Maybe you’re up for a big return this year, or you’re preparing for a big bill. Whatever the case, you can’t avoid lodging your income tax return (unless you’re one of the few who don’t need to lodge one).
We’ve asked Mike, our Financial Capability Counsellor, for some advice about lodging income tax returns. Mike has also shared some handy tips on what to do with your money if you do get a decent return.
IN THIS BLOG:
When and how should I file my income tax return?
You can file your income tax return from 1 July. You can lodge your return by using the myTax (myGov) online system, sending a paper tax return form, or through a registered tax agent.
The new myTax system is getting easier to process single income tax returns. The Australian Tax Office (ATO) will start processing returns from 7 July, and refunds will start arriving from 16 July.
Just remember you only have so long to lodge your income tax return.
If you do your own, you have until 31 October to lodge your income tax return. You can lodge it later if you use a registered tax agent.
What can I claim when filing my income tax return?
The ATO has plenty of handy ‘how-to-guides’ that talk you through whether you need to lodge a tax return, when and how to lodge one, and what you can claim. Visit the ATO website for some useful tips.
Mike’s big hint: Don’t forget you can claim your working from home time in your return as well.
You can claim a deduction of 80 cents for each hour you worked from home for the period between 1 July 2020 to 30 June 2021 in your 2020–21 tax return. There are other calculations you can use, but this is the easiest method.
The ATO will check certain elements of your working from home claims, and the big one will be travel. Last year, the ATO found a lot of people claimed work travel in their cars when in fact they were working from home… and not travelling. This is something to think about before you make your claim.
What should I do with my income tax return?
One of the most common questions people ask is: what should I do with my income tax return?
There are a few good places to put the money:
- pay some money off your credit card
- put some extra money into your super
- make some extra payments on your mortgage
No matter how much or how little you earn, you should regularly check how you spend your money (bills, meals, clothes, petrol, etc) just in case you can get into some better habits. Tax time is a great reason to start. Visit the Money Smart website for budget advice and calculators.
If you don’t have credit card or mortgage debt, you can always put your income tax return into an investment account for a rainy day. Even though returns are low at the moment, putting your money into a savings account is better than having it sit in your everyday account with temptation to spend it.
If you are in a lot of debt, and you don’t know where to start, there are financial advisors and counsellors who can help.
Latrobe Community Health Service provides free and confidential financial capability counselling. We can help you get your finances back on track with a ‘financial health check-up’. Enquire about our service today.