Top 10 things to remember for tax time
The ATO has published a list of 10 key points to note in completing individual tax returns for the 2022 year. Some of the more critical items include:
Make sure to check if the client’s COVID-19 support payments and natural disaster payments need to be included in their 2021–22 tax return, as the tax treatment can vary depending on the type of payment that has been received.
If the client is claiming a deduction for the cost of buying work-related COVID-19 tests, make sure they are eligible.
If the client is claiming working from home expenses, they can choose from either the temporary shortcut method, the fixed rate method or actual cost method, as long as they meet the eligibility and record-keeping requirements of the method they choose. Make sure these methods are applied correctly.
Make sure the client has correct records to substantiate their deduction claims – no receipts, logbook or diary, means no deduction. Clients can use myDeductions in the ATO app to keep their records in one place. Clients can email a copy to their registered tax agent.
Clients need to calculate and declare gains and losses from the disposal of crypto assets (coins, tokens and non-fungible tokens) during the 2021–22 financial year. If the client has received staking rewards or airdrops, make sure to include these as ordinary income. If the client is in the business of trading crypto, income tax will also apply.
If the client received any income from their rental property throughout the year, this will need to be reported their return. This includes income from short-term rental arrangements, insurance payouts and bond money that was retained.
Clients need to be notify of the increase to low and middle income tax offset for the 2021-22 income year. The offset can now be up to $1,500, depending on the client's taxable income.
If the client has one or more prior year tax returns overdue as at 30 June 2022, their 2022 tax return due date is 31 October 2022. If all overdue prior year tax returns are lodged by 31 October 2022, the 2022 tax return will be due according to the normal lodgment program.
From 1 July 2022, ATO pre-fill service will display an indicator notifying when the client's bank interest record is high-certainty data. If the changes made to any bank interest pre-fill information where there is a certainty indicator, there is a need to provide a reason for the adjustment.
Support is available if exceptional or unforeseen situations prevent from lodging the clients' returns on time. Depending on the issues facing, there may be entitled to a lodgment program deferral or a support lodgment program.