Crypto, NFTs in crosshairs as ATO cracks down on digital economy

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If there are no capital gains to offset losses, the investor can declare the loss in their return and carry it forward, to offset future capital gains.

Data matching

The shift to the digital economy and away from cash accelerated by the COVID-19 pandemic is making it easier for the ATO to follow the money trail back to taxpayers.

It is now data matching information not only from banks and insurers, but from areas such as ride-sharing companies and online marketplaces, including those that offer homestays or vacation rentals.

The ATO data matches crypto trading from information supplied by exchanges, Loh says.

Work-related expenses

More people have been working from home since the pandemic began, with one-in-three taxpayers claiming working-from-home (WFH) expenses in their tax return last year.

WFH costs will likely be higher again this financial year but the ATO expects other work-related expenses to be less; including motor vehicles, clothing and such things as parking and tolls.

To claim a deduction for WFH expenses, there are three methods available:

Shortcut method: a fixed rate of 80¢ an hour multiplied by the number of hours worked from home. It is all-inclusive – you cannot claim any other expenses for working from home. It covers expenses such as electricity and gas for heating, cooling and lighting, but you can make additional claims, such as phone, data and internet expenses.Actual cost method: you calculate the actual expenses you incur to produce income when WFH, so long as you meet the eligibility and record-keeping requirements. Scams, accommodation dates

Loh says that taxpayers should be on guard against tax-related scams.

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The ATO is seeing deceptions involving fake Tax File Number applications, where a fraudster offers to help a taxpayer obtain a number for a fee. However, instead of supplying the information, the taxpayer’s cash and personal information are stolen.

There is also a similar scam involving Australian business number applications.

Many of these scams appear on social media platforms.

Taxpayers should not disclose personal information unless they can verify who they are dealing with.

Those who complete their annual tax return themselves must lodge it by October 31.

Taxpayers who use registered agents – providing they have no outstanding issues with the ATO – have until mid-May next year to lodge their return, as long as they register with the agent before the end of October.

Four out of five people get a tax refund. “If you are not lodging your return you [could be] leaving money on the table,” Loh says.

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