Top Tax Time Tips for 2024

Tax time is here again! 

In this episode of TaxVibe, Robyn Jacobson, CTA, chats with Robert Thomson, Assistant Commissioner and Tax Time Spokesperson at the Australian Taxation Office in the Individuals and Intermediaries space, about Tax Time 2024. 

They discuss the top issues for 2023–24, including: 

• The ATO’s focus on undisclosed income 
• Work-related expenses 
• Rental properties
• Record keeping 
• Top tips for getting tax returns right the first time

Host: Robyn Jacobson, CTA 

Guest: Robert Thomson 

For more information about The Tax Institute: https://www.taxinstitute.com.au/

Transcript

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Robyn Jacobson 
Hello and welcome to TaxVibe, a podcast by the Tax Institute.
I'm Robyn Jacobson, the Senior Advocate at the Tax Institute, and your host of today's podcast. 

On the show, I chat with some of the tax professions brightest minds, drawing on each guests, unique perspective to give you valuable and practical insights you won't hear everyday.
 
We hope you enjoy this episode of TaxVibe.

Today I'm joined by Robert Thompson, the assistant Commissioner for Experience, government and case leadership, individuals and intermediaries, and the official tax time spokesperson at the ATO.

Rob is an experienced tax professional with more than 10 years experience and has recently returned from his role as Minister, Council taxation at Australia's permit delegation to the Organization for Economic Cooperation and Development, the OECD in Paris. Rob has extensive experience across several diverse roles in the ATO, starting as a postgrad in high wealth individuals, Rob progressed to a compliance officer role.

He then worked his way into specialist task forces, policy implementation and strategic programs.

Rob also holds a Masters of International Taxation and the Bachelor of Commerce Prior to joining the ATO, Rob worked in the managerial role for a not for profit foundation in New York.
 
Rob, welcome to TaxVibe

Robert Thomson   
Thanks Robyn.
Thanks for having me.

Robyn Jacobson   
Pleasure and look, first thing we need to acknowledge is that we have a new face as the ATO tax time spokesperson.
So our listeners would be familiar with Tim Loh, who held those reins for some years and you've taken over that particular role. So you're doing the media circuit.
 
Robert Thomson
That's right.
That's right.
Obviously so some big shoes to feel given Tim's role, but yeah, excited to step into the role.

Robyn Jacobson   
Yeah, very good to have you here.
So I wanna kick off with tax time.
Why is it important?
It's obviously the start of a new financial year.
It's when we start lodging returns for the year just ended.
Why is the messaging so important?
Why do we need to get it right?

Robert Thomson
Yeah.
So obviously tax time for a lot of individuals is that one time of the year where they actually just engage with the ATO as well.
So, you know, there might not be thinking about tax the whole year around.
We'd like them to, especially when it comes to record keeping Robyn.
But so we're really out there just trying to make sure that people understand their tax obligations and that people have, what they need to when they got to lodge, whether that's online or through an agent and really just help them to make sure that they're in the best position when it comes to lodging their tax return.
Obviously a lot of our messaging is around, you know around the tax basics, but just around reminding people around some other things like record keeping and and areas where kind of focused on.

Robyn Jacobson
So we're talking about millions of Australians who will be lodging their returns in the days, weeks and months ahead and we'll get into more detail about when they need to be lodging by.
But really, it's so important that they get it right the first time.
What are the best ways they can do this?
And we often hear about this rushing to lodge in the first few days.
What sort of numbers have you seen in on the day three so far of the tax time season?

Robert Thomson 
Yeah.
Look, Robyn, it's it's too early to make any predictions around what numbers looking like compared to last year or previous years.
You know, last year also we started on a weekend and we traditionally know weekend lodgments are a little lower.
But no, we definitely are just reminding people some of the things we're focused on is just reminding them actually if they can, to wait for prefill in late July to kick in.
We know people.
Some people want to rush to get their lodgments in, but you're actually twice as likely to have your good to have your return stopped, if you launch either through an agent or obviously online it twice as likely to have it stopped if you do it before all that pre fill information is in, so you know that's one of the main things we're just trying to communicate to people is wait for all that prefill, and that includes where you're logding through an agent.
Obviously that helps agents as well, because then they can see those messages or see those income amounts and remind people of perhaps things they've forgotten about during the year, but also as they lodge, obviously you get the reminders around crypto assets et cetera, share sales and so also helpful for agents once all that's there because it can remind their clients to remind them that they've had that sale and there's some capital gains consequences and they need to have the records.
So we think we think waiting for people to lodge until the end of July is both beneficial for individuals that are lodging, but it's also beneficial for the tax agent because it can then it can stop and having to like go back later on and fix something or deal with the request from the ATO or an amendment.

Robyn Jacobson   
We also know that, of course, employees don't need to finalise through single touch payroll until mid July.
So anyone who's logging in the first couple of weeks is really working off data that hasn't yet been finalised by the employer.

