Do I need to lodge an Australian tax return?
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For most people, the question of “do I need to lodge a tax return?” is fairly straightforward. If you earn any taxable income, the answer is typically yes. But there are a few circumstances where you will not have to lodge a tax return, and a few circumstances where the answer is a little unclear.
I’ve earned no income for the financial year
There are many reasons why someone may have not earned an income for the year. Maybe you’ve been travelling, maybe you’ve lost your job, or have been unable to find work. Maybe you’ve taken some time off to tend to parenting or caring responsibilities.
Even if you’ve received no income from a traditional wage or business profits, you must also consider other forms of taxable income that you may have received:
– Taxable government payments
– Interest on bank accounts
– Profits from investments such as dividends or rental income
– Profits made from property sales
– Fringe benefits
– Superannuation contributions
All of these less obvious forms of income are subject to tax, and you will need to declare it and lodge a tax return.
You may also need to lodge a tax return even if you’ve earned no income if the following apply to you:
– If you’re entitled to the private health insurance rebate
– If you have made a loss
– If you are able to claim a loss made from the year before
I want to know more about US taxes abroad
I’ve only received government payments
Certain government payments or benefits are taxable, and some are not. If you receive a taxable payment from Centrelink, they may or may not be withholding tax from your payments. They do not do this automatically, and you must request that they make these deductions for them to do it. Doing this can help reduce the amount of tax you may be liable to pay at the end of the financial year.
The taxable payments include:
– Parenting Payment
– Parental Leave Payment
– Dad and Partner Pay
– Youth Allowance (if you’re over 16 years old)
– ABSTUDY Living Allowance (if you’re over 16 years old)
– Austudy
– Carer Payment (if you or the care receiver is of Age Pension age)
– Age Pension
– Disability Support Pension
– JobSeeker
– Farm Household Allowance
– Disaster Recovery Allowance
And certain payments are not taxable, such as:
– The Family Tax Benefit
– Child Care Subsidy
– Carer Allowance
– Veterans Affairs Pension
– Disability Support Pension
Centrelink will provide you with a payment summary at the end of the year if you’ve been receiving a taxable payment. Though keep in mind, some of these taxable payments will not show up on your payment summary from Centrelink, but you will still need to declare the income.
I earned less than the tax free threshold, but still had tax withheld
The tax free threshold acts as a starting amount for Australians before their income is subject to tax. This number as of 2022 is $18,200, and any amount earned under this amount is not taxable.
But even if you earned less than the tax free threshold, you will still need to lodge a tax return if you’ve had tax withheld from your payments. This is so you can get all the unnecessary tax you paid throughout the year returned to you.
Make sure to check your payment summary at the end of the year to see how much tax you paid, and the amount that you will be entitled to receive in your return.
I earned less than the tax free threshold, and had no tax withheld
If you earned less than the tax free threshold ($18,200) and no tax was withheld from your payments, you will most likely not have to lodge a tax return. However, you will still be required to file a non-lodgement advice with the ATO, to advise them that you do not need to lodge your tax return.
There are a few exceptions to this, where you will be required to lodge a tax return even though no tax was withheld throughout the year, such as:
– If you’re entitled to the private health insurance rebate
– If you have made a loss
– If you are able to claim a loss made from the year before
– If you were an Australian resident for tax purposes and you received more than $1 in exempt foreign income
– If you have reportable superannuation contributions
– If you have reportable fringe benefits on your payment summary
Filing a non-lodgement advice
Now, even if you’re not required to lodge a tax return, you’re still required to file a non-lodgement advice. This alerts the ATO to the fact that you will not be lodging a tax return for the financial year, and you protect yourself from being put on any lists for having an outstanding tax return or undeclared income.
The ATO is able to issue penalties and sometimes even fines for failing to lodge a tax return, so filing a non-lodgement advice will also protect you from these. Filing a NLA will also ensure that you receive any government payments or tax offsets that you may be entitled to, such as the Family Tax Benefit or the Child Care Subsidy.
You can file this non-lodgement advice directly through myGov and the ATO website, or by filling out the non-lodgement advice form and lodging it through the mail. You are able to submit any outstanding non-lodgement advice for financial years dating back to the year 2000, you are also able to alert them that you will not need to lodge for future years as well.
If you’re still unsure whether or not you will be required to lodge a tax return, there is more information on the ATO’s website, as well as a questionnaire and calculator to help you figure out whether your taxable income is above the tax free threshold. Lodging a tax return allows you to receive any overpaid tax owed by the government, so it’s best to be sure before you submit a non-lodgement advice, so you’re not doing yourself a disservice by not claiming money that is owed to you.
