Cold weather, early nights, and spike in consumption of hot beverages. These are usually what we associate the winter months with. But there's one important thing almost everyone needs to do during this time and it usually results in a lot of stress: Lodging your tax return for the previous financial year.
While lodging a tax return may seem daunting, we're here to help walk you through the process and make things as easy as possible so that you'll be ready come tax time.
What's a tax return?
A tax return basically covers your income and expenses through the financial year, which starts on July 1 and ends June 30 the following year. If you earn an income in Australia, you'll usually have to pay tax on that income. At the end of every financial year, you'll have a few months to lodge your tax return - generally speaking the deadline is October 31.
Once you've lodged your tax return to the Australian Tax Office (ATO), they will look over everything, assess your income, expenses and deductions, and then determine if you'll get a tax refund or have to pay more taxes.
Good to know! So how do I lodge a tax return?
You have two ways of lodging your tax return:
Do it yourself online through myGov using myTax; or
Through a tax agent.
Don't worry we'll dive into both approaches so you can decide which one suits you best.
What information do I need to lodge a tax return?
There are a few things you'll need to have handy in order to lodge your tax returns. Generally speaking, you will need:
Your Pay As You Go (PAYG) payment summary or income statement from your employer. Don't stress if you can't find this, it'll likely already be pre-filled for you by the ATO and will be available online.
Your Tax File Number (TFN). This can be found on your payment summary (group certificate) or previous notice of assessment.
Your bank account details so any tax refund you're entitled to can be deposited directly into your account.
Your myGov login if you're filing your return online yourself.
Depending on your circumstances and employment situation, other information you may need include:
PAYG summary for Centrelink payments.
Information on investments, such as rental income or dividends.
Bank account interest accumulated. This will also likely be pre-filled for you.
Other Tax Offset information, such as spouse's income details.
Other income details.
What about deductions?
A tax deduction is a work-related expense that you paid out of your own pocket and can pop in your tax return. This will in turn reduce your taxable income and get you a higher tax return. Keep in mind that you must have a proof of purchase for your work-related expenses (usually a receipt) and that you don't get ALL the money back you spend on tax deductible items for work, but you do get a percentage based on how much of said item is for work. All in all, tax deductions are your best friend so make sure you keep all your receipts.
As for what you can claim back on tax, acceptable deductions include:
Vehicle and travel expenses if the travel is required to fulfill your work duties
Clothing, laundry and dry-cleaning expenses if your work requires you to wear specific clothing such as a uniform or protective wear
Gifts and donations to registered charities
Home office expenses, including additional costs you had to cover by working from home during the pandemic (such as electricity, internet etc)
Self-education expenses
Tools and equipment
Interest, dividend and other investment income expenses
For more in-depth information about tax deductions, head over to the ATO website here.
Okay, what about the actual 'lodging my tax return' part? What do I do?
The tax return process is pretty straightforward these days thanks to myTax being online and everything being laid out in an easy-to-follow manner. After putting in all your personal details, you'll be guided through a form in a question-by-question manner until you're finished. Some of your details will be pre-filled (such as your income from your employer), and there will be a section for any tax deductions.
Once you're happy with everything you've entered into the form and added in any tax deductions you want to claim, you'll then have the option to submit your tax return. After you lodged it, the ATO will do their thing and you'll get your tax return (if you're getting one) will be paid into your nominated bank account in a few weeks time.
You can read more about myTax here and see how it all works yourself.
Well I just made a mistake on my tax return, what can I do?
No need to stress! The beauty about myTax and it being online is that you can return to any previously lodged tax returns and amend them quite easily. Online amendments usually take a few weeks to get processed.
The other way of doing it is through a paper form and mailing it to the ATO, though this method will take up to 50 days to process. Finally, if you've lodged your return through a tax agent then you can just get them to fix any mistake for you. Speaking of...
Can't I just get someone else to do this?
You most certainly can! Tax return time is a stressful period full of confusing loopholes and questions, but luckily for us tax agents are available to help do our tax returns for us. Not only does a tax agent understand the ins and outs of how tax returns and deductions work, but the fee you're charged for their services is tax deductible on your tax return for the following year. So if you're not confident about lodging your tax return on your own, think about getting a tax agent to help you out.
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If you have any questions or need extra support, we're here to help you anytime, in any language. Simply start a chat with us via the home screen of the Sonder app.
Information sourced from the ATO, Commbank, Finder, H&R Block, and MoneySmart.
Image credit: Everything Everywhere All At Once
All content is created and published for informational purposes only. It is not intended to be a substitute for professional advice. Always seek the guidance of a qualified health professional.