Taking on a part-time or casual second job can be a good way to earn additional income. However, it’s important to understand how this extra money affects your tax obligations for the year. Let’s look closer at how earnings from a second job are taxed in Australia.
Tax Treatment: Both your primary employment and secondary job income are added together to calculate your taxable income for the year. You remain entitled to the same low income tax offset and tax-free threshold, but earnings beyond this will face higher rates.
Tax Brackets: Depending on your combined annual income, additional earnings may push you into a higher marginal tax bracket of 32.5%, 37% or 45%. Single income brackets differ from those who are married or in a de facto relationship.
Claiming Deductions: You can deduct work-related expenses associated with both jobs such as uniforms, training courses and equipment. This can lower your taxable income and potentially save you hundreds each year.
Withholding Tax: Make sure the correct amount of tax is withheld from each pay based on your estimated total income. Too little withheld can leave you with a bill at tax time. Get it adjusted if needed.
Record Keeping: Be disciplined about keeping financial records related to both roles such as payment summaries, bank statements and receipts. Good documentation makes tax return time much smoother.
Seeking Advice: If you have any uncertainties, it may help to consult us, Tax123, your professional online tax return platform. We can guide you on maximizing deductions and withholding the right amount upfront.
With the right preparation, your extra income from a second job doesn’t need to cost more tax than necessary. Approach it properly and you can reap both financial and experience-based rewards.
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“Why do I owe the ATO money after submitting tax return?” That is a common question that our client ask after submitting tax return. Here are some key reasons why:
Your income increased from estimates used for tax withholding during the year
You earned additional untaxed income like bonuses or investments profits
You claimed inadequate amounts as tax deductions compared to what you were entitled to
You started operating your own business or earned freelance/contractor income
You sold investments or assets and made a capital gains taxable profit
You received a HECS/HELP or other educational debt statement for repayment
By law in Australia, you must pay any outstanding tax due by the relevant lodgment due date, even if paid in installments. Filing accurately helps reduce surprises – but the ATO will issue a bill if payment is required to fully satisfy your tax liability.
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What are the penalties of late tax return? While the tax return deadline may seem a long way off, it’s important to be aware of the consequences of filing late in Australia. The ATO takes lodging on time very seriously – here’s what can happen if you miss the due date:
Late tax return Penalty – This is $210 for individuals and $420 for companies. Further penalties apply monthly until you lodge.
General Interest Charge – If any tax is outstanding, you’ll be charged interest at over 10% annually from the original due date.
Reminders, Garnishee Warnings & Directions to Pay – The ATO will issue punishment notices if returns are very overdue before taking stronger actions.
Prosecution – In rare cases of deliberate delay or tax fraud, criminal prosecution is possible with potential jail time.
Dodgy Behavior is Often Caught – The ATO regularly matches third party income information against lodged returns to identify discrepancies.
What To Do If You’re Late – Lodge asap to minimize penalties. Ask for penalty remission if you have a reasonable excuse. Consider an agreed payment plan if tax is owed.
The best approach is to prepare your tax early and request help if needed – facing lodgment penalties is very costly. Take heed of deadlines to avoid complications later on.
https://www.tax123.com.au/wp-content/uploads/2023/11/011.png600900adminhttps://www.tax123.com.au/wp-content/uploads/2023/07/logo.svgadmin2023-11-09 04:31:542024-05-10 14:50:34What Happens If You Lodge Your Tax Return Late in Australia(late tax return)
Estimating income tax in Australia is complicated, you can use our Australia income tax calculator below to estimate your tax return amount:
Calculate tax without income tax calculator
If you want to calculate yourself, here’s a general overview of the process:
Determine your taxable income
Start by calculating your taxable income. This is done by subtracting any allowable deductions from your assessable income. Assessable income includes your salary, wages, rental income, dividends, and other income sources.
