Australian Taxation Office highlights three key areas ahead of tax time

Landlords have been singled out with the ATO saying it is intensifying its crackdown on rental property investors after discovering a shocking number of incorrect returns.

ATO assistant commissioner Tim Loh said regular reviews on property investors' deductions revealed that nine out of ten returns were incorrect.

The ATO is using a new data-matching protocol to cross check claims made by rental property investors in 2023 with financial information provided by 17 of the largest mortgage lenders in the country.

"We encourage rental property owners and their registered tax agents to take extra care this tax time and review their records before lodging their return," Mr Loh said.

The ATO also cautioned that income-producing portions of residential properties could create capital gains tax issues.

"Generally, your main residence is exempt from CGT, however, if you have used your home to produce income, such as renting out all or part of it through the sharing economy, for example Airbnb or Stayz or running a business from home, then CGT may apply," Mr Loh said.

"Don't fall into the trap of thinking we won't notice if you sell an asset for a gain and don't declare it."

The ATO is also targeting work-related expenses.

Mr Loh warned against merely copying and pasting last year's claims. Taxpayers claiming work-from-home related deductions will be required to provide more detailed documentation.

"We continue to see shifts in the way Aussies are working and it's important to consider whether your claims reflect your working arrangements this year," Mr Loh said.

"There have also been some changes in how you calculate things like working from home deductions, so don't be tempted to just copy and paste your prior year's claims.

"We know a lot of people are working back in the office more compared to last year."

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The changes come as the federal treasury seeks to reclaim $9.1 billion in unpaid taxes over the next five years.