Feb 8, 2021 Author: Accounts Junction
What is an Individual tax return?
Every individual earning an income while working in Australia is liable to file an individual tax return in Australia. All forms of income such as wages, profits from business and income from an investment such dividends and bank interest are taxable. Even if you sell your assets such as house or shares, you attract tax liability.
When Individual tax return becomes due?
Various factors in the Australian tax regime determine the due date. But, here a few things you must keep in mind for the 2020 tax year that ends on 30 June 2020.
When you are lodging directly with ATO- If you are doing tax returns on your own, your return is due on 31 October 2020. If you lodge return right, it goes through ATO smoothly. You will receive a Notice of Assessment within 12 to 50 days. If you are eligible for a refund, it will come around the same time as the Notice of Assessment.
If you lodge via registered tax agent, you receive an extension for your due date both for payment and lodgment as compared to those lodging themselves.
The tax-free threshold is $18,200 each year for each individual. Any income exceeding the threshold income will probably have to pay tax.
Who has to lodge a tax return?
Taxpayers who should lodge a tax return:
Every individual who is carrying business or profession irrespective of income or loss.
Resident individuals whose earnings exceed the $18,200 tax-free threshold in the income year.
Any resident taxpayer whose earnings is less than $18,200, withheld income through their job.
How to pay tax?
If you are working as an employee, income tax will be deducted automatically from your salary or wages. And it is paid directly to the Australian Taxation Office. Hence the amount you receive in your bank account is income after tax.
While for income from the other sources such as business profits, dividend earning, bank interest etc. You have to lodge for tax return.
Every year, most of the individual taxpayers have to complete an income tax return, which is a document that discloses all the income for the year and helps to figure your tax liability.
What deduction can I claim?
Certain expenses are allowed as a deduction that has been incurred for the business or job. These deductions decrease your taxable income and may also make you eligible for tax return.
Some of these deductions include:
1) Vehicle and travel expenses.
2) Dry-cleaning expenses
3) Clothing and laundry.
4) Self-education.
5) Gifts and donation.
6) ATO interest charges.
7) Cost of tools, equipment, and other assets.
8) Investment income deduction etc.
Is Individual tax return stressful?
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