Category: Tax Tips | Blog

Let our team provide you with tax tips (and even a few tricks) that will get you through the tax season this year. We’ve got you covered whether you want your refund faster or prefer to spend less. Tax lodging doesn’t need to be stressful. With E-Lodge, you can lodge your tax return quickly and easily then get on with your life.

Questions? Leave us a blog comment or contact our tax team Monday-Friday!

Archive for the Tax Tips | Blog category

Backpacker’s Guide to Australian Tax

You’re a backpacker. That puts you somewhere between a tourist and a…resident?

Actually, yes. The Australian Tax Office may consider you an Australian resident for tax purposes under certain circumstances. As a backpacker, there are some other things you should know as well that could affect your tax return. We know you’re out and about so let’s not waste time getting down to the most frequently asked questions.

 

Are you a resident for tax purposes?

This sounds like a trick question. You don’t have a permanent residence here. Your family doesn’t necessarily live here. You left your dog with your mom when you came here. However, when it comes to taxes, residency is based on what you do while you’re touring the country. As a resident, you are able to lodge a tax return and claim tax back. If you are deemed a nonresident, then you are not eligible for a refund.

Generally speaking, the ATO considers you a resident for tax purposes if ANY of the following applies:

  • You have always lived in Australia.
  • You moved to Australia and live here permanently.
  • You have been in Australia for at least six months, and for most of the time, you have been working the same job and living at the same place.
  • You have been in Australia for more than half of the financial year, unless your usual home is overseas and you do not intend to live in Australia.

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Australian Wage Subsidy Programs and Your Tax Return

Sometimes the only thing missing between two end pieces is one middle piece.

That’s why the Australian government has decided to act as the middleman between job seekers and small business employers.

Getting a job is difficult enough imagine trying to get your hands on a gig when you’re not the classic candidate. Many Australians are in the same boat, and this boat is getting smaller by the day (and by the resume). This is where wage subsidy programs come in.

 

What are wage subsidy programs?

These programs are, most literally, payments made to employers to encourage them to hire job seekers who may otherwise be overlooked as candidates. The big-picture goal is to create more jobs in Australia and boost the economy overall.

These payments are intended to lessen the burden of wage and training costs and are paid to employers based on hours worked by qualifying employees.

 

Who qualifies as an eligible employer?

To become a participating employer, the business must:

  1. Be a legal entity
  2. Be registered, with an Australian Business Number
  3. Not be a part of an Australian, State or Territory government agency
  4. Not have previously received a wage subsidy payment of the same type for the same job seeker

 

Who qualifies as an eligible job seeker?

Since these programs are powered by employment services providers, those looking to be employed must be active with one of the following:

Typical contenders for employment are those over 50 years old or under 30 years old, parents, indigenous job seekers, disabled persons, or those who have been unemployed long-term. Those that fall into one of these categories and also qualify for the position at hand must be considered along with other qualifying applicants.

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Income to Declare on your Tax Return

They say that money makes the world go ‘round. Are you reporting all of yours?

If you work (and even sometimes if you don’t), you lodge a tax return. On this tax return, the ATO requires you to declare your income. And you do. But are you sure you’re declaring all that you should be? It’s easy to miss a number or two. To help make sure you don’t, we’ve compiled a list of all types of income that should be declared on your tax return. Let’s take a look.

 

Employment Income to Declare

This is simply the money you earn from working. You’ll need to report this income whether you are a part time or full time employee. This type of income includes all of the following:

  • Salary and wages which include your normal pay, commissions, parental leave, etc.
  • Allowances such as car, travel, clothing, jury attendance fees, etc.
  • Lump sum payments which include payments when you leave a job and payments made in arrears for prior income years.
  • Fringe benefits such as a low-cost loan or work car for private use provided by your employer.
  • Super contributions that are made on your behalf by your employer.

