What information is important when preparing your Tax Return

The key areas that the Australian Taxation Office (ATO) will be focusing on when you complete your 2021-2022 Tax Return are:

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

When determining what you can claim as a deduction in your Tax Return, you can follow the three rules:

1. You must have spent the money yourself and not be reimbursed by your employer.
2. If the expense is for a combination of private and producing an income, then you can only claim the portion that is for producing an income.
3. You must ensure you have all the records to prove the deduction.

Recordkeeping

With the end of the financial year fast approaching, you can still start organising all your income and deductions that you have kept throughout the year. This will make the process easier for claiming the deductions to which you are entitled.

The ATO will take firm action against taxpayers who deliberately try to increase their refund, falsify records, or cannot substantiate their deductions.

Mistakes are often made when people rush to lodge their tax returns in July by not including interest from banks, dividend income, payments from other government agencies and private health insurers.

By the end of July some of this information will be automatically pre-filled in your tax return, this makes the process smoother, saves time, and ensures for no mistakes being made.

To lodge earlier you will need to allow for extra time to manually add all your income.

You can check if your employer has marked your income statement as ‘tax ready’ as well as when your pre-fill information by going on to myTax or on the ATO app. This will ensure that an amendment will not have to be made later resulting in delays to your refund.

Rental income, foreign sourced income and capital gains events including shares, crypto assets or property are not pre-filled, you will need to obtain this information yourself.

Work-related expenses

If you have continued to work from home the ATO would expect to see a corresponding reduction in car, clothing, and other work-related expenses such as parking and tolls.

There are three methods available to claim a deduction for your working from home expenses:

1. Shortcut (all-inclusive)
2. Fixed rate
3. Actual Cost Methods

Call our office on (03)9848 5933 or contact us if you require assistance in what method to use.

If your working arrangements have changed from the previous year, make sure you don’t just use the same figures.  If your expenses are a combination of work-related and private use, you can only claim the work-related portion. For example, if you use your mobile phone for both private and work you cannot claim 100% of the mobile phone expense.

Rental income and deductions

For rental property owners, all income you have received from your rental should be included in your tax return, including short-term arrangements, insurance payouts and rental bond money you retain.

It is essential that all records and supporting documentation are kept as rental income and deductions are entered manually, if you need assistance, please do not hesitate to call (03)9848 5933 or contact us.

Capital gains from crypto-assets, property, and shares

Capital gains and capital losses from disposing of an asset such as property, shares, or a crypto asset, including non-fungible tokens (NFTs) this financial year will need to be calculated and recorded in your tax return.

The difference between what an asset costs and what you receive when it is disposed is considered a capital loss or capital gain.

Crypto asset is becoming a popular asset so remember you cannot offset your losses against your salary or wages.

Source: www.businessaustralia.com/resources