Written

For

The

Australian

-

Here’s

how

to

optimise

your

tax

returns

without

falling

foul

of

the

tax

office

Nine out of ten rental property owners are getting their tax returns wrong. That's not my figure — that's the ATO's own admission, and it should tell you exactly where the scrutiny is heading this tax season.

Every year the tax office tells us in advance where it's looking, and for 2024 it's the same two hot spots as last year: working-from-home claims and rental properties. If you're planning to copy and paste last year's WFH deduction into this year's return, expect a "please explain" letter. The ATO has said as much publicly.

The bigger issue I want to flag is just how far the ATO's data-matching net now extends. Most people underestimate it. Sell an investment property? The state land titles office has already told the ATO. Have a crypto wallet on an exchange? They know. Overseas bank account? Australia shares information with 126 countries under the Common Reporting Standard. Insure a $1m yacht while declaring $20,000 of income? Red flag.

On the rental property front, the ATO has specifically warned it's targeting inflated deductions used to offset higher rental income. The classic mistake is claiming a full renovation upfront rather than depreciating it over time. That's an audit invitation.

But here's the flip side I always remind clients of: don't overpay tax either. Investors routinely forget legitimate cost base additions when calculating capital gains — stamp duty, legal fees, agent fees, renovations, valuation costs. All of these reduce your CGT bill. Investment advice fees, seminars and courses can also be deductible in certain circumstances. Have that conversation with your accountant.

I'll leave you with a thought from Andrew Jeffers at Shuriken Consulting that I think reframes tax season nicely: clean parks, good schools, and care for the sick and elderly all exist because we pay tax. Declare everything you should — and claim everything you're entitled to.