Victorian high country, Andrew started school in Orbost. After graduating from Melbourne University in 1992, Andrew commenced his career with what was then Price Waterhouse (now PWC). Andrew moved to Bairnsdale in 1995 and has lived in East Gippsland ever since. One of the founders of the practice in 2000, the year GST came to Australia, Andrew is married to Michelle, a third generation East Gippsland resident, and proud father of Nelson and Georgia, who attended local schools for their primary and secondary education.
Andrew and Georgia are keen participants in triathlon and multi-sport events, and in 2022 participated as father and daughter in the Age Group Triathlon World Championships in Abu Dahbi. This year, they will participate together in the Multi-Sport World Championships in Townsville.
As the owner and founder of a business in East Gippsland, Andrew understands the local issues that impact on your business. The impact of flood, bush fires, drought, and the vagaries of world commodity prices can be better understood when you are deeply immersed in the local community.
Dealing with banks and the Australian Taxation Office when you live in a rural area is easier to understand when they happen in your back yard.
Ryan Gaul CA
Ryan, a Chartered Accountant, relocated from Essendon to Lakes Entrance in 2020 to be with his wife, Morgan. In Melbourne, Ryan worked under the guidance of accountant and player manager Peter Jess, serving clients that ranged from small to medium-sized businesses, AFL players, entertainers, and athletes.
After his move to Lakes Entrance, he joined Martin Taylor Associates. Since joining the firm Ryan has enjoyed the challenges of the agricultural sector and has worked closely with Andrew to develop his knowledge in this area.
Ryan is actively involved in the local community. He joined the Buchan Football Netball Club as a player and took on the role of Treasurer. He also serves as the Treasurer for the East Gippsland Farm Dog Group. Ryan’s wife Morgan runs her own speech pathology business which services the East Gippsland region.
Jan Roach
Jan has worked in public accounting in Orbost for 40 years and is one of the founders of the practice. Married to Johno (now retired long-term builder), proud mother of Adam, Paul and Nick and proud grandmother to Owen, Tess, Teagan, and Millie.
Having been in business, Jan understands compliance can sometimes be overwhelming, and will help you navigate the right path. Jan has a strong affiliation with our trade and primary producer clients.
Kerry Ellis
Kerry has worked in administration in public accounting and legal practices for nearly 15 years. Kerry understands when you contact us, you need to talk to someone who has or can get an answer to your query. Kerry controls the workflow in our practice and manages our interactions with the ATO, ASIC and the banks. Kerry understands the challenges of providing information to big bank data centres and dealing with Centrelink.
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