10 Things You Need To Remember Before Paying Taxes

Jun 26,2019 17:59   Source:ForexSQ

To say no one enjoys paying taxes is an understatement. What is there to love? But what does feel pretty great is keeping your annual tax bill as low as possible.

To this end, it makes sense to learn as much as you can as early as you can about the tax preparation process, including any changes to tax law for the current tax year.

We think these 10 things you need to remember before paying taxes will come in handy as you prepare for your annual filing.

1. The Australian tax year runs from the first of July to the 30th of June.

If you are an ex-patriot who has recently moved to Australia, you may be used to the January 1st to December 31st tax year that is customary in the United States. Or perhaps you have moved from the UK and your typical tax year is April 6th to April 5th annually.

To avoid the extra stress of being caught unawares by an encroaching tax deadline, it is good to go ahead and mark your calendar for your new Australian tax year deadline dates!

2. You have plenty of options for how to file your taxes.

If you are accustomed to preparing your taxes in the “old school” way by filing paper returns, did you know you can now go paperless and file your taxes online?

The Australian Taxation Office (ATO) states that you have three ways to prepare and file your taxes: online, on paper or through a registered tax agent.

3. Tax laws, including credits, deductions and income declarations, can change each year.

Every year, the Australian Securities and Investments Committee (ASIC) publishes an updated list of deductions that are permitted and disallowed.

Similarly, the Australian Taxation Office publishes a list of the income types you must declare with your annual tax return.

While this information is not a substitution for consulting a certified tax preparer such as TW Accounting Brisbane , it can give you a very good start in compiling the information required to complete your annual tax filing.

4. Sometimes, delaying your tax filing makes sense.

You may be the type of super-organized person who just likes to get your tax filing out of the way as quickly as possible.

But did you know that if you delay until mid-August, the Australian Taxation Office will help make your filing process a little easier and quicker by pre-filing your return online with income and data from any banks, financial institutions, employers and other relevant agencies?

All you have to do is review your return and add any deductions you qualify for.

If you want to complete your filing earlier, you will need to be prepared to provide complete information and supporting documentation on earned income from the previous tax year.

5. Did you just move to Australia? You may qualify for a special newcomer tax credit.

If you just moved to Australia and have only been here for one full calendar tax year, did you know you are entitled to a special newcomer tax-free threshold?

Currently, this threshold is the first $18,200 of your income – you pay no taxes on this income.

If you moved to Australia in less than a year ago, your tax-free threshold looks a little different. $13,464 of your income is tax-free. An additional $4,736 is apportioned out for the number of months you have resided in Australia, including your arrival month.

6. Even if your income falls below the annual tax threshold, this may not mean you don’t have to file a tax return.

Currently, the annual tax threshold (the amount of income below which you do not have to pay taxes) is set at $18,200.

Here, let’s say you earned less than $18,200 and you didn’t pay any taxes during the previous tax calendar year. Chances are good you don’t have to file a tax return, but you still need to file something called a non-lodgment advice.

This special document can be filed online and simply tells the Australian Taxation Office that you fit the criteria for exemption from filing a formal tax return.

However, if you paid any tax money you would like to get back or if you are due any rebates or compensation for losses, you may still need to file a tax return. Here, the best course of action is to consult a professional tax preparer.

7. If you owe taxes, you have a variety of payment options available to you.

You can pay your annual taxes via credit card, direct pay from your bank, over the phone, by mail, in person or electronic transfer locally or overseas.

8. Hiring a tax preparer may actually save you money!

While tax preparation is not the most fun you are going to have all year, at least you only have to tackle them once a year!

However, as you are engaged in other activities for the rest of the year, tax preparers are keeping tabs on changing tax laws, new credits and rebates and more all year long.

If you don’t have time to devote to researching this information, you may end up saving more money by hiring a professional preparer who knows what you are entitled to.

9. Setting up a system can ease the burden of tax preparation time.

While this may sound like a no-brainer, it can be especially challenging to set aside the time to set up a system of monthly record keeping, especially if you are self-employed and juggling multiple daily responsibilities.

The Australian Securities and Investments Commission offers a simple budgeting tool to help you set up your system online.

10. If you are an expat, your tax rate will likely be different.

Be aware that expats, including students, have a different tax rate than do Australian citizens.

As an expat, a professional tax preparer can help simplify the process of learning how to properly file taxes in Australia.

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