Understand the tax brackets:
Australia has a progressive tax system, which means that different income ranges are taxed at different rates. Familiarize yourself with the current tax brackets and rates provided by the Australian Taxation Office (ATO). These brackets are subject to change, so it’s important to refer to the latest information from the ATO.
Apply the tax rates
Once you know your taxable income and the applicable tax brackets, you can determine the tax payable for each bracket. The ATO provides tax tables and calculators that can assist with this process. The tax payable is calculated by multiplying the income within each bracket by the corresponding tax rate.
Consider Medicare Levy
In addition to income tax, most Australian residents are also required to pay the Medicare Levy, which helps fund the country’s healthcare system. The Medicare Levy is calculated as a percentage of your taxable income, and there may be additional surcharges or exemptions based on various factors.
Apply any offsets and rebates
Australia offers various tax offsets and rebates that can reduce your final tax liability. These may include the Low and Middle-Income Tax Offset (LMITO), Senior Australians and Pensioners Tax Offset (SAPTO), and other specific deductions or credits. Ensure that you meet the eligibility criteria for any applicable offsets or rebates.
Complete your tax return
Once you have calculated your income tax, you will need to complete your annual tax return. This can be done by using our online tax return system . Provide accurate information regarding your income, deductions, and any other relevant details.
It’s important to note that the above steps provide a general overview of the income tax calculation process in Australia. Taxation can be complex, and individual circumstances may vary. It is always recommended to consult with us or use our online tax return services to resolve your tax problems.
https://www.tax123.com.au/wp-content/uploads/2023/10/002.jpg600900adminhttps://www.tax123.com.au/wp-content/uploads/2023/07/logo.svgadmin2023-10-06 00:08:062024-05-10 14:54:42Income Tax Calculator – How to estimate my tax refund?
In Australian tax return, a tax deduction refers to an expense that can be subtracted from your assessable income, thereby reducing your taxable income. By claiming deductions, you can potentially lower the amount of tax you owe.
Type of Tax Deduction
Deductions for costs incurred in running your business are allowable, provided the expenses are not of a private, domestic, or capital nature. You may be able to claim deductions for your business expenses.
– Accounting Fee
– Advertising Fee
– Bank Fee
– Other Fee
– Rent
– Sub-Contractors
– Salary & Wages
– Superannuation
– Work Cover
– Insurance
– Public Liability Cover
– Business Trip
– Staff Training Exp
– Freight & Cartage
– Leasing & Hiring
– Fuel
– Parking
– Registration
– Repairs & Maintenance
– Internet Expenses
– Printing & Stationery
– Postage
– Repairs
– Rubbish Removal
– Telephone
– Office Equipment
– Tool Replacements
– Uniform/Prot. cloth
– Electricity Expense
– Material Purchase
– Closing Stock
– Other Purchase
– Car Purchase
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In Australia, you can generally claim deductions for expenses related to your investment property against the rental income you receive.
Investment Property
You can claim a deduction for your rental property-related expenses for the period your property is rented or is genuinely available for rent.
If you use your property for both private and income-producing purposes, you can only claim a deduction for the portion of any expenses that relate to the income-producing use.
Property rented or genuinely available for rent
You can claim a deduction for rental expenses you incur, if you use your property for income-producing purposes.
You can only claim a portion of your expenses if any of the following apply to you:
– Your property is only genuinely available for rent for part of the year.
– Your property is used for private purposes for part of the year.
– Only part of your property is used to earn rent.
– You rent your property at non-commercial rates.
– Your investment loan is partially used for private purposes.
1. When you can claim
You can claim expenses for periods when your property is either:
rented out not rented out but is genuinely available for rent, which means the property is advertised, giving it broad exposure to potential tenants considering all the circumstances, tenants are reasonably likely to rent the property.
If these don’t apply, it’s likely that you can’t claim all your expenses as you don’t have a genuine intention to earn income from your property.
