Approximately more than 200,000 taxpayers fail to lodge tax returns every year. If these taxpayers did, they would probably be able to receive a tax refund. This is money that is normally withheld by an employer and submitted to the ATO for tax purposes. However, if you make under the $18,200 threshold, you can get this money back.
To find out whether you are entitled to a tax refund, you should assess your income and payslips. The Australian Taxation office (ATO) are your main point of contact for this exercise. If you follow these steps correctly – you may receive a significant refund.
1. Lodge your tax return
Unfortunately, the ATO cannot return your money if you don’t lodge a tax return. Therefore, taxpayers are given from 30 June until 31 October to lodge a tax return. This may seem like a lot of time, but if you are lodging deductions, you need to have documentation to back it up.
Although there are multiple ways of lodging your tax return such as through a registered tax agent, the ATO recommends doing it through myTax for security, efficiency and legitimacy.
You are also required to lodge a tax return if any of these circumstances apply:
- Tax was deducted from any payments (ie. wages) made to you during the financial year
- You are an Australian resident and your taxable income was above the tax-free threshold
- You are a foreign resident and earned more than $1 in Australia during the financial year
- You’re leaving Australia permanently or for longer than one financial year
- You wish to claim any tax deductions
However, you do not need to lodge a tax return if:
- You are a foreign resident and your only Australian-sourced income was interest, dividends or royalties from which non-resident withholding tax has been correctly withheld.
- You are a working holiday maker (417 or 462 visa holder) and your taxable income for the year is less than $37, 001.
2. Get assessed
After lodging your tax return, the ATO will assess how much income you have received and also the tax you have paid in the previous year. To check on the process of your tax return, you can check here using your tax file number or you can log into your myTax account.
There are seven different steps a tax return will undergo, which are:
In progress – Processing
The ATO have received the tax return and have also begun processing it.
In progress – Information pending
The ATO are obtaining further information to complete the processing of the return and will contact you if needed.
In progress – Under review
The ATO are reviewing your tax affairs. This may involve assessments of prior-years as well.
Cancelled
The ATO are reviewing your tax affairs. This may involve ensuring you have put down all the appropriate information and details that you have reported to them. If it says ‘Cancelled’ you should not attempt to lodge your tax return again.
In progress – Balancing account
The ATO are processing the return and calculating how much they need to refund you or how much you need to pay.
In progress – Processing
Your notice of assessment and any refund is being generated.
Issued – $ Amount
The ATO have issued your notice of assessment and the result is on the notice. The issue date will be shown online.
3. Receiving your refund
If you are entitled to a tax refund, you’ll be sent a notice of assessment.
If you have provided a valid Australian financial institution account details then the ATO will pay the refund directly to that account. Electronic returns are normally processed in two weeks. As paper returns are processed manually, they are processed in 10 weeks.
If you require priority processing you can read here for a succinct information sheet with links from the ATO. For more specific advice and legal assistance, you can also speak to a tax lawyer who will be able to assist you.
Don’t know where to start? Contact a LawPath consultant on 1800 529 728 to learn more about customising legal documents and obtaining a fixed-fee quote from Australia’s largest legal marketplace.
