It’s the most magical time of the (financial) year, Flux fam: Tax time. It’s when we scrounge up our receipts, lodge our tax returns with the Australian Taxation Office (ATO) and often, receive a nice juicy tax refund. 

If it’s your first time going solo (aka, mum and dad aren’t helping you this year) or you want to learn a little bit more about your taxes, here’s a Flux breakdown.

What’s a tax return?

Not to be confused with your tax refund, your tax return is the form you lodge with the ATO after June 30 each year. 

The ATO uses your tax return to figure out what your taxable income was for the previous financial year - and whether you paid too much (or too little) tax. 

The formula they use is: taxable income = assessable income - tax deductions. 

So, in your tax return, you’ll declare all your assessable income, like:

• Salary from your employer
• Investments
• Capital gains
• Pensions
• Most government payments (Centrelink).

And any tax deductions, like:

• Work-related expenses
• Charitable donations
• The cost of managing your tax.

So, if you earned $80,000 (pre-tax), but had $3,000 worth of tax deductions, your taxable income actually becomes $77,000.

What can I claim as a tax deduction?

This is normally the fun part. It’s where you can reduce your assessable income by claiming certain expenses. Generally, these are work-related expenses. To do it, you’ll need to:

• Have spent the money yourself (i.e. your employer didn't reimburse you)
• The expense relates to earning your income
• Have a record to prove it (i.e. receipts!).
  

These might be things like:

• WFH expenses 
• Car-related expenses
• Accommodation expenses
• Tools and other equipment
• Clothes and dry cleaning.

You can claim your work-related expenses in the work-related expense section of your tax return.

How and when do I lodge my tax return?

The quickest way to lodge your tax return (and receive your tax refund) is via the ATO’s myTax tool, which is available via myGov. 

Most of the information will be pre-filled by your employer - all you need to do is double check it. However, just because you can lodge your tax return on July 1, it’s actually recommended that you wait a few weeks - even until the end of July. This is because it can take a few weeks for your employer to upload all your info.

You’ll know your tax return is ready to go when your income statement says ‘tax ready’.