ATO targets work expenses, crypto gains

The Australian Tax Office has warned taxpayers against double-dipping deductions for both home office and travel expenses ahead of the end of the financial year.

“Some people have changed to a hybrid working environment since the start of the pandemic, which saw one in three Aussies claiming working from home expenses in their tax return last year,” Assistant Commissioner Tim Loh said.

“If you have continued to work from home, we would expect to see a corresponding reduction in car, clothing and other work-related expenses such as parking and tolls.”

The ATO is targeting undeclared capital gains from crypto, shares and property in tax returns this year, says assistant commissioner Tim Loh. 

Mr Loh also advised taxpayers to declare cryptocurrency capital gains as the ATO was already tracking these transactions through its “data collection processes”.

The ATO estimates between 500,000 and 1 million Australians have dabbled in cryptocurrency trading.

“Crypto is a popular type of asset and we expect to see more capital gains or capital losses reported in tax returns this year,” he said.

“Remember you can’t offset your crypto losses against your salary and wages.

“Through our data collection processes, we know that many Aussies are buying, selling or exchanging digital coins and assets, so it’s important people understand what this means for their tax obligations.”

Mr Loh said the end of the pandemic meant further changes to the way many Australians worked.

“If your working arrangements have changed, don’t just copy and paste your prior year’s claims,” Mr Loh said.

“If your expense was used for both work-related and private use, you can only claim the work-related portion of the expense. For example, you can’t claim 100 per cent of mobile phone expenses if you use your mobile phone to ring your mum and dad.”

The comments were part of a list of four “priority” areas published regularly by the ATO ahead tax time.

This year, the Tax Office is focusing its enforcement efforts on record-keeping, work-related expenses, rental property income and deductions, and capital gains from crypto assets, property and shares.

Accountants have already warned investors to properly declare their crypto earnings in their tax returns because the ATO already forces banks and cryptocurrency exchanges to hand over customer data to help identify taxpayers failing to disclose their crypto income.