The end of financial year can be a stressful period, especially when you are faced with the daunting task of lodging a tax return. To relieve this stress, we’ve answered some frequently asked tax questions for you.
Do I need to lodge a tax return?
If you’re an Australian citizen or permanent resident, are over 18 years old and earned more than $18,200 during the previous financial year you must lodge a tax return with the Australian Tax Office (ATO).
If I don’t lodge my tax return will I be fined?
If you don’t lodge a tax return by the due date, and are eligible to do so, the ATO can apply a number of sanctions and penalties.
The first tax penalty for failure to lodge a return starts at $180 and can go as high as $900, depending on how long it has been.
Failure to pay for several years can also result in a default which will show up on your credit file. If you are late on a tax return do it as soon as possible. The longer you wait the more chance you have of receiving a penalty.
When do I need to lodge my tax return by?
If you complete your own tax return you have until October 31 to do so. If you use a tax agent you can lodge the return later than this. However, you must register with an agent before this date to avoid any penalties. Should I use a tax agent or DIY?
This all depends on how comfortable you are lodging your own return. If your return is complex, or you’ve had several employers over the past year, it might be a good idea to use a tax agent.
On the other hand, the ATO’s online service myTax has never been easier to navigate. It asks questions relevant to the person lodging and automatically includes information provided by employers, banks, government agencies and other thirds parties. It is also available on smartphones and tablets.
What to collate in preparation for lodging an individual tax return
Your Tax File Number
Payment Summaries from your employers over the past year
A summary of how much interest you’ve received
Receipts and/or tax invoices for the items you wish to claim as tax deductions
Documents for any investments you may have that document any financial gains /losses
Charity receipts charities you support as these payments are tax deductible
If you’re running your own business
Business tax returns can be complicated, and require much more detail than PAYG returns, so it might be a good idea to consider using a tax agent to do this for you.
What if I have to pay money?
If you have not paid enough tax, earned interest on money you have in the bank, received untaxed income or reached the compulsory threshold for a HECS/HELP, you may owe the ATO money.
If there is still money owing, you can either deduct the amount owed from any rebate or you can pay via BPay.
What if I’ve been overtaxed?
You may be eligible for money back if:
You have paid for work expenses— like work clothing or work-related travel that are legitimate tax deductible expenses
Took unpaid leave during the year or changed to a lower paying job and were taxed at the same rate
The start of a new financial year is the perfect time to reassess your financial goals. If you are looking to buy your next investment property, home, car or simply need some additional cash consider speaking with a Liberty Adviser for advice on a loan solution for you.