By Ben Spiers, Director.
The 2022 tax season is well under way, so if you haven’t already, now is a good time to collate your information ready to get your tax return prepared. You can also refer to our Individual Tax Return Checklist for help in gathering the information required. In doing so, keep in mind the ATO’s 4 key focus areas for Individuals for 2022.
The ATO has been undertaking a crypto asset data-matching program since April 2019, collecting data on crypto transactions back to 2014/15. A reminder that if you sell/dispose/exchange crypto assets, including NFTs (non-fungible tokens) then you will need to report this transaction as a capital gain or loss in your tax return.
Rental Income & Expenses
All income received from rental properties should be included in your tax return, including tenant reimbursement of expenses, insurance payouts and rental bonds retained at the end of a tenancy. Income from short term rentals like AirBnB, Stayz and other holiday rentals should also be included. Where the property is vacant for periods, or if you use the property personally, you may need to apportion the expenses that are claimed.
Work related expenses
The way people are transition to a more hybrid working environment will likely mean that your expenses and deductions will change. If you are working more hours from home, we would generally expect motor vehicle expenses to decrease and vice versa.
Keeping the right records for your expenditure is the key to claiming the correct amount on your tax return. There are different requirements for different items, but generally the more detail and information that you have, the better. Below are a few key areas where record keeping is critical;
Motor Vehicle expenses:
- If claiming under the cents per kilometre method, a list of all the trips taken for work is ideal. This is best if maintained during the year, but can be recreated using diary or calendar entries that verify where you have travelled on particular days
- If using the logbook method, the requirements are a lot more strict. To ensure the logbook is valid it must go for 12 weeks and be representative of your travel throughout the year. It needs to cover each journey and detail the date and odometer readings at the start and end of each journey as well as the reason for the journey. More details on what to record are available here.
Working from home:
- Under the ATO shortcut method a deduction of 80 cents per hour can be claimed when working from home. This needs to be supported by timesheets, rosters or diary entries
- Using the fixed rate method of 52 cents per hour, a record over the year or a diary for a 4 week period that is representative of your work from home patterns is required.
Phone and Internet:
- If your phone/internet plan does not itemise calls or data usage, you need to maintain a record of all usage over a 4-week period and calculate the work use on this basis
- You need to consider a reasonable basis to calculate this, which could be number of calls, length of calls or data downloaded for work as a percentage of total usage. The usage of other household members should also be considered in these calculations
If you have any questions regarding the tax implications of cryptocurrency or whether or an expense can be deducted, please get in touch with us.
The information provided in this article is general in nature and does not take into account any person's particular financial situation or needs. Please contact us for advice specific to your circumstances.
This information is current at the time of publication and further updates may have occurred since that date.