If you would prefer to read this booklet in portable document format, download the PDF Deductions for prepaid expenses - individualsThis link will download a file here.
How self-assessment affects most individuals
Self-assessment means the Australian Taxation Office (ATO) uses the information you give on your tax return to work out your refund or tax bill. You are required by law to make sure you have shown all your assessable income and claimed only the deductions and tax offsets to which you are entitled.
What are your responsibilities?
Even if someone else-including a tax agent-helps you to prepare your tax return, you are still legally responsible for the accuracy of the information.
What if you lodge an incorrect tax return?
Our systems continually check for missing or wrong information. We have audit programs designed to detect where taxpayers have not declared all of their assessable income or where they have incorrectly claimed deductions or tax offsets. If you become aware that your tax return is incorrect, you must contact us straightaway.
Initiatives to complement self-assessment
There are a number of initiatives administered by the ATO which complement self-assessment. Examples include:
- a change in penalty provisions so that if you take reasonable care with your tax affairs, you will not receive a penalty for honest mistakes but please note that interest on omitted income or overclaimed deductions and tax offsets could still be payable
- the process for applying for a private ruling
- your entitlement to interest on early payment or overpayment of a tax debt
- the process for applying for an amendment if you find you left something out of your tax return.
Do you need to ask for a private ruling?
If you have a concern about the way a tax law applies to your personal tax affairs, you may want to ask for a private ruling. A private ruling will relate just to your situation. Write to the ATO describing your situation in detail and ask for advice. Include your tax file number. If you lodge your tax return before you receive your private ruling, be aware that the ruling may alter the accuracy of your tax return.
You can ask for a review of a private ruling decision if you disagree with it, even if you have not received your assessment. The ATO can give you more information about review procedures.
Publications referred to in this booklet include:
- Business and professional items (NAT 2543-6.2002)
- Partnership and trust tax returns instructions (NAT 2297-6.2002)
- Company tax return instructions (NAT 0669-6.2002).
Reader feedback helps us to improve the information we provide. If you have any comments to make about this publication, please write to:
Personal Tax Publishing Group
Australian Taxation Office
PO Box 900
CIVIC SQUARE ACT 2608
As this is a publications area only, any tax matters will be passed on to a technical area. Otherwise you can ring our Personal Tax Infoline on 13 28 61 for help.