A financial year covers the period from 1st July until June 30th of the following year. In Australia, to determine the amount of tax paid by individuals, the Australian Taxation Office (ATO) uses tax returns.
What is a Tax Return?
A tax return is a document that details your income and any deductions you may have so the ATO can determine your taxable income. Most individuals if they earn an income will need to lodge a tax return However if your situation determines you don’t then a different form will need to be completed.
When Do I Need to Lodge My Tax Return?
If you choose to lodge your tax return on your own as an individual, you must lodge your tax return by 31st October to the ATO. If you decide to use a tax agent, this period can be extended but to avoid penalty, you will need to arrange a meeting before 31st October.
What is Taxable Income?
The ATO according to their website, uses the formula:
Assessable Income – Tax Deductions = Taxable Income
Your assessable income is what you have earned and then if there are any tax deductions that can be subtracted from this amount, then determine the income that can be taxed.
The expenses you may have incurred to make your income, are referred to as tax deductions. The deductions you can make rely on how you make your income. If you have tax deductions that can be made means that you may have less tax to pay.
To Make Tax Season Run Smoothly…
We recommend that to make the tax season run smoothly:
- Keep detailed records: it is important that you keep records such as receipts, payment summaries and income statements.
- Claim Work-Related Expenses: Like keeping your receipts and/or tax invoices for work-related expenses like if you had to buy a computer to complete your work, this could be used as a tax deduction. Please note that the level of usage whether for part work and personal use or as just a work tool, will determine how much of a deduction can be claimed.
Seek Professional Advice: We understand that lodging a tax return can be daunting and we’re here to help make the process easier for you.
At Crest Accounting, our focus is to help our clients understand the taxation process and improve their tax position. Whether you are an individual, a small or medium business, in a partnership, a company or in a self-managed super fund, we aim to create tax strategies that minimize taxes and meet objectives. With decades of experience and a helpful attitude, we give you peace of mind that you’re in expert hands. By keeping up to date with all current legislation, Crest Accounting can help you help meet your objectives. Call (02) 4933 3466 to speak to one of our helpful team members today to enquire about our taxation services.