How quickly you can get your tax refund

Tax time is just around the corner, and many Aussies will be even more eager than usual to get some extra cash in their pocket this year.

Tax time is just around the corner, and with rising cost of living many Aussies will be even more eager than usual to get some extra cash in their pocket.

According to the ATO, more than 9.92 million individual 2021 tax refunds have been issued as of April 7, totalling more than $28.64 billion with an average refund of $2887.

Here’s everything you need to know.

Do I need to lodge a tax return?

If you’re an Australian resident, you need to lodge a tax return if you earned more than the tax-free threshold of $18,200 between July 1, 2021 and June 30, 2022.

Foreign residents must lodge a tax return if they earned more than $1 during the income year, or have a study or training support loan.

Parents who are a liable or recipient parent under a child support assessment for the whole income year must lodge a return if your income was $27,063 or more.

Working holiday makers on a 417 or 462 visa don’t need to lodge a tax return if their taxable income was less than $45,001.

How do I do my tax return?

You can either choose to fill out your tax return yourself, either online or using paper forms, or get help from a tax agent.

For many people the simplest and quickest way is to prepare and lodge it yourself online with myTax, with most processing within two weeks.

What documents do I need?

The good part about using myTax is that most people with simple tax returns need very few documents, apart from having receipts for any deductions.

By late July, the ATO can pre-fill most information from your employers, banks, government agencies, health funds and third parties.

When do I need to lodge by?

For people lodging their own tax return, the deadline is October 31, which this year falls on a Monday.

Those using a registered tax agent have more time, but they must engage their accountant before October 31.

Where do I find my tax file number?

If you can’t remember your tax file number, it can be found online via your myGov account.

Alternatively, if you have previously lodged a tax return, it will be on your last notice of assessment.

It will also appear on your superannuation account statement.

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Most myTax refunds are processed in two weeks.

What can be claimed?

Your tax return includes how much money you earn – your income – and any expenses you can claim as a deduction.

Deductions are subtracted from your taxable income and ultimately mean you get more back in your return.

To claim a work-related expense, you must have spent the money yourself and you weren’t reimbursed by your employer, the expense must directly relate to earning your income, and you must have a record such as a receipt to prove it.

Common work-related claims include motor vehicle and car, travel, clothing, laundry and dry-cleaning, and self-education expenses.

You can also claim working from home expenses such as home office equipment, phone, data and internet, as well as Covid-19 tests, tools and equipment, and union or other professional fees.

Which tax bracket do I fall under?

Australia has five tax brackets, which determine the rate of tax you pay on your income for the year.

From zero up until $18,200, you pay no tax.

Between $18,201 and $45,000 the rate is 19 per cent.

In other words, you pay 19 cents for each dollar you earn over $18,200 until $45,000, meaning if you earn exactly $45,000 you pay $5092 in tax.

The higher tax brackets are 32.5 per cent between $45,001 and $120,000, 37 per cent between $120,001 and $180,000, and 45 per cent for $180,001 and over.

For example, someone earning exactly $120,000 will pay 32.5 cents for every dollar from $45,001 to $120,000, which works out to $24,375, plus the first $5092, for a total of $29,467.

Who is the ATO targeting this year?

The ATO has announced four key focus areas this year – record-keeping, work-related expenses, rental property income and deductions, and capital gains from crypto assets, property and shares.

In particular, work-related expenses such as car and home office claims will be under the microscope due to more people working from home during Covid.

“What we are seeing from people is people continuing to claim current travel expenses at pre-pandemic levels,” ATO assistant commissioner Tim Loh told the ABC.

“We did see a bit of a decrease last year. But we do expect the current travel expenses to go down quite significantly because if you’ve been working from home, you can’t be at two places at once. The other thing we are focused on is laundry expenses. Obviously, if people have been working from home, [they would have not been] wearing their uniform.”

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