Every year the ATO gives a general heads up on the items the taxman is on the lookout for.

It generally gives an indication of the big-ticket items that may start ringing a few bells.

Along with deductions, there are also industries and sectors that can be put on alert.

It’s not always a given, but is good to be prepared.

So what is on the tax red flag list for 2022?

This year, there is a top 3 in play:

  1. Work-related expenses
  2. Cryptocurrency
  3. Investments

Work-related expenses

The effects of COVID and working from home continue to be a focus for the ATO. One in three Australians continue to work from home and therefore continue to lodge working from home expenses. Some of us have opted for a hybrid model – some in the office and some at home.

One thing is for sure, the average 9-5pm in the office is a thing of the past.

Accordingly, the ATO is ensuring we continue to claim correctly.

When claiming working from home deductions you need to satisfy 3 rules:

  1. You paid with your own money and were not reimbursed
  2. Only the work-related part of the expense is being claimed
  3. You have kept receipts

It is important to note that if working from home, the ATO would expect to see a reduction in particular expenses including vehicle and transport costs, clothing, parking and tolls.

It is important to claim your working from home expenses in the right way for your individual circumstances.

No two years are necessarily the same.

Investment properties

This year the ATO is giving the heads up to rental property owners and ensuring you are including all income derived from your investment in your return.

With COVID wreaking havoc on rental properties, the ATO expects to see an increase in rental losses.

Ensure to keep receipts of all expenses and monies spent on your rental property including repairs, bills and maintenance.

Keep records and have them on hand as needed.

Cryptocurrency transactions

Featuring heavily this year are investments and the good old cryptocurrency gains.

If you have offloaded cryptocurrency this year, you will need to include it as a capital gain or loss in your return.

The ATO will be data matching transactions from Cryptocurrency service providers against information declared in your return. If you are unsure what to include, chat to us at tax time and we can guide you through this process.

Remember, your crypto loss cannot be offset against your salary or wage.

Whilst never a given, it is good to know some of the main deductions the ATO is focusing on at tax time.

If you need assistance with the preparation of your tax return, get in contact with a member of our taxation team.