Income tax
Tax return
A tax return is the annual form you lodge with the ATO to report your income, claim deductions and offsets, and have your income tax liability or refund assessed.
A tax return is how most individuals, companies, trusts and partnerships report their income and tax position for the year to the ATO. In it you declare your assessable income, claim your deductions and offsets, and report details such as private health insurance and any capital gains. The ATO uses this information to issue a notice of assessment.
The Australian income year runs from 1 July to 30 June. Individuals can usually lodge their return from the start of July, and many are pre-filled using data the ATO receives from employers, banks and health funds. Pre-filled information should still be checked, because it may be incomplete or wrong, and you remain responsible for the accuracy of what you lodge.
Lodgment can be done through ATO online services via myGov, through tax agents, or on paper in limited cases. If you use a registered tax agent, you may have an extended lodgment date. The general due date for individuals is generally 31 October, but this can vary, so check the ATO website for the date that applies to you. Businesses and entities can have different due dates.
People who run a business, including sole traders, report business income and deductions in the same individual tax return, using a business schedule. A company lodges its own company tax return, and trusts and partnerships lodge returns showing the net income and how it is distributed to beneficiaries or partners. Each entity type needs its own return.
The tax return is a separate process from the BAS. The BAS reports GST, PAYG withholding and PAYG instalments during the year, while the tax return pulls the year together. Amounts reported on BAS, particularly PAYG instalments, are credited in the tax return. Your income figures in the return should be consistent with the GST-exclusive sales you reported across your BAS periods.
If you do not need to lodge, for example because your income was below the tax-free threshold and no tax was withheld, you may not have to file, although some people choose to do so to claim refunds of withheld amounts. Late lodgment may attract a failure to lodge penalty. Keep supporting records for five years. This is general information only, so confirm your lodgment obligations with the ATO or a registered tax professional.
Worked example
Elena works part time and runs a small online shop as a sole trader. After 30 June she lodges a single return showing $48,000 of wages, $26,000 of net business profit and $300 of interest. She claims $1,100 of work-related deductions. The PAYG withholding from her wages and any PAYG instalments are credited against the tax assessed. The result is either a refund or an amount payable.
Practical tips
- Check pre-filled information before lodging, because you remain responsible for any errors.
- Keep your income in the return consistent with the GST-exclusive sales on your BAS.
- Check the ATO website for your lodgment due date, since it can differ for agents and entity types.