Items to Check When Lodging a Tax Return in Australia

This article provides general information only about the checks that individuals and businesses commonly make before lodging a tax return in Australia. It does not constitute tax, legal or financial advice, and it does not take account of the circumstances of any individual reader. Tax rules change, and the Australian Taxation Office (ATO) is the authority for the current position.

1. The purpose of a pre-lodgement check

A return that is lodged promptly but contains an error may later require amendment, and an omitted item of income may attract an adjustment. A short, structured review before lodgement reduces the likelihood of either outcome. The checks below are arranged in the order in which they are usually most practical to complete.

The argument of this article is a plain one: the most valuable preparation is confirming what the ATO already holds about the taxpayer, and then supplying what it does not. Most of the remaining steps follow from that.

2. Confirm the information the ATO already holds

1. Many individuals’ returns are partly completed using information reported to the ATO by employers, banks, health funds and government agencies. This information is generally described as prefilled data.
2. Prefilled data may not be complete on the day a taxpayer first logs in. Employers and other payers report on their own timetables, and an income statement shows as Tax ready only once the payer has finalised it. A taxpayer should confirm that each income statement shows the status Tax ready before relying on it.
3. Prefilled data is a starting point and not a substitute for review. A taxpayer remains responsible for the accuracy of the return, including any item the ATO has prefilled incorrectly.
4. Where prefilled information appears to be wrong, the usual step is to ask the payer to correct it, and not to override it without a record explaining why.

3. Identify all income

The taxpayer should list each source of income for the year and compare the list against the ATO’s records. Categories commonly reviewed include:

1. Salary and wages.
2. Business or sole trader income, including amounts invoiced and amounts received.
3. Interest, dividends and other investment income.
4. Rental income.
5. Government payments and pensions.
6. Income from the sale of an asset, where a capital gain or loss may arise.

A source that is missing from the prefilled information is not exempt for that reason. The taxpayer should add it to the return.

4. Review deductions against the rules that govern them

Deductions are the area in which taxpayers most often claim too much or too little. The ATO describes a general approach to work-related expenses, which in summary requires that:

1. The taxpayer spent the money and was not reimbursed for it.
2. The expense relates directly to earning income.
3. The taxpayer has a record to prove it, and where an expense serves both private and work purposes, only the work-related portion may be claimed.

From the 2026-27 income year the ATO also describes a standard deduction for work-related expenses that does not need receipts. It is not available in the 2025-26 return, and itemised claims still follow the three conditions above.

Some categories attract additional rules. Vehicle and travel expenses, for example, are subject to specified calculation methods and record-keeping requirements, which the ATO sets out on its website. A taxpayer who intends to claim for the use of a car should read the current ATO guidance on the permitted methods, and should not assume that a claim reasonable in one year will be accepted in the next. For a business, the question is whether each cost is incurred in earning assessable income, and whether it is capital or revenue in nature. A registered tax agent can advise on that distinction.

5. Gather and keep records

1. Receipts, invoices and bank or card statements should be retained for each claimed expense.
2. Where a claim depends on a log, such as a vehicle logbook, the log should be kept in the form the ATO requires.
3. Records should be retained for the period the ATO specifies, which depends on the type of record and the circumstances. The ATO website states the current requirement.
4. Electronic copies are generally acceptable, provided they are legible and can be produced if requested.
5. Previous returns and notices of assessment should be kept, since they provide a reference for carried-forward amounts.

A deduction that cannot be supported by a record may be disallowed, even where the underlying expense was genuine.

6. Additional checks for businesses

Matters specific to businesses include the following. The list is not exhaustive.

1. Private and business transactions should be separated, in distinct accounts where practicable.
2. Where the business is registered for GST, the amounts reported on activity statements should reconcile with the annual return.
3. Payments to employees and contractors, and any superannuation obligations, should be reported and paid as the ATO requires.
4. Any instalments paid during the year should be matched against the final liability.
5. Records of assets, depreciation and stock should be current.

The position differs between a sole trader, a partnership, a company and a trust, and the reporting obligations differ accordingly. A business owner who is unsure which obligations apply should ask the ATO or a registered tax agent.

7. Timing

The Australian tax year ends on 30 June. The ATO publishes the lodgement dates for individuals and businesses, and a registered tax agent may have access to a different lodgement timetable for their clients. The taxpayer should confirm the applicable date directly with the ATO. Lodging late may attract penalties, and an early lodgement made on incomplete prefilled data may require amendment. Both considerations support starting the review early, which is also the theme of why tax planning during the year makes lodgement easier.

8. A consideration in fairness to self-lodgement

Many individuals with straightforward affairs lodge their own returns, and the ATO provides online tools for that purpose. Nothing in this article suggests that professional assistance is necessary in every case. A taxpayer whose circumstances include several income sources, a business, property transactions or a substantial change during the year may reasonably choose to seek advice before lodging, and the cost of a registered tax agent’s fee is itself generally a deductible expense in the following return, subject to the ATO’s current rules.

9. Referral to the authority and to a registered professional

A reader who requires an assessment of a specific situation is advised to consult the ATO or a registered tax agent. A tax agent’s registration may be verified through the Tax Practitioners Board. The ATO’s published guidance, and not this article, governs the treatment of any particular item.

Sources: Australian Taxation Office, individual tax return and income statement guidance (https://www.ato.gov.au/individuals-and-families/jobs-and-employment-types/working-as-an-employee/income-statements); Australian Taxation Office, deductions you can claim and keeping records (https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/claiming-deductions); Tax Practitioners Board, register of tax practitioners (https://www.tpb.gov.au/public-register); Australian Taxation Office, Standard deduction for work-related expenses (https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/standard-deduction-for-work-related-expenses).