2. Factors that indicate genuine availability
Property is genuinely available for rent when it is:
– advertised in ways that give it broad exposure to potential tenants
– having regard to all the circumstances, tenants are reasonably likely to rent it.
Factors that may indicate a property isn’t genuinely available for rent include:
– you advertise in ways that limit your exposure to potential tenants – for example, if you only advertise
— at your workplace, or by word of mouth
— outside holiday periods, so it is less likely to be rented out
– the location, condition of the property, or accessibility of the property means it is unlikely tenants will seek to rent it
– you place unreasonable or stringent conditions on renting out the property that restricts the likelihood of the property being rented out, such as
— setting the rent above the rate of comparable properties in the area
— placing a combination of restrictions on renting out the property, such as requiring prospective tenants to provide references for short holiday stays and having conditions like no children or no pets
– you refuse to rent out the property to interested people but you don’t give adequate reasons.
All or part of your property is used to earn rent
If only part of your property is used to earn rent, you can claim only that part of your expenses that relates to the rental income. As a general guide, apportion your expenses on a floor-area basis – that is, based on the area solely occupied by the tenant, together with a reasonable figure for their access to the general living areas, including garage and outdoor areas if applicable.
Property available for part-year rental
If your property is only available to rent for part of the year, you can’t claim a deduction for the portion of any expenses that relates to your private use.
For example, if you have a holiday home or time-share unit, you can’t claim a deduction for any expenses related to those periods when you, your friends or your family used the home or unit for private purposes.
You may need to decide which expenditure is private in nature. For example, council rates paid for a full year would need to be apportioned based on the total time the property was rented out and genuinely available for rent during the year as a proportion of the total year.
However, it may not be appropriate to apportion some of your expenses on the same basis. For example, expenses that relate solely to the renting of your property are fully deductible and you would not apportion them based on the time the property was rented out. Such costs might include:
– real estate agents commissions
– costs of advertising for tenants
– phone calls you make to a tradesperson to fix damage caused by a tenant
– the cost of removing rubbish left by tenants.
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The Australian tax system can be a little overwhelming for people who are new to the country or filing taxes for the first time. It is essential to understand the process of filing individual tax return in Australia to avoid any legal or financial consequences. In this blog post, we will discuss the basics of individual tax return in Australia.
Taxable Income
Your taxable income is the amount of money that you need to pay taxes on. It includes all the income you’ve earned over the financial year, including your salary, wages, and any income from investments or rental properties. You can reduce your taxable income by claiming deductions for expenses related to work or investment income.
Filing Your Tax Return
If you are required to lodge a tax return, you must do so by the end of October. The tax return can be lodged online using the Tax123 Individual Tax Return system. The Tax123 Individual Tax Return system is an easy-to-use online service that guides you through the process of filing your tax return. You will need to provide your personal details, financial information, and any deductions you are entitled to. Once you have completed your tax return, you will receive a notice of assessment from the Australian Taxation Office (ATO) outlining your tax liability or refund.
Penalties for Non-Compliance
If you fail to lodge your tax return by the deadline, you may face penalties or fines. The Australian Taxation Office (ATO) may also charge interest on any unpaid taxes and take legal action to recover the outstanding amount. To avoid these consequences, it is essential to lodge your tax return on time and ensure that all the information provided is accurate.
Conclusion
Filing your individual tax return in Australia can be a daunting process, but it is crucial to stay on top of your tax obligations. By understanding the basics of the Australian tax system, you can ensure that you lodge your tax return accurately and on time, avoiding any legal or financial consequences. Remember to keep all your receipts and documents related to your income and expenses to make the process of filing your tax return a lot smoother.
https://www.tax123.com.au/wp-content/uploads/2023/08/thumb-17.jpg600900adminhttps://www.tax123.com.au/wp-content/uploads/2023/07/logo.svgadmin2023-07-26 06:28:442024-02-14 05:25:09A Simple Guide to Filing Individual Tax Return in Australia
The Business Activity Statement, or BAS, is a business’s quarterly tax reporting form submitted to the Australian Taxation Office (ATO). On the BAS, businesses report their total GST collected on sales and GST paid on expenses over the last three months. This allows the ATO to determine if a business owes additional tax or is due a refund.
if your business is registered for GST, you must submit BAS reports.
