In the blink of an eye, we are already halfway through 2024, and the Australian financial year is about to end. The annual tax season is upon us again. When it comes to lodging a tax return in Australia, especially for those who have only just arrived in Australia during this financial year, there are many things to keep in mind!

1. Why should you apply for a Tax File Number as soon as you enter Australia?

Although applying for a Tax File Number (TFN) is not mandatory, whether you are working or studying, it is recommended that you apply as early as possible. Anyone who lives in Australia for more than 183 days is considered an Australian resident for tax purposes. Therefore, any international student staying in Australia for more than 183 days is required to pay tax.

Most people know that you need a TFN to work in Australia, but even if you do not work, bank interest is also treated as assessable income. Note that if your total annual income (including interest) exceeds AUD 18,200, you are required to pay tax. In addition, without a TFN, tax may be withheld from your savings account balance.

The main reasons include:

1. Legal employment: A TFN is required to work legally in Australia and to receive wages.
2. Avoiding high tax rates: Without a TFN, your income may be taxed at the highest marginal rate, reducing your actual take-home pay.
3. Accurate taxation: It ensures the tax you pay is correct, avoiding overpayment or underpayment.

2. What work-related expenses can you claim as deductions in Australia?

1. Work-related expenses

Such as work uniforms, tools, professional books and magazines, and training courses that upgrade your existing skills. (Entry-level training courses are not deductible.)

2. Motor vehicle expenses

Expenses related to using your personal vehicle for work (fuel, maintenance, insurance, etc.) can be claimed as deductions within certain limits, provided that the travel is directly work-related (ordinary commuting between home and work is not included).

Deduction methods include:

1. Cents-per-kilometre method: 68 cents per kilometre can be deducted, up to 5,000 kilometres per vehicle, equivalent to $3,400. Written evidence must be provided.
2. Logbook method: Record vehicle trips over a continuous 12-week period and calculate the percentage of work-related kilometres against total kilometres. The logbook is valid for five years.

3. Working-from-home expenses

1. Fixed-rate method: Calculated at a fixed rate of 67 cents per hour, covering home and mobile internet, phone, electricity and stationery, among other items.
2. Actual-cost method: Deducted proportionally based on actual expenditure. You must record the total hours worked from home together with itemised details of the relevant expenses.

4. Donations

Donations to eligible charities are tax-deductible.

Further reading:

1. Tax season is coming — what you need to know about lodging tax returns and claiming refunds in Australia
2. How to claim deductions

3. If an employee discovers that their employer has not lodged tax, how can they protect themselves?

1. Communicate with the employer and ask them to fulfil their tax obligations.
2. If the employer refuses, you can report the matter to the Australian Taxation Office (ATO).
3. Prepare relevant employment evidence, such as payslips, contracts and work time records, and provide these to the ATO.
4. The ATO will investigate the employer and require them to pay any outstanding tax, and may also impose penalties.

4. Consequences of late lodgement for ABN self-employed individuals

1. Penalties: You may face substantial penalties, with the amount depending on how overdue the lodgement is and the amount of tax unreported.
2. Interest: Interest is payable on tax that is not paid on time.
3. Damage to credit record: This may affect future business activities, such as obtaining loans or securing government contracts.

Conclusion

Australia’s tax system is complex and strict. As a newcomer, you should take your tax obligations seriously to avoid unnecessary trouble and losses. We hope the information above has been helpful, and we wish you all the best with your life and work in Australia!