Tax time in Australia is an important period. During this time, individuals must fulfil their tax obligations and lodge their tax returns. It’s mandatory for citizens (and even non-citizens under specific circumstances) to go through the process every year.
Filing a tax return is key because it allows you to report your income. This enables the government to calculate the taxes you (or your business) must pay.
How do you ensure your tax return lodging is as smooth and accurate as possible? This might be a common question for first-timers unfamiliar with the process. The good news is, with the correct information and guidance, tax time doesn’t have to be stressful.
The Help My Wealth tax checklist is a helpful guide to fulfilling your tax responsibilities and having a stress-free tax season.*
☑ Gather your income information.
The first thing that you’re going to do is gather all of your income information. Sort payment summaries or income statements from your employers as well as:
- Reports from banks or financial institutions showing interest earned
- Dividend statements from shares or investments
- Rental property income statements (if applicable)
- Any other income records (for example, business income, government payments)
☑ Organise your deductions and expenses.
After gathering your income information, you must organise your deductions and expenses. Tax deductions are subtracted amounts from your taxable income, aiming to reduce your tax liability. Tax deductions, exemptions, and tax credits represent a category of tax incentives provided to individuals and businesses.
If you want to know what deductions you can claim, visit the Australian Taxation Office (ATO) website.
Tax Time Tip: Streamline your finances using online tools that simplify the process. Discover a user-friendly system like the HMW smart budgeting app to efficiently track your expenses and receipts.
☑ Review your private health insurance details.
Ensure you have all the correct private health insurance coverage details, including statements and annual summaries. This is important because you can claim a Private Health Insurance Rebate. This is a financial benefit from the Australian government to help individuals and families pay for their private health insurance premiums.
Remember that the rebate you’re eligible for depends on your income level. This is due to the Private Health Insurance Rebate being means-tested. You may receive a higher rebate if you have a lower income, but it gradually decreases as your income rises.
Learn more about the Private Health Insurance Rebate on the ATO website.
☑ Check your tax file number (TFN) and personal details.
Make sure to verify your TFN (Tax File Number). Ensure you have updated any changes in your personal information (name, address) with the Australian Taxation Office (ATO). And if you still need to get a TFN, you can easily apply for one online.
☑ Choose your lodgement method.
Tax Time Tip: The most convenient way to lodging a tax return is to do it online using myTax. Your information can be pre-filled; most are processed in about two weeks.
☑ Follow up and manage your tax affairs.
It’s good practice to keep copies of your lodged tax return, payment receipts, and relevant documents for future reference. Watch out for any communication from the ATO – updates, requests, or notifications regarding your tax return.
☑ Be better next year.
Tax time allows you to review your expenses and see where to improve. This might be by finding a better deal on your electricity bill or a good place to keep your receipts.
You could look into salary sacrificing into your super or other areas and the associated benefits. Help My Wealth can help you better prepare for next year’s tax time. We will build a plan to ensure you reach your goals for the next financial year.
Remember, everyone’s situation is unique. Whilst the checklist we provide serves as a general guide. You should visit the ATO website or seek professional advice for more detailed information. Doing so will help ensure that you meet your specific tax obligations and maximise any entitlements that may be applicable to you.
When do you seek professional help for lodging a tax return?
Whilst it is possible to do your tax return on your own, it’s recommended that you seek professional help if:
- You have a complex tax situation or have complex deductions and credits.
- You have limited knowledge of tax laws.
- There are changes in your personal circumstances (as in, you need to go through the process of updating records).
- You have time constraints or lack confidence.
- You want tax planning and optimisation.
Choosing a qualified tax professional is important to ensure your tax return is handled correctly. This will also minimize the chances of errors or audits. A registered tax agent has the expertise to navigate Australia’s tax laws and provide personalized advice based on your situation. If you need help finding a trusted professional, contact Help My Wealth, and we’ll help you connect with one.
Frequently Asked Questions About Lodging Tax Returns
When is tax time in Australia?
Tax time in Australia is the period when individuals and businesses prepare and lodge their tax returns for the previous financial year. The tax time period in Australia typically starts from 1 July and extends until the deadline for lodgement, which is 31 October.
When is the best time to do a tax return?
The best time to do a tax return in Australia is typically after the end of the financial year, June 30th. The Australian Taxation Office (ATO) begins accepting tax returns for lodgment in early July each year. It is recommended to start the process as soon as possible after the end of the financial year to ensure you have sufficient time to gather all the necessary documents and information.
What are the benefits of enlisting the help of a tax agent?
Getting the help of a registered tax agent can have a lot of benefits. With their specialised expertise and up-to-date knowledge of tax laws, tax agents can navigate complex tax situations, ensure compliance, and maximise your eligible tax benefits.
By handling the entire tax return process on your behalf, they save you time and effort while minimising the risk of errors and audits. Tax agents can provide valuable advice and tax planning strategies as well. They also offer representation and support in the event of an audit, providing peace of mind.
Definition of Terms Used
End of the financial year (EOFY)
The end of the financial year (EOFY) is the culmination of a 12-month accounting period for individuals and businesses, typically ending on June 30th.
Taxable income refers to the portion of an individual’s or entity’s income that is subject to taxation by the government. It is calculated by subtracting allowable deductions and exemptions from the total income earned during a specific period.
Paper lodgement refers to the method of submitting tax returns and related documents in physical paper form, typically through the mail, to the tax authority or relevant government agency.
Tax File Number (TFN)
A Tax File Number (TFN) is a unique identification number issued by the Australian Taxation Office (ATO) to individuals and entities for tax and financial purposes.
Tax Return Lodging
Tax return lodging refers to submitting your completed tax return to the relevant tax authority or government agency for assessment and processing.
Private Health Insurance Rebate
The Private Health Insurance Rebate is a financial benefit the Australian government provides to individuals and families with private health insurance. It is designed to assist with the cost of private health insurance premiums.
*This material has been prepared for general information purposes only and not as specific advice to any particular person.