The BAS is a separate reporting requirement from your tax return. As a GST-registered business, you must report your GST activity and amounts on a BAS on a quarterly basis, regardless of whether you meet the lodgment threshold for income tax returns. It discloses your total GST collected from sales as well as GST paid on business expenses over the reporting period. The Australian Taxation Office uses this information to determine if you have a GST refund owing or additional GST amount payable.
Submitting your BAS ensures you are meeting your GST obligations as a registered business and helps maintain your GST registration status. Even if no sales or expenses were recorded in a particular quarter, a BAS must still be lodged to report nil activity.
What is TFN?
A tax file number (TFN) is your personal reference number in the tax and superannuation systems.
Your TFN is:
a unique number (usually 9 digits)
an important part of your identity
yours for life – you keep your TFN even if you change jobs or name, move interstate or go overseas.
To find your bank statement from online banking, you can follow these general steps:
Log in to your online banking account using your username and password. This information is typically provided to you when you set up your online banking account.
Once logged in, navigate to the section or tab that contains your account information or transactions. This may be labeled as “Accounts,” “Transactions,” or something similar.
Select your business account for which you want to access the bank statement. If you have multiple business accounts, please download all those accounts’ statements one by one with the following steps.
Look for an option or link that allows you to view or download your bank statements. It may be labeled as “Statements,” “Documents,” or “Statements and Documents.”
Choose the statement period or date range for a financial year. For example, if you are doing a tax return of the financial year 2023, please choose 1 July 2022 to 30 June 2023.
Click on the statement or download button to access the bank statement. Depending on your bank’s online banking platform, the statement may open in a new window or be downloaded as a PDF or other file format.
After finishing downloading, please update your file to our online tax return system.
If you are unable to locate your bank statement, please contact your bank staffs.
How to get bank transaction records
To get bank transaction records from online banking, follow these general steps:
Visit your bank’s website and enter your login credentials.
Once you’re logged in, look for a section or tab labeled “Account Activity,” “Transactions,” or something similar. The exact wording may vary depending on your bank’s online banking platform.
Select your business account for which you want to access the bank statement. If you have multiple business accounts, please download all those accounts’ statements one by one with the following steps.
Choose the transaction period or date range for a financial year. For example, if you are doing a tax return of the financial year 2023, please choose 1 July 2022 to 30 June 2023.
After selecting the date range, click on a button like “Export,” “Generate,” “Search,” or “Get Transactions” to export data.
Once the transaction history is generated, it will automatically download to your device. Please open it and double-check that they include the desired transactions and that the information is accurate. If everything is setting down, please upload all transactions CSV files to our online tax return system.
It’s important to note that the specific steps may vary depending on your bank and its online banking platform. If you encounter any difficulties or have specific questions, it’s best to reach out to your bank’s customer support for assistance.
Type your ABN number is search box and click search button.
Find your ABN record in search result.
Check the status of “Goods & Services Tax (GST)”.
What is Medicare Levy Exemption？
Medicare is Australia’s universal healthcare system that provides affordable medical care for all residents and citizens. While Medicare is funded through a 2% Medicare Levy paid by individual taxpayers, there are certain exemption criteria that allow some people to claim a Medicare Levy Exemption. To understand if have met the requirements of Medicare Levy Exemption, please check the article below:
Why student visa holders cannot claim this self-education expense
For oversea students, if you are holding a student visa, your primary intention for obtaining the visa was to study in Australia before gaining working rights. Prior to enrolling and incurring tuition expenses, you were not permitted to work or be employed in Australia. However, when it comes to claiming self-education expenses, the requirement is that the course should be directly related to improving the skills required for your current income-earning activities. Therefore, as a general rule, international students are usually unable to claim self-education expenses.
