If you earned Australian income between 1 July 2020 and 30 June 2021, you may need to lodge a tax return. Even if your income is a lot less this year, it's worth lodging a return to see if you're due a refund.
If you're doing your own tax, you have until 31 October to lodge your return.
Lodge online with myTax
You can lodge your return using myTax, the ATO's free online tool. You need a myGov account linked to the ATO to lodge online. Returns lodged this way are usually processed within two weeks.
Lodging with myTax is easy and free. Most information from employers, banks, government agencies and health funds will be automatically included in your tax return by late July. You just have to check the information is correct, enter any income that isn't there, add any deductions you have, and then submit. MyTax will then calculate your tax for you.
Declare all your income
Most of the information about your income will be pre-filled from details the ATO receives from your employer and financial institutions. There may be other income you need to add yourself.
Common types of income that must be declared includes:
- employment income
- government payments
- super pensions and annuities
- investment income (including interest, dividends, rent and capital gains)
- income from the sharing economy (for example Uber or Airbnb)
- compensation and insurance payments
- foreign income
Visit the ATO's website for more information on income you must declare.
Claim your tax deductions
Tax deductions reduce your taxable income. You get back some but not the full cost of the tax-deductible item or service you are claiming.
You're entitled to claim deductions for some expenses.
To claim a deduction for work-related expenses:
- you must have spent the money yourself and weren't reimbursed
- the expense must be directly related to earning your income
- you must have a record to prove it (usually a receipt)
If the expense was for both work and private purposes, you can only claim a deduction for the work-related portion.
If your expenses meet these criteria, here's a list of the things you may be able to claim.
Car and travel expenses — If you use your car for work, then you may be able to claim a deduction. This does not include the normal cost of travel between work and home.
Clothing, laundry and dry-cleaning expenses — To claim the cost of a work uniform, it needs to be unique and distinctive. For example it contains your employer's logo. You may also be able to claim a deduction for occupation specific clothing, like chef's chequered pants or protective ('hi-vis') clothing that is required to meet safety standards.
Self-education expenses — If the study relates to your current job, you can claim expenses like course fees, student union fees, textbooks, stationery, internet, home office expenses and professional journals.
Tools and other equipment — If you buy tools or equipment to help earn your income, you can claim a deduction. If the equipment or asset costs $300 or more the full amount is not immediately deductible. You will need to claim the costs back over a number of years.
The ATO have created occupation and industry guides to help you work out what you can and can't claim.
You may be able to claim the cost of earning interest, dividends or other investment income.
- interest charged on money borrowed to invest
- investment property expenses
- investing magazines and subscriptions
- money you paid for investment advice
The ATO has more information about investment income deductions.
Working from home expenses
If you're an employee who works from home, you may be able to claim a deduction.
For the 2020-21 income year, there are three ways you can choose to calculate your working from home deductions, depending on your circumstances:
- temporary shortcut method (available between 1 July 2020 and 31 July 2021)
- fixed rate method
- actual cost method
The ATO has more information about how to calculate working from home expenses.
Other items you can claim include:
- union fees
- the cost of managing your tax affairs
- income protection insurance (if it's not paid through your super fund)
- personal super contributions you paid to your super fund
- gifts and donations to organisations that are endorsed by the ATO as deductible gift recipients
Keep receipts using the myDeductions tool in the ATO app and make it easier to do your tax return. myDeductions allows you to record deductions including work-related expenses, gifts and donations, interest and dividends. It also lets you store photos of receipts and record car trips.
Get help from a registered tax agent
If you want to use a professional to do your tax return, make sure you use a registered tax agent. You can check if the accountant or agent is registered on the tax practitioner register.
Most registered agents have special lodgment schedules and can lodge returns for their clients later than the 31 October deadline.
Whichever way you choose to lodge your tax return, remember you are responsible for the claims you make. So make sure your deductions are legitimate and you include all your income before you or your agent lodges your return.