This month’s column will primarily focus on assisting readers who may need to lodge their first tax return because this is the first year you have earned assessable income, e.g. school leavers and tertiary students. It may also be relevant to other low income individuals, but due to space constraints, the information below does not cover the additional information relevant to seniors, pensioners and self-funded retirees. If you are in this latter category you may wish to access information relevant to your particular circumstances on www.ato.gov.au/Individuals/Tax-return/2017/Before -you-start/Do-you-need-to-lodge-a-tax-return.
1) Do I need to lodge a tax return?
Yes – if you had tax withheld from payments made to you irrespective of the amount of wage or salary income you earned, as you may be entitled to a tax refund.
Yes – if you received payments in the form of, interest, dividends or distributions from investments or from a trust or partnership and your taxable income is more than:
• $18,200 and you were 18 years or older on 30 June 2017 and you were an Australian resident for tax purposes for the full year or,
• $416 and you were under 18 years old at 30 June 2017.
Yes – if you had a reportable fringe benefits amount or a reportable employer superannuation contribution on your PAYG payment summary (previously called a group certificate).
Yes – if you were entitled to the private health insurance rebate but you did not claim your correct entitlement as a premium reduction.
Yes – if you carried on a business even if you made a loss.
Yes – if you sold property or investments resulting in a capital gain or loss.
2) Franking Credits
If you received dividends or distributions that included franking credits reflecting tax paid by the entity making the distribution and your taxable income was such that you would not otherwise be required to lodge a tax return you can claim a refund of your franking credits by downloading from the ATO website Form NAT 4105 and lodge your claim either online, by mail or simply phone 13 28 65.
3) Non-Lodgment Advice
If after reading the above you believe you are not required to lodge your 2017 personal income tax return you may wish to complete a 2017 non-lodgment advice form available on the ATO website. This will avoid receiving a lodgment demand from the ATO if you have been in receipt of assessable income or have lodged tax returns in prior years.
4) Lodging Online with myTax
If you prefer to prepare and lodge your own personal income tax return online please log into the ATO website www.ato.au/Individuals/Lodging-your-tax-return/Lodge-online/ and familiarize yourself with how to use the software and watch the demonstration video. Then you access myTax through myGov by following the menu options: Tax> Income Tax> Lodge Return>Lodge. You can lodge your tax return on your computer, smartphone or tablet.
5) myDeductions App
An excellent companion tool available on the ATO website is the myDeductions App which you can download and find more information about at www.ato.gov.au/General/Online-services/ATO-app/myDeductions/. This tool makes it easier and more convenient to keep your tax deductions and income records on your device and is ideal for individuals claiming work related expenses or business income and expenses. Best of all, you can upload your myDeductions data to prefill your tax return if you are lodging online with myTax.
6) Availability of Pre-filled information from the ATO
The ATO collects a huge amount of information relevant for completing your tax return which is available either by using myTax which the ATO automatically pre-fills for you, or through your tax agent’s access to the information via the Tax Agent’s Portal. Unless you are certain you have all the relevant documentation needed to complete your tax return, or to provide to your tax agent, it is recommended that you wait until mid-to late August before completing and lodging your tax return either through myTax or through a registered tax agent. The ATO has advised that they are unlikely to have received all of the information from providers until this time. This should then ensure the accuracy and completeness of your tax return when the prefilled information is cross checked against the records you have retained and the need to lodge an amended tax return can then be avoided.
7) When Must I Lodge My Return
Unless you are using a registered tax agent to prepare and lodge your return, you will need to lodge your return by 31st October 2017. Tax agents normally have until 15th May 2018 to complete lodging their client’s returns.
8) When Should I Use a Registered Tax Agent
- If you feel competent to use myTax software and,
- are confident of your understanding of assessable income that must be disclosed and allowable deductions that may be claimed and,
- you have adequate documentation supporting your claims and,
- your tax situation is quite straight forward,
why not give myTax a try as the ATO is endeavoring to provide more and more tools and information to assist self- preparers.
If you have doubts about your competence and /or your circumstances are more complicated, then it is recommended you seek the services of a registered tax agent who may well enlighten you as to a number of ways you can increase your tax refund or arrange your affairs so as to reduce your tax liability and of course reduce the chance of making mistakes. Tax agent’s fees are tax deductible as is the cost of visiting and communicating with your tax agent.
Your homework is to log on to the ATO website and research the information available that is relevant to your circumstances. Use the tool, “Do I need to lodge a tax return” and open up myTax through myGov and see if it is for you.
Disclaimer:
The content of this article is not intended to be used as professional advice and should not be used as such. If you have any questions you should consult a registered tax agent.
Brian Spurrell FCPA CTA, Director, Personalised Taxation & Accounting Services Pty Ltd. 0412 011 946