Each year, the Australian Tax Office sets its focus on particular areas they'll be honing in on as they review tax returns and where we're trying to reduce our taxes. This year is no different with cryptocurrency earnings, money made from new platforms like Uber, home office expenses and work-related claims on their hitlist.
Home office deductions, phone and internet use and work equipment deductions are in the ATO's sights this year. The tax office does allow for legitimate deductions to be claimed if you're running a home office. They provide guidance on utilities and depreciation for your home office. As a general rule, you can claim a proportion of your home bills that matches the amount of space dedicated to the office. So, if your office counts as 10% of the home's floor space, you can claim 10% of your heating and energy costs. They also say you can keep a diary of a representative period or claim a flat $0.45 per hour for the time you spend working in your office.
And that needs to be a dedicated space. if you work from the kitchen table - that doesn't count.
With deductions, the ATO provides advice about what's legit and what's not on their website. It's important to keep your documentation straight in case you are audited. That means keeping receipts (scanned copies are fine as long as they are unaltered) and other documentation so the audit process can go through as smoothly as possible.
Earlier in the year, the ATO issued a warning, telling people to keep appropriate receipts and other documentation, particularly for what they call "other work-related expenses". And that warning is accompanied by ATO staff being directed to undertake random audits to make sure people are following the rules when it comes to work-related expenses. So, what can you do to ensure you aren't hit with any fines or extra payments to the ATO?
It's worth noting that if you claim home office expenses, then there may be a Capital Gains Tax liability to consider when you sell your home.
Cryptocurrency earnings are another thing the ATO is looking at. It's important to remember that they look at more than just tax returns when evaluating claims. They might even trawl though your social media posts to look for folks showing off wealth that doesn't tally up with their claims.