ATO Tax Time Focus 2025: Key Compliance Areas
The Australian Taxation Office has released its key compliance focus areas for this financial year. Here’s what taxpayers need to know to ensure compliance when lodging their tax returns.
Work-Related Expenses
Work-related expenses are a primary focus because the ATO consistently found errors last year. Key areas include:
Working from Home: When using the 2025 fixed rate of 70 cents per hour, the ATO expects complete records of hours worked from home, such as timesheets, diaries, or work rosters.
Occupancy Expenses: Deductions for rent or mortgage interest are only valid if running a business from home, not just working remotely. Even then, you may not want to claim your mortgage because it would hinder your ability to use the main residence Capital Gains tax exemption when selling your home.
Mobile Phone/Internet: These amounts are bundled into the home office rate, so the ATO is cracking down on “double dipping” by claiming them again separately.
Rental Properties
Investment properties and holiday homes face intense ATO scrutiny, with 90% of audited returns showing errors:
Excessive Interest Claims: Avoid claiming interest on non-rental loans or even claiming principal payments by accident.
Holiday Homes: Claims are limited to periods when properties are rented or available for rent.
New Properties: Renovation costs are deductible over time, not immediately.
Sharing Economy
The ATO is monitoring platforms like Uber and Airbnb for undeclared income, using third-party data to identify mismatches.
Cryptocurrency
It’s estimated that half to one million Australians are in crypto. The ATO is using data from service providers to ensure accurate reporting of capital gains or business income.