What Are Audits and Reviews?

Understanding Tax Reviews and Audits

A tax review is a preliminary check of your return to confirm its accuracy, while a tax audit involves a detailed examination of your financial records, deductions, and income.

Common Triggers for Audits

• Unusual Deductions: High or unusual claims compared to others in your industry.
• Omitted Income: Failing to report income from jobs, investments, or side hustles.
• Late Lodgements: Consistent delays in filing tax returns.
• Discrepancies: Mismatches between pre-filled ATO data and your tax return.

How to Prepare for an Audit

1. Keep Detailed Records: Retain receipts, invoices, and documentation for all claims.
2. Review Your Return: Use the Cado Tax app to verify deductions and income accuracy.
3. Understand Your Obligations: Familiarise yourself with ATO guidelines for your claims.
4. Respond Promptly: If audited, respond within the specified timeframe and provide clear, accurate information.

Staying organised and maintaining accurate records can help you navigate audits with ease. The Cado Tax app helps store receipts and track deductions for compliance.

For tips on avoiding common audit triggers, visit our Common Tax Return Mistakes guide.

FAQs

What should I do if I’m notified of an audit?

Carefully read the audit notice and gather all requested documentation. Contact a tax professional if needed, and respond promptly to avoid penalties.

How long does a tax audit take?

The length of an audit varies depending on its complexity. Some audits are resolved quickly, while others may take several weeks or months.