Doing your first tax return can be daunting. Here are some helpful tips to get you through it.
If you are earning or will earn more than $20,542 this year, a tax return will need to be lodged. You should also lodge a tax return if you earned less than that amount, and your employer took tax out of your pay as you may receive that tax back.
The first step is working out where all the income earned has come from. Most of your income is automatically uploaded to the ATO, be it from your wage or via interest from a bank account. Income that you might have received but that has not been sent to the ATO could include tips, income earned while working under an ABN (think gig economy) or distributions from a family trust. These amounts will need to be worked out and included in your tax return.
You will be entitled to certain tax deductions as well for things such as:
· Uniforms and protective clothing
· Certain travel expenses between workplaces (but not from home to work)
· If an apprentice or trainee, any tools or equipment that you may have had to buy out of pocket
· Union fees
· Any donations you make
· Costs incurred while educating yourself (courses, seminars, training, etc.)
It is important to understand that, when claiming something as a tax deduction, you don't receive all the money back that you spent on the item. You will instead get the tax rate of your earning back on the total cost, which can be quite low for people entering the workforce.
If your income is above a certain threshold, you may also have to make HELP or HECS debt repayments which could impact what you get back from your return.
Now many also be the time to check on your superannuation. If you are full time or earn more than $450 per month as a casual employee, your employer must pay money into your super. It might not be the most pressing concern in your thoughts but acting now with regard to your super could have long term benefits. Make sure that you are receiving superannuation and that it is placed in the most suitable portfolio for you.