Robert Thomson   
That's right.
And you know, and it's not just employer data.
You know, it's bank information.
It's information we get from other government agencies.
You know, it's your private health insurance information, which obviously can impact the amount of rebate that you should or should not claim, which can impact your tax return.
So it's just about making sure that people wait for all of that information to come through, make sure that you know the income statement is marked as Tax ready for employers which are talked about us then and that just really allows people to be in the best position to obviously make sure that they're including everything in the tax return that they should, you know, and getting it right the first time.
And then the agent doesn't have to worry about any reverse workflow later on as well.

Robyn Jacobson   
Banks are pretty good at getting the data to you each year, as are the listed companies with their dividends paid, but we've all heard stories about other data taking many months to come through, and whether that be managed funds or other types of data.
So what can taxpayers do?
It's one thing to wait a few weeks until the end of July, but it's quite another to potentially wait some months in order for that data to be prefilled.

Robert Thomson   
That is correct, Robyn.
I mean and for some of those, some of those, some of those obviously reporters, they do have legislative requirements around when they need to provide that to us and that can be a few months after the income year.
But we think waiting is just a good reminder, but it's also just a reminder that people still need to check the prefill information is correct, You know, if there is a discrepancy with the prefill information, then the client and agent need to work that out with the provider.
So for example, your employer, unless it's the bank information that you don't need to kind of work out with the bank.
But it's also just a reminder that it may not include all the income sources.
You know, we'll probably talk a little bit later about, you know, some side hustles and some of the income that people get from sharing economy, et cetera.
So it is a good reminder that it won't include all of your income, potentially for some for yourself or some of your clients, and they still need to think about asking, you know, agents still need thing about asking their clients about any other income sources that they may have had during the year or any other assets that maybe they've disposed of or that might generate income during the year.

Robyn Jacobson   
Just one more point before we move off this particular topic.
I've heard that there are people who literally stay up till midnight on the 30th of June just so they can then tick over midnight and lodge their return and be the first one.
Is there any prize offered to the person who lodges their return first?

Robert Thomson   
No, there is no prize Robyn and you are correct.
There are some people that do that.
You know it is an Olympic year.
Maybe they're inspired and wanna go for gold, but you know, like what we're saying to people is, you know, actually wait, you know, it's better.
Better to get it right the first time and that be a few weeks longer than be the first person to lodge.
No, there is no prize.
Obviously people can lodge before all that prefill information is there, they just need to make sure.
Obviously they've got all their records in order, but as I said before, you know.
We just find people, make more mistakes and they do double their chances of having the of they're having their tax return flagged by the ATO as being incorrect and now obviously holding it up while we have to go and ask questions.

Robyn Jacobson   
So revisiting the deadlines self lodgers have until the end of October.

Robert Thomson   
That's correct.
So if you're logging yourself, one July starts to one, you're saying hold off to mid July, but Deadline is 31st of October, if you're logging yourself, obviously.
Otherwise, individuals need to be on the books of a registered tax agent by the 31st of October and that registered tax agent needs to inform us that they're doing that.
If you are logging through a tax agent, obviously you may have up until the 15th of May to lodge a tax return through the tax agent and we obviously have the lodgement support and the lodgement program for tax agents which is designed it just a recognition of the important role that taxations play in the system and design to help them manage their lodgements through the year.
Now we've just published the 24/25 Lodgement program dates, Robyn. 
So they're on the website for everyone, and also anyone that gets our tax professionals newsletter will also be informed of  those dates.
I think in the next week or so, so also good plug for the tax professional newsletter and why you might want to sign up for that because it does have lots of helpful information in terms of you running your practice.

Robyn Jacobson   
Yeah, that's great.
And it does have valuable information. Something that I'd like to call out, is while those are extended lodgment dates for agents so they can spread their workload over the year.
There are so many agents who often talk about the clients working to those same dates, so it's a really good reminder to the clients of agents that don't take your work to your agent a week before the 15th of May and expect that you're going to be prioritised because there are so many other clients they need to look after.
So I’d be saying to the clients also get your work in as early as you can let the agent manage their workload over that 11 months period and don't just dump it on them in the days before.
And then expect it to be lodged on time.

Robert Thomson   
No, that's that's definitely right, Robyn.
You know, like it's not a, you know, it's not a, you know, handing their assignment in, you know, 2 minutes before it's due, you know, this is definitely making sure you have all your records in order and providing those to the tax agent as early as you can, even if you are lodging, if you've got that extension.
And one of the reasons for that is because obviously your tax agent might look at those records, have some questions or identify some other information that you need to provide.
And if you're leaving that to the last minute, you're really putting yourself at risk.
Kind of not being in a good place to lodge, so definitely talk to your tax agent about when they need the information from you.
If you are gonna lodge through a registered tax agent.

