Last week, the Australian Taxation Office (ATO) announced its focus on lifestyle expense tax audit for Fy2021, targeting around 300,000 taxpayers. The ATO is gathering evidence from insurance companies to determine the value of certain goods purchased, such as luxury cars exceeding $65,000, boats over $150,000, and art and collectibles valued at over $100,000.00.
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The ATO will compare the collected data with tax returns lodged by entities to identify any mistakes in declared income or over-inflated work-related expenses.
Additionally, the ATO is targeting taxpayers who collect arts and collectibles to ensure accurate disclosure at the time of disposal, as it may lead to capital gains tax implications.
As the leading CPA accountant and tax agent in Ashfield, Sydney, and Adelaide, we can review your prior lodged tax returns and analyze your lifestyle expenses to determine your audit risk before the Australian Taxation Office does. Identifying and amending mistakes before the ATO initiates an audit means you only need to pay the shortfall. If the ATO identifies errors during the audit, a shortfall tax penalty of 25%, 50%, or 95% may apply.
For assistance, give us a call at 1800 841 312 or send us an email at firstname.lastname@example.org. We are here to help you navigate through the lifestyle expense tax audit process and ensure compliance.