ATO puts focus on landlords and their tax expense claims

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June 4, 2024

Landlords have been advised to improve their compliance during tax time, as the ATO has revealed that nine out of every 10 people who own a rental property make errors in their tax returns.

The ATO has announced its three “focus areas” for this year, specifically pointing out landlords who claim expenses they are not entitled to.

According to the ATO, 90% of landlords submit incorrect tax returns, with a particular focus on claims that may have been exaggerated to offset increases in rental income for a greater tax benefit.

The ATO emphasized that property improvements cannot be claimed as immediate deductions, and it encouraged rental property owners to carefully review their records before lodging their return to ensure correct deductions.

The other two areas of concern highlighted by the tax office are work-from-home expenses and the omission of certain sources of income. The ATO cautioned against lodging a return in early July, as this increases the chances of errors in including all income.

While most errors in tax returns are genuine mistakes, the ATO acknowledged that some individuals deliberately claim expenses they are not entitled to. The ATO urged everyone to take the time to ensure their tax return is accurate.

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