How to file taxes in Australia.
Learning to file your taxes may not be the most exciting aspect of moving to Australia , but it’s certainly important if you’re going to work in Australia. This guide will walk you through the essentials, from who needs to file an Australian tax return to how the whole process works. Let’s start.
Who must file taxes in Australia?
If you live in Australia and your income is above the tax-free threshold – which at the time of this writing is $18,200 – then you will normally need to file a tax return. This is the case even if your employer automatically withholds income tax payments from your salary over the course of the year, as is the norm.
If your income is less than the tax-free threshold and your employer didn’t withhold taxes from your pay, then you generally won’t have to file a tax return. Instead, you should report this to the Australian Taxation Office (ATO) by submitting what is known as a ‘notice of failure’
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This can be done quickly by creating a my Gov account and linking it to the ATO site (a process we’ll delve into later in this guide). Afterwards, you just have to select “no-show notice” on the ATO site. Alternatively, you can download a PDF of the form and send it by post. Either way, submitting the no-filing notice ensures that the ATO will not reprimand you for failing to file your taxes.
When is the tax return due?
The Australian financial year runs from July 1 to June 30. After that, you will have until October 31 to file your tax return for that year. That is if you file the tax return yourself. If you file through a specially qualified accountant, known as a fiscal agent, you may be eligible for an extension of the deadline, which can be as far away as the following year. However, to qualify for this extension you must have registered as a client of the accountant before October 31.
It’s a good idea to apply for your tax return number (TFN) well in advance of the filing deadline. Your TFN is a unique number that identifies you within the Australian tax system and having one ensures that you are charged the correct amount of tax. Migrants in Australia who have a valid work visa can apply for their TFN. You should receive your TFN within 28 days.
How can the tax return be filed?
As mentioned above, you can file your tax return through a qualified tax agent. If you prefer to do it yourself, you can opt for a paper tax return form. However, it is considerably easier to do so through the myTax online tool after July. By that date, the ATO should have already received all the relevant information regarding your income and tax payment from your employer, and should have automatically added it to your digital tax return form.
To access myTax, you will first need to create a myGov account and link it with the ATO. Having a myGoV account is generally a good idea, as it allows you to access a variety of government services online.
Go to the myGov site and select “Create a myGov account”. You will need to provide a secure email address and Australian mobile phone number for verification.
Once you have created your myGov account, navigate to the “Services” page. You will see a list of services, such as the Australian JobSearch and Medicare. Select the Australian Taxation Office.
You will need to provide certain personal information, such as your TFN, for verification purposes. When you first file your tax return in Australia, you will need to call the ATO support staff to receive a verification code for this stage of the process.
You will now have linked the ATO to your my Gov account.
At this point, you are ready to file your tax return online through my Tax on the ATO site. You simply select the “Prepare” link to start the process, and then follow the instructions on the screen to:
Confirm your contact information.
Confirm the income information that your employer, bank and others have already provided to the ATO. You can add any missing data.
Request a tax deduction, if possible for you.
You can save your progress on your tax return at any time. Once you have completed all the relevant sections and are satisfied, you can simply click “File” to submit the return.
Deductions
As we said before, it is possible to request tax deductions through the my Tax tool. These can be work-related expenses, such as:
Travel expenses, such as gas, car rental or ride sharing costs, hotel bills, food and beverage bills.
Occupation-specific clothing, such as protective clothing or uniforms.
Tools and equipment, such as computers, chairs, and power tools.
All of these expenses must be directly related to earning your income and you must have records, such as receipts, to prove that they were incurred. You cannot claim deductions for expenses that your employer has reimbursed you for.
You can also potentially claim deductions for other expenses, such as:
Gifts and donations to organizations that have been designated as recipients of deductible donations. You can find a list of these organizations.
The cost of paying a tax agent to handle your tax affairs.
Your personal and voluntary contributions to your retirement fund (also known as “super”). Your employer must pay a percentage of your salary into this fund for your retirement.
What happens after I file the tax return?
Any return filed online will normally be processed within two weeks. When this happens, you will receive an assessment notice in your my Gov account or through your tax agent. It will indicate if you are due a tax payment or if you are due a tax refund because your employer withheld too much money from your earnings during the last financial year.
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