The 2018 tax season is about to begin. Do you really know how to do this?
July 1 to Oct. 31 is Australia's statutory tax return season. As long as you work in Australia, you are required to file a personal income tax for the previous fiscal year with the Australian Taxation Office (ATO), regardless of whether you are a foreign student or an office worker. Individual independent tax returns must be completed before October 31, entrustment accountant tax returns can be extended to March 31 of the following year.
So do you really know how to file taxes? Do you know that a lot of the related fees can be deducted?
Today, we have collated the latest 2018 tax returns, so that you can do tax returns.
Tax returns need to know this basic information.
If you are a rookie or know nothing about filing a tax, you need to know some professional vocabulary before you do so that you can have a good understanding of the tax return.
Tax filing cycle
According to the calculation cycle of individual's annual income, Australia's tax returns are from July 1 to June 30 of each year. As a result, taxes are calculated according to this time cycle (not from January to December of the natural year). This is why businesses promote the fiscal year in May and June.
Tax number and Enterprise numbe
Before working in Australia, everyone needs to register their own legal tax number, Tax File Number (TFN). If the work model is not in the form of employment but in the form of a contract, you need to register the enterprise tax number Australian Business Number (ABN).
Generally speaking, employees in the form of employment will need you to provide TFN for tax payment. If you are an Contractor contract or Casual employee, you will need to provide ABN.
Australian tax resident
First of all, to clarify a concept, Australian tax residents are not equivalent to Australian citizens. Australian tax residents define their rights and obligations from a tax perspective and have no direct connection with whether you are a permanent resident or citizen of Australia. As long as you are an Australian tax resident, you are required to file tax returns with the Australian Inland Revenue Service (ATO), both within and outside Australia.
How to define Australian tax residents? Generally speaking, a person who resides in Australia or has lived in Australia for more than 183 days is recognized as an Australian tax resident who is liable to pay taxes.
Therefore, regardless of any nationality, as long as this requirement is met, it is necessary to pay taxes. It is particularly noteworthy that although the main task of international students in Australia is to study, they will also be recognized as tax residents.
Main types of tax returns
- Personal income tax: it is reported on the basis of annual income. Australia has a step-by-step tax rate ranging from 19% to 47%. The more you earn, the more you pay.
- Salary tax: salary tax is a tax levied by the Australian state goverment, paid by the company according to the salary base, not withheld from the employees' wages. The goverment rates vary from state to state. Of course, when reporting income, you can also apply for tax relief;
- Asset proliferation tax: the asset proliferation tax is referred to as CGT,. Australian homeowners need to know about this tax. The full or part of the asset appreciation (based on the time of property holding) is included in the individual income of the taxpayer in the fiscal year, and the specific amount of tax is calculated. Australian citizens are required to declare global value-added property, while foreigners are required to declare only Australian property taxes.
Prepare tax filing materials
The forms of materials for tax filing are diverse and are not just as simple as a payroll. In general, tax returns include the following materials:
- The tax statement the company gave you, Group Certificate, or last year's tax record, Tax Return Orassessment Notice.
- [计] payroll
- All other income records, such as pensions, benefits, sale of shares, income from rent
- All vouchers of expenditure related to work, business, and financial investment (receipts, invoices, tickets, bills, private health care numbers, income and expenditure documents for spouses and children, valid notes, etc.)
- A breakdown of the accounts of a company or small business.
Note: interest on bank deposits, dividends, rent, and goverment subsidies such as pensions, benefits, etc., are required to be declared to the ATO.
Tax-deductible expenses
As a matter of fact, the expenses incurred in many jobs can be used for tax credits, and we need to have a clear understanding of these.
Work-related production: computers, mobile phones, printers or other electronic devices, work clothes, even parts of handbags, sunscreen and sunglasses (for people working in the sun) can be declared.
Small business owners with annual turnover of less than 10 million Australian dollars: purchase of goods for businesses with a value of less than $20000 before June 30 each year may be used for tax credits.
Home-based entrepreneurs or self-employed households: these groups report a lot of tax items, such as office tables and chairs, car fuel, mobile phones, Internet bills, a certain proportion of rent, and so on.
In any event, tax returns are subject to the following three guidelines:
- Must be work or business related
- You have to make sure you haven't been reimbursed before.
- Leave Receipt or other records as proof.
How to calculate personal income tax
Australia uses a step-by-step tax rate, with a minimum of 19 percent and a maximum of 37 percent under the current policy, as shown in the figure below.
What if it doesn't work out?
It's easy to log on to the "online calculator" available on ATO's website: https://www.ato.gov.au/Calculators-and-tools/Host/?anchor=STC&anchor=STC#STC
Suppose you are an Australian Inland Revenue Department with an annual salary of 70,000 and a fiscal year of 2016 / 17. Just fill it out.
However, this approach does not include student loans such as, Medicare Levy, so if you are more than just a salary, you need to look for professional accounting advice.
Online DIY self-service tax return
If you do not want to ask accountants, hope to try self-help tax returns, the editor here prepared a self-help tax return strategy, step by step with the operation, you can also complete the tax return work.
- Log on to the ATO website (ato.gov.au)
- Click Individuals
- Click Lodge online with myTax
- Self-service tax return begins
Self-help online tax reporting proc
I, Registration of MyGov account
Before filing your tax, you need to register a myGov account on the ATO website.
Enter a common e-mail address and make valid settings for the account.
Registration is successful and you can log in. Click Services.
Follow the instructions to fill out the information, including bank information, pension, Notice of Assessment, etc.