Robyn Jacobson   
We could talk about how the ATO gets ready for tax time each year, and obviously that's about awareness and it's education.
It's updating resources on the website.
The tax time toolkits, the occupation guides rolling systems over giving instructions to the digital service providers who update all the software that the agents use.
That's all stock standard.
Is there anything different this year?
Is there anything in terms of how the ATO is prepared for tax time?
That is a little unusual or something that is new.

Robert Thomson   
So there are one or two new programs obviously this year for tax time and which I I'll talk to in terms of lodgment requirements.
But one of the thing also we're just also highlighting to agents in terms of preparing for tax time this year is around proof of identity.
So just to reminder to tax agents to make sure that there's obviously the tax practitioner board know around the minimum requirements when you're on boarding a new client.
But we're saying it's important where you still have concerns about the identity of that client.
So even go beyond those minimum requirements and also to even check the check the POI of your existing clients.
You know, we do see criminals actually take over people's kind of identity and lodge through their existing agents.
So just to reminder around POI at this time of the year as well.
But in terms of changes, there's probably there's one or two changes, one that probably is being conflated with tax time, but won't impact tax time.
And that's the change to the rates and thresholds, income tax rates and thresholds that have come in this year. So obviously they apply from 1 July 2024 and so there we're just reminding people that and reminding agents that it's just a good time to have a discussion with those clients that are employers, that they've updated their payroll software to reflect those new rates or they've looked at the ATO’s new tax with holding tax tables which we've published, if they're not using a software provider.
But for individuals, you'll see the change in the tax rate and how much tax you pay for salary and wage earners in their take home pay from one July.
It's not going to impact the size of their tax return this year, and you don't need to contact the Ato or do anything for those tax cuts to kick in.
We know there's been a little bit of conflation of the two, so that's it's it's not new for tax time, but you know it is something that we have seen a little bit of questioning around the one of the main changes is around the non for profit return.
So obviously from for the 23/24 income year and from one July non charitable non for profits with an ABN need to lodge an annual non for profit self review return with the ATO
And so we think there's about 155,000 of these types of norm for profits that all need to lodge with the ATO.
So just to reminder for those that they need to lodge.
And obviously this came in as part of the 21/22 budget and it's just meant to increase the transparency in the integrity and the taxation system.
But there are a few things that non for profits can do.
Now so one is to set up my Gov ID and and obviously link that to RAM in online services for business is the 2nd is to just review their documents and their constitution around what their purpose is.
Umm, the third is, to look at our look at online.
We have a guide around eligibility, so checking the eligibility guidelines to see if you do need to lodge and the last one is just to make sure you update your details as soon as possible.
We've put the change of registration details form actually seeking.
Download it on the ATO website, but we are gonna be sending out more information in July and August to all these entities.
So it's really important they kind of update their details now so that we can make sure that communication goes to the right people that may be representing that non charitable non for profit with an ABN.

Robyn Jacobson   
A few points on that new regime Rob not for profits in a sense, have always had to look at whether their tax exempt or not.
But this requirement to lodge a self review return is new and this is one that starts 1 July 24, but it actually does apply for the 23/24 years.
So that's one way we do have to look back at the year that's just ended and you've identified there are going to be many, many 10s of thousands of not for profits that are gonna be going through this for the first time.
What is of great concern is that the data on the ABI in some cases will not have been updated for a very long time and so the person who was named as the Treasurer or the Secretary or the public officer or whatever on the business register is probably long out of date for many of these.
So I can see some challenges when they try to get a my Gov ID and then linked through the relationship access manager that it's not going to be a straightforward process.
So in that case, should they be reaching out to a tax agent for assistance?
Should they be reaching out to the ATO? 

Robert Thomson   
So either Robyn, obviously tax agents have a lot of experience in terms of being able to help people update their registration details etcetera, but they can also reach out to the ATO.
So we have a lot of good information on our website.
We know this is going to be an issue for some and we so we have already done some letter campaigns out earlier in the year to try and make sure that people's details are up to date, but we know there will be somewhere they're not.  
We know we're not so new regime.
We know it's the first year we also appreciate that a lot of non for profits are run by volunteers.
We have very much in these first few years about supporting people to make sure they get right, can get their lodgment obligations right.
This is really, I think, this first years about a lot of support and a lot of education for those that do have a new lodgment requirements.
So just with that message, obviously talk to your taxation or give the ATO a call, if you're having any issues updating your data files.

Robyn Jacobson   
And of course, just to mention that it to engage a tax agent now they have to go through what's called client agent linking.
To do that, they need to have a my Gov ID, so it becomes a very circular process and we've seen some challenges and difficulties with taxpayers navigating their way through client agent linking.
So just to make mention, there might be quite a few tax agents who are called upon to assist those who may not have gone through the process before.

