The tax office has put small businesses and sole traders on notice about excessive claims relating to personal deductions on tax returns. | sdanck
The tax office has put small businesses and sole traders on notice about excessive claims relating to personal deductions on tax returns, particularly for home offices, not declaring “side hustles” and some COVID support payments as part of their income.
The ATO has warned small businesses and sole traders over home office deductions and declaring income from COVID payments and other ‘side hustles’.The warning comes after a near two-year period where the ATO drastically reduced its collection activities due to the serious impact of COVID on many businesses around the country.notices to the directors of Australian companies warning them that they could face penalties for failing to pay accumulated tax debts.
The ATO is also keen to remind businesses that most government payments or financial support received as a result of COVID-19 need to be included as taxable income, whereas some others are exempt and should not be included. This includes JobKeeper payments, state government voucher subsidies and grants to support the creative economy.
“Almost half of the 1.9 million sole traders also have non-business income, like salary and wages or income from investments, so make sure to double-check you’ve included it all before you lodge. Don’t fall into the trap of leaving out non-business income thinking we won’t notice.”“Small businesses should include all income in their income tax return, including cash, coupons, EFTPOS, online, credit or debit card transactions, and income from platforms such as PayPal, WeChat or Alipay.
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