Dealing with tax return can be quite the chore. Depending on your personal circumstances, lodging your return could be a straightforward but tedious couple hours of work, but it could also be a Byzantine morass of ambiguity and errors. Regardless, they are a necessary aspect of managing your finances, as failure to correctly lodge your tax return can result in stiff penalties. While taxation is in general a roughly similar practice from country to country, specific details and regulations will, of course, vary; thus, in unpacking the concept of tax return, this article will give an overview of tax return in one specific country i.e. Australia.
What is a Tax Return?
A tax return is a tax form that taxpayers must submit annually to the governmental department which deals with the collection of taxes. In Australia’s case, this would be the Australian Tax Office (ATO).
What should be included on a Tax Return?
On this document, taxpayers must declare the assessable income they’ve earned through the year. This assessable income includes employment income, investment income, foreign income, etc (Refer to ATO for more specific details). Taxpayers should also include the amount of tax deductions they may have on their tax return form. Correctly recording the tax deductions that you wish to claim will ensure that the portion of your income that can be taxed will be reduced. Thus, this will save you money. The expenses that you can claim as tax deductions are generally work-related. For example, if you have personally paid for work travel, occupation-specific clothing, home office devices, work-related self education, etc (Again, refer to ATO for more specific details). To claim these deductions, it is advisable to keep written evidence of your expenses in the form of receipts or tax invoices.
What happens after you submit your Tax Return?
From this, the ATO can calculate the amount of tax that the taxpayer needs to pay. This will be assessed against the amount of tax that your employer has deducted from your income on your behalf. Lodging your tax return is thus important to ensure that the amount of tax your employer deducted is correct. If this assessment shows that you’ve paid too little tax, you’re obligated to pay more. On the other hand, if this assessment shows that you’ve paid too much tax, you are eligible for a tax refund. The latter scenario quite commonly occurs; according to the Australian Securities and Investment Commission, 77% of taxpayers are likely to get a tax refund in 2015, and the average tax refund was $2,283.
From the general overview provided above, one might see how many find dealing with tax return a thankless task. Thus, it can be quite common for people to seek help from tax agents on this matter. This is especially the case if one’s tax situation is complicated – for example, if you’re a freelancer, if you’ve performed a few jobs or managed a number of investments over the year. In those cases, seeking out the services of companies like Tax Return 24/7 (https://www.taxreturn247.com.au/) could save a wealth of time and effort.