CPA Australia reveals ‘crucial’ detail Aussies preparing tax return need to know

As the end of the financial year approaches, Australians are being urged to thoroughly prepare their tax returns, ensuring they declare all their earnings and have evidence to support any deductions they make.

The “key” advice from CPA Australia – the country’s leading professional accountancy body – comes as the tax crisis looms, with the tax office likely to investigate claims they believe are disproportionate to normal service expectations.

The company warned that anything that stood out from the crowd could attract the attention of the Australian Taxation Office (ATO).

As a result, the tax office may require additional evidence to support claims that are disproportionate to what would be expected of someone working in a similar position or having similar financial investments.

This year, the ATO is likely to focus on unreported income, including money generated from cryptocurrencies, as well as rental property claims, including owners claiming for renovations as repairs, according to CPA Australia.

For work-related expenses, the ATO is likely to focus on ensuring that expenses are properly allocated between work and private use, including people working from home.

CPA Australia says it is “crucial” to keep a log of all work-related activities, along with relevant remuneration, and recommends maintaining records, including hours worked from home, evidence of running costs such as telephone and electricity bills and receipts and documentation for the depreciation of assets such as machinery and office furniture.

For motor vehicle expenses where the car is used for both business and private use, the CPA says it is important to keep evidence such as a logbook or log book to enable proper identification and justification of the percentage claimed as business use.

CPA Australia spokesman Gavan Ord said it was important everyone paid the right amount of tax and claimed what they were entitled to.

“The ATO uses highly sophisticated analytics to scrutinize all claims, including those relating to work from home and motor vehicle expenses, property rental income as well as undeclared income from investments such as cryptocurrency,” Mr Ord said.

“Your tax return is your personal responsibility and you should be as thorough as possible when reporting your income and claiming your deductions.

“If you don’t report all of your income correctly or claim for overages, the alarm may go off and your claims may be rejected if you don’t have evidence.”

Read related topics:Tax time

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