‘Crucial’: Leading accounting body urges Aussies to keep diary, receipts ahead of tax time crunch

Australia’s leading professional accounting body has provided its top tips in the lead up to tax time, including the “crucial” details that Aussies need to know.

As the end of financial year looms, Aussies are being urged to be thorough when preparing their tax returns by ensuring they declare all their earnings and have evidence to back up any deductions they make.

The “crucial” advice from CPA Australia - the country’s leading professional accounting body - comes as the tax crunch looms, with the tax office likely to probe claims they think are disproportionate to what is expected in an ordinary job.

The company has warned anything ng that stands out from the crowd may attract the Australian Tax Office’s (ATO) attention.

As a result, the tax office may ask for additional evidence to validate claims that are disproportionate to what it would expect from someone working a similar job, or with similar financial investments.

The ATO is likely to focus on undeclared income, including money made from cryptocurrency, and rental property claims, according to CPA Australia.

This year, the ATO is likely to focus on undeclared income, including money made from cryptocurrency, as well as rental property claims, including owners who make claims for renovations as repairs, according to CPA Australia.

For work-related expenses, the ATO is likely to focus on ensuring the correct apportioning of expenses between work and private use, including for people who work from home.

CPA Australia says it is “crucial” to keep a diary of all work-related activity along with corresponding receipts, and recommends maintaining records including hours worked from home, evidence of running expenses like phone and electricity bills and receipts and documentation for depreciating assets such as technology and office furniture.

CPA Australia is urging Australians to ensure they have the required evidence to support their tax return.

For motor vehicle expenses, when a car is used for both business and private use, CPA says it’s important to keep evidence, such as a logbook or diary, to enable the correct identification of and justification of the percentage being claimed as business use.

CPA Australia spokesperson Gavan Ord said it was important that everyone paid the right amount of tax and claimed what they were entitled to.

“The ATO uses highly sophisticated analytics to scrutinise all claims, including those relating to working from home and motor vehicle expenses, income from rental properties, as well as undeclared income from investments like cryptocurrency,” Mr Ord said.

“Your tax return is your personal responsibility, and you should be as thorough as possible when declaring your income and claiming deductions.

“Failure to properly declare all of your income, or over-the-top expense claims, may set off alarm bells and your claims could be rejected if you don’t have the evidence.”