What's the difference between business-related expenses and PAYG expense?
In the context of Australian tax returns, there are two types of work-related expenses: business-related expenses and PAYG (Pay As You Go) work-related expenses. Here’s an overview of the differences between them:
Business-Related Expenses (ABN): These expenses are incurred by individuals who operate their own business or work as independent contractors. In this section, you can claim deductions for expenses directly related to your business activities, such as office rent, equipment costs, advertising expenses, professional fees, and other costs directly incurred in running your business.
PAYG Work-Related Expenses: These expenses are incurred by individuals who are employees and receive a salary or wages subject to the PAYG withholding system. PAYG work-related expenses are typically associated with the performance of your job and are directly related to earning your income. For example, expenses for uniforms, training courses, and work-related travel.
It’s important to note that there are specific criteria and substantiation requirements for claiming both types of work-related expenses. Generally, you can only claim deductions for expenses that are directly related to your work and are not reimbursed by your employer.
What Happens If I Don't Have an Invoice?
Under Australian Tax Law, deductions totaling more than $300 must be substantiated with proof such as a receipt or other relevant document. If you cannot provide such evidence, we regret that we will be unable to process your deduction.
What is Medicare Levy?
The Medicare levy is an amount you pay in addition to the tax. if you meet certain conditions, you could claim a Medicare levy exemption from your taxable income.
To be legible for an exemption, ATO may ask you to provide a Medicare levy exemption certificate. In this case, you must get a Medicare Entitlement Statement(MES) from www.servicesaustralia.gov.au.
Why need the information of my family?
Because you may get a reduction or exemption from paying the Medicare levy surcharge, depending on you and your spouse’s income and circumstances.
Tax returns require truthful and legally obtained documentation. Please double check all information you upload matches your actual financial records.
The ATO conducts compliance checks, so false claims may result in penalties if discrepancies are found later on. We’re here to help you maximize deductions, but cannot condone fabricated receipts or expenses.
Income statements like pay slips or supplier invoices must be the copy of original documents, not altered versions.
Personal details like your name, address and birthdate should be entered exactly as shown on official identification like a drivers license or passport.
Be sure to include all required income, including cash earnings or side jobs. Leaving things out risks an audit down the road for underreporting.
Ask us if you have any unclear situations or documentation issues before submitting. We’d love to help make sure your return is fully accurate to avoid issues with the ATO.
What Is Capital Gains Tax?
Capital gains tax (CGT) is the tax you pay on profits from disposing of assets including investments, such as property, shares and crypto assets. Although it is referred to as ‘capital gains tax’, it’s part of your income tax. It’s not a separate tax.
ABN
ABN stands for Australian Business Number. It is a unique 11-digit number that is issued by the Australian Business Register (ABR) to businesses and other entities, such as sole traders, partnerships, companies, and trusts, that are carrying on an enterprise in Australia. The ABN is used as a universal identifier for businesses and is required for various purposes, including:
Registering for Goods and Services Tax (GST) and Fringe Benefits Tax (FBT) with the Australian Taxation Office (ATO).
Claiming tax credits and deductions, such as input tax credits for GST.
Dealing with other government agencies, such as the Australian Securities and Investments Commission (ASIC) and the Australian Business Licence and Information Service (ABLIS).
Conducting business with other entities, such as suppliers and customers, who may require an ABN for invoicing and payment purposes.
To apply for an ABN, businesses and other entities must meet certain eligibility criteria, such as being registered for GST or operating in a business-like manner. Once an ABN is issued, it does not expire and can be used for the life of the business or entity, provided that the information held by the ABR is kept up-to-date.
