A Step-by-Step Guide
Filing a tax return might seem overwhelming, especially if you’re a student new to the Australian tax system. However, understanding how to manage your tax obligations is an important step in your financial journey. Whether you’re working part-time, on a scholarship, or earning a taxable income in Australia, this guide will walk you through the process of filing your tax return as a student.
- Determine If You Need to Lodge a Tax Return
As a student, you may or may not need to file a tax return depending on your income and financial circumstances.
You need to file a tax return if:
You earned more than $18,200 (the tax-free threshold) during the financial year (July 1 to June 30).
You had taxes withheld from your income, regardless of your total earnings (you may be eligible for a refund).
You received taxable government benefits, such as Youth Allowance.
You are earning income from investments or other sources.
If you earned less than $18,200 and no tax was withheld from your income, you can lodge a non-lodgment advice to inform the Australian Taxation Office (ATO) that you don’t need to file a return.
- Gather the Necessary Documents
Before starting your tax return, ensure you have all the required documents and information:
Tax File Number (TFN): You must have a TFN to file a tax return. If you don’t have one, apply through the ATO website.
Income Statements: These are provided by your employer(s) through Single Touch Payroll and can be accessed via your MyGov account.
Bank Statements: If you earned interest from your bank account, this income must be declared.
Scholarship Details: Some scholarships may be taxable, so check the terms and conditions.
Receipts for Deductions: Keep records of expenses that may be tax-deductible, such as textbooks, stationery, or professional association fees.
- Check Your Residency for Tax Purposes
Your residency status affects how you are taxed in Australia.
Australian Resident for Tax Purposes: Most international students qualify as residents for tax purposes if they’ve been studying in Australia for more than six months. Residents are taxed at a lower rate and can claim the tax-free threshold.
Non-Resident for Tax Purposes: If you’re a non-resident, you’ll be taxed at a higher rate, and the tax-free threshold does not apply.
You can use the ATO’s online residency test to confirm your status.
- Claim Tax Deductions and Offsets
Students are eligible to claim deductions for certain expenses related to their studies or employment. Some common deductions include:
Work-Related Expenses: Uniforms, protective gear, or equipment required for your job.
Study-Related Expenses: Textbooks, stationery, and equipment used for earning taxable income.
Travel Expenses: Costs incurred when traveling for work-related purposes.
Internet and Phone Bills: If used for study or work purposes, you can claim a portion of these expenses.
Be sure to keep receipts and documentation for all claimed expenses, as the ATO may request evidence.
- Lodge Your Tax Return Online
The most straightforward way to file your tax return is online via the MyGov platform, linked to the ATO.
Steps to Lodge Online:
Log in to your MyGov account and link it to the ATO.
Navigate to the “Tax” section and select “Lodge Tax Return.”
Review your pre-filled information (income statements, bank interest, etc.).
Add any deductions or offsets you’re claiming.
Submit your return.
You can also use a registered tax agent or accountant if you’re unsure about the process or have complex financial situations.
- Check for Refunds or Payments Owed
After filing your return, the ATO will process it within two weeks.
If You’re Owed a Refund: Your refund will be transferred to your nominated bank account.
If You Owe Tax: The ATO will notify you of the amount and payment deadline.
Make sure your bank details are accurate to avoid delays.
- Stay Organized for Next Year
To make future tax returns easier, adopt good financial habits:
Keep receipts and documentation throughout the year.
Use expense-tracking apps to monitor deductible expenses.
Ensure your MyGov account details are updated.
Conclusion
Filing a tax return as a student in Australia might seem daunting, but it’s a manageable process if you follow these steps. With the right documents, an understanding of your residency status, and knowledge of eligible deductions, you can file your return with confidence. Plus, you might even receive a refund to boost your savings!
Take the time to familiarize yourself with the tax system, and you’ll be setting yourself up for financial success during your studies in Australia.