Tax returns for individuals
Most Australians are required to lodge a tax return every year. Your tax return is a record of your taxable income, calculated over the financial year (1 July – 30 June), and the tax payable on that amount. If you have paid too much tax through the year, you will receive a refund of the over-payed amount. If you have not paid enough tax, you will be required to make up the shortfall. All tax documents must be kept for at least five years.
The earlier you submit your tax return, the earlier you will receive any refund owing to you. However, unless you use a registered tax agent, you must lodge your return by 31 October. Registered tax agents can sometimes lodge returns later.
So where do I start?
Make sure you have all the necessary information handy. If you want to claim work-related deductions totalling more than $300, you must have written evidence that proves the total amount. For expenses totalling less than $300, receipts are not required, however you will have to be able to show that the deductions relate directly to your income. This evidence can include:
- paper or electronic copies of invoices or receipts;
- credit card statements;
- BPay receipt numbers;
- PAYG payment summary; or
- warranty documents.
What other information do I need?
Pay as you go (PAYG) payment summaries (group certificates) for all employers you have had during the financial year. Reportable fringe benefits will also be listed on your payment summary. Eligible termination payments will require an ETP payment summary to be issued as well.
PAYG payment summaries are issued for any taxable benefits.
Statement of rental income from property, annual tax summary for any managed funds or trusts, purchase and sale receipts for any capital gains (property or shares). Evidence of any dividends paid on share holdings.
Bank statement detailing any foreign income earned and records of any other income received.
Bank account interest
Bank statements detailing interest earned throughout the year.
- Spouse's income details;
- payment summary for any deductible or rebateable superannuation annuity or pension amounts;
- letter from your health insurance fund for any health insurance offsets;
- details and receipts of any claimable medical expenses;
- receipts for childcare and letter of reconciliation from the Family Assistance Office to claim the 30% childcare rebate.
- Motor vehicle log book;
- receipts for other travel expenses;
- receipts for uniform or protective clothing purchases;
- receipts for self-education purposes;
- receipts for all other claimable expenses.
- Bank or dividend statements for deductible amounts;
- receipts for gifts or donations given;
- details from your superannuation fund for any undeducted purchase price of annuity;
- receipt for previous year's tax agent fees;
- previous year's tax return for details of any losses;
- any foreign pension documentation for details of undeducted purchase price;
- real estate agent's statement for any rental property expenses.
Other required information
- Superannuation statement for details of any contributions made for yourself or your spouse;
- business Activity Statements for the year for any small business venture you may be involved in.
What if I need help?
For information on any tax related enquiries, contact the Australian Taxation Office. Their Personal Tax Infoline number is 13 28 61, and is available from 8.00am – 6.00pm Monday to Friday.
There is also a host of information available on the ATO website.
If you are a low income earner you may qualify for Tax Help which is a free community service designed to assist people with their tax return.
How do I keep records?
The Australian Tax Office has a free, easy-to-use software package available for any taxpayer to download from their website. e-record is a simple accounting program suitable for both individuals and small business owners. The ATO also has e-tax, a facility where you can lodge your refund online. It offers:
- most refunds within 14 days;
- time-saving, interview style questions;
- all calculations done for you;
- built-in checks;
- on-the-spot estimate of your refund;
- safe and secure lodgement of your tax return.
In 2005, 1.37 million Australians took advantage of this free program to lodge their tax return online and with the newer version even more comprehensive and simple, it makes sense to download it from the ATO website.
Hiring an accountant Vs. Using software
Although it is cheaper, and now a lot easier to use software such as e-tax to complete your tax return yourself, sometimes it is still advisable to use an accountant. This would be an option to be considered in circumstances where finances are complicated, or there are some things you are unsure of.
Also if you aren't very computer savvy, trying to download and use the e-tax software might be too much of a challenge, and take up too much of your time. Therefore it would be quicker and easier to simply hire an accountant.