Tax returns can be costly if you get them wrong. We now answer the 20 most commonly asked questions to help you get it right.
When it comes to filing our tax returns, some people still have no idea that they can do this online in mere minutes. Gone are the days of tax agents, here are the days of e-tax lodgements, and the ATO (Australian Tax Office) and myGov websites should be some of your favourite bookmarks. While it’s quite simple to lodge your tax return, you may still have some questions. The information below will help give you the tips and answers you need to get the most out of your tax return this year.
Here are 20 questions to help you understand your tax needs better:
What to know before you lodge your tax return
When is the tax lodge deadline this year?
For the financial year ending 30 June, you have four months before the 31 October due date to lodge your tax returns if you’re doing it yourself. If you plan to lodge via a tax agent, you’ll still have to contact them by the same date if you’re doing this for the first time. Tax agents have their own deadlines so it would be a good idea to check with them.
I’ve never lodged a tax return
If you are new to tax lodgements, the easiest way to learn the ropes is by visiting the Australian Tax Office website. You’ll find a range of tips to help you get started.
Do I need receipts for work-related expense claims?
The ATO generally instructs that you keep all relevant records for five years from the time your tax return is lodged, in case you’re asked to provide them. This is uncommon however, because Australians can claim undocumented expenses up to $300. You are only required to substantiate claims $300 or more with written proof.
Where can I find out more about what to claim?
The place to start is the Australian Tax Office or ATO. They provide free, detailed guides explaining what you can claim and what you cannot. The ATO website should be your first and final point of reference when it comes to tax matters.
What is an assessment sequence number? And where can I find it?
The notice of assessment is an itemised statement that shows your taxable income and how much tax you’ve paid over the year. It also shows any likely refunds. You can find the assessment sequence number at the top of your notice of assessment.
What to know when lodging your tax return
I frequently donate money to charities. Can I claim these with the tax office?
Absolutely. For donations above $2, you can claim a deduction equal to your donation amount. The important thing to note is that your choice of charity must be a ‘deductible gift recipient’ (DGR), and your gift must truly be a gift, i.e. you must not have gotten anything in return for it. You can’t claim back the cost of those girl scout cookies, student raffle tickets or that gala fundraising dinner.
What is e-tax pre-fill?
The Australian Tax Office offers a service whereby they pre-populate your online tax lodgement form. This saves you time because all you need to do is review the form and fill out any missing details.
What do I have to do if I fall into the group of targeted professionals?
In the past, the tax office has yearly targeted a group of occupations for scrutinising unusual claims that fell outside the norm of their industry. As of 2015, its’ focus shifted from who to what, and everyone now falls under the radar. For instance, this year, the ATO will be examining work-related expense claims pertaining to overnight travel, motor vehicle expenses for commute between home and work, and claims related to computers, phones and other electronic devices. Every single lodged return will be compared to claims made by others in the same occupation and income bracket, and outliers will be queried. The rule is to keep your claims legit, and to keep those receipts in case they’re summoned.
Can I claim my rental property costs?
Yes you can, but only for the period your property was rented or available for rent. To find out exactly what you can claim, visit the rental section of the ATO.
Are there any capital gains tax for sold properties?
You can make a capital gain or loss on property sold, depending on whether your capital proceeds covered the cost base of that property. You should always declare any gains or losses you make on property previously or currently owned. The ATO will then calculate how much you have to pay, if at all. Capital losses can be used to offset capital gains.
Is bank account interest taxable?
Yes it is. You should already have a statement from your bank showing how much interest you earned in the financial year.
How does a same-sex relationship get taxed?
As of 1 July 2009, same-sex couples have been treated the same way as any other couple for income tax and superannuation purposes.
How about the contribution to my first home saver account?
The First Home Saver Account (FHSA) scheme was abolished effective 1 July 2015. If you have an existing FHSA account, you have until 30 June 2017 to lodge your claim on any government contributions you might be eligible to claim. Consult the ATO website for more details.
How can I check whether my tax agent is legit, i.e. registered?
You could ask to see their Certificate of Registration of Tax Agent, but a better way would be to check the Tax Practitioners Board (TPB) Register on the TPB website.
Can I receive free help with my tax return?
If your income is around $50,000 or less for the financial year, you might be eligible for the Tax Help program, where a trained volunteer will help you with completing your tax return. Call 13 28 61 to find out more. Otherwise, tax accountant fees are always deductible too.
Is there free help for businesses to lodge a tax return?
Australian business owners can get free tax support for help with managing their taxes. You can get free support over the phone by calling 13 28 61.
How can I lodge a Family Tax Benefit claim?
More changes have been made to Family Tax Benefit that are effective as of 1 July 2016. To stay abreast of these changes and understand what you can claim, check with the Department of Human Services.
Can I claim children school expenses under the Education Tax Refund?
The Education Tax Refund (ETR) was replaced by the Schoolkids Bonus as of 1 January 2013. If you receive family tax benefit part A for a dependent child at school and meet the income test requirement, you would be eligible for claims under the Schoolkids Bonus. Unfortunately, Schoolkids Bonus is also being phased out and will pay its last instalment in July 2016.
What to know after you’ve lodged your tax return
Can I amend mistakes made on my tax lodgement?
You can lodge an amendment if you realise that you’ve made a mistake while lodging your tax return. You’ll get a tax refund if the amendment reduces your tax owed, but you’ll have to pay the outstanding amount if it increases your tax owed. You could also be liable to pay a penalty and interest, but the tax office will generally be lenient because of your voluntary disclosure.
How do I get my refund? And when will I get it?
You can choose to receive a cheque or direct credit to your account. If you’re desperate for a fast refund then doing an e-tax lodgement is your best bet. Most tax refunds for online lodgements are issued within 12 business days, but paper returns can take up to 50 business days.
How to choose a tax agent
Now that you know how to get the most out of your tax return, it’s time to compare and choose a tax agent.
|etax||Tax advice on personal returns, rental properties, capital gains, and more||Entirely online, with functions like auto pre-fill and tax calculator that make things very easy.||etax offers multiple services|
Low income: $38.50,
|H&R Block||Services individuals as well as small, medium, and large businesses.||Specialises in service to clients over 60 years old.||The fees for assisted online tax returns begin at $70 for under 21s and full-time students under 25|
|Navado||Tax advice for individuals, companies, partnerships, super funds, trusts and charities.||Provides tax advice on a variety of client situations.||Prices start at $143 for individual tax returns|
|ITP||Provides advice to individuals, businesses, sole traders, partnerships and trusts.||Boasts having 240 offices nationwide, and a smartphone app that captures all your receipts for deductions.||Varies with complexity of return and calculated on a per-quote basis.|
|Taxback||Caters to backpackers, students, foreign workers and business owners.||Get an instant free tax refund estimation online, and also pay nothing until return is complete.||Non-resident: $87 + handling fee,|
Resident: 9% of refund (minimum $99) + handling fee
|Tax return 24/7||Deals with backpacker tax backs, individual and company tax returns.||Maximum refund guaranteed in an easy process—10 minutes over the phone.||Basic individual: $99 + fees for additional services.|