Australia, it’s time to lodge your tax return for 2021.

Correctly crunching the numbers isn’t easy at the best of times. It’s only been made more confusing by coronavirus complications.

Watch the video above to see the top 10 tax hacks you can claim on your return this year

Whether you do it with a registered tax agent or do it online, the Australian Tax Office is expecting you to submit your claim before the deadline so that your affairs for this COVID-crazy financial year are in order.

We’ve put together the ultimate guide on how to get the best bang for your buck and also make sure you’re in line with your ATO obligations.

ATO tax return focus areas

The ATO has laid bare the targets in its sights for people submitting their 2021 tax returns.

A spokesperson told 7NEWS.com.au it will be cracking down on:

  • work-related expenses (including double-dipping when claiming deductions and work-related expenses that AREN’T related to work)
  • rental properties
  • capital gains from cryptocurrency, property and shares
A stock photo of the Australian Tax Office forms.
A stock photo of the Australian Tax Office forms. Credit: LPETTET/Getty Images/iStockphoto

For your convenience, we’ve put together a guide to explain these in more detail so you know what to keep an eye out for.

You can click here to see all of the issues and advice from the ATO so that you are prepared for your tax return.

Tax brackets 2021

Individual income tax rates show the amount of tax payable in every dollar for each income tax bracket, depending on your circumstances.

There are different tax brackets for residents, foreign residents, children and working holiday makers.

The below information has been supplied by the ATO.

Resident tax rates 2020–21

The below rates apply to individuals who are Australian residents for tax purposes. They do not include the Medicare levy of 2 per cent.

Taxable income: 0 – $18,200

Tax on this income: Nil

———-

Taxable income: $18,201 – $45,000

Tax on this income: 19 cents for each $1 over $18,200

———-

Taxable income: $45,001 – $120,000

Tax on this income: $5,092 plus 32.5 cents for each $1 over $45,000

———-

Taxable income: $120,001 – $180,000

Tax on this income: $29,467 plus 37 cents for each $1 over $120,000

———-

Taxable income: $180,001 and over

Tax on this income: $51,667 plus 45 cents for each $1 over $180,000

Foreign resident tax rates 2020–21

These rates apply to individuals who are foreign residents for tax purposes.

Taxable income:0 – $120,000

Tax on this income: 32.5 cents for each $1

———-

Taxable income:$120,001 – $180,000

Tax on this income:$39,000 plus 37 cents for each $1 over $120,000

———-

Taxable income: $180,001 and over

Tax on this income:$61,200 plus 45 cents for each $1 over $180,000

Income tax rates for Australians under 18

Special rules apply to income earned by people under 18 years old.

Under these rules, certain types of income, such as a distribution from a family trust, may be taxed at a higher rate.

Click here for more information.

Working holiday maker tax rates 2020–21

These rates apply to working holiday maker income regardless of residency for tax purposes.

You are a working holiday maker if you have a visa subclass:

  • 417 (Working Holiday)
  • 462 (Work and Holiday).

Taxable income:$0 – $37,000

Tax on this income: 15c for each $1

———-

Taxable income: $37,001 – $90,000

Tax on this income: $5,550 plus 32.5c for each $1 over $37,000

———-

Taxable income:$90,001 – $180,000

Tax on this income: $22,775 plus 37c for each $1 over $90,000

———-

Taxable income: $180,001 and over

Tax on this income: $53,325 plus 45 cents for each $1 over $180,000

The ATO will be cracking down in 2021 tax returns on work-related expenses, rental properties, and capital gains from cryptocurrency, property and shares.
The ATO will be cracking down in 2021 tax returns on work-related expenses, rental properties, and capital gains from cryptocurrency, property and shares. Credit: alfexe/Getty Images/iStockphoto

Tax return calculator Australia

A simple tax calculator is a basic way to calculate tax on your taxable income.

The Income tax estimator gives you an estimate of the amount of your tax refund or debt, and takes into account:

  • the Medicare levy
  • higher education loan scheme (HECS) repayments
  • tax offsets
  • tax credits

The 2020–21 calculator will be available from 1 July 2021.

The calculated results are based on the information you provided at the time of the calculation. You should use these results as an estimate and for guidance purposes only.

The exact amount of your tax payable or refund can only be calculated upon lodgment of your income tax return.

To use the calculator, you will need to provide:

  • Total gross income payments you received
  • Total amount of tax that was withheld
  • Total amount of deductions to claim
  • Your residency status for taxation purposes
  • Details of your tax credits and any tax offsets you are entitled to claim

You may need additional information, depending on your circumstances and what you choose to calculate.

