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Tax Time 2024: ATO Zeros in on Work-Related Expenses and Rental Property Income

As the end of the financial year approaches, business owners and property investors need to be aware of the Australian Taxation Office’s (ATO) focus areas for 2024 EOFY. The ATO is looking closely at work-related expenses and rental property income, so making sure your tax return is accurate the first time can help you avoid potential audits or penalties.

What You Need to Know About Tax Time 2024

ATO’s Focus Areas for 2024

For the 2023-2024 tax year, the ATO has identified three key areas of concern: incorrectly claiming work-related expenses, inflating claims for rental properties, and failing to include all income when lodging 2023-2024 tax returns.

Work-Related Expenses: What’s Changed?

Claiming Deductions for Working from Home

In 2023, over 8 million Australians claimed work-related deductions, with many relating to working from home. The ATO has updated the fixed rate method for these deductions to include a wider range of expenses, a higher rate, and new record-keeping requirements.

To claim deductions using the fixed rate method, you need to keep records of the actual number of hours worked from home, such as a calendar, diary, or spreadsheet, and maintain receipts for additional costs like electricity or internet bills.

Rental Property Income: Avoid Common Pitfalls

Correctly Reporting Rental Income and Deductions

Rental properties remain a significant focus for the ATO, with 9 out of 10 rental property owners making errors in their tax returns. Common mistakes include incorrectly claiming repairs and maintenance deductions and inflating claims to offset increased rental income.

Immediate vs. Capital Deductions
  • Immediate Deductions: You can claim an immediate deduction for general repairs and maintenance, such as replacing a damaged carpet or a broken window.
  • Capital Deductions: Renovations, such as updating a kitchen, are classified as capital improvements and can only be deducted gradually over time through depreciation.

How to Get Your Tax Return Right

Wait to Lodge

Rushing to lodge your tax return on 1 July can lead to mistakes. The ATO recommends waiting until all your income information is pre-filled, which typically happens by the end of July. This ensures your tax return is accurate and reduces the risk of errors.

Use a Registered Tax Agent

Given the complexity of reporting rental income and deductions, many property owners choose to use a registered tax agent. Providing complete and accurate records to your tax agent helps them prepare your return correctly, helping you claim all eligible deductions without errors. At PCR Accounting & Advisory, we can assist you in navigating these complexities, making sure your tax return is accurate and compliant.

Tips for a Smooth Tax Time 2024

Review Your Financial Records
  • Work-Related Expenses: Keep detailed records for all work-related expenses, particularly those related to working from home.
  • Rental Properties: Review your rental income and expenses carefully and differentiate between immediate deductions and capital improvements.
Stay Informed About Tax Changes

Given how complex reporting rental income and deductions can be, many property owners opt to use a registered tax agent as EOFY approaches. At PCR Accounting & Advisory, we’re here to simplify the process for you, ensuring your tax return is accurate and you claim all eligible deductions.

Seek Professional Advice

Working with experienced professionals like PCR Accounting & Advisory can simplify the tax return process. Our team specialises in helping business owners and property investors navigate their tax obligations and maximise their deductions.

Make Tax Time 2024 Stress-Free with PCR Accounting & Advisory

Navigating tax time can be challenging, especially with the ATO’s focus on work-related expenses and rental property income. Need help with your tax return? Contact PCR Accounting & Advisory at 03 9847 7516 for tailored advice and support. Let’s make tax time 2024 as smooth and stress-free as possible.


Disclaimer: This blog post is for informational purposes only and should not be considered as financial or legal advice. Consult with a qualified professional for personalised guidance based on your specific circumstances.