Tax Return – FAQ’s
When do I need to do my tax return declaration? Which period do I need to declare it?
The Australian financial year starts on 01st July until 30th June. The tax season starts in July and you can do your tax return declaration through the MyGov until end of October. If you decide to do it with a tax agent, you can lodge your taxes until May of the following year if you do not have anything overdue with ATO.
How do taxes work for individuals in Australia?
Taxable individuals include people working for Tax File Number (TFN) and Australian Business Number (ABN) sole traders. The following below are parameters for the 2021FY:
Note: The amounts above do not include 2% of the Medicare levy.
Do I need to lodge my tax return even if I did not work a lot?
Yes, the tax return needs to be done even if you did not have any income during the financial year, for these cases ATO offers a not necessary declaration.
I have worked for a company or another ABN sole trader however, they did not ask for any of my personal information. Do I still need to declare it?
Yes, incomes from any kind of work need to be included in your tax return. If you do not have any evidence that your employer withholds taxes from your payment, the income will be declared as income on your ABN sole trader.
I have worked only as ABN sole trader during the financial year and my income was less than $18k. Do I need to do my tax return?
Yes, you do. ABN sole trader is considered a small business and because of that you need to declare your revenue regardless of the amount.
I have shares or other investments, do I need to declare this in my tax?
It depends, in Australia you pay tax on the earnings from your investments and not on the amount invested. Therefore, it is necessary to declare in your tax in cases such as dividends, capital gain on shares, and cryptocurrencies. Remember that it is always necessary to keep track of your purchases and sales (price and dates) since it can impact the calculation of your capital gain and tax.
I am leaving before July, how can I lodge my taxes? Do I have to wait until July?
You can do a procedure called early assessment where you report all your income until the date you are leaving Australia. This procedure can be done at anytime before July. The sending of the early assessment must be done through the post office, since it is a paper-based tax return and can take up to 50 business days to be processed.
Is superannuation deducted from my salary?
No, superannuation is a contribution of at least 9.5% of your gross salary made by your employer to your superfund, the information is in your payslip for illustrative purposes only.
What is Medicare?
Medicare is the department responsible for public health in Australia. During the tax reporting period, a value of 2% of gross revenue is collected from all those entitled to use. If you are on a temporary visa where you are not entitled to use it, it is necessary to apply for a Medicare letter proving your non-eligibility.
What is Medicare surcharge?
Medicare surcharge is an extra percentage charged to taxpayers who are eligible for Medicare and who earn over $90,000 if single or $180,000 if they are family.
Note: The family exemption threshold increases for those who have more than 1 child by $1,500.00 for each child.
I bought a house. What do I have to inform on my tax return?
It is only necessary to inform in your tax return the purchase of investment properties. If the purchase of the house is for the purpose of housing, it is not necessary to inform. If you bought the house with the intention of investment, but still living on the property, you do not need to declare it. The house will only need to be informed when it is available on the market for rent or etc.
I worked from home, what kind of expense can I put on my tax?
If during the financial year you needed to work from home, expenses such as internet and telephone can be claimed on the tax return. General bills will be deducted through the calculation of hours worked from home or actual space of your office. You can include on your tax return expenses such as:
- Internet and telephone – only the percentage used for work at home.
- Equipment – computers or laptops, printers, etc.
- Office supplies – printer ink, paper, pen, etc.
What expenses with my children can I claim on my tax return?
No, expenses from dependents cannot be deducted from the tax return.
Do I need to inform my partner in my declaration? Does it change anything?
Informing your partner on your tax return will only affect your Medicare calculation. If you are not eligible for Medicare, it will not make any difference to your tax return.
Can I claim vehicle expenses on my tax return?
You can deduct your car expenses if you use your car for work purposes and you are not reimbursed by your employer. You can only deduct what was spent for work purposes. There are two ways to calculate the expense:
- The cents per kilometer that would be a pre-defined ATO rate of $0.72 per kilometer run up to a maximum of 5,000 kms. You must have a diary with all your business trips, but you do not need to present invoices for your expenses.
- If you make constant use of your car for work purposes, you have the option of making the logbook. It would be a diary with ALL your trips for 12 weeks so at the end of the period is possible to measure the percentage of how much you use your car for work and personal purpose. All expenses would be considered, and the percentage used for work would be applied, however you must also have all expense invoices.
Can I claim education as a deduction on my tax return?
You can claim your self-education expenses in your tax return if the course is related to your current job. The course needs to maintain or increase your skills or help you to increase your salary and position. Only courses in your area of training are eligible, qualifying courses are not accepted. To be able to claim this expense, ATO requires a letter from the employer and invoices as proof. Follow the link below to obtain the information you need to have in your employer’s letter.
What does GST stands for?
GST is an abbreviation of “Goods and Services Tax” which will be the tax charged on sales of goods and services.
Who is required to register for GST?
Companies or ABN sole traders who have a turnover of more than $75,000 and non-profit associations with a turnover of $150,000. Exceptions to the registration requirement are those who do ride-sharing such as taxi, uber, DiDi, Ola and etc.
When do I have to declare the GST?
You will be declaring your withholding GST through the Business Activity Statement (BAS). There are 3 different calendars for your declaration which are:
- Annually – for those who have registered voluntarily and have a turnover of less than $75,000
- Monthly – if the GST turnover is greater than $20 million
- Quarterly – if the GST turnover is less than $20 million and for ABN’s used for ride-sharing.
I am an Uber Driver, what expenses can I claim?
You can claim any expenses that have GST and are linked to the infrastructure to carry out the work, such as: internet, fees paid to operators, car washing, fuel, car maintenance, accountants – tax agents, etc. Keep in mind you must keep a diary of your trips for extra documentation to receive the deduction at BAS.