Tips to lodge first tax return

This guide will walk you through the process, give you some tips and tricks, and answer some frequently asked questions and concerns regarding the big scary ‘T’ word.

Tax season in Australia opens July 1 and ends on October 31, that is the period of time that people who owe tax or are owed tax are required to lodge a tax return form with the ATO either online, through an agent, or by paper.

Failure to lodge a tax return form in that period can result in a penalty for every 28 days the form is not lodged. That is why it is so important to get on top of your tax this season.

Getting started

So, before you venture off into the unknown, you need to know whether you actually need to lodge a tax return. The main way of figuring out whether you have to lodge a tax return is knowing what threshold you’re situated in.

What is a ‘threshold’? A threshold is the category that the government places to sort the amount of tax that people pay according to how much they make.

For example, the highest threshold is if a person makes over $190,001 per year, they will pay $51,638 in tax for that year plus 45¢ for each $1 over $190,000.

On the flip side, if you make under $18,200 in income per year, you do not need to pay any tax; therefore you do not need to lodge a tax return.

To check out how much tax you pay per year and figure out what threshold you sit in, check out the ATO website.

The nitty-gritty of tax lodging

So, now that you’ve figured out that you do need to lodge a tax return – what now? Well, the ATO has made it easier for people to lodge their tax compared to years past.

Gone are the days of pulling boxes of kept receipts out of the cupboard and spending hours shuffling through papers, now you can do it all online through the ATO’s tax system, myTax.

But of course, if you still wish to shuffle through receipts, you can still lodge a paper form, or just completely hand the duty off and complete your tax returns through a registered tax agent.

For online, to file a tax return, you need to have a myGov account; otherwise you will not be able to go forth with this process.

After you make an account, the ATO has made it quite easy to lodge a tax return.

First you need to confirm your contact and financial institution details, to make sure that any tax you may be owed goes straight into your pocket and not anyone else’s.

After that all important step, the real work begins. MyTax will ask you to personalise your tax by checking answer boxes to questions relating to your financial status: questions such as whether you are an Australian citizen or have had a spouse in the last year.

It will also ask you to state how much income you have made, if you have made any investments, have any outstanding government payments, or whether you have any deductions ... more on deductions later.

You may find that some checkboxes have already been checked, or details have already been filled out. This isn’t your computer reading your mind, this just means that your employer or bank is three steps ahead of you.

That information from your employer or bank is usually available by the end of July, which is why the ATO recommends you lodge your tax returns around that time.

However, if you need to lodge before the end of July, there is a section where you can add any missing dividends.

So after 10 minutes of mouse clicking, you’ll find yourself at the end of your tax return journey, and myTax will provide you with a handy estimate of either how much you will receive back from your tax lodge, or how much you may owe in tax.

If you are receiving a tax return payment (lucky you), the ATO website said the refund would generally be in your account two weeks from the time you submitted the form online.

The time varies if you decided to fax a paper lodge, or if you went through a third-party agent instead.

What is a deduction?

Now, back to that word – deduction. A deduction is money that you can claim that you spent in the past year for a work-related expense.

For example, if you use your personal phone for work-related calls — you could receive money back on your phone bill for the time per month that you spent making work related phone calls.

Or, if you use your personal car to drive to locations for work, you can claim the money you spent on petrol for how many kilometres you drove while working.

Even small things, such as if you work from home, you can claim on electricity or gas expenses for the hours that you work from home because those amenities are essential to you getting your work done.

You cannot, however, claim a deduction on expenses where your employer has already reimbursed you for the cost, or items that your employer has already provided you with.

An extensive list of what you can claim as a deduction in your tax returns is listed on the ATO website, so have a look if you’re not sure.

You will need to keep a record to show that you incurred the expense, and you can do so by using the myDeductions tool in the ATO app.

However, if you have not added these expenses before tax time, you can add these records while lodging with myTax.

And that is the basic run down of how to lodge your very first tax return.

If you need any assistance with tax, there is a free service provided by community volunteers that help people earning $60,000 or less to prepare their tax returns, and this can be accessed through online, by phone, or in person at the Tax Help centre.

Or if you are lucky enough, a family member or friend can give a helping hand. Or maybe, just maybe, I have inspired you to lend a helping hand now that you know all there is to know about this year’s tax return season.

For more information relating to tax and how to lodge your tax return, visit the ATO website