Lodging your tax return can be stressful, especially if it’s your first one! First of all, congratulations on your new job! Now that you’ve earned some money, you want to keep as much of it as you can. Let’s see how much tax we can get back for you.
Australians have a tax-free threshold of $18,200. That means if you earn less than that, you don’t need to pay tax. If your employer has taken tax out of your wage or salary, you can expect to get a full refund from the Australian Taxation Office (ATO). You can claim the full tax-free threshold that had been withheld from your pay during the year, but you still need to lodge a tax return to claim it back.
The $18,200 tax-free threshold is equivalent to:
- $350 a week
- $700 a fortnight
- $1,517 a month.
Tax File Number
Before you start work or when you start work, you should get your Tax File Number. This is done online and then through Australia Post if you are an Australian resident. The process is slightly different for foreign passport holders, permanent migrants and temporary visitors, and for people living out of Australia. We’ll take a look at how you get your TFN for Australian residents.
Pro Tax Tip: Getting a Tax File Number (TFN) is free. There are scammers and services that charge a fee, so beware. These people are just out to get your money.
Next, print out your summary which will include your reference number. Book an interview with your closest participating post office within 30 days and attend the interview. Your application will be lodged and you’ll receive your TFN up to 28 days after that!
You can also apply through Services Australia or by post if you live remotely.
Pro Tax Tip: Keep your TFN safe. This number is a part of your personal identity and you’ll need it for the rest of your life. You should only share your TFN with the ATO, Centrelink (Services Australia), you bank, your employer, your super fund and your registered tax agent.
What Is A Tax Return?
Tax is taken out of your salary or wage and paid to the ATO by your employer with every pay cycle. This is called Pay-As-You-Go (PAYG). That is your tax liability. The tax you’re obligated to pay to the Australian Government in return for national services such as roads, hospitals, schools, police and defence and social security.
A tax return allows you to claim back some of your work expenses. If you didn’t lodge a tax return, you would never be able to claim any money back. When you lodge your tax return, you’ll calculate your total tax liability, calculate all your claimable expenses and request money back for overpayment of taxes. It is your opportunity, once a year, to claim back everything that you have overpaid to the ATO.
How Do I Claim Money Back?
The ATO has strict guidelines on claiming any overpaid tax. Your expense must be work-related. You cannot claim back private expenses at all. You must already be out-of-pocket. That is, you must have already spent your money, and you must be able to prove your claim. This is usually done through receipts, tax invoices and bank statements. Beware through, not all proof is equal in the eyes of the ATO.
You might be surprised that the ATO will not accept bank statements alone to prove your claim. That’s because they don’t contain all the information required. Your best bet is to keep all receipts. A receipt must show the name of the supplier, the amount of your expense, the nature of the goods or services, the date of the expense and the date of the document.
Pro Tax Tip: Don’t throw your receipts out! You need to keep them for 5 years from when you lodge your tax return. The ATO can and does backtrack. You may store electronic copies of receipts which will assist in keeping your paperwork to a minimum.
What Other Records Do I Need?
Other than receipts you’ll need certain other financial documents when you lodge your tax return. When you lodge your tax return with an ITP Tax Accountant, all you need to do is give them your TFN and they will be able to access your employer income statements, social services payments and your Medicare information.
You will still need to bring in with you:
- Your Tax File Number (If not previously supplied)
- Income statements or payment summaries and payments made by Services Australia
- Bank statements and other financial institutions showing interest earned
- Dividend statements
- Summaries from investments funds
- Medicare and health insurance premiums paid
- Receipts for equipment
- Receipts for assets purchased
- Receipts or invoices for your expense claims
- Annual rental statements from the property agent(s)
- Credit card statements
- Travel or vehicle logbook
- Home office hours logbook
How Do I Claim Money Back?
It’s actually quite easy. There are three ways to lodge your tax refund.
- Through ITPs online portal
- In office with an ITP Accounting Professional
- Online with the face-to-face zoom or via email with an ITP Accounting Professional
No matter how simple it may seem, the process can be complicated. Your ITP Tax Accountant will lead you through the process and make sure to claim all your expenses – even those you might know nothing about! It’s their job to find them all, so you’re in safe hands. The simplest mistake could see you miss out, or even have to pay a fine.
If you want to maximise tax time and get everything your entitled to back from the ATO, using an ITP Tax Accountant will help every step of the way.
Lodging your tax return with ITP Accounting Professionals is easy. Click here to start your tax return online.
Simply fill out your details as you go. Submit your details. An ITP Tax Accountant will review the numbers, claim all your legitimate deductions and lodge your tax return to the ATO on your behalf. This option is ‘hands off,’ fast and easy – with the expert help of a tax agent to back yourself up.
Our booking form will automatically locate your closest branch and an ITP Accounting Professional will be in touch with you. You can choose to come in for a face-to-face appointment, go over your details on the phone, via zoom or email. It’s your choice.
What Tax Deductions Can I Claim?
There are certain deductions that most people can claim, which include:
- Vehicle and car expenses
- Travel expenses
- Uniform or protective clothing, laundry and dry-cleaning
- Tools and equipment
- Investment expenses
- Home office expenses
- Other deductions such as union fees and subscriptions
- The costs of managing your tax affairs
If you’re unsure, your ITP Tax Accountant will go through what you can claim prior to your appointments, so you will know what receipts and proof to bring in. On the day of your appointment, they’ll work out all the details.
How Long Will My Appointment Take?
Everyone’s tax return is different. Some take longer than others but allow at least 30 – 45 minutes to go through everything. Once you’ve booked your appointment, an ITP Tax Agent will contact to you to work out a date and time. Once you’re an ITP client, your tax agent is available all year round for tax advice – for free!
You’ll need to lodge your tax return between 1 July and 31 October. Extensions may be granted if you book your appointment with a tax agent before 31 October, which might grant you up until 15 May – but if you have claims to make, why wait?
If you’ve missed the tax deadline, it’s not too late. You can still lodge with an ITP Accounting Professionals who will liaise with the ATO on your behalf.
How Much Will It Cost?
If you’re under 21 or are a student, ITP’s tax return service is just $79. Even better, you’ll be able to claim the expense when you lodge next year’s tax return. All tax accountant fees are 100% tax deductible.
If you have more questions, check out our FAQ’s for student and under 21s here. ITP Accounting Professionals have helped Australian businesses and individuals for 50 years. There’s not a lot they don’t know about tax. Want to maximise your tax return? Book online or phone 1800 367 487 today