Tax Time 2021: Avoid Costly Tax Mistakes | Blue Mountain Gazette

0


[ad_1]

If you’ve worked from home and expect to claim work-related expenses, expect the Australian Taxation Office (ATO) to be attentive.

With many more people still expected to work from home than during the pre-COVID-19 pandemic, spending would be one of three key areas monitored in 2021, ATO Deputy Commissioner Tim Loh said.

Other key areas of interest would be rental properties (both income and allowable deductions) and capital gains (from property, stocks, and cryptocurrency).

Work at home

Last year, Loh said 4.39 million people reported working from home, up from over 3 million people the year before.

“We expect work-from-home expenses to increase, particularly around home office expenses, but we expect work-related expenses, such as travel expenses, to decrease significantly.”

There are now several ways to calculate the costs of working from home – no, you can’t claim your toilet rolls, your coffee, or your mortgage. The flat-rate and real cost methods remain, which consist in calculating the real additional costs linked to teleworking. But a temporary shortcut method introduced at the height of the pandemic last year is still available for tax season 2021.

“It works like this: you calculate the number of hours you worked from home and multiply that by 80 cents per hour, and that’s your deduction,” Mr. Loh said. “I think the best thing about it is that it’s easy. All you have to do is record the number of hours you’ve worked from home. Multiple people living under the same roof can claim them. home working expenses using the shortcut method. “

It’s an all-inclusive method, covering all of your operating costs, technology and asset depreciation. You will still need a document, such as a journal or timesheet, as part of the claim.

Rental properties

“This is an area where we have noticed that a lot of people make mistakes,” Loh said.

The Airbnb revenues you receive? It must be declared, along with any other third party payments, as part of your rental income.

“On the deduction side, it’s really important to remember that you can only claim deductions directly related to the rental property – for example, you cannot request personal travel to the rental property,” said Mr Loh said.

It was also important to claim deductions over time rather than immediately.

“If you’ve done a $ 50,000 kitchen renovation for the rental property, that’s something that can’t be claimed up front; it has to be deducted over time.”

If you’ve refinanced or redesigned an investment mortgage to buy a boat, car, or take a vacation, you can’t claim an interest deduction on that purchase.

Capital gains

There are major areas of capital gains that the ATO is monitoring in 2021: rental property sales, stocks, and cryptocurrency.

It is important to make sure that any gain or loss from the sale of property is part of your income tax return, as well as the profits and losses of the stocks. Include it in your tax return, whether you complete it yourself, through MyGov or a tax agent.

“We noticed that a lot more people invested in stocks during COVID, and the stock market performed very well during the same period,” Mr. Loh said.

With the rise of cryptocurrency, investors should be aware that taxable transactions must be disclosed as part of a tax return. More information is available on the ATO website.

Know your demands

“We want people to make the deductions they can, no more and no less,” Loh said.

To help you determine what you can claim, the ATO has created nearly 40 occupation and industry guides to show what can be considered expenses.

Above all, it is important to keep records.

“Trying to find that receipt from last year can be like a needle in a haystack,” Mr. Loh said.

While the shoebox under the bed is still a viable option, the technology is here to help.

The ATO application has a “My deductions” tool, allowing you to take a picture of your receipt. At tax time all you need to do is download it if you are doing it yourself or email it to your tax agent.

[ad_2]

Leave A Reply

Your email address will not be published.