Auto Tax Return (Australia)

An Australia-only app for PERSONAL/individual taxpayers: upload bank/card statements and it classifies, organises, and drafts your tax return automatically for review before you self-lodge in myTax. Sole-trader/business is out of scope.

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Snapshot

An Australia-only app for PERSONAL / individual taxpayers. You upload your bank and card statements (PDF/CSV, or via CDR open-banking later), and the app:

parses transactions;
classifies each into income vs deduction vs personal;
maps deductible expenses to ATO categories (work-related expenses, self-education, donations, interest/dividends, etc.);
reconciles against ATO prefill where available;
produces a ready-to-review draft individual tax return with an explanation for every classification.

You review, correct, and copy the figures into myTax (or, later, lodge via a compliant path). The core promise: "Upload your statements, get a defensible draft return in minutes, not a shoebox of receipts in October."

How it works (the 60-second version)

The flow, in one line:

📄 Statements → 🔍 Parse → 🧠 Classify → 🏷️ Map to ATO labels → 📊 Draft return → 👀 You review → ✅ Copy into myTax

From shoebox to submitted in one coffee. ☕

Scope — personal only

IN SCOPE: individual Australian taxpayers — primarily salaried employees (and mixed salary + simple investment income) who self-lodge via myTax and hate the deduction-categorising work.

EXPLICITLY OUT OF SCOPE:

sole traders, freelancers, gig/contractor business income (ABN business schedules);
companies, trusts, partnerships, SMSFs;
GST / BAS / payroll;
anything requiring business bookkeeping.

Why: sole traders are already well served by dedicated tools (Hnry, Thriday, Rounded, Airtax, etc.). The underserved segment is the ordinary salaried person with no tool that auto-classifies deductions from statements. Narrowing to personal returns keeps classification simpler, liability lower, and the wedge sharp.

Job To Be Done

The painful part of an Australian individual return is not the ATO form — myTax already prefills salary, interest, dividends, and health cover. The pain is:

figuring out which bank transactions are legitimate deductions;
categorising them correctly to ATO labels;
keeping evidence;
not missing deductions;
not over-claiming and triggering an audit.

So the wedge is transaction classification + deduction discovery + substantiation, with the draft return as the output.

What Aussies pay for one simple return

Tax agent: $150–$400 😩
H&R Block / Etax online: ~$50–$99 😐
This app: $0–$29 😎 (draft free)
myTax: $0 🥱 (…you do all the work)

Same result. Wildly different amount of your Sunday afternoon.

How It Could Work

Ingest statements (PDF parse, CSV import; CDR/open-banking as a later, cleaner path).
Normalise transactions (merchant, amount, date, direction).
Classify with rules + ML + the user's own history; ask only about ambiguous items.
Map to ATO categories and apply eligibility rules (work-related apportionment, $300 substantiation threshold, WFH methods).
Pull ATO prefill to reconcile the income side.
Generate a draft with per-line reasoning and a confidence flag.
Human review + correction loop that trains the classifier for next year.
Output: an export/summary the user types into myTax — OR, only if a compliant path exists, assisted lodgement.

The Regulatory Wall (read first)

This is the make-or-break constraint — and it is exactly why even AI-first players keep a human on lodgement.

TPB tax agent registration — https://www.tpb.gov.au/tax-agent-registration — preparing/lodging returns for a fee generally requires being a registered tax agent. Software that helps a person prepare their own return differs from one that provides tax agent services.
ATO Digital Service Provider requirements — https://softwaredevelopers.ato.gov.au/RequirementsforDSPs — plus the Practitioner Lodgment Service / SBR path — https://www.ato.gov.au/tax-and-super-professionals/digital-services/practitioner-lodgment-service — lodging to the ATO for others is gated behind DSP operational-security + SBR.
CDR accreditation (open banking) — https://www.cdr.gov.au/for-providers/become-accredited-data-recipient — automatic bank-data ingestion needs accredited-data-recipient status (a high bar).
Individuals can always self-lodge free via myTax — https://www.ato.gov.au/individuals-and-families/your-tax-return/how-to-lodge-your-tax-return/lodge-your-tax-return-online-with-mytax

Implication: the safe v1 is a preparation assistant that outputs figures for the user to self-lodge in myTax — this avoids TPB/DSP/SBR. Full auto-lodgement is a later, heavier play needing registration or an agent partnership (the LodgePro / Hnry model). CDR is the trustworthy long-term ingest path but is not table stakes for a PDF/CSV v1.

