With the end of the financial year in Australia, it's time to start thinking about your tax return. This guide will explain who needs to lodge a tax return, the steps to complete it, and important tips to ensure you meet your tax obligations.
Do I Need to Lodge a Tax Return?
If you've earned money in Australia, it's likely that you need to lodge a tax return. This applies to all types of work – part-time, full-time, and casual.
Tax-Free Threshold
The current tax-free threshold is $18,200. This means you don't pay any income tax on earnings up to $18,200 in a financial year (1 July – 30 June). You need to lodge a tax return if:
You had any tax taken out of your pay.
You want to claim any tax deductions.
When You May Not Need to Lodge a Tax Return
You might not need to lodge a tax return if:
You didn't earn any income.
Your total income is below the tax-free threshold and no tax was withheld by your employer.
All your income is exempt from tax (e.g., some scholarships).
What if I’m Here for Less Than 6 Months?
If you're studying in Australia for less than 6 months, you will likely be considered a non-resident for Australian tax purposes. Non-residents need to lodge a tax return for any Australian income earned and won't be entitled to the tax-free threshold, meaning they pay tax at a higher rate.
When and How to Lodge Your Tax Return
The Australian financial year runs from 1 July to 30 June, and you need to lodge your tax return between 1 July and 31 October. It's crucial to lodge on time to avoid any penalties from the Australian Taxation Office (ATO).
Steps to Lodge Your Tax Return
Gather Your Documents: Collect your PAYG payment summary (usually found in your myGov account after 1 July) and receipts for any work-related expenses.
Use myTax: Lodge your tax return online using the ATO’s myTax system through your myGov account.
Complete Your Return: Follow the prompts to enter your income, deductions, and other relevant information.
Submit Your Return: After completing the details, submit it online. You will receive a Notice of Assessment from the ATO, indicating whether you owe any tax or are due a refund.
Tip!
You can hire an accountant or tax agent to complete your tax return, but be aware there will be a fee for this service.
Submitting a Non-Lodgment Advice
If you do not need to lodge a tax return, you should inform the ATO by submitting a Non-Lodgment Advice. This notifies the ATO that you won't be lodging a return for the financial year, preventing unnecessary follow-ups.
Example Scenarios
Part-Time Worker: You worked part-time and earned $15,000 during the financial year, with $500 withheld in tax. Even though your income is below the tax-free threshold, you need to lodge a tax return to claim back the $500.
No Income: You were a full-time student without any income. You do not need to lodge a tax return but should submit a Non-Lodgment Advice.
Claiming Expenses
As a student, you might be eligible for various tax deductions that can reduce the amount of earnings you need to pay tax on. If you've spent money on job-related items like uniforms or equipment, you may be able to claim these as deductions.
What to Do When You Leave Australia
If you're leaving Australia permanently, you can lodge your tax return online from your home country. Alternatively, you can lodge your tax return before leaving Australia if you're eligible.
Support
If you're unsure about any part of the tax return process, there are resources available to help you:
Visit the ATO’s website for detailed information.
Check if you’re eligible for the ATO’s free Tax Help Program.
Consider hiring an accountant to complete the return for you. (Find the accountant)
By following this guide, you'll be well-prepared to complete your Australian tax return and meet your financial obligations.
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