Individual Tax Return 2022
It is compulsory to Lodge a tax return every year for most people earning money in Australia. Tax time may feel like a bit of drag and stressful, however, the average Aussie will get around $2,600 back as a tax refund. Failing to lodge your Tax Return on time may end up costing you up to $1,110 in fines. So, it is important to submit a tax return on time. This article describes all the things you need to know about individual tax returns.
What is a tax return?
A tax return indicates all the income and expenses through the financial year. Usually, a financial year starts on July 1st and ends on 30th June the following year. At the end of the financial year, you have a limited time to lodge your individual tax return. Generally, it’s four months and the deadline is the 31st of October.
If you earn an income, you’ll usually have to pay tax on that income. You are not required to pay tax if your all-source income is less than $18,000. Your employer will deduct tax from each payment and submit those records directly to ATO (Australian Taxation Office) on behalf of you. This is known as Pay As You Go (PAYG) withholding. After lodging your tax return, the ATO will examine your income, expenses, and deductions and determine whether you’ll get a tax refund or have to pay additional taxes
Who needs to file for tax return?
You must lodge an individual tax return if:
- your tax withheld by your employer during the last tax year
- your taxable income was over the tax-free thresholds for residents
- you are a foreign resident and earned $1 or more in Australia during the tax year
- you are planning to leave Australia permanently or for more than one tax year
Best time to lodge your tax return
Technically you can lodge your tax return the next day after the end of the financial year. So you can able to lodge your tax from July 1, 2022. However, it’s not the right time to do it. The ATO also warned Aussies against lodging their return too early. Lodging tax returns too early in the new financial year can actually slow down your tax refund while the ATO waits for your employer and relevant government agencies to provide everything they are required.
Up to July 31, your employer can provide your PAYG details, year-to-date salary, and super contributions to the ATO. The same deadline applies for government agencies like Centrelink, banks, and health funds to submit their records to ATO. Once all these records are received by ATO your MyGov account statement will be marked as “tax ready”.So, the recommended option is to wait until your statement is “tax ready”, or until July 31 if you don’t want to check your account regularly
Deadline for lodge your tax return
This will depend on the method you chose to lodge your tax return. If you are lodging on your own, your deadline will be October 31. However, this deadline can be extended up to May 15, 2023, when you choose to employ a tax agent to submit your tax return. However, you will need to register a tax agent before October 31.
What happens if you failed to lodge a tax return before the deadline?
If you failed to lodge before the deadline you are liable to a late lodgement penalty, which increases every 28 days. Fine for lodging tax return within 28 days after the deadline is $222, but if you’re really late, it can increase up to $1,110.
However, if have a good tax history or you’re owed money by the ATO, you can often get the chance to get minimized penalties or complete withdrawal of penalties. This is also applicable if you are unable to lodge due to an illness, natural disaster, or any unfortunate circumstance beyond your control.
Information required to lodge a tax return
The more organized you are, the easier it is to lodge your taxes.
To lodge a tax return, you need to gather information on:
- The income you have earned through working, from investments, or interest on bank accounts.
- Any deductions and tax offsets you are claiming.
Deductions are the costs that you can claim to reduce your tax. Usually, deductions are work-related expenses. In other words money, you have spent on something to help you earn your income. To claim those deductions you must show the:
- expenses directly related to earning income
- expenses are not private in nature
If you want to claim work-related expenses over $300. You need to have copies of receipts or invoices which can be paper or electronic, credit card statements, travel, and home office logbooks.
Methods to Lodge your individual tax return
If you have all the information and records it’s time to lodge your tax returns. Your tax return may look simple and straightforward to you, however, income tax is complicated and often confusing. A simple mistake you make on your tax return leads to missing out on a refund or even ending up additional tax payment. If you want to maximize your refund and take some of the stress out of tax time, consider using a registered tax agent. You could lodge a tax return either using a tax agent or by yourself.
Use a tax agent
According to ATO nearly 70% of people used accountants or tax agents to lodge their tax returns. A tax agent helps you to get the maximum benefit in your tax return and also takes the stress out of you. You can always contact TASC to act as your tax agent.
Lodge online yourself
You can choose to lodge your tax return online using myTax, its available 24/7. You can lodge your tax return online. You can use mytax after creating a myGov account and link that to ATO online services. We advise you to link before the new financial year (1st July) to make sure you receive all communications and there are no delays in lodging your tax return
When you will get your tax refund?
It depends and may differ from time to time. If you lodge your tax return online it can take up to two weeks, but filing a paper return can take up to 10 weeks.
Protect your TFN number
It’s important to protect your TFN (Tax file number), so keep it secure. You keep the same TFN even if you change your name, job, address or move interstate and go overseas. Don’t let others use your TFN, including friends and relatives. Allowing someone else to use it, giving it away, or selling it is a crime.
TASC can help you
Lodging your taxes and managing your personal finances on your own can be a hard task. TASC is here to help you out with the dedicated services. Contact us to find out more.