GuidesTax Time Guide
Tax Time & What the End of Financial Year Means for You
Follow our tax return checklist and guide around the end of the financial year and you’ll be done in no time.
12 min read
If you’ve never done a tax return in Australia before and don’t follow the proper steps, it can be tedious and time-consuming. But it doesn’t need to be. Follow our tax return checklist and guide around the end of the financial year and you’ll be done in no time.
UPDATED ON
Feb 20, 2021
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What is EOFY/Tax Time?
Despite what you may have heard, tax time is not as scary or complicated as it sounds. It's a yearly report of your income and a chance for you to claim deductions. In a nutshell, tax time is when you’re required to submit a tax return form to the Australian Taxation Office (ATO). The ATO then use this form to work out how much tax you owe or are owed by the government.
The main date you need to remember is October 31. This is your tax return deadline; it’s the same date every year. Tax time begins in July, so you have approximately four months to prepare and lodge your tax return. You can do your tax return online on myGov, or have a tax agent do it for you.
What do I need to know about tax returns in Australia?
Whether it’s your first time doing a tax return or you’ve lost count, here are the answers to the questions most of us forget every year.
What is the tax-free threshold for 2021?
The tax-free threshold for 2021 is $18,200. It’s worth noting that this is the same for overdue tax returns from 2020, 2019 and 2018. Wondering how to claim the tax-free threshold? Well if you earned $18,200 or less between 1 July 2020 and 30 June 2021, you generally won’t pay income tax. This also means that you don’t need to worry about a tax return lodge, but you will need to send a ‘non-lodgement advice’ to the ATO. The quickest way to do this is online through myGov.
When is the end of the financial year?
The end of the financial year in Australia is 30 June, with the next financial year beginning on 1 July. So when you do your tax return for 2021, you’re taking into account your earnings from 1 July 2020 to 30 June 2021. This is different from your tax return deadline, which is 31 October.
When is my tax return due?
Here are the 4 main dates and deadlines that'll keep you in the know.
- 30 June 2021: The official end of the 2021 fiscal year.
- 7 July 2021: This is when the Australian Taxation Office (ATO) begins to process tax returns from the fiscal year just ended.
- 14 July 2021: Unless you're self-employed, this is when you'll receive an annual Pay As You Go (PAYG) payment summary from your employer. This provides you with some of the information you'll need for submitting your tax return. Employers need to disclose your PAYG information to the ATO by 14 August at the latest.
- 31 October 2021: This is your tax time deadline for the fiscal year.
How do I lodge my tax return?
You can lodge your tax return online yourself or through a registered tax agent. To lodge your tax return, you’ll need a myGov account. If you don’t have a myGov account, you can create one online and link your account to the ATO. To do this, you’ll need your Tax File Number (TFN), name and date of birth. To verify your account, you can use the following information:
- A recent PAYG payment summary
- A superannuation statement less than 5 years old
- A dividends statement less than 2 years old
- A Centrelink payment summary less than 2 years old
- A notice of assessment less than 5 years old
- Your bank account details (BSB, account number, your name and bank name)
Tax return checklist
Our tax return checklist outlines the information you will likely need to lodge your tax return in Australia, and where you can find all the necessary information. Once you have all this information, you can submit your tax return online.
Income & Earnings
Payment summaries (PAYG)
Your employer(s) should send you a PAYG.
Statements on earnings from other investments
For example, properties, managed funds etc. Accessible from online accounts or by requesting information from the funds themselves.
Information on foreign earnings
Any earnings made from overseas need to be included.
Redundancy, income protection and work cover payments
If you’ve received an income for being off work, you usually need to provide evidence to the ATO. Speak to your insurer or employer for information.
Interest earnings
Contact your bank or fund for a statement.
Your spouse’s earnings
Payment summaries from their employer.
Personal Information
Tax File Number (TFN)
Found on your payment summary (provided by your employer) or income tax notice of assessment.
Bank Details
BSB, account number, account holder name and bank name. Found on a bank statement, online account or contact your local branch.
Medical Expenses
Your medicare number, found on your medicare card.
Last year’s Income Tax Assessment
Your notice of assessment is sent to your myGov Inbox. Otherwise, call 13 28 61 to get a copy.
Deductibles
Receipts for work-related expenses.
Receipts for donations and gifts.
Receipts for medical expenses exceeding $2,120.
Contributions to super (if you are self-employed).
Income protection insurance premiums are tax-deductible if bought outside of superannuation, so attach your income protection bills.
If you use a tax accountant, provide statements, as their fees are tax-deductible.
Looking to consolidate your debts?
What is a tax refund and how is it calculated?
A tax refund is the money you receive from the government if you’ve paid too much tax throughout the financial year, or have paid for other expenses that qualify as a tax deduction. In other words, it’s the part where you can get some money back.