Robert Thomson 
Yes.
And you know and, you know, I think we're continuing to obviously engage with the tax agent community around client agent linking and after every kind of every deployment of client agent linking, we have sort feedback around how we can improve the process.
So that is an ongoing kind of process for us with respect to client agent linking.

Robyn Jacobson   
Alright, so in terms of some common areas that people often either claim or tend to get wrong, they're working from home expenses.
So part of work related expenses, it's interesting because there isn't a separate working from home claim in the tax return.
It just falls into other work related expenses and in fact it's not even specified in the law itself.

Robert Thomson   
That's right.

Robyn Jacobson   
So the ATO’s approach of this fixed rate method now $0.67 an hour, is an administrative approach, and that's essentially because the law is deficient.
Uh, it doesn't address this properly in, so the ATO’s come up with this approach in terms of where it will direct its compliance resources.
So what are the key points people need to understand if they're going to be using this fixed rate method $0.67 an hour as opposed to claiming using the actual cost method?

Robert Thomson   
So Robyn, as you noted, there's two methods and it's obviously up to an individual as to which method that they would like to use.
So there's the fixed rate method which you've just talked about and that allows someone to claim $0.67 per hour for every hour that they work from home.
And that's an all inclusive method.
And so that's one method that people can use, and that method is also designed that we appreciate that under the actual cost method, some of those costs can be a little bit more tricky to apportion.
So if people don't want to go through the process of working out how to apportion those, they can, they can just use the fixed rate method.
So to be able to use the fixed rate method, there are some record keeping requirements which come into effect for the income year that you'll be logging 23/24 and that is you need to have kept a record of the hours you've worked at home for the full year.
Now that can be a diary, that can be a spreadsheet that can be whatever works in terms of either a physical or digital record that allows you to identify the hours you've actually worked from home for the whole year.
So that's one thing you need to have.
The second is just need to have copies some copies of some bills that show that you have incurred a little bit of expense, additional expense from working from home.
So for example, your electricity bill, you know your Internet bill, etcetera.
So that's the fixed rate method.
There's then obviously the actual cost method that people can use as well.
Now if you are using that method, you do need to be able to show for each cost that you're claiming the apportionment between the work related element and then the personal related element.
So a little bit more work on that.
There's a lot of information on our website around examples around how to apportion some of those, and obviously it also need to keep.
There are some time.
There are some time record requirements around that, not as extensive as needing to keep it for the whole year.
You know, to get the rest of the whole year, do need a give an indicative sample.
But what we're saying to people is if you actually keep the record for the whole year, then you've got the flexibility at the end of the year or your clients have the flexibility to choose whichever method they want and whichever method may actually give them the best result.

Robyn Jacobson    
And that record of actual hours worked from home should be run contemporaneously.
It's really not something that should be put together retrospectively once the year has ended.

Robert Thomson   
That's right, rather than that is definitely right.
You know, I don't sit down on 30 June and try and remember all the hours you went at home.
It does need to be a contemporaneous record of the hours you've worked.

Robyn Jacobson   
All right.
I also note that there should be an inverse relationship between travel expenses and working from home expenses.
Now, unless you're working 120 hours a week, in other words, you're doing an awful lot of travel and you're doing an awful lot of hours from home, there shouldn't be a high claim for each of these.
Is that fair to say?

Robert Thomson   
You know, I think rather than you know, like we've had some changes to those methods over the last few years.
You know, people still do need to travel for work.
I think it's remembering what exactly what trips you can claim as a work related travel.
You know, we continue to still think people still think it is.
Some people still make mistakes and think they can claim you know their from their home to their work  Travel.
So you know, it's just that reminder about if people are looking to claim work travel, obviously reminding them around what trips they can claim, then obviously in terms of the car expenses, if you're using a motor vehicle, there are the two methods that you can use.
So there's the cents per kilometre method that someone can use.
Now that doesn't require you to keep a log book.
It's the other method, but it does allow you to claim up to 5000 kilometres per vehicle without any receipts, but you still do need to be able to have a record to show you how you've calculated the five.
Yeah.
The up to 5000 kilometres, we see some myths out there that people just think, oh, I just need to have a number.
No, you still, if the ATO asks and before you lodge your tax return, obviously, you need to be able to show your agent how you've calculated, you know, the kilometres that you'll be using under the cents per kilometre method, which has gone up to $0.85 this year.
Then there's obviously the log book method.
Now the logbook method obviously does require you to keep a log book, not for the whole year.
For 12 weeks and obviously then, if you're that's, you know consistent year on year you can use that same logbook as evidence over a number of years, but you then do need to keep there are more receipts that you need to keep with respect to that method and the logbook method, you do need to keep receipts of all the types of expenses that you are going to claim.
Now one thing we do see here, one common mistake we are seeing people make is people think they can use their credit card statement or their bank statement as a receipt.
Just a reminder, obviously that normally for most claims, a credit card or a bank statement on its own won’t suffice as substantiation for those expenses.

