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ATO Hit List on Tax Returns

The ATO has released the most common errors found in individual taxpayer returns, with a section of the guide targeting tax agent errors.

The two primary areas of concern are work related expenses and rental property deductions:

Work-related expenses

• Claiming deductions when no money was spent, including exceptions to substantiation rules being used as ‘standard’ deductions, where taxpayers claim up to or around the substantiation exception amount, but have not incurred the expenses

• Claiming deductions for private expenses

• Not correctly apportioning expenses between work-related and private purposes

• Not having records to prove claims

Rental property deductions

• Claiming deductions for properties that are not genuinely available for rent

• Claiming deductions for loan interest expenses when a portion of the loan was used for private purposes

• Incorrect categorisation of capital works and capital allowances

• Not having records to substantiate income received and deductions claimed

• Incorrectly apportioned claims for interest deductions

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