Yahoo Finance 
6 tax tips for first-time lodgers
Each year, thousands of people enter the tax system for the first time, perhaps joining the workforce from school or university or maybe entering Australia as a new migrant. Navigating your way around the tax system can be difficult so, if you’ve never lodged a tax return before, here’s my guide to what you need to know and need to do.
Also read: Here’s how to claim your work clothing at tax time
Do I need to lodge a Tax Return?
Most taxpayers need to lodge a tax return. Taxpayers who are obliged by law to lodge a tax return include:
Most people whose total assessable income exceeds the $18,200 tax-free threshold for the income year.
Anyone who carried on a business regardless of income or loss.
Anyone who earned less than $18,200 who has had tax withheld from that income, if they want a refund of the tax.
A taxpayer who has been asked to submit a return by the Commissioner. A full tax return is required even if there is no assessable income to report.
A resident minor (under 18 on 30 June) who received income that isn’t from salary or wages.
If you do not lodge a return for a particular year, the ATO may send you a request to lodge. It is a good idea to notify them if you are not required to lodge a tax return. You can do this by filling out a lodgement advice form (which you can do using the form “Non-lodgement advice 2018” (NAT 2586).
How do I lodge?
There are two main ways to lodge a tax return:
Use an accountant
About 74% of people who lodge a tax return choose to do so through an accountant or tax agent. Tax is a complex business and many people prefer to leave it to the experts to get the best possible outcome with the minimum stress. Accountants are good at making sure you are claiming all the deductions you are entitled to and that your return is completed accurately and fast. The fee your accountant charges you is itself tax deductible.
Also read: 4 reasons you’re not successful yet
Lodge yourself
The other 26% of lodgers choose the “do-it-yourself” option using the ATO’s own lodgement software, myTax.
Much of the information which people with simple tax affairs need to include in their tax return is obtained by the ATO from third parties and pre-filled into your tax return. This includes all your personal details from last year, wages and salary information from employers, interest income, dividends received and private health insurance details. In theory therefore, all you need to do is ensure that the pre-filled information is correct and complete, fill in the remaining details which aren’t pre-filled, and then lodge.
You need to be careful however to ensure that the information is correct and complete. If it isn’t, the responsibility for any omissions or errors lies with you, not the ATO. This can be particularly significant if you lodge early, since some information from third parties often reaches the ATO late, sometimes well into August.
You’ll also need to work out your own deductions. If you do it yourself, it’s very easy to inadvertently claim things you’re not entitled to or fail to claim things you are entitled to.
Also read: 5 signs you’re playing it too safe with your money
Deadlines for lodging
If you’re a self-lodger, you must lodge your return by 31 October 2018.
If you use an agent, you can lodge later, possibly as late as 15 May 2019. To take advantage of those extended deadlines, you need to be registered as a client of the agent by 31 October 2018.
Once you’ve lodged your return, typically allow up to 2 weeks for the ATO to process and pay your refund (if applicable). The ATO doesn’t send refund cheques anymore; you’ll need to nominate a bank account when you lodge your return and you’ll get your refund paid by EFT in due course.
Failure to lodge penalties can be as much as $180 for every 28 days that the return is late, up to a maximum of $900 for every year not lodged, plus the General Interest Charge (GIC) which the Tax Office imposes if you owe them money. This rate is approximately 9%pa.
Once you’ve lodged your return, the ATO will send you a Notice of Assessment showing how much tax you owe or how much tax you’re due to be refunded.
What deductions can I claim?
You can only deduct work related expenses under specific circumstances. If you are not sure what you can claim, you can always ask a tax agent like H&R Block.
If you have spent money on something in order to do your job, such as purchasing uniforms, and paying for travel or ongoing education expenses, you may be entitled to claim that cost as a tax deduction.
Remember to only claim what you are entitled to. You cannot claim private expenses or things that have been reimbursed by your employer.
What evidence do I need?
If you are claiming more than $300 for work expenses, written evidence must be kept to prove the total claim, not just the amount over $300. Documentary evidence must be kept for 5 years beginning the 31 October in the year the return has been lodged or from the date of lodgement.
The records that you need to keep are receipts, invoices or similar documents, except where a diary is sufficient.
The document must show:
date of purchase
item purchased
date the document was prepared
name of supplier
value of item.
What documents do I need to do my tax return?
Required documents may include:
payment summaries from payers, including Centrelink
receipts for deductions you are claiming
statements from banks and other financial institutions showing what interest you have earned.
Mark Chapman is the Director of Tax Communications at H&R Block.
