Tax Time for beginners: understanding what to do

If this is the first time you enter the intricate world of Tax Declaration in Australia, hold on to your seat and take note.

The End of Financial Year arrived last week, which means most people are putting their documentation together so they can maximise their tax refund for 2014. This is a basic guide.

Payment Summary or Annual Income Statements

During July and August most employers will be supplying the Payment Summary, otherwise called Group Certificate for salary and wage earners, as it shows wages or bonuses and the amount of tax withheld.

For contractors and subcontractors, (People working with ABN) things are different because instead of a Payment Summary, they will need to calculate their annual income based on invoices, payslips or other payment statement for all the services rendered under that ABN. In both cases, the documentation will need to be supplied to the ATO (Australian Taxation Office).

Work Related Expenses

If you intend to claim work-related expenses on your Tax, make sure you have actually spend the money and provide evidence of it we a receipt. It also needs to be related to the jobs you got paid for E.g.: Uniforms, protective gear, equipment, stationery, etc

Keep your details updated

At the time of your lodgement, make sure your personal and banking details are up to date. You will have the choice to get your refund deposited to your selected account or as a cheque which will be posted to the address you supplied.

Private Health Insurance

Keep information of your Private Fund at hand. The Australian Government offers a rebate system and Discounts on the Medicare Levy if you have Private Health Insurance.

Medical Expenses

If you were unlucky enough to spend a fortune on Medical expenses this year, you might be eligible for a claim as long as you can provide any records. You can check your eligibility at the ATO website, or directly with your Tax Agent

Choose how to Lodge your Tax Return

For simple Tax Declarations, like those from people with only one job and a very straight forward income, the ATO has the Tax Return for Individuals, which is free and available online or at the ATO offices. In Brisbane, they are located on 140 Elizabeth Street Building, Level 1.

For more complex returns, like those from contractors or employees with several incomes, the option is having a Tax declaration made by a professional.

During this time, Tax accountants can be found in shopping centre booths or you can visit them at their offices.

Their professional fees may vary depending of the complexity of your return, but they normally start at $150 (simple claims) and can go up to $440 for sole traders.

By Janeth Taborda