The ATO has again emphasised the importance of good tax record keeping for income earned in 2021-22 and for expense deductions.
It says this will guarantee a smoother tax time but warns it will take “firm action” against individuals who falsify records or can’t substantiate deduction claims.
The regulator is also focusing on work-related expenses, particularly deductions claimed by people working from home. It expects reduced car, clothing, and other deductions such as parking and tolls.
Individuals can choose from the government’s shortcut (all-inclusive), fixed rate and actual cost methods, provided they meet eligibility and record keeping requirements.
“The ATO’s been cracking down on work-related expenses for a few years,” Kasapidis says.
“It’s about making sure practitioners take reasonable care, so make sure the client has the required records and educate them about what they need to do.
“Also, let them know that the shortcut for working from home expenses will not be available from 1 July.”
The ATO notes the importance of taxpayers understanding the rules for claiming different types of work-related expenses.
“While some make genuine mistakes, we do see people trying to gain an unfair advantage by claiming incorrect or false expenses,” it says.
“A mistake we often see in tax returns is people claiming expenses twice.”