In certain ways the Tax Office / Big Brother is making it easier and easier to include everything in your tax return these days. The ATO has very extensive data matching tools at it’s disposal and can tell, amongst other things:
- How much interest you received from the bank
- Which companies paid you a dividend and whether it was franked
- If you received a distribution from a partnership or trust
- Whether you hold Private Health Insurance
- Whether you disposed of shares or property during the year
- If you purchased an expensive car, boat, aeroplane, etc
- If you travelled overseas and when / where you travelled
- Whether you contributed to a super fund during the year and the level of your contributions
- Salary and subcontractor Payment details
- If you have dependants and/or a spouse
If you fail to disclose certain information in your tax return they normally allow you time to rectify the situation before sending you a “please explain” letter and commencing a potential audit. However it is far better to take the time to review your situation and include everything that may be relevant to a tax year before lodging your return.
Voluntary disclosure is always the preferred method and you are less likely to find yourself in trouble with the ATO if you follow this mantra.
If you have lodged a tax return and become aware of additional information after it has been assessed you are always able to prepare an amended return to include the additional information. It is best you do this before the ATO finds the problem as they will take a far more lenient approach in regard to fines, penalties & interest.
If you need any assistance in preparing your tax return we suggest you seek independent professional advice from a registered tax agent.