Robyn Jacobson   
Because that only tells you you've spent money.
It doesn't tell you what you've spent it on, even if it lists the retailer.

Robert Thomson   
That's right.
That's right, Robyn.
I was at an event recently and someone, a tax agent, came up to me, and said but Rob, what else would my tradie client be buying from the servo you know other than fuel?
And I was like, I don't know. A sausage roll, a coffee? Like there's a range of other things.
You know the Tax Administration Act does identify some of the things that need to be included for, for to be a valid kind of receipt and substantiation of the expense.

Robyn Jacobson   
I've also heard over the years people who are still enough to try and claim whether it be a car expense or a travel expense or somewhere collated expense when passport records indicate they were not even in the country at the time or their mobile phone records indicate that they were in some lovely wine region as opposed to where they say they were or the E tag on their car places them in a particular location.
Now it could be that they lent their phone or their passport or their E tag to someone else, but chances are that wasn't the case.

Robert Thomson   
Yeah.
Look, Robyn, unfortunately, every year we do see, you know, the minority of some people that do try and, make some claims they're not entitled to.
I think recently we had a social worker that tried to claim about 12 cars as it as motor vehicle expenses for the year when they only owned one.
So you know we do see the occasional crazy claim that, you know, we think the majority of areas where we see non-compliance or people making with around motor vehicle expenses is really around record keeping and just not understanding the records that they need to keep.
So just a good reminder there for tax agents around just making sure that their clients have all those records in place before they kind of come and see them to do their return.

Robyn Jacobson   
And a quick one also, we've got guidance on electric cars where they can claim at the rate of 4.2 cents a kilometre.

Robert Thomson   
That's right, Robyn.
And look on that guidance.
Obviously we've put out some guidance there.
There are some limits around that.
Guidance around that's only for charging at home.
Unless you know your car specifically, does have the ability to track where your charging from that commercial versus home.
So if you are, if you are using.
If you do have electric vehicle, do you have a look at our guidance there and rounding what circumstances you be able to claim?
What costs?

Robyn Jacobson   
Moving to another area – rental properties.
Now these have long been challenging and I consider that it's become even more challenging the last five to 10 years, we've had a lot of legislative change and if we think about the rules around claiming travel expenses for residential rental properties, depreciation on plant and equipment that's already been used.
When we look at the way that we've got interest deductibility issues and having to apportion, we've got vacant land rules, they've got rules around GST withholding its settlement, we've got foreign resident capital gains withholding rules and you got to get clearance certificates.
So you don't lose part of your settlement proceeds.
There's been a lot of law change, so I get why people are finding a lot of hurdles when they're trying to navigate their way through this particular mine in terms of all the problems they face.
But at the same time, we are hearing stories about some people who seem to be wilfully double dipping or are not apportioning or are claiming for holiday houses when they should not be, so this is a really big focus area for the ATO this tax time.
What are some of the things you are seeing and what are the key messages to those who are claiming rental properties?
And I know it also, it's often been quoted, 9 out of 10 returns have errors in them and that is being challenged the profession's saying "really?".
So how do you respond to that?

Robert Thomson   
Or Robyn, you know, we do continue to see mistakes being made and/ and I might talk about genuine mistakes being made before we talk about those that maybe trying to inflate their claims artificially.
But as you've noted, there has been a lot of changes.
And then there's complexity in the law.
And so we think that actually a lot of those mistakes are due to the complexity or due to record keeping.
And so that's why it continues to be 1 area that we're focused on.
Obviously, you've talked about interest income, interest expense apportionment that continues to be an area that we do continue to remind people about the need to apportion.
But one area we've been focused on this year is about the difference between repairs and maintenance and capital works. Now you know spend money on the property.
It can be a repair, it can be an initial repair, it can be capital works or you could have spent money on a depreciating asset.
So you know, it’s not like an A or B choice.
It's ABC or D choice, so we're just reminding people there, you know about ensuring that they are spending money on the property that they do understand which of those kind of expenses it does fall into. Obviously, repairs themselves are immediately deductible.
Why initial repairs?
So we've bought a property and it needs some repair, and that damage was there prior to you buying it irrespective of when you discover it.
Anyway, that's actually not immediately deductible.
Needs to be, you know, needs to be deducted over a number of years.
Kind of in line with the capital works provisions generally.
So it's just about reminding people about that and ensuring that they're correctly characterising it, obviously perhaps being depreciating assets, another area where we see people that think it's an instant, you know, bought a new air conditioner for a few 1000 bucks, installed it in the rental, think it's an immediate deduction instead of deducting that over the effect of life of the property.