So how is a tax refund for individuals calculated? The amount of tax you pay depends on your earnings for the entire financial year. Ordinarily, you don’t need to worry too much about the tax you pay if your salary is the same for the entire financial year and you don’t have any other forms of income. But if your income increases over the course of the year, or you’ve gained earnings elsewhere (such as an investment property) you need to declare them, which might move you up a tax bracket. This is how many of us end up owing tax come to the end of the financial year.
If for any reason you’ve stopped working, taken a pay cut or become unemployed, you might be eligible for a tax refund. For an idea of how much tax you should be paying and whether or not you’re eligible for a tax refund, check out the table below.
| Income Tax Brackets | Tax You'll Pay |
|---|---|
| 0 – $18,200 | $0 |
| $18,201 – $45,000 | 19c for each $1 over $18,200 |
| $45,001 – $120,000 | $5,092 plus 32.5 cents for each $1 over $45,000 |
| $120,001 – $180,000 | $29,467 plus 37 cents for each $1 over $120,000 |
| $180,001 and over | $51,667 plus 45 cents for each $1 over $180,000 |
It's worth noting that if you're not a resident, you'll be taxed at a higher rate and will still have to pay tax if you earn less than $18,200 a year.
Whether you are expecting a refund or to pay more, the process is the same. Lodge your tax return by following the steps contained in the tax checklist above. You should either receive your refund within two weeks of lodging your tax return or be informed of the amount you owe.
Tax deductions & what can you claim back
Now for the good bit: the money you can get back. You can claim tax deductions for heaps of expenses you’ve forked out for throughout the year. The main ones are listed below.
Work-related expenses
Do you ever pay for work-related expenses? If so, keep a diary and keep your receipts. The majority of it can be claimed back come tax time. Work-related expenses include but are not limited to:
- Vehicle and travel expenses
- Clothing, laundry and dry-cleaning expenses
- Home office expenses
- Tools and other work-related equipment
- Self-education expenses
Keep in mind that if the expense was for both work and private purposes, you can only claim a deduction for the work-related portion. If your employer has already reimbursed you, then you won’t be entitled to a tax refund.
Other Tax Deductions you can claim
Aside from your income and work-related expenses, other tax deductions can include:
- Certain tax offsets and government rebates
- Medical expenses
- Tax accountant fees
- Gifts and donations
- Interest charged by the ATO
- Interest, dividend and other investment income deductions
- Super contributions if you’re self-employed
Should you use a tax accountant?
This really depends on how confident you are with lodging your own tax return. If you’re currently still a little confused, then it might be worth considering a tax agent. But if you’re not sure a tax accountant is worth it, consider the following pros and cons.
Advantages
Disadvantages
Their fee is tax-deductible
Using a tax agent is completely tax-deductible, so you generally don’t need to worry about it costing you a lot.
Tax returns can be pretty straightforward
If you only have one income, few items to claim and good bookkeeping, lodging a tax return can be fairly quick and easy.
Claim more deductions
Tax agents are professionals; they know exactly what you can and can’t claim for so they’ll be able to maximise the amount you’re entitled to.
The ATO has important information already
The ATO has a lot of data it pre-fills into your return so some of the work is done for you and reduces your chances of making a mistake.
Correct claims
If you make a mistake and don’t claim your deductions correctly, the ATO won’t hesitate to fine you. Tax agents can provide peace of mind, so you don’t need to sweat the little stuff come tax time.
The ATO has important information already
The ATO has a lot of data it pre-fills into your return so some of the work is done for you and reduces your chances of making a mistake.
Time-consuming
Life’s busy and many of us simply don’t want to spend our free time calculating things like home office expenses. If you do it yourself, you’ll need to keep track of this information throughout the year. With a tax agent, the work is done for you.
Frequently Asked Questions
What is a tax return?
If you work, a tax return is something you need to send to the Australian Tax Office (ATO) each year. Your tax return consists of all the income you've earned throughout the financial year, which begins July 1 and ends June 30. It’s essentially an annual assessment to ensure that you’ve paid the correct amount of tax.
How do I end up owing tax?
There are a few reasons you might end up owing tax. It all comes down to how much you earn throughout the year, and what tax bracket you fall into. You might end up owing tax if you have more than one taxable income. For instance, if you have an investment property, as well as an income, you will probably end up owing more tax by the end of the financial year.
How do I get a tax refund?
If you've paid more tax than you needed to, or if there are some tax deductions you are entitled to, you should get this money back. All you need to do is submit your tax return correctly, and the amount you are entitled to will be refunded into your bank account.
Important: This page provides general information only and does not take into account your individual objectives, financial situation or needs. You should seek independent, professional tax advice before making any decision in relation to the information presented above. The Australian Taxation Office also has resources available at www.ato.gov.au/Individuals. SocietyOne is not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser in relation to any liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.