• Stella Jansen

ATO Data Matching - What is it and how will it affect me?

In Australia, ATO data matching technology is now being used. With this system, the ATO is able to identify people who are undertaxed and catch them by finding out what income they are not declaring on their tax return.

What is ATO Data Matching?

It might be best to describe the ATO data matching process as two-step.

Step 1

Taxpayers' information is collected by the ATO. The ATO collects information about you from...

· your employers,

· your bank and other financial institutions (now including banks overseas),

· health insurance funds,

· BAS Statements,

· Superannuation accounts,

· and the property information your state may have

Step 2

Your tax return data is compared to all this data by the ATO. You will be able to discover undeclared income easily if you don't declare it.

The ATO gets my personal information from other organizations. Why?

The ATO is extending its reach overseas as well. Australian banks and other institutions are legally required to provide your information to the ATO. Nobody should believe that their finances are a secret that can't be discovered by the ATO.

Have you ever had undeclared income? The ATO will match your information.

The ATO data matching program's goal is to identify taxpayers who aren't following the rules. If someone tries to hide undeclared income on purpose, the ATO's data matching aims to find them, and the ATO applies back-payment of taxes plus fines, and in some cases, back-payment of interest charges.

When it comes to side jobs, such as renting a room on Airbnb or driving your car as an Uber driver, you must ensure that you declare all of your income to avoid penalties and fines. The ATO data matching technology is specifically being used to catch these two industries.

The same applies to tradies and sole traders receiving undeclared income "off the books." These individuals now face serious legal consequences. Your bank accounts can be checked, payments cross-referenced against an ABN, and you can confirm missing income on your tax return.

You can correct yourself if you're in the wrong

If you do the wrong thing and want to own up to it, the ATO offers voluntary disclosures. Your tax accountant can help you amend your tax return to reflect your actual income. Even so, it is better if you do it right from the start. It is here to stay, which will become another reason why Australians choose to hire a tax agent to file their returns correctly.

Feel free to contact us at (07) 3804 7575

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