Sometimes, the line between a genuine business and a hobby can be quite blurry. And so there are many occasions in which it’s difficult to determine whether or not a taxpayer is in business or just making some profit while enjoying their hobby. The taxpayer may think this is fine, but the ATO considers this to be an ongoing problem, and from a tax accountant’s point of view, the distinction between the two can be extremely important.
It’s that time of the year again when many of us are thinking of getting away for a bit. With this in mind, the ATO is cautioning taxpayers to keep in mind that it is keeping a close eye on rental properties located in favorite vacation spots around Australia.
Officially, the Australian Tax Office (ATO) can choose to respond to income reporting mistakes with increased financial penalty. This will apply where the taxpayer hinders the ATO, but as this article will explain, there are five specific situations where you might be vulnerable to increased penalties, but may be able to “catch a break” for a reduced base penalty.
Taxpayers in Australia have contributed to the much debated and anticipated Tax Reform White Paper, prepared by the government.
