Keep More Money: Valuable Tax Return Advice for Under 21s

Tax season is always stressful, but filing your first student or under-21 tax return is even more daunting. What if you forget to include a document or a source of income? Worse still, what if you completely miss the deadline? Though your tax obligations certainly are important, there’s no need to stress out about them. ITP’s certified tax accountants have all the expert tips you need to start maximising your tax returns year after year. Whether you’re a student, apprentice, or young professional, these are the tips everyone under 21 should know. Read on to get off to a flying start with your finances.

Tax Return Tips for Students and Under 21s

Understanding the Tax-Free Threshold

Did you know Australian resident taxpayers get the first $18,200 of their income tax-free? This is known as the tax-free threshold. It means that if you earn less than $18,200 collectively, you won’t have to pay tax at all. This is important to know as it may mean that you don’t even need to worry about lodging a full tax return. If this is the case, you must still notify the ATO that a return is not necessary. This will prevent the ATO from requesting a return for that year in the future.

Pro tax tip: If you have earned less than the $18,200 threshold but your employer has deducted tax from your wages, you must lodge a tax return. In this case, you would receive a refund of all the tax you paid in that financial year.

Any time you start a new job, you’ll need to fill out a Tax File Number Declaration form. Note that if you have more than one job, and your overall income exceeds the $18,200 amount, you can only claim the tax-free threshold for one employer (usually the higher-paying one). Attempting to claim the tax-free threshold for both jobs will result in a tax debt when lodging your tax return.

If you’re at all uncertain about claiming the tax-free threshold or lodging your first tax return, ITP can help. We offer generously discounted rates for filing under-21 tax returns. As a client, you’ll also get free tax advice anytime you need it. Contact your nearest ITP branch today for an obligation-free chat with one of our friendly accountants.

Lodging Your Student or Under-21 Tax Return

Completing your tax return the first time can be confusing. So it’s always a good idea to turn to an experienced adult or a local tax accountant who can help you determine what you need to lodge. The benefit of going with a certified tax accountant is that they’ll be able to go beyond the basics, helping you claim every deduction you’re entitled to and ensuring you walk away with the biggest refund possible.

Having multiple jobs can make lodging a tax return quite confusing. Problems can occur, even if both you and your employer do the right thing. This is because your first job often attracts the tax-free threshold and your second job is taxed following the progressive tax rates stipulated by the Australian Taxation Office. Failure to report all your income properly can result in a host of stressful issues, so it’s best to consult a professional and make sure you’re getting everything right from the start.


What If I Can’t Pay a Tax Debt?

Depending on how you make your income and how much tax is taken from your earnings, you may have a bill to pay come tax time. This can be a daunting prospect if you think you won’t have enough funds to cover what you owe. However, avoiding the ATO is never a good idea. It can result in penalties, unwanted fines, and a whole lot of unnecessary stress.

There’s no need to worry, though – you do have options if you don’t have the money to pay a tax bill. ITP’s expert tax agents can, for example, defer your tax return to a later date. All you need to do is finalise your tax return and we will hold it for lodgement for several months after the normal October deadline and apply for an extension of time with the ATO.

If you still need more time after we’ve lodged your tax return, we can also help you set up a payment plan with the ATO. This will allow you to pay off your tax debt in small, manageable chunks, eliminating all the stress and anxiety. Going forward, we can help you establish a plan for managing your tax obligations in a way that fits with your cash flow situation.


Why Work With ITP’s Income Tax Professionals?

Our main job is to take the stress and confusion out of the tax season for you. But you can also count on our expertise throughout the rest of the year. After helping you lodge your tax return, we’re happy to help you with student-specific situations like working holidays, residency issues, and understanding the implications and rules of part-time work. We can give you insightful tax return tips and advice on record-keeping, all while maximising your return year after year. With our expert service, you can rest assured you’re always getting all the deductions and benefits you deserve.

Ready to lodge your tax return for the first time? We understand how difficult money management can be for students and under 21s, so we offer our professional services at a great discount. We’re happy to help you maximise your tax return for just $79-$89 if you’re under 21. Drop by your nearest ITP office today or make a booking online to get started.

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