Claiming tax deduction across financial years

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wufflepuffle · Answer

Hi there, I have extracted this from the ATO page Accounting methods for business income. The ATO website states the amounts you include as your assessable income in any income year depend on whether you account for your income on a cash basis or accruals basis. Cash basisIf you account for your assessable income on a cash basis you: - include payments you received during the income year, even if the work was done in a different income year - don't include amounts where the work was done, but you did not receive payment during the income year. When you complete your tax return, you may have to reconcile any unpresented cheques to remove them from your income or deductions if you had previously included these amounts. Accruals basisIf you account for your assessable income on an accruals basis, you include all income earned for work done during the income year. This is even if you hadn't received payment by the end of the income year. The webpage has an example of when to include income. Hope this helps Wufflepuffle

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