It's Tax Time
- Chinwag Co
- Aug 31, 2020
- 4 min read
It’s that time of the year again...
Tax is a confusing and irritating thing, but it must be done. To (hopefully) make your life a little easier, we’ve put together a basic how-to guide.
BASIC INFORMATION:
What is a tax return?
A tax return is a document that states how much income you received and how much tax you paid during the financial year (1 July – 30 June). If you've paid too much tax, you'll receive a tax refund. If you haven't paid enough tax, you'll receive a tax bill.
Do I need to submit a tax return?
You need to submit a tax return if you have had tax withheld from your wage during the financial year. If your myGov account is linked to the Australian Taxation Office (ATO), you can check whether you need to submit one on the ATO website under Do I Need To Lodge?
Why do I have to do it?
To ensure we're paying the right amount of tax to the government. Our tax goes towards:
· Health
· Education
· Roads & transport
· Defence
· Social security
How much tax will I have to pay?
Everyone is different. It primarily depends on how much income you earn, but also on whether you have a tax file number and if you're an Australian resident.
What information do I need to include?
· Your bank account details
· Income statement or payment summaries from all your employers
· Centrelink payment summaries
· Receipts for expenses you are claiming as deductions
· Private health insurance information
Who can do it for me?
You can do your own tax return or get a registered tax agent/accountant to do it for you. Or, if your parents are feeling really generous, get them to help you out!
What is a deduction and how do I claim one?
A deduction is a work-related expense that you haven't been reimbursed for by your employer.
Claiming a deduction reduces the amount of tax taken from your wage. This contributes to the tax refund that you receive.
Some deductions include:
· Uniform (with a logo)
· Safety equipment
· Required self-education/courses
· Phone bills & computer costs (if you work from home)
· Flights, accommodation & food (if you travel for work)
· Charitable donations
· Tax agent fees
Most Pay As You Go (PAYG) workers can't claim on too many deductions because they don't typically make expenses directly related to work.
This may become more relevant to you in the future as you move into your career. It may be helpful to have a tax agent help you as your work-related expenses become more complicated.
When do I have to submit one by?
October 31. If you're lodging through a registered tax agent the due date may be a little later.
If I get a tax bill, when do I have to pay by?
November 21.
Where do I submit my tax return?
There are three ways to submit your tax return:
1. Through a registered tax agent
2. Online with myTax (via the myGov website)
3. Via mail to the ATO (this is a slower, more tedious process)
How long will it take to receive back?
It should take around 12 days to receive your refund if you lodged online, but it can take up to 50.
HOW TO DO IT YOURSELF:
With all that info out of the way, let's get to the nitty-gritty stuff: how to actually do it. Don't worry, it's simpler than we thought.
How to submit a tax return yourself
You can submit a tax return online or with a paper tax return form.
We'll run through the online method because it's faster and easier. The sources we have linked at the bottom have more in-depth information, this is just a barebones how-to.
1. To begin, you'll need to make a myGov account. MyGov is the new way to access government services (like the ATO, Centrelink and Medicare) online. It's very likely you already have one.
2. Link your myGov account with the ATO.
3. Access the myTax website and access your current return through the Prepare button
4. Work your way through the form. A lot of the information is prefilled if you are a PAYG worker because your employer will have provided your salary information to the ATO.
5. Claim deductions or work related expenses. Be careful when filling this out because a false claim is an offence and, with auditing software becoming better than ever, you'll get caught easily.
6. Submit your tax return!
7. The waiting game begins. It will be processed and you'll receive a refund in your bank account in 12-50 days.
TIPS AND OTHER QUERIES:
What can I do to make it easier for me?
Receive payslips to ensure the figures going to the ATO from your employer are correct. It is your legal right to receive payslips, so don’t be afraid to ask your employer for them and to check to ensure you are being correctly paid for the hours you work.
If you are claiming deductions, keep track of the work-related expenses you aren't reimbursed for. Either keep a folder of paper receipts or take photos of these receipts and make a digital folder.
Alternatively, the ATO app has a myDeductions section that allows you to file deductions throughout the financial year. The filed deductions can then be easily uploaded to your tax return on the myTax website.
Is there a limit to what I can claim?
There isn’t a limit on the deductions you can claim, so long as they are legitimate.
What if I stuff it up?
An online myTax claim can be amended and edited through the website. An amendment is usually processed within 20 business days.
Although tax returns are frustrating, it's important to understand where your money is going and why. A simple Google search will give you loads of helpful resources to make the process easier - we've linked a couple of the best ones below.
Good luck!!!
Ben and Sophie
Comments