Welcome to the world of taxes and superannuation in Australia. If you’re new to the tax and super system, this blog will be your guide to kick-start your journey. To learn everything about taxes and superannuation, continue reading this blog. Let’s get started:
Why Do We Have Taxes?
It’s simple. The Australian Taxation Office collects taxes to fund essential community services such as:
- Healthcare
- Education
- Infrastructure
- Defence
- Welfare and disaster relief
These services are important and the foundation of our society.
Starting Your First Job
When you start your first job, there are a few vital aspects you should keep in your mind. Are you a contractor or an employee or thinking of starting your own business? You might need to apply for a tax file number, and TFN and complete a TFN declaration.
Superannuation
If you’re starting a new business, an Australian business number ABN might be necessary. Your first job is also the perfect time to think about your superannuation. You can choose a super fund for your employer’s contributions. The YourSuper comparison tool helps you find a fund that suits your needs. Don’t forget to regularly review your super account to ensure your contributions are being made correctly. The Super Health Check tool helps you stay on top of your super. It is a good habit to check your super daily, enabling you to manage your super, know your entitlements, and make the right choices for when you retire.
Your Income
Your employer pays your salary or wages and withholds any tax. Your payslips show the amount of tax deducted. Your taxable income is your accessible income minus allowable deductions. It’s essential for calculating your tax liability.
Claiming the Tax-Free Threshold
If you’re an Australian resident, the first $18,200 you earn is tax-free, known as the tax-free threshold. You can claim this threshold on the TFN declaration you provide to your employer.
Access ATO Online Services
With ATO’s online services, managing your tax and super has become easy and simple. First, create a myGov account and link it to the ATO.
Access Your Income Statement
At the end of the income year, your employer will provide you with an income statement showing your tax and Super information. You can access the statement through ATO online services.
Lodging Your First Tax Return
The Australian income year runs from 1st July to 30th June. When you file your tax return, the ATO makes calculations for your tax liability while checking the figures or amounts sent by your employer.
Claiming Deductions
You can claim certain expenses as deductions in your tax return. These deductions can minimise your taxable income, resulting in a tax liability reduction.
Protect Your Information
Protecting your personal information is crucial. Don’t forget to:
- Keep your TFN safe, share it only with your employer and tax agent
- Never share your myGov or online passwords
- Don’t ever send sensitive information in emails
- Keep your ABN details updated
Now that you’re equipped with the basics. The information shared in this blog will help you know why you should pay taxes, how you can reduce taxable income by claiming deductions, what you should know when you lodge your first tax return, etc.
Conclusion
Remember that Reliable Melbourne Accountants are here to support you throughout your tax and super journey. We make the complex simple. Contact us today for professional assistance and expert advice on your tax and super needs.