The income tax estimator gives you an estimate of the amount of your tax refund or debt.
The income tax estimator gives you an estimate of the amount of your tax refund or debt. Credit: ATO

You will not be able to use this calculator if you:

  • had a spouse for only part of the year
  • had an employment termination payment
  • had a lump sum payment in arrears
  • had a lump sum payment because you retired or finished working in a job
  • were under 18 years and had unearned income such as interest, dividends or other investment income
  • received credit for any tax paid by a trustee
  • had exempt foreign employment income
  • had an amount released under the First Home Super Saver Scheme
  • had income that was subject to averaging
  • had superannuation concessional contributions in excess of your concessional contributions cap

Click here to access the income tax calculator, and give yourself between 15 and 25 minutes to complete it.

The 2020-21 financial year forced millions of Australians to begin working from home almost overnight amid an unpredictable coronavirus crisis.
The 2020-21 financial year forced millions of Australians to begin working from home almost overnight amid an unpredictable coronavirus crisis. Credit: courtneyk/Getty Images

Tax return deadline

Generally, the deadline for lodging your return is 31 October.

As 31 October falls on a Sunday this year, you have until 1 November to lodge.

If you choose to use the services of a registered tax agent, they will generally have special lodgment schedules and can lodge returns for clients later than 31 October. If you are using a registered tax agent, you need to engage them before 31 October.

If you’re having difficulties meeting your tax obligations or are unable to lodge by 31 October, the ATO advises that you contact it as soon as possible.

If you lodge your own tax return and it results in a tax bill, payment is due by 21 November, regardless of whether you lodged before or after the deadline.

When can I do my tax return in Australia in 2021?

“We start full processing of 2020–21 tax returns on 7 July 2021. We expect to start paying refunds from 16 July 2021,” says the ATO website.

“We aim to finalise the majority of electronically lodged current year tax returns within 12 business days of receipt.”

What happens if you don’t do your tax return?

Tax returns, activity statements, other documents and information must be lodged or returned by certain dates.

Australian taxpayers who fail to submit their tax return can face a number of actions from the ATO.

Some of these actions include:

Can I do my tax return myself online?

Yes, you can lodge your tax return online with myTax.

All you need is a MyGov account that is linked to the ATO.

Some of the benefits of myTax include:

  • being able to lodge it at your convenience, as it’s available 24 hours a day, 7 days a week
  • most information from employers, banks, government agencies, health funds and third parties will be pre-filled by late July
  • you’ll get your refund faster, generally within two weeks (14 days).
  • you can upload your records from myDeductions to pre-fill your tax return
  • it is available for all individuals and sole traders who want to lodge their own tax return.
  • you will receive a lodgment receipt by email to confirm that the ATO has your lodgment

What happens if I make a mistake on my tax return?

The ATO has promised that genuine mistakes will be treated with empathy, but that it will not hold back on applying penalties to those who have deliberately entered misleading information on their tax return.

“We want to reassure the community that we will be empathetic to and understanding of legitimate mistakes where good faith efforts have been made,” the ATO spokesperson said.

“However, we will apply penalties against those deliberately trying to get away with doing the wrong thing.”

What is the ATO focusing on when assessing tax returns in 2021?

The ATO has laid bare the targets in its sights for people submitting their 2021 tax returns.

A spokesperson told 7NEWS.com.au it will be cracking down on:

  • work-related expenses (including double-dipping when claiming deductions and claiming work-related expenses that AREN’T related to work)
  • rental properties
  • capital gains from cryptocurrency, property and shares

For your convenience, we’ve put together a guide to explain these in more detail so you know what to keep an eye out for.

You can click here to see all of the issues and advice from the ATO so that you are prepared for your tax return.

How will COVID-19 complicate tax returns?

Australians have long been wary of complications that the coronavirus pandemic continues to create, but will now need to be more finely attuned to its impacts while lodging their tax returns in 2021.

The Australian Tax Office says there are a number of changes it has made in respect to preparing income tax returns in a COVID-19 environment.

The ATO has made changes to tax returns for Australians who:

  • were on JobSeeker payments
  • were on JobKeeper payments
  • were/are working from home
  • accessed their superannuation early
  • received stand down payments
  • changed jobs

Click here to see how these changes may impact you.

Tax return 2021 Australia: ATO’s focus areas, brackets, calculator, deadline and everything you need to know
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