How To Lodge A Tax Return In Australia: A Complete Guide

No matter how simple your tax return is, the income tax system is complex and, at times, confusing. The simplest mistake could result in a missed refund or a fine.

If you are lodging your tax return in Australia for the first time and need guidance, you have come to the right place. Read on to explore tax return filing options to maximize your refund and the steps to lodge the tax return.

1. What Is A Tax Return?

A tax return covers your income and expenditures through the financial year, which starts on July 1 and ending June 30 of the following year.

A resident individual whose taxable income is more than the tax-free threshold of AUD 18,200 is liable to file an income tax return. Also, a non-resident who earns AUD 1 or more must file a return.

Once the financial year ends, you get a limited timeframe to lodge your tax return. Usually, the deadline to file your tax return is October 31.

2. How Does It Work?

Filing a tax return is a yearly settlement process. The ATO enquires you to report your income, expenses, deductions, and any tax withheld by employers and financial institutions from payments they make to you.

You have to pay income tax if your income exceeds a specific limit, regardless of your nature of employment:

• Salaried: In this case, your employer deducts tax from each salary and transfers it to the Australian Taxation Office on your behalf. It is called "pay-as-you-go (PAYG) withholding."

• Self-Employed: You are liable to pay tax if you are a self-employed contractor and use an Australian Business Number. 

Taxpayers who earn money from a business/investment may need to pay tax instalments based on their previous year's income.

The income tax filing begins with the taxpayer completing his Tax File Number declaration or providing the TFN to the entity that pays him. It enables him to calculate how much tax he should withhold from his earnings.

After submitting the tax return, the ATO examines your information and determines what tax you owed for the year and whether you paid the right amount. You get a refund if your deductions exceed your income and you have paid excess tax. In other cases, you may owe any additional tax to the ATO.

Note: Each person has to pay their tax individually, as no joint filing with a spouse is allowed. However, based on your circumstances, you can add the income details of your spouse to your tax return.

3. What Documents Do I Need For My Tax Return Australia?

Here are the things you need to keep ready when lodging a tax return:

• Your Tax File Number 

• Your bank account details

• Your Income Statement 

• Details of additional income that include business income, rental income, subcontract home, and investment income such as dividends, shares, and managed funds  

• A summary of the accrued interest on your bank accounts

• Tax offset information, like income details of your partner

• Details about profession-specific deductions you want to claim

• Hard or soft copies of invoices related to work-related expenses

• Credit card statements

• Statement of your private health insurance

• Details of child support payments

• Acknowledgment receipts for charity donations

Note: You can view and download most of these documents online from your bank, insurance provider, and government agencies such as Centrelink and Medicare.

4. Do I Need To File A Tax Return If My Income Is Low?

You don't need to lodge a tax return when:

• Your income is below the tax-exemption limit ($18,200)

• There is no tax withheld from that income.

If you are not liable to lodge a tax return, follow the below steps to complete non-lodgment advice online through ATO online services:

• Log in with myGov    

• Choose ATO services from the select Tax Menu 

• Choose Lodgments from the submenu

• Choose Non-lodgment advice.

• Download and take a print of the non-lodgment advice form and file it by mail.

5. When Do I Need To Lodge A Tax Return?

The typical circumstances when you need to lodge a tax return are:

• If you are an Australian resident and your earnings are above the tax-free threshold of $18,200

• You receive family assistance payments such as Child Care Subsidy or Family Tax Benefits. In such cases, you need to report your family income to Centrelink.

• Your tax is withheld from earnings under the tax-free limit.

• You are an overseas resident with training and study support loans such as Higher Education Loan Program, Trade Support Loan, or VET Student Loan debt owing to the Government.

• You are a recipient or liable parent under a child support assessment who received government benefits for the income year and whose income was below $27,063.

• If you have an Active ABN, PAYG withholding, or instalments

• If you received franking credits refund

• If tax was deducted from your payments, including salary, during this financial year

• If you are a foreign resident and have made more than $1 in the country (you can file a return to claim a refund for that amount) 

• You run a business

• If you are a taxpayer whom the Commissioner has asked to submit a tax return

6. Can I Do My Tax Return in Australia?

Yes. You can file your income tax return in the following ways:

Using ATO's myTax Utility

Its 'Pre-fill' function' makes it easier to fill in the information while ensuring you don't miss out on any income. However, before you use this feature, you need to create a myGov account.

It takes two days to process tax returns made digitally or up to 10 weeks for paper-based returns. For more details on how to file tax returns online via myTax utility, click here.

By Mail

If you don't choose the digital way, you can lodge a paper tax return by mail. However, the process takes significantly longer to process refunds, i.e., around 50 business days. Find out more about lodging a paper tax return here.

