Are You Doing Tax Returns for the first time? The whole process of doing tax returns can be complex and confusing if you are lodging it for the first time. 

In this article we look at various tax issues that you might face when you first start work as an employee.

When you finish your university or work while you are still studying or when you arrive in Australia for the first time, there are lots of things to think about. You need to be aware of your tax responsibilities in addition to settling into your new job. 

When you become an employee your employer is responsible for deducting income tax and Superannuation contribution  from your salary before you receive it. This system is called Pay As You Go (PAYG). Your employeer provides the Payment Summary or some people call it Group Certificate which will have total income and tax withheld. You will need this document when you lodge tax return. 

Keeping the record of work related expenses is crucial if you want to claim as deduction on your tax returns. You need to provide the evidence of all the expenses if you are asked by ATO. 

What is Tax-free threshold?

According to ATO “If you’re an Australian resident for tax purposes, the first $18,200 of your yearly income isn’t taxed. This is called the tax-free threshold. You can claim the tax-free threshold to reduce the amount of tax that is withheld from your pay during the year”. You can find more about tax free threshold at Australia Taxation Office (ATO) official website. 

What is the rate of Tax on my income?

According to ATO:

Resident tax rates 2019–20
Taxable income Tax on this income
0 – $18,200 Nil
$18,201 – $37,000 19c for each $1 over $18,200
$37,001 – $90,000 $3,572 plus 32.5c for each $1 over $37,000
$90,001 – $180,000 $20,797 plus 37c for each $1 over $90,000
$180,001 and over $54,097 plus 45c for each $1 over $180,000

The above rates do not include the Medicare levy of 2%.

The rate is different for businesses. 

When is the deadlines for lodging tax return? 

31 October of each year is deadline for lodging tax return. However, if you are lodging with registered tax agent is 15 May of the following year. 

Will there be any penalty for not lodging tax return or lodging after deadline?

ATO can issue penalty for not lodging or lodging after deadline. However, the actual penalty can vary to individuals to individuals depending upon their situations. 

What is the best to file tax return for first time lodgers?

Tax returns can be lodged in different way. You can file your tax returns via official website of ATO. However, for the first time lodger, it is highly recommended to get service from registered tax agent. 

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