The tax floodgates open this weekend and once again, the Australian Taxation Office (ATO) has announced who it’ll be paying closer attention to this year. On the chopping block for 2017 are those who are getting a little on the side, the financial side that is. If you’re involved in the sharing economy - that being you earn extra income as an Uber driver, AirBnB host or Airtasker - then you better make sure you’ve listed this additional money as part of your taxable income or risk being fined.
The ATO is getting clever, using its high-tech matching software to cross-match what’s going into your bank account and what you’ve written down on your return. Any suspect deposits will immediately raise a red flag.
“The ATO scrutinises every return. We have the technology and experience to detect non-compliance and we are continuing to catch taxpayers who are deliberately doing the wrong thing,” warns the ATO’s Assistant Commissioner Kath Anderson.
“Our systems are great at finding errors in tax returns, and if we have to investigate something further in your tax return.”
^ You right now.
It’s not all bad news though, by claiming this extra pocket money as actual income it also means you can make deductions. Obviously, these have to be legitimate deductions and you can’t just start being creative in order not to pay your fair share.
Before you breathe a sigh of relief, this isn’t the only extra income makers the ATO will be putting under the microscope in 2017. Holiday home owners are set to have their financials gone through with a fine-tooth comb after the tax office received a number of imaginative tax returns last year. Some holiday home owners even went so far as to claim for deductions when they were holiday at their own rental.
“There’s no problem with people using their rental property for their holiday, but holiday home owners need to remember they can only claim tax deductions for expenses made during a period when the home is rented out or genuinely available for rent,” says Ms Anderson.
“Property owners should be aware that incorrect rental property claims will not go unnoticed. Technology enhancements and extensive use of data is allowing us to identify incorrect or suspicious claims. We also have a good idea of the locations likely to be used for holiday homes.”