Information required to apply for ATO account numbe
- Bank BSB Number,Account Name
- Pension Company ABN, Pension Superanuation account
- If there was a tax rebate last year, a Notice of Assessment, would have to be ready.
- If this is the first tax return, ATO will ask you to provide a full-year pre-tax salary such as that on PAYG Summary
- If you have a spouse (including cohabitation), you may need to fill in their information
Second, enter the MyTax operation tax return
After entering the ATO service, click "Lodge my Tax" directly, Lodge, you will see below, a total of four steps.
1, fill in basic information
2, fill in the tax rebate bank account numbe
3, verify whether it is an "Australian tax resident"
After completing the above steps, you will see the income list and the application form for deductions. If the employer has not uploaded your income portion, you can also enter it yourself according to the Pay Slip, or contact the employer as soon as possible.
If you serve more than one employer, all income lists need to be entered, and you will see the Payment Summary. of different employers when entered
It is important to note that there will be an "Super lump sum" pension option in the, Payment summary, and that if you don't leave Australia permanently, you don't have to choose it.
The next step is to move into the tax relief module, which currently requires no supporting evidence for each expenditure of less than A $300.
4, check and confirm information
Due to the submission can not be modified, you need to carefully fill in and check before submitting.
After submission, all you have to do is wait for the review to pass.
It is important to remind you that if your annual income is zero or less than $18,200 a year, you need to submit a "no-income declaration" (Non-Logdment Advice),).
How to justify legal tax avoidance
We must not underestimate the legitimate and reasonable tax avoidance, if scientific methods can be operated, you can save a lot of money.
Hire a professional accountant
If you are more than just a company employee, have multiple sources of income, such as real estate, companies and so on, try not to file your own taxes and find a professional accountant to solve these problems. Because accountants can not only help with tax issues, but also help answer questions from the Inland Revenue Department.
Study and day-to-day work credit
In Australia, when your job needs to learn new skills, if the company does not pay, it is your own money, the tuition (including book fees, lecture fares, etc.) can be used for tax deductions; If we can provide valid relevant proof, we can save tax within reasonable limits because of the meal cost, the wrong fare and so on.
Home office tax credit
As mentioned above, if you start a business or work at home, you can deduct the housing costs associated with it, usually in terms of rent, mobile phone bills, electronics, and so on, as a percentage of the space used. Office supplies purchased in the form of an old exchange (Trade-in) can be deducted directly from a charge of less than $300 Australian dollars, while depreciation is required for more than $300 Australian dollars.
Negative withholding tax
If the expenditure on maintaining an investment property (cash and non-cash) exceeds your investment income (rent, etc.), the resulting negative taxable income is called negative withholding tax. In other words, the loss portion of investing in real estate is called negative withholding tax.
Negative taxable income can offset other sources of positive taxable income, such as wage earnings (Salary/Wage), capital gains (CapitalGain), and so on, thereby reducing taxable income and ultimately achieving the goal of tax reduction. Specific withholding tax content should be based on the individual case to operate, suggest that you consult accountants to deal with.
To give you an example from the Australian real estate network:
Ms Wong, a long-term resident in Australia, an Australian tax citizen, earned $80,000 in fiscal year 2013 and owned an investment property worth $66,5000 in Sydney. The property income and expenditure are as follows: income: rental: $640 / week, $640x52=$33280/ annual expenditure:
- Property management fee (Body corporate feesand charges): $4800 / yea
- Bank interest (Interest on Land): $26600 / year (loan 80%, repayment rate 5% / year)
- City fee (Council rates) water (Water Rates): $2500 / yea
- Depreciation of in-house facilities (Deductions fordecline in value) Building structure depreciation (Capital worksdeductions): $9,000 / yea
- Repair and maintenance costs (Repairs andmaintenance): $300 / yea
- Total Expenditure for property Management intermediaries (Property agent feesor commission): $1830 / year: $45030 / net Investment income: $33280 / year =-$11750 (negative tax deduction) taxable income: $800,000 / 11750 / 68250 tax payable: $14752
According to the example above, we break down the expenditure:
- Non-cash expenditure: depreciation = $9000
- Cash Expenditure: property fee, interest repayment, Municipal fee, Water fee, maintenance fee, intermediary fee = $36030
The actual net cash income was $33280 / 36030 / 2,750, meaning that Ms. Wang's actual cost of maintaining the investment property was $2,750. If Ms Wang does not have this investment property, she will have to pay $18,747 in tax on her $80000 taxable income, an excess tax of $3995on investment property.
By contrast, Ms. Wang, who owns an investment property, can reasonably save $3,995, deducting $2,750 for maintenance of an investment property, and Ms. Wang can earn a tax benefit of $1245 through a negative tax deduction.
Tax avoidance between husband and wife
If the couple's income is higher and lower, the high-income party can buy a spouse's pension for the lower-income side, with up to $540 in tax benefits.
In addition, the original co-owned property can be changed to a high income side, or the high-income party to pay home wages to the lower side (must have written documents, true and effective). In this way, to lower the high-side tax rate in order to achieve more benefits.
Establishment of the Family Trust Fund
Set up a trust fund composed of its own members. When income is generated, income tax can be minimized or even zeroed through the diversion of funds, allowing all family members to reasonably use their income tax exemption threshold.
This kind of trust fund is especially suitable for business operators, so that the profits from business can be distributed to each family member.
See here you should have a full understanding of the coming tax season. Although the above content is a summary of the latest information, but the specific operation still requires you to consult professional accounting or online practice here, I wish you all the tax return season Shunli, the next year prosperous and prosperous.