7. Do I Need A MyGov Account To Lodge My Tax Return?

Yes. If you file a tax return through ATO's myTax utility, you must create your myGov account to pay your taxes online.

However, other options are available to file an income tax return that doesn't require a myGov account. You can use Etax, a low-cost service offering better refunds, online professional assistance, and peace of mind to its taxpayers.

Some of its features include the following:

• Prefill saves time 

• No appointments

• Accessible online and mobile to use anytime and anywhere 

• Deduction finder that boosts your refund

• Low fees, plus it's tax-deductible

• More convenience and ease than ATO online services

8. When Can I Lodge My Tax Return?

Tax returns for individuals (without a tax agent) are due on October 31, following the June 30 financial year-end. Those who file returns using the help of a tax agent can file their returns with extensions beyond October 31.

The extended due dates for tax returns filed through a Licensed Tax Agent are:

October 31

• It is for all individuals and trusts with unsettled Tax Returns on June 30.  

• Taxpayers sued for non-lodgement of last year's tax returns and advised of a lodgement due date of October 31.

February 28

• It is for medium or large trusts (with a yearly income above $10 million in the latest year filed) that were non-taxable in the newest year.  

• For new registrant medium or large trusts.

March 31

It is for individuals and trusts with the latest tax assessment resulting in tax payable of $20,000 or more. It excludes medium or large trusts

May 15

It is for all other individuals and trusts. To be considered for extended due dates, an individual contact a licensed Agent before October 31.

9. Step By Step Guide To Lodge A Tax Return

Step 1: Have Your Tax File Number (TFN)

The TFN is essential in lodging your tax return as it serves the purpose of identification. You can apply for it onlien here. Have it ready when filing your tax.

Step 2: Get Your Bank Account Number And Bank State Branch Number (BSB)

You can find the bank account number on your bank statement. BSB is a six-digit number that identifies banks and their branches within the country. If you don't have the code, use the branch locator tool on the relevant bank's website.

Once you have the above information, you can proceed with your tax application.

Step 3: Get The Tax Return Form

Visit The ATO Website 

It is the simplest method to get the form. All you need is to access the ATO website. Next, download and print the tax return form. You will get a copy directly from the ATO website.

Via The ATO Office

If you don't have a printer, you can get a copy of the form from the ATO Office. You will need to place an online order at the ATO office. You can also call on 1300 720 092 to place the order.

You will get two copies of the tax return form along with the instructions.

Step 4: Fill Out The Tax Form

Use the below ways to get the tax return form and fill it out:

Through myGov Account

How do I do a tax return through myGov?

The myGov tax return is the place where you deal with the ATO. To use this utility, you need to have a good understanding of Australian tax rules.

• Set up a myGov account. 

• Enter your required personal and financial details on the Government's online system, including income and deductions.

• Go to the Services tab on the myGov homepage. Click the link for the Australian Taxation Office and connect your account with "ATO online." 

• Provide information such as your full name, TFN, and birthdate to confirm your identity. Answer questions concerning your latest PAYG payments, dividends statements, notices of assessment, or super account statements. 

• Once done, sign a declaration stating everything is correct.

Through myTax

How do I do a tax return on myTax?

myTax is a user-friendly utility for taxpayers who don't have complicated tax matters. To use this feature, create a myGov account and a myGovID during the setup using identify proof documents.

Filing a tax return through myTax is fast and easy as it is pre-filled with information that financial institutions and employers need to report to the ATO. It includes your tax withheld and income throughout the financial year.

It also has information about your private health insurance to help evaluate your liability for the Private Health Insurance Rebate and Medicare Levy Surcharge. To benefit from the pre-populated data entry fields, you should wait till late July to prepare your income tax return.

Click here for more information on how to use myTax to file a tax return.

Via Tax Agent

Though ATO's myTax is a quick, safe, and secure way to lodge a tax return online, seeking the assistance of a registered tax agent is beneficial when:

• You lack proper knowledge of Australian taxation laws

• Your tax situation is complicated

• You find documentation overwhelming

Tax agents are experts at profession-specific deductions and help you make the most of your tax while taking the stress out of tax time. Your tax return filing deadline may extend if you use an agent.

They usually charge a fee for helping with your tax return filing but ensure your tax return is complete and accurate. You can claim it when you file the tax return the following year.

Step 5: Provide The Required Information

To start lodging the tax return online, answer a pre-filled questionnaire on your income and deductions for the financial year.

You can receive information about your income from your employer, bank, or government agencies. Make sure you check it with your records before filing the form.

If you choose to complete a paper form instead, you must provide a copy of the required documents, such as:

• Your employer's Australian Business Number if you obtain income from an employer.

