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ATO focus on 2007 Tax Returns

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The Tax Office has advised that it will be paying particular attention to the following in 2006/07:

  • Capital gains from assets sold to contribute to superannuation;
  • Capital returns on shares, and capital gains or losses on share buy-backs; and
  • Work related expenses (WREs), including motor vehicles, self-education, home-office, and travel expenses.

Occupations targeted

Each year, the ATO selects a number of occupations for specific focus because they have above average WRE claims, a high number of WRE claimants or because the ratio of WRE claims is high compared to the salary and wages. For 2007, the ATO will focus on:

  • tourism, travel consultants and guides;
  • fitness and sporting industry employees;
  • construction tradespeople who are employees;
  • guards and security employees; and
  • a continued focus on mining site employees.

Rental property deductions for 2007

In 2007 returns, the ATO will be looking at:

  • renovations claimed as repairs – such as remodelling of bathrooms and kitchens;
  • claiming too much interest on loans that have a private component;
  • claiming the full cost of an inspection visit when it is combined with a private purpose;
  • claiming deductions for properties only available for rent part of the year;
  • claiming the cost of land as a capital works deduction; and
  • claiming depreciation on assets such as fixtures, instead of capital works deductions.

If any of the above areas are of concern, please contact this office.

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