So were reminding people around the complexity and making sure that they're identifying the right deduction and claiming at the right time.
But we're also reminding people around record keeping and what I record keeping is really important because it can help you understand what you can claim this year.
But it sets you up to maximise the deduction.
You're entitled to claim every year by having good records at the start, and also then when you go to dispose of the property, as most rental property owners you know, investors don't hold it for 40 years.
It does help you to get your capital gain or loss correct, when you go to dispose the property.

Robyn Jacobson   
Some thoughts on repairs – we often talk about initial repairs and of course that is capital in nature and you can't just claim an outright deduction for that.
And that's something that's inherent in the property at the time you bought it.
But I think taxpayers also get confused with a genuine repair.
But it's to the entirety.
So for example, if you have a pothole in your concrete or paved driveway, and you repair the pothole, then that's a repair and it's deductible.
But if you can't replace the entire driveway, even with the same material because you've replaced the entirety, that's considered to be capital.
Replacing one tile on the roof as a repair, replacing all the tiles on the roof is capital, so it does bear going back to look at the ATO guidance and there is a ruling that talks about this and I think from memory it's something like 92.3 but don't quote me on that one and that does talk about when you've got these things in their entirety being replaced.  I think the other thing that confuses people is this distinction.
As you say, between what's capital, even if it is capital, is it cost base, is it depreciable or is it climbable over the 14 year period?
So there's a lot to navigate through there.

Robert Thomson   
That there is Robyn and your point around, you know, the pothole versus the driveways are really good example around, you know about a repair being improving something back to its basic functionality versus an improvement.
So replacing the whole driveway and so we have we have put out a lot of information in this in our investor toolkit to help people understand the difference.
But this is also why, you know, we have been saying in our messaging to people.
If you are thinking about investing, you might actually want to go and talk to registered tax agent so you understand.
Actually, you know, if you are going to make this investment, what your tax outcomes might look like, what records you need to keep from the start, so you've got good record keeping from the start because obviously that impacts just not every year tax return.
But obviously when you go to dispose of the investment as well.

Robyn Jacobson   
And of course, with interest rates that continued to rise throughout last year, we've seen them pause this year.
The claims that people are making for interest on their rental properties are now much more significant than they were some years ago, so the importance of allocating between the private use and taxable's was always there.
But now I'm gonna say it's even more important because of the more substantial figures that are involved.

Robert Thomson   
Yes, I I don't have the latest figures, Robyn.
In terms of the trend over the last few years and how that's played out, but you are correct.
What we continue to see is that people just fail or make mistakes in terms of apportioning their interest between, you know, where they've taken out a mixed use loan.
So they've bought a property, but they may have used some of that for a personal personal expense or a non income generating expense might be the more technical way to put it and.
And so there's 2 kind of mistakes we see there.
Umm one is well actually the same thing is really about people understanding.
They need to apportion that for the whole life of the loan.
And so, you know, if you've taken out a loan for, say, 750,000 and the you've used 50,000 for another purpose, you know some people think they can pay the 1st, 50,000 off and then everything else is deductible for the interest they don't need to apportion anymore. And so that's one mistake we're saying.
No, you're actually need to apportion for the entirety of the loan and obviously that becomes complex.
You know that needs to keep good records around how they're doing that year on year, but it is one area we do see people make mistakes

Robyn Jacobson    
The ATO has a top 10 tips for residential rental property owners.
It's a really good guide and and are doing encourage people to have a look at that.
Alright, let's look at side hustles.
Call it gig economy.
Call it what you will.
These are people who may not fully appreciate the extent of their tax obligations.
They may need to be registered for GST.
They certainly have income tax implications.
They do need to get an ABN, they have got record at keeping obligations and of course they may be kicked into depending on the size of their activity, the PAYG instalments system.
So there's quite a bit to get across.

Robert Thomson
There is, there is Robyn.
You know, I think it's like side hustles and like, start again, a new income stream or any new business you need do need to think about the tax consequences.
But we definitely have seen with the rise of online, social media, gig economy that more people are doing Content creation, side hustles, you know, might be working rideshare, on the side and it's just really a reminder for those people that they do need to do need to include that in their income tax return as income.
Now obviously they can claim the deductions that are entitled to in generating that income.
So, you know, don't just remember the income.
Remember the deductions, but this is 1 area where just reminding people you're doing a little bit of side hustle work.
While you might just think it's a little bit of side hustle, it could have tax implications.
So you do need to make sure that you've reported that income in your tax return, and that's just not income that can be whether you've received that income through online services, but also if you've also got cash as well.
So it's just about reminding people about their what income needs to go on their tax return.
And obviously another one in that kind of same space is around crypto.
So obviously we continue to see people are investing in crypto and we're just trying to remind them of their tax consequences there.
And we think about 30, I think 30% of people don't think they need to keep records for crypto, but obviously at a basic level, they do need to create keep you know the transaction dates, how much they bought it for, how much they sold it for etcetera.
So just a reminder and this will pop up, you know there is a pop-up alert when people go to file their tax returns to remind them that they might have had a crypto event or a crypto transaction during the year.
So it's just a reminder as well around crypto needing to being included in a gain or loss. If for individuals this year, if they've invested in crypto and one reminder is they were just under people, you know like every quarter download your transaction wallets, you've got that information there and before you close out your account, definitely make sure you've got you've downloaded your account.
Activity and information.
So you can give that to your tax agent at tax time and kind of work out your capital gain or loss on any crypto assets you've had.

