What you need to file;
Where you can lodge;
Best apps to help you claim on tax;
How to know if you need to lodge a return;
What you can claim on tax;
When’s the tax return deadline; and
What happens if you don’t fill out a tax return?
Today is the day - it’s a new financial year and you’ll be able to file your tax return.
But if you’re feeling overwhelmed, don’t worry - filing a tax return doesn’t have to be scary or hard.
However, it does help to be prepared.
What do you need to have to file a tax return
You’ll need to have the details about any income you’ve earned.
Details about pensions and government payments;
Interest earned from the bank on any savings accounts;
Details on any business income;
And details of income earned from rental property.
You’ll also need to have details about any money you’ve spent on items that you wish to claim back on tax. This might be work-related expenses, or could be to do with an investment property. Again, it’s critical that you have receipts and clear details.
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Details about income protection insurance and investment expenses, private health insurance details and children’s details may also be required, in addition to details about any fees you paid for tax management.
Having your Tax File Number, bank details, last year’s income tax assessment and medicare number handy will also speed up the process.
Where can you lodge your tax return
The good news is you can lodge your return online. For a lot of taxpayers this is the easiest way to lodge - and it’s free.
If you don’t want to lodge online, you can fill in a paper tax return form.
But if your tax return is going to be a bit more complicated - for instance if you had a number of investments, an investment property or run a small business - heading to a registered tax agent might be the best solution for you.
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While you will have to pay for this, you will be able to claim the lodgement payment on your tax next year, and for most Australians who use this service, the cost is about $156.
Online tax agent services like Etax also offer support and come with registered accountants’ support. Again, however, there is a fee - although lower at $27.50.
Best apps to help you claim on tax
Yahoo Finance selected five apps that are especially good for filling out Australian tax returns. In addition to the ATO’s free smartphone app for both Android and iOS, millennial-targeted app POP, Tax Return by Pocketbook, Etax and TaxBot will also take the pain out of filing your return.
However, prices for the non-ATO services range from $20 to $129 - but service levels and support also vary. We have a full run-down.
How to know if you need to lodge a tax return
Simple: this ATO tool will tell you if you’re required to lodge a return.
What you can claim on tax
This one is not so simple. What you can claim depends on whether you have an investment property, work from home and what type of job you have. Even Instagram influencers have a special set of deductions.
If you’re claiming for a work expense, there are a few good rules of thumb. You need to have spent the money yourself and not have been reimbursed, the expense needs to have been needed for your job and you need to have the receipts.
This means that if you had to buy a uniform for your job as a tradesman and weren’t reimbursed, you can claim this expense. However, the same rule doesn’t apply for office workers who bought new clothes for work, as that dress from CUE and those RM Williams boots aren’t a company uniform.
Workers may also be able to claim vehicle and travel expenses, but this has to be for usage directly required for work. That is, you can’t claim the petrol you used just to get to your job in the city.
It’s also worth noting that individuals can claim tax on work-related assets and write them off without receipts if they’re up to $300.
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If you own an investment property there are also a number of handy deductions. You can claim a series of expenses including the costs to advertise to tenants, body corporate fees, council rates, land tax, cleaning, water charges, insurance, pest control and repairs and maintenance.
Again, you will need receipts.
And if you used a tax agent or accountant you can also claim their fees on tax.
When’s the ATO’s tax return deadline?
The deadline for lodging a tax return is 31 October if you’re lodging your own. But if you’re lodging through a tax agent, you only need to be registered with your agent before 31 October.
That’s because agents have an agreement with the ATO that allows them to lodge for you after that 31 October deadline.
What happens if you don’t fill out a tax return?
Even if you don’t owe the ATO money, you could still be hit with a late lodgment penalty which can be as much as $1,050 if you’re more than 112 days late, and $210 if your return is 28 days late.
So if you’ve missed the 31 October date, the best thing to do is work quickly to get that tax return in as soon as possible. If you have a good history of lodging, the ATO may waive the penalty.
If you’ve missed the deadline, the ATO will send you a letter or give you a call.
And, generally speaking, the ATO is pretty reticent to issue a fine for late lodgment in isolated cases.
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