[Podcast] ATO expert reveals tax time hacks for property investors, with Assistant Tax Commissioner Rob Thompson

You've probably heard the whispers or read in the media that the taxman is on the hunt.

The Australian Taxation Office is implementing some innovative strategies and forming new alliances to recoup billions of dollars of revenue deficit.

This means Australian property investors should be on high alert and make sure they have completed all their obligations correctly.

To discuss how to avoid getting trapped by the tax man today I'm joined today by Rob Thompson, Assistant Tax Commissioner at the ATO.

We are going to discuss some things that will help you understand what your obligations are and how not to get yourself in trouble, particularly some aspects that relate to property investors.

Property compliance insights from the ATO's Assistant Commissioner

Today, Rob Thompson from the Australian Taxation Office (ATO) shared valuable insights on tax compliance and investment strategies with me, and I think you’ll benefit greatly from hearing them too.

Some of the things that the ATO is looking out for that might affect you include:

• Work-from-home deductions.
• Motor vehicle claims
• Ensuring that excessive interest expenses aren't claimed
• Making sure rent and expenses from various owners of a property are claimed correctly.
• Holiday homes that aren't genuinely available for rent.
• Side hustles like Uber or Airtasker
• Income from investing in crypto

Take a look at some of the main points Rob and I discussed:

• ATO's focus on enhancing tax compliance and closing revenue gaps through advanced data-matching technology
• The importance of accurately declaring rental income, work-from-home deductions, and motor vehicle expenses
• The correct declaration of interest expenses and the division of expenses for jointly owned properties
• Emphasizing meticulous record-keeping for borrowing expenses and capital costs
• Understanding the tax gap in rental property income reporting and the common pitfalls in tax deductions
• The need for precise apportionment of interest expenses for loans with mixed investment and private purposes
• Strategies for lawful tax minimization and the significance of consulting with tax professionals
• Treating property investments as a business venture and the value of strategic financial planning

Links and Resources:

Michael Yardney

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ATO Resources:

• Tax time toolkit for investors: ato.gov.au/Investorstoolkit
• Rental properties guide: ato.gov.au/rentalsguide
• Rental video series: gov.au/Rentalvideos
• Property sale clearance certificates: gov.au/clearancecertificate
• Working from home: gov.au/home
• Car expenses: gov.au/car

Some of our favourite quotes from the show:

“So, this is really a good conversation to have, because you've got to plan to become the people you plan to become. A lot of people go off, get excited, buy a property, an investment, and they don't think through all the cash flow consequences.” – Michael Yardney

“So, one expense that’s often forgotten is these borrowing costs. It's the cost of establishing your loan and, as you say, they can be written off over the period of the loan or a five-year period.” – Michael Yardney

“Again, a surefire way to fail in life is never to take the blame.” – Michael Yardney

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