Are you an Australian resident and would love to know the tax-free threshold? All taxpayers who receive income are expected to pay taxes. However, the first $18,200 of your income is not taxable, which is the tax-free threshold.
As such, if your total income is less than $18,200 per year, you will be expected to pay any taxes. Any amount that is above $18,200 is taxable. To make it easier to understand, the tax-free amount is equal to:
- $1,517 per month or
- $350 a week
As soon as you are employed, you will need to fill out the Tax File Number Declaration form, where the employer will be advised if you would wish to claim the tax-free threshold. In cases where you have more than one source of income and the total is more than $18,200, you can only claim the tax-free threshold for only one job.
There are some residents who claim for tax-free threshold from all the income sources, which is a serious tax trap. At the end of the year, you will end up with tax debt, when lodging your end of year return. This is usually a problem for most people as it is determined by the ATO. Ideally, the first job, which is the highest paying one, will attract a tax-free threshold. As such, the other jobs are usually undertaken and you will have a tax debt at the end of the financial year.
Tax-free Threshold for Residents with Multiple Jobs
There are a number of possible scenarios that can happen when you have multiple jobs. You may realize that you have a lower refund or even have a tax bill when you lodge your tax returns. The possible reason for this is the fact that your employer may have withheld less tax and this causes the discrepancy in the tax return lodged. There are progressive tax rates and as such, it is advisable to see to it that the tax-free threshold is clearly defined.
In a bid to prevent such an issue from recurring in the subsequent years, you need to have a clear plan for the tax-free threshold. You should analyze your jobs and identify the one that should cover most of the tax for the year. This can be arranged with the payroll office in your company. If you are confused about this, you should talk to registered tax agents, who will help you make the right decisions. A professional tax consultant will be able to advise you on the income that you derived from every source and allow you to make the right adjustments.
Contact Accurate Business & Accounting Services for more information in regards to the tax-free threshold. We will help you determine the best course of action and ensure that you have the tax deductions done in the right way. At the end of the year, you will get the maximum refund. Call us today and let us analyze your case to help you with the proper lodge of tax returns.