The revised fixed rate method allows you to claim 67 cents per hour you work from home for the expenses listed below. You no longer require a dedicated home office to use this method:
Expense included in the revised fixed rate are:
data and internet
mobile and home phone usage
electricity and gas
computer consumables (e.g. printer ink)
stationery
You can’t claim a separate deduction for any of the expenses the revised fixed rate includes. You can claim a separate deduction for:
the decline in value of assets used while working from home, such as computers and office furniture
the repairs and maintenance of these assets
cleaning (only if you have a dedicated home office)
Method Two: Actual cost method
The actual cost method allows you to claim a deduction for the actual expenses you incur as a result of working from home.
You may be able to claim a deduction for each of the expenses you incur, such as:
data and internet
mobile and home phone usage
electricity and gas
computer consumables (e.g. printer ink)
stationery
the decline in value of assets used while working from home, such as computers and office furniture, as well as any maintenance and repairs of these items
cleaning (only if you have a dedicated home office)
The actual cost method requires detailed calculations and records. For example, you will need to know and have records of the cost per unit of electricity and average units used per hour.
Is it safe to give tax agency your crypto API and secret key?
In order to better understand this question, it’s important to understand the various types of access that certain cryptocurrency exchange API’s grant. You can configure what type of access you want your API key to grant using your exchanges account settings. Read only access allows the system that is connecting to the exchange API to only “read” or “view” the transaction data for that user account.
This type of granted access is popular amongst portfolio trackers and tax software systems that only need to know your transaction history in order to work properly. These applications, such as us, do not need to be able to make trades on your behalf, we only require this “read only” access to get your income data for tax return purpose. Programs with this type of access CANNOT make trades or withdraw funds on your behalf, so it is safe for you.
How can I get my Uber report?
To obtain your Uber report, you can follow these steps:
Visit the Uber website: Go to the official Uber website at www.uber.com and sign in to your account using your Uber credentials.
Access your account settings: Once logged in, locate and click on your profile icon or photo in the top-right corner of the screen. This will open a drop-down menu.
Open the Privacy settings: In the drop-down menu, find and select the “Privacy” option. This will take you to the Privacy settings page.
Request your data: On the Privacy settings page, scroll down until you reach the “Access and manage your data” section. Look for a link or button that says something like “Download your data” or “Request your data.” Click on it to initiate the data request process.
Specify the data you want: The Uber platform may provide options for you to select the specific types of data you want to include in your report. This can include trip history, account information, payment details, and more. Review the available options and make your selections.
Submit your request: After making your selections, submit your request to Uber. The platform may require you to re-enter your password or go through an additional verification step to ensure the security of your data.
Wait for the report: Once you’ve submitted your request, Uber will process it and generate your report. The time it takes to receive the report can vary, but you should typically receive an email notification from Uber when your report is ready for download.
Download the report: When you receive the notification, follow the instructions provided to download your Uber report. The report is usually provided in a downloadable format, such as a ZIP file or PDF document.
If you encounter any difficulties or have specific questions about obtaining your Uber report, it’s recommended to reach out to Uber’s customer support for further assistance.
When Should I Amend My Tax Return?
To amend your tax return, to fix a mistake or include additional information you can lodge a request online, by paper, through your tax agent or by sending us a letter.
Individuals and sole traders can request an amendment to their income tax return if
they have made a mistake
forgotten to include something
had a change in circumstance after lodging.
Who Is Sole Trader
A sole trader is an individual running a business. If you run your business as a sole trader, you are:
the sole owner and controller of it
legally responsible for all aspects of the business, including debts and losses you incur in running it.
Fares paid to taxi drivers by passengers include goods and services tax(GST). If you’re a taxi driver and you’re not employed by someone else, you must:
register for GST – regardless of how much you earn
only claim GST credits related to your work
lodge business activity statements (BAS) monthly or quarterly (you can’t choose to lodge annually)
pay your net GST
Also, lodge a tax return regardless of how much you earn from ride-sourcing because you are operating a business. If you have registered ABN and GST, please choose “GST Activated”. If you don’t have, please contact us to register them.
