How FediPilot prepares an individual tax return: a worked example
The client is fictional: one employer, one residential rental property held in sole name, resident for the whole year, with bank interest as the only other income. FediPilot takes 7 documents, builds 3 working papers, enters 4 items into the return and leaves 2 questions for the accountant. The accountant reviews and lodges. Every name and figure on this page is invented.
The steps
- Documents in. The accountant gives FediPilot the client's folder. In this example that is 7 documents.
- Working papers. FediPilot reads each document and builds 3 working papers. Each figure points back to the document it came from.
- The return, filled in. On a supported workflow FediPilot enters 4 items into the return in LodgeiT or Xero Tax. Anything it cannot support from a document is left as a question: 2 in this example.
- The accountant reviews. The accountant opens the return, compares it with the working papers and the source documents, answers the open questions and corrects anything they disagree with.
- The accountant lodges. FediPilot stops before lodgement in LodgeiT. The registered tax agent presses Lodge. Nothing is lodged without the accountant's approval.
Documents in (7)
| Document | What FediPilot takes from it |
|---|---|
| Income statement from the employer | Salary paid and tax withheld for the year. |
| Bank statement, everyday account | Interest earned and the rent payments received. |
| Rental property agent annual statement | Rent collected, agent fees and other costs the agent paid. |
| Home loan interest statement | Interest charged on the loan used to buy the rental property. |
| Council rates notice | Council rates charged for the property. |
| Water notice | Water charges for the property. |
| Prior-year return | Last year's figures, so changes can be spotted. |
Working papers (3)
- Salary reconciliation: Income statement total agreed to the bank deposits. Employer income statement against the bank statement.
- Rental income and expenses: Rent collected less each cost, line by line. Agent statement, loan interest statement, rates and water notices.
- Year-on-year comparison: Each line against last year, with the differences listed. Prior-year return against this year's papers.
The return, filled in (4 items)
| Section | Entry | From |
|---|---|---|
| Salary or wages | Gross salary and tax withheld | Income statement from the employer |
| Interest | Interest earned on the everyday account | Bank statement |
| Rent | Gross rent received | Rental property agent annual statement |
| Rental deductions | Agent fees, council rates and water charges | Rental property agent annual statement; council and water notices |
What the accountant is asked (2)
- The agent statement shows a repair cost; FediPilot asks whether it is a repair or an improvement instead of choosing.
- The loan interest statement does not say how much of the loan was used for the property; loan interest stays out of the return until the purpose split is confirmed.
Sources
- Rental properties - Australian Taxation Office. Checked 2026-10-30: rental loan interest must be apportioned when borrowing has private purposes; rental expenses are limited to income-producing use.
- Rental property – repairs or capital expenses? - Australian Taxation Office. Checked 2026-10-30: explains the distinction between repairs and capital improvements, including initial repairs.
- AI and the Code: What every tax practitioner needs to know - Tax Practitioners Board. Tax practitioners remain responsible for reviewing, testing and verifying AI-generated content before it is used or relied upon.
- TPB(GS) 55/2026 The use of Artificial Intelligence and the Code of Professional Conduct - Tax Practitioners Board. Tax practitioners are still ultimately responsible for the tax agent services they provide when they use AI tools.
Related
Last reviewed 2026-10-30. Fedix is software, not a registered tax agent: the registered agent reviews and lodges. Supported workflows differ by release. Fedix is developed by Tax7 R&D Pty Ltd.