Any year you have minimal or no income, you may be able to skip filing your tax return and the related paperwork. However, it's perfectly legal to file a tax return showing zero income, and this might be a good idea for a number of reasons.
Perhaps you've lost your job. Maybe you've taken some time out to go travelling, but whatever the reason you still might have to lodge at tax return at the end of the financial year. Lodging your tax return, even if you have zero income to declare, may offer many benefits that just might surprise you.
If you're under 18 years old (a minor), special rules apply to income you earn and you may pay tax at a higher rate.
Failing to lodge is a criminal offence and once convicted by the court you could face additional fines and/or imprisonment for up to 12 months.
Your payment summary shows your taxable and non-taxable payments the Australian Taxation Office (ATO) need to know about. You need this to lodge a tax return.
We receive data from a range of sources, including banks, financial institutions and other government agencies. We validate this data and match it against our own information to identify where people and businesses may not be reporting all their income.
You must lodge a tax return if any of the following apply to you. You: had tax withheld from any payments (such as wages) made to you during the income year. are an Australian resident and your taxable income was more than the tax-free threshold ($18,200)
The ATO applies a “failure to lodge on time penalty” (FTL) to overdue tax returns or activity statements (BAS or IAS). The FTL is typically up to $900 on each late return / activity statements for individuals and small businesses, and $4,500 for large businesses.
If you're 60 and over, the income will generally be tax-free. If you're between your preservation age and 59, the components of your super will dictate how it will be taxed.
For Australian residents the tax-free threshold is currently $18,200, meaning the first $18,200 of your income is tax free, but you are taxed progressively on income above that amount. The tax-free schedule is due to stay at $18,200 until at least 2024–25.
You usually don't need to lodge a tax return where: your income is under the tax-free threshold ($18,200) no tax has been withheld from that income.
All of the tax you paid during the year is refunded to you. However, once you start earning a little more and your income moves above the tax free threshold, you'll no longer get all of your tax back on your return. The same thing applies if you get a promotion or a new job that earns more money.
If you get a taxable Centrelink payment, you may need to lodge a tax return at the end of the tax year. You'll get a Centrelink payment summary if you get any of these taxable Centrelink payments: ABSTUDY Living Allowance, if you're 16 or older. Age Pension.
Low income tax offset (LITO)
If you earned: $37,500 or less, you will get the maximum offset of $700. between $37,501 and $45,000, you will get $700 minus 5 cents for every $1 above $37,500. between $45,001 and $66,667, you will get $325 minus 1.5 cents for every $1 above $45,000.
Work out which income you need to declare in your tax return, such as employment, government and investment income. Income from working such as wages, allowances, lump sum payments, cash and tips, reportable fringe benefits and super.
Not reporting your full income – The ATO looks at your full income, which may include bank interest, dividends, trust distributions, and other sources. You need to account for all of your income on your tax return, not just your salary or wage. Fail to do so, and you could trigger an audit.
ATO data is provided under table item 6 in table 1 in section 355-65 of Schedule 1 to the TAA. To detect Centrelink clients failing to declare assets, we match all beneficiaries against trust data from the tax return database. This identifies welfare beneficiaries who are also recipients of trust distributions.
Bank interest reviews. We check your bank account information is up to date. We do this to check we paid you the right payment and amount in the past.
This includes cash deposits of 10,000 Australian dollars or more that you placed into your bank accounts in Australia or other financial institutions in Australia. When conducting an audit, the Australian Taxation Office (ATO) can obtain access to any reports made to AUSTRAC about cash transactions of $10,000 or more.
In order to be eligible for a tax deduction, you are required to present documented documentation if the total amount of your claimed expenses is more than $300. On the other hand, if the entire amount of your claimed expenses is less than $300, you are exempt from the requirement to present receipts.
This can include evidence of current employment or self-employment, recent pay statements, a letter from the employer on business letterhead – showing dates of employment, wages paid, and type of work performed – or other financial data.