Tax time is right around the corner and the Australian Taxation Office (ATO) has revealed the three things it will be focusing on when you submit your tax returns. There are plenty of things you can claim in your return and it's worth remembering what is and isn't legal.

The ATO has warned that work-related expenses, rental properties and income statements will all be in its crosshairs this year. ATO Assistant Commissioner Rob Thomson said they deal with issues in these specific areas every year.

"These are the areas that people are most likely to get wrong, and while these mistakes are often genuine, sometimes they are deliberate. Take the time to get your return right," he said in a statement.

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Work-related expenses

Since the COVID pandemic, Aussies have been able to claim a tax deduction for working from home as they use personal resources for work purposes.

Last year alone, there were more than eight million work-related deductions and around half of those were related to working from home.

However, the system was changed last year and will be in full effect come July 1.

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You'll now have to provide "comprehensive records" that back up your work-from-home claims as you normally would for any other deduction. Those records can be in the form of a calendar, diary or spreadsheet and you'll have to submit evidence of at-home costs like an electricity bill.

Thomson said the ATO will be watching this area intently.

"Deductions for working from home expenses can be calculated using the actual cost or the fixed rate method, and keeping good records gives you the flexibility to use the method that works for you, and claim the expenses you are entitled to," he said.

"Copying and pasting your working from home claim from last year may be tempting, but this will likely mean we will be contacting you for a ‘please explain’. Your deductions will be disallowed if you’re not eligible or you don’t keep the right records."

You can only claim a work-related expense if you spent the money yourself and weren't reimbursed, it was related to earning your income, and you have a record to prove it.

What you can and can't claim for rental properties

The ATO said nine out of 10 rental property owners are getting their income tax returns wrong and it will be looking for claims that "may have been inflated to offset increases in rental income to get a greater tax benefit".