From the months of July to the end of October, individuals are required to lodge a tax return. However, there are some circumstances where you do not legally have to. Whether you are a business trying to make the most of EOFY or an individual, it is important that you follow tax guidelines. Failing to comply with these guidelines can have serious consequences. Putting yourself in control of your finances ahead of tax time will give you an advantage. In this article, we’ll explain the circumstances where you won’t have to lodge a tax return.
What is a Tax Return?
A tax return is a form or set of documents filed with a country’s taxing authority that reports income, expenses and other important tax information. Accordingly, tax returns allow taxpayers to calculate their tax liability, schedule tax payments, or request refunds for the over-payment of taxes. In most countries, tax returns must be filed annually for an individual or business with taxable income. This may include wages, interest, dividends, capital gains, or other profits. Information on how to lodge an individual tax return can also be found on the Australian Taxation Office website.
Tax Free Threshold
Firstly, if you are within the tax free threshold, you may not have to lodge a tax return. The tax free threshold for 2019 is an annual income of $18,200 or less. Below are some circumstances where this might apply:
If you earned more than $18,200
You must legally lodge a tax return. The amount of tax you pay will vary depending on your income bracket and whether you have any outstanding HELP loans, such as HECS.
If you earned $18,200 or less, but had tax withheld
You must lodge a tax return to claim back that tax. When you lodge your return, you should expect to receive a full refund of the tax taken out in the preceding financial year.
If you earned less than $18,200 and paid no tax on your income
You do not legally need to lodge a tax return. This is because you have both earned below the tax-free threshold and have not had any tax withheld on your income. This means you won’t be entitled to a tax refund.
Working Holiday Makers
You will not be required to lodge a return for 2018 – 2019 if you hold a 417 or 462 visa and your taxable income for the year is less than $37,001. It is important to read about these guidelines if you are unsure of whether they apply to you.
Foreign Residents
Under Australian law, foreign residents are exempt from lodging a tax return if their only Australian-sourced income was interest, dividends or royalties from which non-resident withholding tax has been correctly withheld.
Fulfilling legal tax requirements is your responsibility as a tax-paying citizen. If you do not adhere to these requirements, there can be legal implications. If you are unsure of your legal obligations, it is worth consulting a tax lawyer.
