With tax time just around the corner, we take a look at what the Tax Office is on the lookout for and how you can steer clear of simple errors that might land you and your firm in a potential audit.
With the ATO releasing its first-ever Individuals not in business tax gap report last year, tax agents and their clients can expect greater scrutiny from the Tax Office as it looks to tackle the $8.7 billion tax gap.
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With that in mind, the Tax Office has sounded a warning that it will be taking a closer focus on several deductions this year, particularly clothing, motor vehicle expenses and rental property deductions.
Of those, one in five claims were exactly at the maximum 5,000km limit for the cent per kilometre method.
Work-related clothing deductions will also remain firmly under the spotlight as the ATO believes many people are claiming this without actually incurring the expense.
With 1.8 million people owning an investment property, the ATO believes errors in rental property claims are one of the key contributors in the $8.7 billion tax gap.
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