Do I need to lodge a tax return?

A very common question during tax time, we get during tax season is “Do I need to lodge my tax return?” or “am I eligible for tax refunds?” Well if your income was $18,200 or less in the past financial year (For example, FY2021-2022). And ensuring you had no tax withheld from the income, you may not be required to lodge your tax return for the year. However, there are many other aspects that may need to considered for your tax lodgements.

In this article, we speak with our director – Madeeha Usman, a Chartered Accountant (CA) by occupation and the founder of The Kalculators – an award-winning accounting and taxation service provider in Adelaide and regional SA.

As per Madeeha Usman, “Lodging your tax returns is so important, it not only helps you for your future investments, but also good for your credit history. You must get a tax return with a professional, especially when you have any property investments, carried on a business, made concessional and non-concessional contributions to your super”.

Let’s start with your residency status, during the given financial year (for example, 2021-22) if you were or are an Australian resident, then the answer is ‘Yes’ you are required to lodge your tax return.

For individuals, who were part year Australian residents, and were 18 years or older with a taxable income of more than $17,806 during the given income year and/or had tax withheld. Then ‘Yes’ you are required to lodge your 2022 tax return.

Moreover, as accountants we also get many queries over the tax return for foreign residents. So, are you still required to lodge your tax return as a full year foreign resident? Yes, if you had a taxable income of more than $1 and/or had tax withheld.

Additionally, as a tax payer in Australia. You also need to be mindful of the following:

1. Had tax withheld from payments made to you.

By tax withheld, we mean the money deducted from an employer’s wages or salary and are directly paid to the government for taxation purposes. However, this does not include the mining payments.

2. Paid taxes under PAYG (also known as Pay As You Go)

This simply means as you receive your pay, you pay your tax. (Also known as tax withheld). For a detailed overview, we spoke to our accountants on understanding the tax tool questions – so if any of the following applies to you, then you may be required to lodge your 2022 tax return.

Have you received an Australian Government taxable payment or allowance and you had other income during the given FY 2021-22 or income year?

If you have answered “No” to this question, or “Not sure” then here is a breakdown of taxable payments or allowances by the Australian government, that you may or may not have claimed:

• Jobseeker payment – Have you received any financial aid by the Services Australia, when searching for employment?
• Austudy payment – Have you received any financial help or assistance for your education?
• Special benefits*
• Farm household allowance – If you belong from a farming household, have u received any financial assistance for experiencing any hardships.
• Parenting payment (partnered) or partner allowance
• Widow allowance

Additionally, allowance or education-based payment when you were 16 years or older, for any of the following:

• Payment under the Veterans' Children Education Scheme
• ABSTUDY living allowance for your everyday allowance.
• MRCA Education Allowance – Also known as the payment under Military Rehabilitation and Compensation Act Education and Training Scheme 2004, shown ' on your PAYG payment summary – individual non-business
• Any other training payments or Commonwealth education that is shown on your payment summary.
• Youth disability allowance also a component of youth allowance.

Moreover, have you received any kind of income support from the following:

• Community Development Employment Project (CDEP) shown as 'CDEP Payments’ on your PAYG payment summary – individual non-business.
• Disaster recovery allowance
• Special category visa (subclass 444 holders) for disaster income support allowance.

If you fall under any of the above category mentioned, then yes you are required to lodge your tax return. However, if you are unsure that you fall under any of the given category then you must speak with a professional.

Let’s move on to the next question…

Was your taxable income more than $21,884 during the given income year?

If you have answered ‘yes’ to this question, then the answer is quite simple. Yes, you are required to lodge your 2022 tax return. However, many individuals also confuse the term taxable income. For example, your taxable income is calculated by:

Gross Incomes minus the Allowable Deductions for the give income or financial year*

If you are unsure, how to calculate your taxable income. You can also seek help of a professional.

What are some of the other reasons, that may require an individual to lodge their tax returns?

If ANY of the following has applied to you, then yes you must lodge a tax return:

• Have you had a reportable fringe benefits amount on your PAYG payment summary (applicable to individual non-business or foreign employment)? Yes, then you must lodge your tax return.
• You carried on a business in Australia.
• You are entitled or have been to private health insurance rebates but have not claimed your entitlement (including your spouse is not claiming any kind of rebate in their income tax return).
• You were 60 years or older and have received an Australian superannuation lump sum that involved superannuation lump sum (death benefit) paid to you as a non-dependant.
• You have made a loss, which may also include any kind of capital or non-capital losses on disposal or redemption of a traditional security. Moreover, you can also claim on such losses in the previous year.
• You were or are an Australian resident for tax purposes, and you had exempt foreign employment income (which had $1 or more of other).
• Entitled to an interest from a partnership or a distribution from the trust carried on a primary production of business.
• You have received income from the dividends that exceeds the $18,200 threshold. (or $416 if on 30th June 2022, you were under 18 years old).

If you have made contributions to your superannuation fund?

If any of the following points apply to you, then yes you are required to make contributions to your superannuation fund:

• Your non-concessional contributions have exceeded the non-concessional contributions app.
• You have concessional contributions to your super that has exceeded the concessional contributions cap.
• You have made personal contributions to a complying superannuation fund or a retirement savings account. And are eligible for receiving a super co-contribution for these contributions.
• You were 60 years old or older, and received an Australian superannuation lump sum that includes superannuation lump sum death benefit or an untaxed element and was paid as a non-dependant to you.

1. An important tip if you are a special professional

If you are an author of literary, musical, dramatic, inventors, performing artists, active sports people and production associates. You are considered a special professional for income averaging provisions.

2. An important tip if you are on a working holiday visa (417 or 462)

You have received Australian based taxable income of $45,001 or more (and this excludes employment termination or superannuation remainder).

3. How do I know, if I am a foreign resident?

You are a foreign resident, if you have permanently resided in Australia or you have lived in Australia for 6 months or more.

4. How do I know, if I am a part year Australian resident?

You are a part year resident, if you have a tax-free threshold of at least $13,464.

If you have lived for few additional months that will based on pro rata calculation. This means, the remaining amount which means deducting $13,464 from the full year threshold of $18,200. Basically, will equal to $4,736 is pro-rated according to the number of months during the given financial year (you were considered as a tax resident).

As accountants we always tell our clients to be mindful of their tax practices. Especially migrants who have recently moved to Australia and spent half of the financial year working on a TFN (Tax File Number) or an ABN (Australian Business Number). Remember paying your tax on time, is not only good for your future investments but also results in a good credit score.

For more information on lodging your 2022 tax return, you can also view the ATO to – Do I need to lodge a tax return?

*Please note, the article was written in accordance with the ATO website. The credit of the questions, are sourced from the ATO tool to expand the details for providing detailed and easy information to individuals. However, we do not take any responsibility should the circumstances or eligibility criteria change.

If you are unsure of any of the answers, feel free to speak with one of our friendly accountants. Please give us a call on 08 7480 2593 or send an email to info@thekalculators.com.au. The Kalculators is an award-winning accounting and taxation firm with over 8 offices in Adelaide, Port Augusta and Whyalla. We believe you deserve maximum tax refunds and we have industry expert-based accountants for you to claim maximum deductions so you receive the highest refund as possible.