Yahoo Finance $2,600: How much tax will YOU get back?
It’s officially the new financial year, so it’s time to start thinking about filing your tax return and planning what you’re going to do with your money.
The average Aussie will get around $2,600 back, but it’s hard to start planning if you’re not sure exactly how much you can expect. So, Yahoo Finance has put together some simple steps to help you figure it out.
The best way to figure out how much money you can expect to get back is by using a tax calculator, but there are a couple of different ones you can use.
Also read: What the ATO is scrutinising this tax time
Also read: Tax 2021: All the dates you need to know to avoid $1,110 fine
Also read: 5 tips to maximise your tax return, according to the ATO
Simple tax calculator
As the name suggests, this is the ATO’s easiest tax calculator to use and it only takes a few minutes to fill in the necessary information.
The simple tax calculator only requires you to input the tax year you want to know about, your taxable income (which is your full income before tax has been removed) and your residency status.
The problem with this calculator is that it will only show you how much tax you have paid in a full year and not how much you will get back.
You will have to use a more complicated calculator if you want to know how much you’re actually eligible to get back.
Income tax calculator
The ATO’s income tax calculator will help you work out your tax refund or debt estimate if you owe money. However, it can only be used for the 2015–16 to 2020–21 income years.
This calculator will estimate your tax payable and calculate your:
Medicare levy surcharge
Income Contingent Loan (ICL) repayments – study and training loan repayments, including Higher Education Loan Program (HELP), Student Start-up Loan (SSL), Student Financial Supplement Scheme (SFSS) and Trade Support Loan (TSL)
any tax offsets that may apply.
It will also take into account the Low to Middle Income Tax Offset (LMITO), which was extended for another year in the 2021 Federal Budget.
To use the calculator you will need to know:
The tax year
Your residency status
Any items such as loans of tax offsets that apply to you
Your income and deductions
Income tests
Spouse details (if applicable)
Other claimable amounts such as credit for interest on early payments
Medicare and private health insurance.
Home office expenses calculator
For those working from home and wanting to calculate how much you can get back you have two options.
You can use the ATO’s shortcut method of calculating additional running expenses allowing those working from home to claim a rate of 80 cents per work hour during the coronavirus crisis.
Also read: ATO extends tax ‘shortcut’ to Aussies working from home
Also read: ATO explains exactly how to claim your remote work hours
However, if you want to calculate it the old fashioned way you can use the ATO’s home office expenses calculator.
Using this calculator you’ll need to know the tax year you're wanting to claim, whether or not you’re eligible to claim deductions for occupancy expenses (such as rent) and whether or not you want to use the fixed rate to calculate your running expenses.
Then you’ll need to figure out how many hours over the year you worked and the cost of depreciation of your assets, for example a computer, leasing costs, repair costs and any other office running expenses.
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