If you are new to the Australian tax system, you might need some help understanding how income tax works. Hence, being one of the most reputable and reliable Brisbane based accounting companies – offering professional financial assistance – Syndeo Group has prepared a detailed beginners guide to income tax. Here’s everything you need to know:
What’s Income Tax Exactly?
First, let’s dig deeper and clarify what exactly income tax is. Namely, income tax is the tax you have to pay on any form of income you receive including; salaries, business profits, investment returns like dividends or bank interest, profits from selling shares or properties such as land, house, flats, etc.
But, you only have to pay income tax if your income is worth more than $18,200. Otherwise, if your income is less than this amount, you don’t have to pay any taxes. In other words, $18,200 is the tax-free threshold. Also, bear in mind that the more you earn, the higher the tax rate you will have to pay due to the Australian progressive tax system.
How to Pay Income Tax?
Namely, if your income consists of a wage or salary only, you don’t have to do anything, since the amount of money you receive every payday is the amount after your income tax has been deducted. Your employer should pay your income tax directly to the ATO (Australian Taxation Office).
On the other hand, if you receive any other form of income, listed above, on your bank account, you have to pay income tax by yourself. Basically, you have to put your income information into an income tax return to calculate your tax liability based on which you will have to pay tax.
Also, remember that the ATO has set up strict deadlines that you must follow. So, you have to lodge your income tax return from any time from the 30th June to the 31st of October each year, not sooner or later. Luckily, if you hire a highly-experienced accountant, like the ones that work at Syndeo Group, you won’t have to worry about any deadlines since they will do the work for you.
What about Deductions?
Fortunately, as you have the obligation to pay income tax, you also have the right to claim deductions for specific expenses you made in that income year which may significantly decrease your taxable income. But, you cannot claim deductions on personal expenses. In fact, only business-related expenses are eligible for deductions. If you have any doubts about whether you have the right to claim deductions on certain expenses, consult the Syndeo Accountants – they can keep you up to date on all the tax rules and legislation.
The entire process of paying income tax, lodging a tax return, and claiming deductions can be quite complicated, especially for beginners. That’s why you’d better get in touch with the best – Syndeo Group! Let us help you, help yourself! It’s easier when you have guidance.
Don’t hesitate – call us today!