Taxpayers like you can have a choice on how they prepare their tax returns. And it can be either on an accruals, or a cash basis.
Point is, that once you have applied that basis/system, you cannot change it unless you will receive a notification from the ATO that you are allowed to do it.
There is no two way about it, that the cash basis is the easiest and best because you are only entering the income you received, and the expenses that you have incurred and paid for, in the year of income, and not having to include it even if you didn't get paid.
Then again, if you were to be completing a Tax return on an accrual basis, and if you were not to receive payments for your services rendered you could use that loss of income as a tax deduction via "BAD DEBTS WRITTEN OFF" facility.
The accrual system is far more complicated, hence why smaller businesses are allowed to make use of the cash basis system instead. It is easier and cheaper to comply with.
Regards and all the best with your investments.
ADE Price at posting:
20.0¢ Sentiment: None Disclosure: Held