Robyn Jacobson   
And do not lose your password.
I had a fellow who had his crypto pathway to his wallet password on the hard disk of an old laptop and inadvertently through the laptop out.
This was, I believe, in the UK and then spent vast amounts of money trying to convince the local council to dig up the tip to try and locate this missing laptop.

Robert Thomson   
They should’ve bought BitCoin early on Robyn.

Robyn Jacobson   
Absolutely.
Just sounds like he might because you're storing it on the head to.

Robert Thomson   
You know, a good reminder about why it's good to keep contemporaneous records, right?
So if you're downloading your transaction account every few months, you know your clients get into a good practice that doing that.

Robyn Jacobson   
Yeah, we're focused a lot on tax time.
Looking back at the 23/24 income year, but just perhaps some quick highlights of what's changing from one July, the rate of superannuation guarantee has gone up again by another half a percent.
So 11.5%.
So for employers, this is for payments made on or after one July of salaries and wages.
It's not based on when the work was done, so you might be making a payment today in respect of work done in June, but it will attract the higher rate of SG.
So that's really important.
The amount of a penalty unit goes up, so for those who are on the wrong side of the law, we've now got $330 for one penalty unit and penalties throughout the tax admin system and essentially based on penalty unit.
So you might have 10 penalty units or 50 or 100 or whatever it is based on the particular misdemeanour.
So that makes of course noncompliance, late, lodgment that sort of thing become even more expensive.

Robert Thomson   
What we'd say on the penalty units for late lodgments?
Umm is you know if you think you're gonna have an issue lodging by time, then get in contact with us early and we can help you work through that.
So you don't have to.
You know, need to worry about the penalty unit.
We do appreciate and we can probably talk about tax agents, support and a little while, but you know, we do appreciate other things come up in people's lives where perhaps they are intending to lodge by certain date, but they've got something that's outside of their control.
And So what we're saying to people is if you do find yourself in that situation make sure you in contact and discuss your circumstances or speak to your registered tax agent.

Robyn Jacobson 
That’s a nice segway into talking about what support is available.
So if people are having trouble lodging or paying, what can they do?
And then separately as a second part to that question, what support is available to agents?

Robert Thomson   
So if people are having issues lodging or paying.
You can go online.
There are some you can go online.
So for example, you can request some payment services online, so you can actually go to the ATO website online or your tax agent can help you with those.
So I think our main messaging is getting contact with us early to discuss your situation or speak to your registered tax agent early on.
Don't leave it to the last minute.
The earlier can get in contact with us, obviously, the easier it is for us to be able to address your situation and obviously we are busy at tax time as well, right?
So we have a lot of people trying to call us.
It's also leaving it to the last minute, you know, isn't the best idea.
So just engage with us early.
Also have a look on our website.
You'll also, depending on your circumstances, might be entitled to other support options like tax help.
So there is a lot of support on the website around how you can see support if you need it, how you can go on our online services to perhaps request a deferral or to request a payment plan but then who to contact if you need.

Robyn Jacobson   
Agents have something called the supported lodgment program.
So how does that work?

Robert Thomson   
So the supported lodgment program is a program that allows agents to acquire to request additional time, to defer some of their lodgments, and this can actually be done through online services for agents.
Now if you things about that, the agents do need to be aware of, it needs to be that the the deferral needs to kind of be because of exceptional or unforeseen circumstances, being your client or your practice and that those circumstances are actually affecting your ability to lodge.
So our reminder there and why I made that reminder is because we're seeing a significant number of these lodgment requests that deferral requests that come through where the the agent hasn't provided that information in the enough detail for us to be able to grant that lodgment requests. So really important for you to be able to provide detail to us, to explain what the unforeseen circumstance is, why that's impacting on your ability to lodge because otherwise we're just gonna come back to you on, it creates a lot of reverse workflow for both tax agents and us.

Robyn Jacobson   
Certainly in the last week alone
I've spoken with two agents who have lost Staff and this is really challenging.
We've talked often about the shortage of Labor across the accounting and tax profession, particularly post COVID.
But it's still biting and I know the governments are aware of this, but it's something that is a real issue for practitioners where they're trying to keep up with lodgements, whether it be dealing with last years, we've now got a brand new compliance season kicking off and when they lose Staff, it just depletes their resources and they can only work so many hours a week.
They can only do many so many six or seven day weeks without leading that break and and needing a bit of reprieve.
So to what extent is the ATO aware of this and mindful of this?