• Income statements

• Stocks or unit trust statements

• Bank statements

• Rental property records

• Private health insurance documents

• Foreign income or pension documents

Please fill out the form slowly and carefully and ensure everything is clear to ensure the timely processing of your tax return. Write in block letters with a black ink pen. Place a neat X in the suitable box for boxes that require answers in Yes or No.

Step 6: Mention The Deductions

Getting your unreimbursed work-related expenses ready will help simplify claiming deductions. Here is a list of expenditures you can consider claiming for:

• Travel costs to another workplace

• Internet and other similar expenses if you work from home with a computer, 

• Uniform purchases, recruits, or repairs 

• Training and Self-education expenses

• Union dues

You can use ATO's myDeductions app to gather your income and deductions. Double-check everything before you file a tax return, as you are responsible for all the information you include in your tax return.

Step 7: Submit Your Application

After thoroughly checking and verifying the correctness of the information you mentioned on paper or online application, you can lodge your tax return now.

If you identify a mistake or miss including an amount after lodging your return, you must lodge an 'amendment' of the tax return.

Following are the instances when you may need to modify your tax return:

• Making an error while answering a question

• Forgetting to add some capital gain or income 

• Failing to claim a deduction or an offset 

• Receiving a revised payment summary after you lodge your tax return

• Obtaining an updated income statement from your employer after you lodge your tax return.

Regardless of how you lodged your original tax return, you can request an amendment of your assessment online at no extra charge. It takes around 20 days to process an amendment request.

However, to access ATO's online services, you must have a myGov account linked to the ATO. Click here to learn the procedure to amend your tax return.

10. When Do I Need To Lodge A Tax Return in 2022?

If you earned Australian income between July 1, 2021, and June 30, 2022, you might be required to lodge a tax return. Even if you made a lot less this financial year, it is worth lodging a tax return to see if you are due a refund.

11. What Happens If You Don't Lodge A Tax Return?

Case 1: If you earned below the income threshold (< $18,200) and didn't pay any tax, you don't need to lodge a tax return.

However, you must submit non-lodgement advice to the ATO explaining why you don't need to file the tax return. It helps ensure they don't list you as one with an outstanding return.

If you don't submit non-lodgement advice, the ATO assumes you need to lodge and may take compliance action to get a clarification on why you didn't file the return.

Case 2: If you expect a tax bill and miss the due date, you must lodge it as soon as possible. You may receive a tax bill if you need to pay adequate taxes. The ATO will issue you a Failure To Lodge penalty if they still need to accept your tax return by the due date.

The penalty is usually applied automatically but not to returns that generate a nil result or refund. The ATO may remit the penalty in the event of a natural disaster or severe illness.

The due date for payment when you file your income tax return is November 21, even if you file late. You will need to pay the interest on any amount you owe after November 21.

12. What Happens Once I Lodge My Tax Return?

After the ATO processes your tax return, they will send a Notice of Assessment and tax receipt to the individual's myGov Inbox. You will also receive an SMS or email from myGov informing you that you have mail.

Those who file their tax return by mail will receive a paper notice of assessment (NOA) and tax receipt at their registered postal address.

The NOA shows you the amount of the following:

• The total tax you owe on your taxable income

• The credit you have for tax paid during the income year

• Amount of tax you need to pay or refund

• Excess private health refund or reduction (if applicable).

Tax Receipt shows the allocation of your taxes to significant categories of government expenditure.

After you receive your NOA and tax receipt, please read it thoroughly to ensure everything is correct.

13. How To Track The Progress Of Your Tax Return?

Online returns process in 2 weeks while paper takes up to 10 weeks (50 business days). Tax returns that need manual checks processing may need longer than usual.

Here are the four ways to check the progress of your tax return:

• Online using ATO online servicesBy phone

• Using the ATO app

• With a registered tax agent

14. How Early Can I Do My Taxes In Australia?

You have a 12-month taxable period in Australia from July 1 to June 30. After the end of the financial year, i.e., on June 30, individuals can start lodging their returns with the Australian Taxation Office. The due date to file tax returns is the following October 31.

Most registered tax agents can lodge returns for their clients after this deadline. The exact due date for the tax return will depend on your situation and when you engage your tax agent.

15. Do I Need To File a Tax Return If I Live Outside Australia?

Individuals who live outside of Australia may have to lodge a tax return if they earn:

• Income on a rental property

• Investment income, such as interest, dividends, or trust income

• Any income in a foreign country to determine repayment of their HELP debt

16. Conclusion

Lodging a tax return is undoubtedly tricky if it is your first time. However, once you are through the process, you no longer find it as complicated as it seems.

The key to successful lodging is to start early. Aim to file your return on time while ensuring you understand all the requirements and have accurate figures in the documents you send.

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