Do I need to lodge a tax return?

Do I need to lodge a tax return?

The financial year has just ended once again and accordingly a lot of people will now be asking “Do I Need to Lodge a Tax Return”?Well unfortunately the answer isn’t quite as easy as we would like (tax never is) but we will attempt to simplify things and help you work out the answer …

Or call now on 9228 7100 and let us help.  We GUARANTEE you will receive your maximum legal refund, plus you will receive a FREE wealth creation book which will show you the fundamental principles of building wealth and achieving the financial future you desire.

Tax Year

The 2016 tax year in Australia runs from 1 July 2015 to 30 June 2016.  It is possible under certain circumstances for a different period to apply, but this is rare and the vast majority of tax payers only need to concern themselves with this period.

Did you earn Income during the Tax Year

Most people will know that if you are an Australian Resident for tax purposes (see our related article Australian Tax Residency When Working Overseas) and you earned income, you are likely to be required to lodge a tax return.Similarly, even if you are not an Australian Resident for tax purposes but you earned income sourced from within Australia then you also are likely to be required to lodge a tax return here in Australia.So often the trick is to assume you DO need to lodge, unless you can find an out!

Seniors & those receiving Government Payments

If you fall into either of these categories, the primary Tests to determine whether you are required to lodge a tax return are as follows -.

 Test 1

During the 2016 tax year, were you eligible for the Seniors and Pensioners Tax Offset, AND your Rebate Income (not including your spouse’s) was less than:

• $32,279 if you were single, widowed or separated at any time during the year, or
• $31,279 if you had a spouse but one of you lived in a nursing home or you had to live apart due to illness, or
• $28,974 if you lived with your spouse for the full year.

then you do not need to lodge an income tax return!(Your rebate income includes your normal taxable income (reduced by allowance deductions), adjusted fringe benefits amounts, net investment losses and reportable super contributions.  If you have doubts as to whether or not these items apply to you and that your Rebate Income could exceed your applicable threshold we recommend you give us a call to discuss the matter further.)

Test 2

During the 2016 tax year, if you were not eligible for the Seniors and Pensioners Tax Offset but you received one or more of the following Government Payments –

• Newstart allowance
• Youth allowance
• Austudy payment
• parenting payment (partnered)
• partner allowance
• sickness allowance
• special benefit
• widow allowance
• farm household allowance
• there are others, so if in doubt contact Centrelink

so long as when added together (with your other income) your taxable income remains less than $20,542, then you do not need to lodge an income tax return!

For everyone else asking “Do I need to Lodge a Tax Return?” here is a non-exhaustive list of reasons as to why the answer is more often than not, yes!

(Note: you would need to be satisfied that NONE of these apply to you for you to be in with a chance that you do not need to lodge a return!)During the 2016 tax year -i) If you were not eligible for the Seniors and Pensioners Tax Offset AND you did not receive a payment listed above, BUT your taxable income was more than:

• $18,200 if you were an Australian resident for tax purposes for the full year, or
• $416 if you were under 18 years old at 30 June 2016 and your income was not salary or wages, or
• $1 if you were a foreign resident and you had income taxable in Australia which did not have non-resident withholding tax withheld from it, or
• your part-year tax-free threshold amount if you became or stopped being an Australian resident for tax purposes

Then you are required to lodge a 2016 tax return!ii) You were an Australian Resident for tax purposes AND you:

• paid Pay As You Go Tax Instalments (ie. via an Instalment Activity Statement), or
• had tax withheld from payments made to you (ie. from an employer or someone you worked for as a contractor)

Then you are required to lodge a 2016 tax return!iii) If any of the following applied to you:

• You had a reportable fringe benefits amount on your PAYG payment summary – individual non-business, or your PAYG payment summary – foreign employment
• You had reportable employer superannuation contributions on your PAYG payment summary – individual non-business, PAYG payment summary – foreign employment, or PAYG payment summary – business and personal services income
• You were entitled to the private health insurance rebate but you did not claim your correct entitlement as a premium reduction, and your spouse (if you had one) is not claiming the rebate for you in their income tax return
• You carried on a business
• You made a loss or you can claim a loss you made in a previous year
• You were 60 years old or older and you received an Australian superannuation lump sum that included an untaxed element or it is a death benefit superannuation lump sum paid to you as a non-dependant
• You were under 60 years old and you received an Australian superannuation lump sum that included a taxed element or an untaxed element
• You were entitled to a distribution from a trust or you had an interest in a partnership and the trust or partnership carried on a business of primary production
• You were an Australian resident for tax purposes and you had exempt foreign employment income and $1 or more of other income
• You are a special professional covered by the income averaging provisions. These provisions apply to authors of literary, dramatic, musical or artistic works, inventors, performing artists, production associates and active sportspeople.
• You received income from dividends or distributions exceeding $18,200 (or $416 if you were under 18 years old on 30 June 2016) and you had franking credits attached, or
  amounts withheld because you did not quote your tax file number or Australian business number to the investment body
• You made personal contributions to a complying superannuation fund or retirement savings account and will be eligible to receive a super co-contribution for these contributions
• You were a liable parent or a recipient parent under a child support assessment unless you received one or more Australian Government allowances, pensions or payments for the whole of the period 1 July 2015 to 30 June 2016, and the total of relevant payments was less than $23,752 taxable income

Then you are required to lodge a 2016 tax return!

Tax Office Tools

The ATO also has a useful decision tool which may be able to help.  You can access it here.

All too confusing?

Sorry, we did say the answer wasn’t as easy as we would all like.  But we are here to help.  So give us a call on 08 9228 7100 or get in touch online here and let us help!

And don’t forget, we GUARANTEE your maximum legal refund and you receive FREE a copy of our favourite book on building wealth and creating the financial future you desire …

Disclaimer: The information provided here is designed to act as a general guide only.  It does not cover all possible scenarios and does not consider your personal circumstances.  Further we can not guarantee the information remains up to date or relevant in light of any changes.  You should not rely on the information provided without seeking personalised, professional advice.  CapitalQ disclaim all liability where unauthorised and unapproved reliance is placed on the above information.