It’s now officially tax time, and all across the country accountants are hard at work churning out returns for hard working Australians. But if it’s your first time lodging a return, or you don’t fully understand the process, our Coffs Harbour Branch Manager Derek Lodge has some timely advice.
If 2014 will be your first time lodging a tax return, you might have some idea of what you need to do, or you may be totally clueless. Either way, your tax return is important, so it’s never a bad idea to improve your understanding.
There’s no need to be daunted – we've taken some of the most commonly asked questions when it comes to tax time for individuals, and answered them as simply as we can.
Q: Do I need to lodge a tax return in 2014?
A: If you were employed and paid tax during the period 1 July, 2013 and 30 June, 2014, then yes, you need to lodge a return. It’s probably a good idea not to put it off either, as if you forget to lodge a return you may incur a fine and have to pay interest on any tax you owe.
Q: What does it mean to lodge a return?
A: Basically, you’re letting the Australian Tax Office know how much tax you've paid, how much you earned and what deductions you are claiming from the last financial year.
Q: How do I lodge a return?
A: You have two options, you can lodge a return yourself, or defer it to a professional like an accountant or tax agent. If your tax situation over the past year is quite simple and you know all your deductions, you can submit a return online using e-tax, or send your tax return to the ATO in the post.
If you've been with a few employers in the past year, you have investments or aren't sure of all your deductions, best to see an expert, who’s fees will be tax deductible as part of your return next year.
Q: What will I need to lodge my return?
A: You’ll need the following to lodge your return:
- Your tax file number
- Summaries from your employer stating how much you earned
- Summaries of any interest you may have earned this year (available through The Greater’s Internet Banking– find out how to register here.)
- If you plan on claiming any deductions, you’ll need receipts or tax invoices for proof of purchase
Q: What sort of things can I claim as deductions?
A: In a nutshell, you can claim most things you need for work that you've paid for out of pocket. These can include:
- If you’re currently studying or training, you can claim expenses for self-education
- If you work from home, you can claim expenses for your home office
- You can claim uniform expenses if you’re required to wear one
- If you have to travel or use your vehicle for work, you can claim these expenses back as well.
For a full list of deductions, it’s a great idea to check out the ATO website.
Q: Why do I get money back or have to repay once I've lodged my return?
A: If you are self-employed, this won’t be an issue for you. For the majority of us though, your tax is paid using the Pay As You Go (PAYG) method, meaning your employer deducts a little tax out of each and every pay. However, this system isn't always 100% accurate, and so if it’s found that you've paid too much tax you’ll get a refund, and if you haven’t paid enough tax you’ll need to pay more.
Once you've lodged your tax return, if you think you could do with a little help managing your finances, it might be a good idea to meet with a Financial Planner.
Do you have a question about your tax return we haven’t answered? Leave it in the comments below and we’ll answer it for you.