Privacy & Security

Bank statements are among the most sensitive personal data.

local-first / on-device parsing where feasible;
if cloud: strong encryption at rest and in transit, minimal retention, clear deletion;
never sell or reuse data beyond the return;
be explicit about whether statements leave the device;
CDR accreditation is the trustworthy long-term ingestion path.

Competitive Landscape

Deep web research: 6 angles, 25 sources fetched, 114 claims extracted, 3-vote adversarial verification (23 confirmed, 2 refuted). The space is no longer green field — but nobody occupies the exact spot.

The positioning in words: rivals cluster in two corners — full-return products that need a human accountant plus a fee (LodgePro, Etax, H&R Block), and free/cheap tools that only categorise or find deductions without producing a lodgeable return (TaxFox, Snapclaim, TaxTank, Frollo, WeMoney). myTax is free and self-lodge but gives no deduction help. The empty corner — auto full draft, no human, free — is the pitch.

Who does what (feature read)

This idea: reads statements ✅, auto-finds deductions ✅, drafts return ✅, no human ✅, free draft ✅
LodgePro: reads statements ✅, auto-finds deductions ✅, drafts return ✅, no human ❌ (accountant reviews), free ❌
myTax: reads statements ❌, auto-finds deductions ❌, drafts return ✅ (you fill it), no human ✅, free ✅
Etax / H&R Block: reads statements ❌, auto-finds deductions ⚠️ (prompts), drafts return ✅, no human ❌, free ❌
TaxFox / Snapclaim: reads statements ⚠️, auto-finds deductions ⚠️, drafts return ❌, no human ✅, free ⚠️
TaxTank / Frollo: reads statements ✅, auto-finds deductions ⚠️, drafts return ❌, no human ✅, free ⚠️

Direct / AI-first competitors (the real set)

LodgePro — https://lodgepro.com.au/ — key rival. Open-banking ingest, auto-classify to ATO categories, accountant-reviewed lodgement; "prepare + lodge in under 15 min." (Verified, high confidence.)
AITaxReturns — https://aitaxreturns.com.au/ — AI individual prep. Its "self-lodge via SBR" claim was refuted; likely routes through a registered agent.
TaxFox — https://www.taxfox.com.au/ — deduction finder / estimate. Its "CDR ingest" claim was refuted; appears manual / receipt-based.
Snapclaim — https://www.snapclaim.com.au/ — AI deduction capture.

The genuine gap

A salaried-consumer, statements-in, auto-classified deductions, reviewed draft, self-lodge-in-myTax product with no human in the loop still does not cleanly exist. Competitors either insert an accountant (LodgePro, Hnry) or stop at deduction-finding without lodgement (TaxFox, Snapclaim). Deduction discovery for salaried DIY earners is the underserved wedge myTax cannot match.

(Sherlok — previously listed — is mortgage refinancing, not tax. Dropped.)

Business Model (later)

freemium: free draft, pay to export / premium deduction discovery;
flat low fee per return (undercut the $150–$400 agent);
B2B2C via accountants who want clients to arrive pre-categorised;
avoid subscription until repeat annual value is proven.

Validation Plan

Cheapest first, no build:

Get 3–5 real Australians to share (redacted) 12 months of statements + their actual lodged return.
Manually run classify, categorise, draft by hand (or with an LLM + rules).
Measure: transactions auto-classified correctly; deductions found vs missed; draft total vs real return.
Interview: would they trust an auto-draft? would they pay? would they still want a human check?

Pass: over 80% transactions auto-classified correctly, at least one missed deduction found per user, and users say they would use it if it stopped at "copy into myTax".

Kill/pivot: classification too noisy without heavy manual work; users will not share statements; the regulatory/liability burden sinks even the assistant version.

Open Questions

Assistant-that-outputs-figures vs full lodgement — where is the real willingness to pay?
Is statement parsing accurate enough without CDR, or is CDR accreditation table stakes?
How much liability does the app carry for a wrong classification the user accepts?
Can deduction discovery be the paid hook rather than the return itself?
How to differentiate against LodgePro's accountant-reviewed model — is "no human, instant, free draft" enough?

How To Help

Share a redacted real return + statements for the manual pipeline test.
Pressure-test the TPB / ATO DSP / SBR line for a preparation-only vs lodgement product.
Try LodgePro (https://lodgepro.com.au/) and report how close it gets / where it frustrates.
Suggest the ATO deduction categories and eligibility rules that matter most for salary earners.
Flag privacy/security patterns for handling bank-statement data safely.

Research Note

Research method: deep-research workflow (6 angles, 25 sources, adversarial verification). Some per-competitor pricing specifics beyond LodgePro remain unverified; URLs and the findings above are solid.