Tax, money, finances, accounting…words that can send us into a tailspin if we have to confront them without fair warning. And yet, the end of the financial year rolls around every year, and we put off that sit-down session to sift through all that needs to be sifted through in order to file a tax report.
If you’re the kind of person who puts off filing your tax return for fear that you’re doing it wrong, or not really understanding what you’re doing at all, then this article is going to help. We’re breaking down tax returns in the simplest terms, so that you can feel more confident and ready to tackle that form filling.
The best we can hope for is tax time to be boring, rather than stressful. So let’s dive into the basics and help make sure you’re ready for this coming end of financial year on 30th June.
What does the end of the financial year mean for individuals?
If you’re not running a business or working in a corporate job, you may have no idea when the end of the financial year is, or why it applies to you. The end of the financial year (or ‘EOFY’) refers to the end of the fiscal year that runs from July 1st to June 30th. For both businesses and individuals, EOFY preparation typically involves preparing documentation for what you’d like to claim back this tax time, as well as depreciation schedules for properties and business assets.
Think of June 30th as the clock returning to zero – and every July 1st as a fresh start and an opportunity to trial a new receipt and record-keeping system for every quarter in FY24. So although EOFY is the time to prepare necessary paperwork for this year’s return, it can also be a great time to set a strong organisational foundation for next year’s return. You have to file your tax returns every year, so you may as well use this time to do some of your own financial planning.
When does EOFY happen? And what other key dates should we know?
As we’ve mentioned, the official end of the financial year falls on June 30th every year without fail. That means, the start of the new financial year begins the next day on 1st July. You can’t file or claim anything until this date, but you can gather your records and get your numbers in order so that you’re able to record them right away. This will make sure any returns you successfully claim are paid faster.
And although EOFY never changes, June 30th isn’t the only date that’s of significance to many personal and business tax claimants. For instance, HECS indexation is applied on June 1st every year – not June 30th. Similarly, due dates for quarterly statements may be subject to change from year to year. So it’s helpful to know your key financial year dates for every coming financial year as part of your EOFY preparation. Staying on top of your statements from quarter to quarter will naturally make navigating EOFY requirements a lot easier every year.
Who needs to lodge a tax return in Australia?
As a general rule of thumb, assume you do need to fill out a tax form, rather than assume you don’t. But here’s a quick checklist of who definitely does need to lodge one:
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If you’re an Australian resident and your taxable income was higher than $18,200 (anything under this is classified as tax-free).
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You’re leaving Australia for one income year or longer.
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You’re a parent liable to or receiving a child support assessment for the whole income year, with an income above $27,063.
If you don’t need to lodge a tax return, you normally still need to declare this to the Australian government. Form filling is usually involved either way – sorry! Make sure the information is accurate: knowingly submitting incorrect information can constitute tax fraud and you can face serious financial penalties and legal consequences.
Foreign residents in Australia on a temporary or working visa
If you’re a foreign resident here for education, you’ll need to file a tax return if you received any form of training or study support loan, even if you didn’t earn any money in Australia. If you’re in the country on a working holiday visa (417 or 462 subclass), and your taxable income was less than $45,001, the same applies.
For most other visas, you’ll need to lodge one if you had any Australian income whatsoever, except in a very specific case of circumstances.
What will I need?
Here’s a simple checklist of what to have in front of you or easily accessible before you sit down to file your tax report, according to the Australian Taxation Office (the ATO).
Your bank account details (BSB & account number)
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A summary of payment from all your employers (income statements or written proof of total payment from all employers or sources of income)
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Payments from Centrelink (for any financial benefits or assistance you receive from the state)
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Receipts or statements of the expenses you’re claiming as deductions (whether for business, medical or other reasons)
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Private health insurance information (if you have it)
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The income of your spouse or de facto partner if you have one (the person you live or share your life with, but are not married to or in a civil partnership)
You have until 31st October to lodge your return, but we don’t recommend leaving it that late. If you’re working with a registered tax agent however, the lodgement period is extended until 15th May. But make sure you’ve already established this, and that they’re registered with the ATO before the end of October. If you don’t, you can receive a penalty, and subsequent late payment fees the longer you leave it. Failing to lodge one at all is a criminal offence, and you could face additional charges and a maximum of 12 months imprisonment. So you really don’t want to leave it that late!
Conclusion: Tax Time Basics
Now you’ve read this article on our tax time basics, hopefully you feel more confident about what you need to do, and when you need to do it. The EOFY for Australia this 30th June is a time to take stock of your yearly earnings, income streams and financial planning. But it’s also important the information you record is correct, and submitted on time.
So in summary, don’t leave it til the last minute, prepare everything ahead of the end of June, and look online for instructions relating to your specific set of circumstances regarding if or what you need to claim.
