It’s a question we often get asked by clients. So we’ve taken the time to explain why.

Within your Income Tax Return, you must make a legal declaration whether you had a spouse during the year; where you answer ‘yes’ to this question then the Australian Taxation Office (ATO) require a number of spouse income labels to be completed.

Spouse income details are required as a range of tax obligations, concessions and government benefits are assessed using family income, rather than individual income.  To accurately assess these entitlements or liabilities, it is necessary to provide information about your spouse’s income in their tax return. This means that your spouse’s personal details and income details are included in your Income Tax Return (and vice versa) as a reporting and cross-checking measure.

Yours and your spouse’s incomes are not added together or aggregated or even averaged for Income Tax purposes. You are solely assessed for Income Tax on your Taxable Income. It’s merely the other obligations, concessions and Government benefits that these measures apply to.

Even when these things don’t apply to you or your family, unfortunately the reporting requirement still remains.

We aren’t trying to be painful or difficult, but rather just comply with what is required so that we are able to complete your Income Tax Return. Yes, these reporting labels are a bit of an extra pain and the source of frustration, however this isn’t just a nicety that we insist on – they must be included within your Tax Return. We aren’t trying to pry, the information that we are asking for is to ensure your Tax Return is completed accurately.