The time of the year for lodging tax return is once again approaching. Most people need to lodge their tax return for the 2013/2014 period by 31 October 2014, but those who lodge through a tax agent may be able to lodge later. If you are lodging your first tax return, these insights will guide you through the process.
Options for lodgement
The Australian Tax Office (ATO) offers a few different ways for lodging a tax return. Tax returns can be lodged via paper and mail, online, or through a registered tax agent.
If you are lodging by paper, complete the ATO form Tax return for individuals and mail it to the ATO address provided. If you are lodging online, you can use the ATO software program e-tax to complete and lodge your return. If you are having an accountant prepare your return, your accountant will submit the return on your behalf.
Receipt and information
You will need some basic information and documents to start preparing your tax return. In addition to your tax file number and electronic funds transfer details, you will need any payment summaries (such as a summary of payments from an employer), receipts for allowable deductions, and financial records for the past year. People who have used e-tax will be able to use the pre-filling option provided in the e-tax program.
Calculate deductions
Take time to review your expenses for allowable deductions so that you can minimise the amount of tax you are required to pay. For example, if you travel by car for work, travel for work, or wear a uniform for work, you may be able to claim the costs associated with these in your tax return.
Other work-related deductions that you may be able to claim include expenses that are directly related to your work or assets purchased for use in producing your assessable income. Other deductions to consider include interest and dividend deductions (expenses incurred to produce interest or dividend income), donations, and costs of managing tax affairs. If you own an investment property, you may be able to reduce your tax bill through negative gearing.
Consult an accountant
Tax laws and regulations change from year to year, so if you have any doubts, consult your accountant for more information. Your accountant can provide you with useful information about reducing your tax bill and maximising your allowable deductions. Note that if your tax affairs are fairly simple and you fall under a low-income bracket, you may be eligible for the ATO’s Tax Help program, a volunteer-based program that provides free tax advice to those that are eligible.
Refunds or payments
Depending on your income and deductions for the year, you may be required to make a payment or you may receive a refund from the ATO. In some cases you will neither make a payment nor receive a refund. If you use e-tax, you may receive a refund within 12 business days of lodgement. Refunds for paper lodgements are usually issued within 50 days of lodgement. If you need to pay more tax to the ATO, you will be notified when and how to make that payment.
