If you’ve never done a tax return in Australia before and don’t follow the proper steps, it can be tedious and time-consuming. But it doesn’t need to be. Follow our tax return checklist and guide around the end of the financial year and you’ll be done in no time.
Despite what you may have heard, tax time is not as scary or complicated as it sounds. It's a yearly report of your income and a chance for you to claim deductions. In a nutshell, tax time is when you’re required to submit a tax return form to the Australian Taxation Office (ATO). The ATO then use this form to work out how much tax you owe or are owed by the government.
The main date you need to remember is October 31. This is your tax return deadline; it’s the same date every year. Tax time begins in July, so you have approximately four months to prepare and lodge your tax return. You can do your tax return online on myGov, or have a tax agent do it for you.
Whether it’s your first time doing a tax return or you’ve lost count, here are the answers to the questions most of us forget every year.
What is the tax-free threshold for 2020?
The tax-free threshold for 2020 is $18,200. It’s worth noting that this is the same for overdue tax returns from 2019, 2018 and 2017. Wondering how to claim the tax-free threshold? Well if you earned $18,200 or less between 1 July 2019 and 30 June 2020, you generally won’t pay income tax. This also means that you don’t need to worry about a tax return lodge, but you will need to send a ‘non-lodgement advice’ to the ATO. The quickest way to do this is online through myGov.
When is the end of the financial year?
The end of the financial year in Australia is 30 June, with the next financial year beginning on 1 July. So when you do your tax return for 2020, you’re taking into account your earnings from 1 July 2019 to 30 June 2020. This is different from your tax return deadline, which is 31 October.
When is my tax return due?
Here are the 4 main dates and deadlines that’ll keep you in the know.
You can lodge your tax return online yourself or through a registered tax agent. To lodge your tax return, you’ll need a myGov account. If you don’t have a myGov account, you can create one online and link your account to the ATO. To do this, you’ll need your Tax File Number (TFN), name and date of birth. To verify your account, you can use the following information:
Our tax return checklist outlines the information you will likely need to lodge your tax return in Australia, and where you can find all the necessary information. Once you have all this information, you can submit your tax return online.
Income & Earnings
A tax refund is the money you receive from the government if you’ve paid too much tax throughout the financial year, or have paid for other expenses that qualify as a tax deduction. In other words, it’s the part where you can get some money back.
So how is a tax refund for individuals calculated? The amount of tax you pay depends on your earnings for the entire financial year. Ordinarily, you don’t need to worry too much about the tax you pay if your salary is the same for the entire financial year and you don’t have any other forms of income. But if your income increases over the course of the year, or you’ve gained earnings elsewhere (such as an investment property) you need to declare them, which might move you up a tax bracket. This is how many of us end up owing tax come to the end of the financial year.
If for any reason you’ve stopped working, taken a pay cut or become unemployed, you might be eligible for a tax refund. For an idea of how much tax you should be paying and whether or not you’re eligible for a tax refund, check out the table below.
It’s worth noting that if you’re not a resident, you’ll be taxed at a higher rate and will still have to pay tax if you earn less than $18,200 a year.
Whether you are expecting a refund or to pay more, the process is the same. Lodge your tax return by following the steps contained in the tax checklist above. You should either receive your refund within two weeks of lodging your tax return or be informed of the amount you owe.
Now for the good bit: the money you can get back. You can claim tax deductions for heaps of expenses you’ve forked out for throughout the year. The main ones are listed below.
Do you ever pay for work-related expenses? If so, keep a diary and keep your receipts. The majority of it can be claimed back come tax time. Work-related expenses include but are not limited to:
Keep in mind that if the expense was for both work and private purposes, you can only claim a deduction for the work-related portion. If your employer has already reimbursed you, then you won’t be entitled to a tax refund.
Other Tax Deductions you can claim
Aside from your income and work-related expenses, other tax deductions can include:
This really depends on how confident you are with lodging your own tax return. If you’re currently still a little confused, then it might be worth considering a tax agent. But if you’re not sure a tax accountant is worth it, consider the following pros and cons.
Tax Agent Pros
Tax Agent Cons
If you work, a tax return is something you need to send to the Australian Tax Office (ATO) each year. Your tax return consists of all the income you've earned throughout the financial year, which begins July 1 and ends June 30. It’s essentially an annual assessment to ensure that you’ve paid the correct amount of tax.
There are a few reasons you might end up owing tax. It all comes down to how much you earn throughout the year, and what tax bracket you fall into. You might end up owing tax if you have more than one taxable income. For instance, if you have an investment property, as well as an income, you will probably end up owing more tax by the end of the financial year.
If you've paid more tax than you needed to, or if there are some tax deductions you are entitled to, you should get this money back. All you need to do is submit your tax return correctly, and the amount you are entitled to will be refunded into your bank account.
This page is intended to provide general information only and does not take into account your individual objectives, financial situation or needs.. You should seek independent, professional tax advice before making any decision based on this information. The Australian Taxation Office also has resources available at www.ato.gov.au/Individuals.
SocietyOne is not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.