Tax tips for new taxpayers

Lodge a return

If you're preparing and lodging your own tax return, you have until Monday 1 November to submit it. If you lodge online from August, a lot of your information will be pre-filled in your tax return. This will save you time and mean you'll be less likely to leave something out.

Most registered tax agents have a special lodgment program and can lodge tax returns for their clients later than the deadline. If you're using a tax agent for the first time, or using a different tax agent, you need to contact them before 31 October to take advantage of their lodgment program due dates.

If you haven't lodged your 2020 or earlier tax returns yet, it's important to get up to date as soon as possible to avoid penalties.

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Get your refund

If your total taxable income for the year ended 30 June 2021 is below the tax-free threshold of $18,200, you may not need to lodge an income tax return. Due to the low-income tax offset and low-and-middle income tax offset, the effective tax-free threshold is $23,227.

However, if you have had tax withheld from your income during the year and are under the threshold, you must lodge a tax return to have these amounts refunded to you.

Typical examples of situations where tax may have been withheld are pay as you go (PAYG) withholding amounts from your salary, withholding from bank interest income during the year where you have not provided your tax file number (TFN) to your bank, or if you have received franked dividends or distributions from a family trust where you have not previously provided your TFN to the trustee.

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Set up your MyGov account

If you haven’t already, you should set up your myGov account. This is a secure way to access government services online with one login and one password. You can then link government services, including the ATO, to your account. If you choose to lodge yourself, you can also access myTax through your myGov account.

Most employers will send your income statement (formerly known as payment summaries) via myGov. You will also be able to see your superannuation information there as well. If you use a tax agent, they’ll be able to access this information for you.

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Identify all your assessable income

To determine whether you need to lodge a tax return, identify all the sources of income you received during the year that is assessable for income tax purposes. For many taxpayers, this information will be contained on the income statement provided by your employer and pre-filled on your tax return.

These include:

  • income from work as an employee or a contractor, including any allowances, tips or gratuities received
  • investment income, such as any bank interest or dividends on shares received
  • capital gains or losses on cryptocurrency and other investments
  • certain government payments received such as Youth Allowance, ABSTUDY, living allowance and Austudy
  • some non-government scholarships, grants and awards
  • distributions from a family trust or partnership.

If you get paid in cash you still need to declare this and any tips, as income on your tax return. Check that your pay slip or income statement shows all your earnings and the amount of tax taken out, as well as superannuation payments if you’re entitled.

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Understand HELP debts

Higher Education Loan Program (HELP) debt repayments are not tax deductible.

If you have a HELP debt, repayments begin once your salary exceeds $46,620 for 2020–21. The specific amount required to be repaid will depend on a range of factors, including your taxable income.

If you’re working and you’ve filled out a tax file number (TFN) declaration form indicating you have a HELP debt, your employer will withhold additional tax from your salary to assist you to recover your debt. The ATO will automatically calculate what your HELP repayment is for the year once you lodge your tax return.

If you don’t notify your employer of your HELP debt through the TFN declaration, your employer will not withhold the additional tax and you may find yourself facing an unexpected hefty tax bill.

People who are overseas with a HELP debt are required to make repayments based on their worldwide income. There are notification, myGov registration and income reporting requirements.

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Special rules for those under 18

Certain types of income earned by minors under the age of 18 may be taxed at a higher rate.. The types of income that may be taxed differently include:

  • income received as a beneficiary from a trust
  • interest, dividends, rent and royalties.

Minors will also not be able to typically claim the low-income tax offset to reduce their tax liability on such income.

Ordinary marginal tax rates will apply to other income (known as ‘excepted income’) earnedby a minor aged under 18, such as:

  • employment or business income
  • taxable government payments such as Youth Allowance
  • income from a deceased estate
  • income from property transferred to a minor as a result of a person’s death or a family breakdown and/or
  • net capital gains on a disposal of investments.

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Tax Help program

The Tax Help program is available to eligible recipients from July to October in all capital cities and many regional areas across Australia. Tax Help is a network of ATO-trained and accredited community volunteers who provide a free and confidential service to help people complete their tax returns online using myTax.

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Reporting illegal and concerning behaviours

You can report illegal activity and concerning behaviours to the ATO, for example:

  • JobKeeper fraud
  • demanding or paying for work cash in hand to avoid obligations
  • underpayment of wages
  • bypassing visa restrictions and visa fraud
  • identity fraud
  • tax fraud
  • not paying correct super to employees
  • creating false or fraudulent documents or records.

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