How to make sure you include your income and deductions in the right income year
By John Kelly
Editor-in-Chief, Smart Tax Handbook
The ATO is taking an increasingly tough stance on income and expenses which aren't disclosed in the correct year.
Income needs to be included in the year of income in which it is 'derived'. The 4 main ways to tell that you have derived income are:
For example, if a large deduction was claimed in the year after it was incurred, the ATO could deny that deduction on the basis that it is not a valid deduction for that year. If the time limit for amending tax returns has expired for the previous year, you could end up not getting a deduction for that expense at all. Depending on the amount, it could end up being a very costly mistake.