THE end of the financial year signals the beginning of lodging tax returns, which can feel like a daunting task for students, especially if you’re doing it for the first time.
But Melbourne University’s student adviser for financial aid, Ben McCarthy, said most students had simple tax affairs that could be sorted out quickly.
Do I need to lodge a tax return?
Tax returns must be lodged by Australian residents who have tax withheld from income earned, Australian residents whose taxable income has exceeded $6000, and non-residents whose taxable income has exceeded $1.
International students living in Australia for longer than six months are considered residents for tax purposes.
So, if you have earned less than $6000 in the past financial year, all tax paid will be refunded – this is known as the tax-free threshold.
Students living in Australia for less than six months are not considered residents for tax purposes, and will be required to pay a higher tax rate, and are thus not entitled to the tax-free threshold.
How can I reduce the amount of tax I need to pay?
Visa regulations mean most students work only a limited number of hours a week and are unlikely to exceed the threshold, but for those who have, it is possible to reduce the taxable income through deductions.
Deductions may include work-related expenses like uniform purchases, and also charitable donations.
Mr McCarthy said it was a common myth that study expenses could also be claimed as deductions.
“The advice we have had from the Tax Office is that in most cases students cannot claim study expenses such as tuition fees and books as work related education costs if they are undertaking part-time work,” Mr McCarthy said.
How do I file my tax returns?
Any deductions may be filled out when lodging your tax return, which can be done by phone, mail, or online.
Tax Commissioner Michael D’Ascenzo said the online method, E-tax, was the easiest way to complete a tax return.
“It’s user-friendly, secure and fast, with most people entitled to a refund receiving it within 14 days,” Mr D’Ascenzo said.
The online tax form, used by 2.2 million people last year, also allows international students to complete their returns from outside Australia.
“International students who go home before the end of the tax year, or before they have a chance to do a tax return, can still complete an electronic tax return over the internet from their own country,” Mr McCarthy said.
Should I pay an accountant to do my taxes?
“I am always surprised meeting students who pay accountants to do very simple tax returns,” Mr McCarthy said.
A free program, Tax Help, is available for those who do not wish to hire accountants, but would like help with their forms.
Tax Help is offered at Melbourne University, and several other schools, and has volunteers accredited by the Australian Taxation Office.
Mr McCarthy said the Tax Help program at Melbourne University is usually very busy.
“This year we have more volunteers to cope with the demand, so we should be able to see more people,” he said.
Tax Help is also accessible to the general public, through the Taxation Office.
You should contact your school’s financial advisor to see if it has Tax Help, or call Tax Help on 13 28 61 to make an appointment at the nearest centre.
Things to remember:
*International students living in Australia for longer than six months will be treated as residents for tax purposes.
*If you made less than $6000 in the last financial year, all tax will be refunded.
*Tax returns may be lodged online, so it can be completed from your own country if you have left before the end of the tax year. Superannuation can also be claimed.
*Any work-related expenses can be counted as deductions, but generally study expenses cannot be deducted.
*Make appointments with your tax agents as soon as possible – if using a new tax agent, they must be contacted before October 31.