How Should We File Our 2023 Tax Return?

Are you a resident or non-resident and earning money in Australia? You need to file a tax return to declare your income. A tax return covers all your income and expenses throughout a financial year (from 1 July to 30 June of the preceding year).

We are approaching tax season now, so you must be thinking about how long does it take to get a tax return in Australia. A fine of up to $1,110 may be imposed if you don’t file your tax return on time. The new financial year will begin on July 1st, 2023.

Filing a personal income tax return can be unpleasant for many people. Many people put off the process, whether they recoil at the thought of potentially paying higher taxes to the Australian Taxation Office (ATO) or find gathering the essential information daunting. But simply putting off the chore won’t make it go away, as with most things.

Generally speaking, you must pay taxes on all income you get. When you receive a salary, your employer will withhold tax and send it to the ATO on your behalf. We know it as PAY AS YOU GO (PAYG). You must pay your tax and super if you’re a self-employed contractor and use an Australian Business Number (ABN).

The ATO will evaluate your income, expenses, and deductions after filing your tax return to determine whether you’ll receive a tax refund or have to pay more. When submitting a tax return, you could have a lot of issues, like if you need to declare a deduction, whether you should file for a refund, and when can I claim tax back. Let’s start with some basic queries relating to filing a tax return.

What Do I Need To Do To File My Own Tax Return?

The first question that arises in a person’s mind who is residing in Australia is, “Do I need to file tax return”? The answer is “yes” if you are earning by whatever means, you must file a tax return. When you receive a paycheck as an employee, your employer will withhold tax and submit it to the Australian Taxation Office (ATO) on your behalf. If you work for yourself, you must set aside and pay the money.

To file a tax return for the very first, you must prepare all the information required by the ATO to be submitted. The filing of tax returns and income tax is a complex and time-consuming process. Even a minor error could result in you losing out on a refund or even incurring fines. Consider utilising a qualified tax professional when you wish to maximise your refund and reduce some of the stress associated with tax season. Here are a few methods for filing a tax return:

• Using A Tax Agent

Working with a certified and knowledgeable tax advisor is the fastest and safest approach to finishing your tax return. Tax Return Advisors are full of the expert knowledge needed to help you maximize your return and can support you with filing claims and organizing your assets.

Using a tax agent makes filing taxes simpler, gives you access to expert tax counsel, gives you more time to file your return, and gives you peace of mind. He can also assist you with an appropriate record-keeping procedure to maximise your claims and give advice on the tax repercussions of your future operations.

• myTax

Using myTax is a website on ATO’s online portal to file taxes online. You can lodge a tax return using myTax on a computer, smartphone, or tablet. Although using myTax is a simple and quick process, it does demand a high level of organization, and some understanding of your responsibilities will depend on your sources of income.

To file my taxes online with myTax is most demanding, and using the method of tax return filing. You will not receive a confirmation of your eligibility for the deductions you claim before submitting if you decide to handle your taxes separately. Incorrect or fraudulent claims may result in significant delays in your refund process.

How To Add Your Tax Deduction At myTax?

On My tax website, while filing the tax return, you will find an option as myDeductions where you can upload all your information regarding the deductions. All of your general and work-related expenses, as well as your revenue from business endeavors and related tariffs, can be tracked using the my Deductions tool throughout the year.

The professionals providing tax-related services will provide you with the best tax deduction tips. And you can claim the highest deductions and reduce your ultimate tax liability.

Making a claim or deduction on your income?

You must know what expenses you can deduct on your tax return and the documentation required to support your claim. You must declare your income for claim tax deduction to reduce your tax liability. Generally, the following types of income an individual can articulate to claim deductions on it-

• Salary or employment earnings received for the financial year
• Retirement benefits and annuities
• Insurance payments
• Foreign income earned outside the boundaries of Australia
• Income from riding applications such as uber or ola
• Investment income like interest, dividends on shares, capital gains, or rent
• Income from partnerships, trusts, or businesses.

Are Tax Deductions Required To Be Declared?

Yes, You must claim tax deductions to lower your taxable income and earn a refund. Companies, sole proprietors, and individuals are entitled to claim a deduction for investments or work-related expenses.

Tax deductions for the majority of people revolve around purchasing a life insurance policy or investing in the Public Provident Fund. Although many taxpayers are eligible for additional deductions, they often opt not to take advantage of them because they don’t know about them. For example, many taxpayers have health insurance and are unaware they can qualify for a tax exemption on up to $15,000 of their health insurance monthly payments under Section 80 D.

Can I Claim Certain Tax Deductions?

Because many people may be heedless of these deductions and how to use them to lower their tax obligations, claiming a tax deduction is not easy for an individual. You should know when to claim tax deductions to get more cash back.

The problem is what to claim and how to claim it can be difficult. When an individual considers how frequently the ATO changes its regulations, restrictions, and rates. Therefore, it is obvious why people regularly categorise tax deductions as “too complicated.”

In general, you should think about the following when identifying expenses that can qualify as tax deductions:

• Was the cost directly connected to your job or other sources of income?
• Did you spend the money, and your employer didn’t pay you for it?
• Do you have a formal record of the expense, such as a bank statement or receipt?

You must adhere to the following three criteria to deduct expenses linked to your job:

• You must have used the funds and don’t pay them back.
• The costs must be directly related to bringing in money.
• You must have documentation to back it up (usually a receipt).
• You list them under “Work-Related Expenses” on your tax return.

If you use the item for professional and personal reasons both, only the work-related use is eligible for a deduction. You cannot claim a deduction if your employer covers these expenses or reimburses you for any of them.

Also Read: Business Tax Planning Tips To Maximize Your Return