Get Ready for Tax Time!

We all know that doing your tax can be daunting and stressful. But if you start preparing and collecting all the documentations you need before tax season comes, then you’re saving yourself a lot of time and trouble.

In Australia, the fiscal year ends at the 30th of June and until 31st of October you can lodge your tax return for the prior financial year. Lodging your tax return can be done in 3 ways: online, completing a paper tax return form, or through a registered tax agent.  Unless you utilise an Australian registered tax agent like us, you may be able to lodge your return until May of the following year only if you had your previous tax affairs up to date.

What you need

Whichever lodgement method you use, the information that you will need to provide will be the same such as payment summaries from employers, documents for all income received, receipts for claiming your deductions, financial statements from banks, contracts, and documents for selling an asset such as property and shares. All of these documents must be kept for five years to be able to validate your claims when the Australian Taxation Office (ATO) wishes to audit your tax return.  

For more details download our tax checklist.

Income

Your income is the key reason why you lodge your tax return every year. Income sources comes from employment (salary and wages), government payments, investments such as interest earned from banks, dividends from shares, rental property, and capital gains. You must also declare proceeds earned from business, partnerships, trusts, and foreign income sources.

Deductions

Increase the refund or reduce your tax payable for each year by claiming (tax deductions) expenses which you have incurred to generate the income your earn. Most of the deductions you can claim  are work related and were not reimbursed by the company or employer you are working for. Where you used an item for both work and personal purposes, you can only claim the portion which you have used for work. Deductions you can claim are travel expenses such as the cost of travelling between two work sites. Note that expenses for travelling from home to work or vice versa is not deductible.  If you used your own vehicle, then a logbook or diary is required to substantiate your car expenses for work related car travel expenses. In addition, you can also claim out of the pocket expenses for overseas and interstate work related travel. 

Other items you may claim are occupational specific clothing, uniform with logo, non slip shoes, first aid training courses, union and professional membership fees, donations you made through Australian registered charities, tools or equipment used for work, a percentage of your mobile expenses that was used for work purposes, educational expenses related to your profession, income protection insurance, and tax agent fees. While there are a lot of items that can be claimed,  note that you can only claim tax deductions related to your profession or occupation during the financial year.

Do You Need To Lodge A Tax Return?

Whether or not you earned an income for the year, you can either lodge a tax return or submit and Non Lodgement Advice (NLA) to the ATO. Even if you went overseas, you still have to do either one of the two before the applicable due dates. If you are unsure, you can always use ATO’s  ‘Do I need to lodge a tax return’ tool or contact us to work out whether you need to lodge a tax return or submit and NLA. Failing to lodge your tax return may incur you penalties. Although the ATO may not always impose fines for late lodgement it does not mean they will forget, so it is always best to get ahead with your tax affairs.

Source: Australian Taxation Office

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