ATO announces its focus for 2022 small business returns

The ATO announced that it will be focussing on the following matters for small business tax returns for the 2021/22 year:

• deductions that are private in nature and not related to business income, as well as overclaiming of business expenses (especially for taxpayers running a home-based business);
• omission of business income (e.g., income from the sharing economy or new business ventures); and
• record keeping (including insufficient or non-existent records that are needed to substantiate claims).

The ATO has also released a tax time toolkit to help small businesses and their tax professionals 'nail' their income tax returns, which includes guides on the following:

• Home-based business expenses.
• Motor vehicle expenses.
• Travel expenses.
• Claiming deductions for the cost of digital expenses.
• Using business money and assets for personal use.
• Pausing or permanently closing your business.

Visit the ATO website for more information.