Robert Thomson   
Obviously we engage with the tax agent community quite often.
We have the tax practitioner stewardship group and we do understand the pressures facing tax agents.
So you know, we do have.
I've talked about the Lodgment program.
We also have other programs available, such as our tax Practitioner Assistance Service, which can help provide advice on an even administrative matters around your practice and the programs we've talked about, including that tax practitioner support program.
There are obviously available to all size of agents and we also have other programs. 
So I guess the main messaging is if you are having issues and you're an agent, just out getting contact with us early, that's the best idea and then we can work out what's the best support. 

Robyn Jacobson   
OK, look, this next issue is one that we could speak for hours and hours on, but with just a moment left: scams.
Try to identify what is genuine contact from the ATO.
We're all so suspicious, myself included, of phone calls, emails and text messages, and trying to work out.
Is it in fact the genuine supplier or provider?
Or is there someone scamming me and we've all been a victim of some form of scam or text message that is not genuine?
What does the ATO do and not do?
And if you're not clear on whether something is genuinely from the ATO, how can you check?

Robert Thomson   
Yeah, so, so good question, Robyn,
I had someone the other day calling me telling me that the tax office and they're gonna throw me in jail for a tax debt, which I kind of found funny.
And when I told them that I knew the deputy Commissioner of fraud and criminal behaviours, they hung up very quickly.
But no, it's it's something we're facing, right.
You’ve gotta you've got an unpaid toll account.
You've got an unpaid, you know, TV streaming account.
We do see it at Tax Time obviously though, because people are expecting to engage with the ATO that there is scammers use that to their advantage.
And what you know, I say scams all year round, but we see new scams at this time of the year and what most of them are trying to do is harvest people's mygov ID credentials, typically through either a fake email or a fake text message.
So a few red flags, one is that we're never gonna text you or send you an unsolicited email that asks you to click onto a hyperlink and enter your mygov  ID or details or any other personal information.
Well, that's one way that you can identify something is probably not from the ATO the other.

Robyn Jacobson   
If there's a link, it's not from the ATO.

Robert Thomson   
Not from the ATO.
What I do when I get those, even when I get I, you know, it's just you always just going to to your my Gov you know in your browser and check your activity that's the easiest way. So that's the first thing you can do.
That’s the first flag, the second flag is.
We're never gonna ask for personal information via email via text message over social media.
That's another red flag.
The other one is when the ATO calls you, it actually comes up as no caller ID.
So if you're getting a mobile number coming up and they telling you the ATO, they’re not.  and the last thing is we're never gonna make you stay on the line and threaten you with jail until you've made a payment.
So any of those things Red flag if you don't think it's genuine, you don't know, hang up, you can call us on 1800 008 540 and speak to someone and they'll be able to help you to understand whether it is you're generally talking to an ATO officer or not.

Robyn Jacobson   
Can you repeat that number again Rob?

Robert Thomson   
1800 008 540, Robyn.
There’s also a few things practices can do at this time of the year you know, so one is making sure that they've updated their obviously their IT security software.
The second is making sure that they're obviously gone through POI for all their clients, which we talked about earlier.
And the third one is to have a discussion about who has access within your practice, to what information and do they need it?
So that question around access to information.
So they're obviously things you can do as an individual, but there's also things that can be done for practices and the same information on our website for tax agents around what they can do to kind of make sure that they're protecting themselves as well.

Robyn Jacobson   
And I think it's also important to mention that there have been a number of changes in recent years involving the ATO’s approach and security procedures and so on.
And ultimately this is done to protect agents, to protect the community and to protect the ATO itself.
So sometimes they're inconvenient, but sometimes these steps are unfortunately necessary.

Robert Thomson   
That's right rather than we definitely want to protect taxpayers, we also wanna protect tax agents as well.
I mean, there's nothing worse for a tax agent than having their kind of their ID taken over as well.
You know that can impact their whole practice and their livelihood as well.
So this is very much about making sure we're keeping both the community and tax agent safe.

Robyn Jacobson   
Rob, I really appreciate you taking time out.
I know you've been doing a big circuit and this is one of just many, many discussions you are having, so we've gratefully appreciate your time.

Robert Thomson   
Thanks Robyn.
Thanks very much.

Robyn Jacobson   
Thanks for listening to this episode of TaxVibe.
I've been chatting with Rob Thomson, assistant commissioner at the ATO and the tax time spokesperson.
If you enjoyed this episode, we'd love for you to subscribe, rate and review TaxVibe wherever you listen, we welcome any feedback and suggestions. To catch all the latest from TaxVibe and The Tax Institute, join us on LinkedIn. If you're interested in being at the center of the tax conversation, a membership with The Tax Institute could be just what you need.  Stay current and connected with tangible real world benefits.  Learn more at taxinstitute.com.au. 
Thanks again. Till next time on TaxVibe