 

Investment Income to Declare

Investments are important, not to mention expensive. You don’t want to leave these in the dust when preparing your tax return. These 5 types should be declared:

  1. Interest. Interest typically accrues on financial accounts, term deposits and foreign sources of income.
  2. Dividends. These are paid to you as money, shares, and other property. A company issuing shares to you will inform you of whether the issue is considered a dividend or not.
  3. Rent. This is to include the full amount of any rent and rent-related payments that you become entitled to or have received. That being said, you cannot declare defaulted rent unless it is in the form of an insurance payout or rental bond money.
  4. Managed investment funds. This would be any income or credits you received from an investment product.
  5. Capital gains. This amount is the difference between how much you paid for an asset and how much you sold it for.

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Can I Claim the Tax-Free Threshold at Two Jobs?

Over the past decade or so, we’ve seen shifts in the workplace. One of these shifts is an increase in multiple-jobholders.  

It’s no longer odd to see a father at home with the kids on a Monday afternoon, a woman owning a billion-dollar company, or people (male or female) working for more than one employer at a time. No matter what the job situation may be, we all have one thing in common that we need to prepare for; taxes.

The ATO has created an income limit known as the tax-free threshold. This allows Australian workers to not be taxed on income earned up to a certain point. That limit is $18,200.

So, how do you claim this tax-free threshold at two jobs? Well, it depends.

How much of an income are you earning?

The ATO typically allows you to only claim the tax-free threshold from your primary source of income, or in other words, the job that earns you the higher salary.

If you have a secondary job that earns you a bit less income, that employer will withhold tax at the higher, ‘no tax-free threshold’ rate.

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How to Lodge a 2015 Tax Return after the Tax Deadline

Wake up and smell the coffee. You’ve missed the 2015 tax return deadline. 

It happens to the best of us! Remember our former prime minister, Paul Keating, a few years back?

So now what? First, it may not be the smartest decision to keep putting it off. If you owe money to the ATO, you’ll want to lodge your 2015 tax return before waiting for a personal invitation. That’s because once the ATO reaches out to you, your chance of being hit with a penalty fee increases.

 

How the late lodgement penalty works

If you lodge your tax return after the deadline, the penalty fees increase by $170 every 28 days. This accumulation begins 1 November. To put that into perspective for you, here is a breakdown of how quickly these fees add up:

 

# Days Past Deadline

Amount Owed in Penalty Fees *

1-28

$170
29-56

$340

57-84

$510

85-112

$680

113 and up

$850

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Leaving Australia? How to Lodge Your Tax Return Early

Your tax return is the furthest thought from your mind while trying to hit every destination on your Oz holiday bucket list.

You’ve been on Cloud 9 for the past several months travelling through the wonderful world of Oz. Now your time as an Aussie has come to an end and you’re faced with the bittersweet farewell to new friends and Tim-Tams. Oh, but wait! Don’t forget your tax return. If you are leaving Australia before the end of the income year (30 June), you may be able to lodge early (and maybe even claim your refund before hopping on your flight out.

Read on to see if you qualify to lodge before 1 July.

 

What are the eligibility requirements?

Whether you are a foreign or Australian resident for tax purposes, you may qualify to lodge your tax return early. The ATO will accept early lodgement for individuals before the end of the income year if you are:

a foreign resident for tax purposes and you:

  • are leaving Australia permanently, and
  • will no longer receive Australian-sourced income (other than interest, dividend and royalty income)

OR

an Australian resident for tax purposes and you:

  • are leaving Australia permanently,
  • are ceasing to be an Australian resident for tax purposes, and
  • will no longer receive Australian-sourced income (other than interest, dividend and royalty income).

 

Still earning an Australian income or plan to move back?

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Claiming Newstart Allowance & 6 Other Job Search Tips

Finding a new job can be time-consuming and stressful. We can help!

Job hunting? You may have emailed your resume to countless employers, completed multiple applications, and maybe even nailed a few interviews. If you haven’t yet received a job offer,  keep trying and remind yourself of the Japanese proverb:

“Fall seven times, stand up eight”.

 

Now for some tips & tricks for your job search. Because you deserve it!

Can you imagine lodging your taxes in as little as 10 minutes so you can get back to job hunting? Now you can with E-Lodge.

