Tax Time 2023 – ATO Key Focus Areas

It is that time of year again to be checking everything is in order with your record-keeping for a smooth process when it comes to lodging your 2023 tax to the ATO.

Whilst all aspects are important in relation to correctly declaring your income and expenses, the ATO have announced three key focus areas for the upcoming ‘Tax Time’ 2023.

The ATO will be focusing on:

Rental Property Deductions: Landlords – Listen up!

This is a yearly reminder for rental property owners to include all income sources from your rental property (including any short-term rental arrangements, insurance payouts, and rental bond claims).

The ATO’s review of income tax returns show 9 in 10 rental property owners have incorrect declarations, and often sees rental income being left out, or mistakes being made with property related deductions – like overclaiming expenses or claiming for improvements to private properties.

The ATO is particularly focused on interest expenses and ensuring rental property owners understand how to apportion loan interest expenses correctly where part of the loan was used for private purposes (or the loan was re-financed with some private purpose).

Work-related Expenses: Avoid the ‘copy-paste’

This year, the ATO is particularly focused on ensuring taxpayers understand the changes to the working from home methods, and if claiming home office expenses the taxpayer can back up their claims.

To claim your working from home expenses as a deduction, you can use the actual cost, or the revised fixed rate method, so long as you meet the eligibility and record-keeping requirements (maintain a 4 week diary between 1 July 2022 to 28 February 2023, and from 1 March 2023 the taxpayer is required to record the total number of hours worked from home).

Capital Gains Tax: Have you considered all assets?

Capital gains tax (CGT) needs to be calculated when you dispose of assets such as shares, crypto, managed investments or properties. To ensure taxpayers are meeting their obligations and paying the correct amount of tax, the ATO has a particular focused to ensure taxpayers who need to calculate a capital gain or capital loss, include these CGT events for each asset you dispose of unless an exemption applies.

With ‘Tax Time’ 2023 nearly here, please don’t hesitate to reach out to our offices on 1300 365 125 or email us at [email protected] to book in an appointment today.

The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.

References: In the ATO's sights this tax time | Australian Taxation Office