Individual Tax Return: Everything you need to know

Shock as the end of the financial year has crept up again, for most, the lodgement of their individual tax return can be a yearly hassle. Here’s what you need to know to ease your concerns regarding what is an individual tax return and when are individual tax returns due.

An individual tax return is a compulsory form required by the Australian Taxation Office (ATO) so that they can determine your taxable income. This form allows the ATO to assess whether the amount of tax withheld and paid throughout the financial year period is enough to cover your taxation position.

Who needs to lodge an individual tax return?

Most of the Australian population is required to lodge an individual tax return each year, although certain conditions permit you not to lodge. It’s important that if you’re unsure, you clarify with the ATO through any means possible or use the tool on the ATO website “Do I need to lodge a tax return?”.

Please find the link below:

https://www.ato.gov.au/Calculators-and-tools/Host/?anchor=DINTL&anchor=DINTL/questions#DINTL/questions

Methods of lodging an individual tax return.

Below, we will cover the many methods available for the lodgement of an individual tax return.

Computer Self Lodgement

A popular method to lodge an income tax return is using MyTax through your MyGov portal. This method requires you to log into your MyGov and connect with the ATO. Then proceed by clicking prepare, confirming details and ticking the necessary boxes that apply to you.

This method is efficient, and most of your information is already prefilled through the ATOs records from your employers. All you are required to do is confirm details and input any further income or deductions.

If you need more assistance with this method, please refer to the link below:

https://www.ato.gov.au/Individuals/Your-tax-return/How-to-lodge-your-tax-return/Lodge-your-tax-return-online-with-myTax/

Paper Self Lodgement

The traditional method of lodgement and preparation for many individuals. The paper method entails the printing and posting of a completed tax return to the ATO. This can take longer due to the details required to complete the return, including annual payment details from your employers as well as filling in your personal details every year before you begin the return.

Tax Agent

Over 74% of people still lodge a return through a tax agent or accountant, and it’s easy to understand why. Accountants and tax agents make it their goal to understand the nuances of occupation-specific deductions and assist clients with getting the most out of their taxes. Tax Agents also have quick turnaround times and provide the sound of mind as your tax is completed from the convenience of your own home or office.

When are individual tax returns due?

It’s vital to stay aware of any updates regarding the lodgement date of your individual tax return. Lodgement dates can depend on circumstances such as the date of last year’s lodgement and the outcomes of the previous year’s assessment. The best way to check the lodgement date of your return is to log in to your MyGov and check your ATO Portal.

As a rough guide, the lodgement deadline for an individual to lodge their tax return is usually the 31^st of October. Whereas, if you’re with a tax agent or accountant, this can be extended substantially.

How to prepare an individual tax return?

The most important step is to decide between the lodgement methods. Use the below as a guide or reference.

1. Prepare and sort the information required for the lodgement of your returns.
2. When preparing your return online, this information may already be prefilled depending on the method of preparation. Please review to confirm the following are correct:
   1. Your Name, Contact details and Tax File Number
   2. Bank Account Details (For any refunds)
3. Tick the boxes relevant to yourself and proceed with the preparation of the return or work out which pages manually need to be completed.
4. Fill or confirm your salary and wages are a correct indication of what you’ve earnt and had withheld throughout the year.
5. Fill in any amounts of income received that the ATO doesn’t have a record of. Common examples of this could be:
   1. Interest amounts received on Bank accounts
   2. Dividends from shares
   3. Distributions from Trusts or managed funds
   4. Supplementary income such as:
      • Rental or Business Income
   5. Capital Gains or Losses
   6. Cash received for work completed
   7. Income From Cryptocurrency
6. Check and confirm all your income for the year is accounted for and represented fairly on your income tax return under Total Income
7. Prepare your receipts and records for your deductions:
   1. As outlined above, a great indication of your deductible expense can be found in the occupation guides.
   2. Anything you claim must have been paid for by you and not have been reimbursed to you by your employer, as well as this must have sufficient relevance with your job.
   3. Ensure you put your deductions under the relevant label and for example:
      • itemise them out into different categories within each section, such as:
        D5 Other Work-Related Expenses
        Mobile Phone, Internet, and Stationery
8. Carefully fill in or tick applicable tax offsets relevant to your situation. In most cases, you should do some research on if offsets are applicable.
9. Medicare and spouse sections are straight forward, complete your details correctly, private health details need to be filled in with the details outlined by your private health provider or tick that you weren’t covered by private health. Spouse income can be worked out when they have partially completed their return.
10. Finally, check your details are correct and lodge:
    1. For online, click lodge and we recommend saving a copy of the lodged return for your records.
    2. For manual, sign the return, scan it for your own records, package it up and post the copy of your return to the address outlined on the bottom of the return.

Tax Agent Method

The Tax Agent method requires you to provide details to the Accountant. They will inform you of any further information they need and will assist you with your deductions, as well as any further queries you have.

Should you require any additional assistance please don’t hesitate to contact us.

Other Individual Tax Information & Articles:

• April 2023: No more Low and Middle-Income Tax Offset (LMITO) to lower tax bills or increase tax refunds.