Not only do we want to offer you a quick and inexpensive way to complete your taxes, but we’ve gathered together a few tips that might help along your job-hunt journey. (We weren’t joking when we said we wanted to help!)

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When Do I Need to Lodge a Tax Return?

When must I lodge a tax return?

It’s actually fairly simple to figure out. You must lodge a tax return if:

  • you earned more than the tax-free threshold. For the past several tax years, the tax free threshold has been $18,200.

This is the only time that you are absolutely obligated to lodge a tax return. No excuses. If you do not submit a tax return but are required to do so, the ATO can issue you a fine.

 

What if I earned less than the tax-free threshold?

There are two situations that may pertain to you if you earned less than the tax-free threshold this year:

  •  You earned less than the tax-free threshold but still paid tax on your income earned.

You technically don’t NEED to lodge a tax return but it is in your best interest to do so. You’re most likely going to be issued a refund consisting of the amount you paid in taxes throughout the financial year. Or,

  •  You earned less than the tax-free threshold and paid no tax on your income earned.

You do not need to lodge a tax return if you paid no tax UNLESS one of the following applies to you:

  1. You calculated a loss or can claim a loss from a previous year.
  2. You had a reportable fringe benefits amount reported on your PAYG.
  3. You’re entitled to the private health insurance rebate.
  4. You had a reportable employer superannuation contribution reported on your PAYG.
  5. You are an Australian resident for tax purposes and you had an exempt foreign employment income plus any amount of other income.

 

How do I lodge a non-lodgement advice form to the ATO?

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Can I Claim Prior Year Deductions on My Current Year Tax Return?

No, you can’t. You will need to lodge an amended tax return.

Contrary to popular belief, you cannot just carry over prior year deductions from last year to your current year tax return. Whether you forgot to add up those weekly laundry costs for your uniforms or you just found the receipts for your work phone line, you’ll need to lodge an amended return to report these expenses.

 

How long do I have to lodge an amended tax return?

As an individual taxpayer or a small business, you can typically lodge an amended return within two years from the date of assessment or the date that your original return was lodged. Larger businesses typically have four years to lodge an amended tax return.

 

Is lodging an amended return worth the trouble?

Prior to lodging an amended return, you want to be sure of a few things:

  • The reported expense should be worth the tax preparation fees. You will most likely need to pay an additional fee to amend a tax return. The deduction you forgot to originally claim should at least exceed the price you will be charged for tax prep.
  • The expense cannot be claimed twice. You want to be 100% positive that you have not already claimed the expense otherwise the ATO will confirm that it wasn’t. If it was, your amended return will be rejected.
  • Have receipts to back up all expenses. Whether you are lodging an amended return or not, keep receipts and records of all expenses. You are not required to keep receipts for expenses under $300 but you still need to be able to account for them.

 

How do I lodge an amended tax return?

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What If I Lost or Did Not Get My PAYG?

14 July is the deadline for your employer to issue you your PAYG.

 

What do I do if I have not received my PAYG by 14 July?

From where you stand, there are no obvious penalties you could impose on your employer. However, they are in fact subject to another deadline: on 14 August, they must have their complete PAYG report for all employees submitted to the ATO. If they fail to do so, they will be faced with a failure-to-lodge on time penalty.

With that out of the way, you still need access to your PAYG so that you can lodge your tax return on time. What can you do?

You have three options:

  1. Contact your employer. Give them the benefit of the doubt and consider that they have a lot on their plate and it slipped their mind.
  2. Wait until 14 August and give the ATO a call. Remember, that’s the deadline for employers to submit the full company report.
  3. See Can I lodge without a PAYG? below.

 

What if I have ceased employment with a company?

If you are no longer employed with a company as of this year, you may have a higher chance of not receiving your PAYG on time. Although these are documents generally compiled and mailed together, there tends to be a bit of tension between employees and their former employers. If bridges were burned or you’re simply out-of-sight, out-of-mind, you may need to step up and make a call to your former employer. Either way, your employer has 14 days to issue your PAYG from the date you make a written request.

 

Can I lodge without a PAYG?

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