How to Do Your Tax Return – Complete Guide

preparing tax return online

During tax time, many Australians are already thinking about how they spend their tax refund. But tax return is not just about the deductions and refunds residents receive. 

If it is your first time to lodge a tax return, let’s give you a rundown of what it is about first. A tax return is used to provide information to the Australian Taxation Office (ATO) regarding your earnings for the current financial year. The document also gives details about your potential tax offsets for that same period. 

Do All Australians Need to Lodge Their Tax Return?

In general, Australians who earned an income throughout the current financial year are required to lodge their tax return. Some beginners think there is no need to do it if they did not meet the tax threshold, which is $18,200. However, if you earned less than the mentioned amount, you should still lodge a tax return. It’s possible that you may have been charged to pay your taxes even if your income was lower than $18,200. In such a case, you may be able to obtain a tax refund from the ATO. 

If you are unsure whether you should lodge a tax return or not, you can use this tool provided by the ATO.

Important Dates and Other Facts to Remember about Tax Return

As a beginner in filing your tax, you can make your task of lodging easier by knowing the following details:

  • The financial year is from 1 July to 30 June. It means everything that you earn after this period will be included in next year’s tax return.
  • If you work for a business, your employer may pay for your tax return by deducting it from your income.
  • If you have a job and are earning money, you have to lodge your tax return between 1 July and 31 October. 
  • Meanwhile, suppose you previously worked but decided to skip this year due to certain reasons. In that case, you may have to lodge a different type of tax return. In most circumstances, you will be required to lodge a Non-Lodgement Advice or NLA.

Anyone who wants to earn from a job in Australia must apply for a Tax File Number first. Your TFN is valuable, so ensure that you never lose it. You can apply for a TFN on the ATO’s website. Find it here.

person working on laptop

How Much Tax Should You Pay?

Whether you pay for your taxes regularly or your employer does the job, it helps to know how much you will pay. Your taxes are actually determined by how much you earn. 

So, as mentioned, if you earn $18,200 or less, you do not have to worry about paying for your taxes. However, if your income is $18,201 or up to $45,000, the law requires you to pay 19% of your total taxable income.

Aside from your taxes, you will also have to pay a Medicare Levy every year. Medicare Levy is two per cent of your income.

How to Lodge Your Tax Return

You can work with the ATO directly when filling out your tax return information. It is done through the ATO’s myTax. To access myTax, you have to create a myGov account first. After opening an account, you can enter the information required from you into myTax, such as your income for the financial year.

However, be aware that you cannot get assistance from there. No one will check the information you have provided to make sure everything is correct before you lodge your tax return. Also, the ATO will not help you increase your refund if you are eligible. Every little step is up to you, so be very careful in filling out your income and expense details.

If it is your first time to lodge a tax return, you’ll probably find the process difficult and confusing at times. That’s why many Australians turn to tax agents. Traditionally, you can meet with a tax agent to get the help you require in person. The agent will prepare your tax return for you, so be sure to provide all the necessary documents for the meeting. You may have to pay a small fee for the agent’s time.

An alternative is to go for an online tax agent. You don’t need to go somewhere else to make an appointment with the agent. You can simply upload the required documents and work with the agent until your tax return is complete. It’s the easiest way to do your tax return, especially if you have no prior experience in doing so.

The online tax agent will provide you with a quick and straightforward form that you will need to fill out. You are not alone as you work on it. You can easily reach the tax agent, usually through live online support. Don’t worry about asking too many questions. You can get helpful advice so there will be no delays in lodging your tax return. Compared to traditional agents, an online agent has lower fees. Plus, the platform you can access for your tax return can usually allow you to save your progress. You can return to it whenever you’re ready.

filling out tax forms

Will You Get a Tax Refund?

Many people who do not have the experience in lodging their tax returns do not know they can get a refund. If you’re improperly taxed, you may have overpaid your taxes. The ATO will first process the situation, which can take a while.

Once the ATO has gathered the necessary details about your account, you will receive a Notice of Assessment. Typically, during this time, the ATO already has an idea about the total amount they owe you. If the ATO found you are eligible for a tax refund, you will usually receive it within six to 10 business days in your bank account.

Do You Need Help?

Did you know that Australians get a tax refund after lodging a tax return correctly? It is estimated that the average tax refund in the country is $2,500. Therefore, it pays to be diligent, careful, and intelligent in lodging your tax return. You can benefit from a tax agent service to get guidance as you enter your details in the tax return document.

Once you are done with the tax return, the tax agent service will work on the document to review it thoroughly. That way, you’re sure you did not miss anything, especially details that can actually boost the refund you receive.

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