Tax time is just around the corner, and many Aussies will be even more eager than usual this year to have some extra cash in their pockets.
Tax time is upon us and with the cost of living rising, many Aussies will be even more eager than usual to have some extra cash in their pockets.
More than 9.92 million individual tax refunds for 2021 were issued as of April 7, according to the ATO, totaling more than $28.64 billion with an average refund of $2,887.
Here’s everything you need to know.
Do I have to file a tax return?
If you are an Australian resident, you must file a tax return if you earned more than the $18,200 tax-free threshold between July 1, 2021 and June 30, 2022.
Foreign residents must file a tax return if they have earned more than $1 during the income year or have a loan for educational or educational support.
Parents who are a liable or receiving parent under an entire income year child support assessment must file a return if your income was $27,063 or more.
Working vacationers with a 417 or 462 visa are not required to file a tax return if their taxable income was less than $45,001.
How do I do my tax return?
You can choose to complete your tax return yourself, online or using paper forms, or you can get help from a tax advisor.
For many people, the easiest and fastest way is to prepare it online and submit it to myTax online, with most processing within two weeks.
Which documents do I need?
The good thing about using myTax is that most people with simple tax returns need very few documents other than receipts for any deductions.
At the end of July, the ATO will be able to pre-populate most of the information from your employers, banks, government agencies, health insurance funds and third parties.
When do I have to register?
For people filing their own tax returns, the deadline is October 31, which falls on a Monday this year.
Those who use a registered tax advisor have more time, but must engage their accountant before October 31.
Where can I find my tax file number?
If you can’t remember your tax file number, you can find it online through your myGov account.
If you have already filed a tax return, this will also be stated on your last assessment notice.
It will also appear on your retirement account.
What can be claimed?
Your tax return will state how much money you earn – your income – and any expenses you can declare as a deductible item.
Deductions are deducted from your taxable income and ultimately ensure that you get more back in your tax return.
To claim a work related expense you must have spent the money yourself and you have not been reimbursed by your employer, the expense must be directly related to earning your income and you must have proof such as a receipt to prove this .
Common work-related claims include car and auto expenses, travel expenses, clothing, laundry and dry cleaning expenses, and self-study expenses.
You can also claim work-from-home expenses such as home office equipment, telephone, data, and internet, as well as Covid-19 testing, tools and equipment, union or other professional fees.
Which tax bracket do I fall under?
Australia has five tax brackets, which determine the tax rate you pay on your income for the year.
From zero to $18,200 you pay no tax.
Between $18,201 and $45,000, the rate is 19 percent.
In other words, you pay 19 cents for every dollar you make over $18,200 to $45,000, meaning if you make exactly $45,000, you’ll pay $5092 in taxes.
The higher tax brackets are 32.5 percent between $45,001 and $120,000, 37 percent between $120,001 and $180,000, and 45 percent for $180,001 and above.
For example, someone who makes exactly $120,000 pays 32.5 cents for every dollar from $45,001 to $120,000, which works out to $24,375, plus the first $5092, for a total of $29,467.
Who is the ATO targeting this year?
The ATO has announced four key focus areas this year: administration, work-related expenses, rental income and deductions, and capital gains from crypto assets, real estate and stocks.
Work-related costs such as car and home office claims in particular will come under scrutiny as more people work from home during Covid.
“What we’re seeing from people is people continue to claim current travel expenses at pre-pandemic levels,” ATO Assistant Commissioner Tim Loh told ABC.
“Last year we saw a slight decrease. But we do expect that the current travel costs will drop considerably, because if you have worked from home, you cannot be in two places at the same time. The other thing we focus on is laundry costs. It is clear that if people have worked from home, [they would have not been] in their uniforms.”
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