Student Tax Deductions – Complete Guide to Organise Your Adulthood Finances

1. Student Tax Deductions – Complete Guide to Organise Your Adulthood Finances Safe & Secure The minute you enter adulthood, you are required to land a part time job, open a bank account and tackle taxes. Unfortunately, most of us find our tax obligations a little daunting. But don’t worry if you’re feeling lost. Jaxon Rylah, go-to tax guru, has got your back in this helpful guide about student tax deductions and obligations in Australia. www.taxly.ai

2. Are you an Australian Citizen? The first step is to determine if you’re an Australian resident to meet your income tax obligations. Here’s what you need to know: If you were born in Australia and currently live here, you’re generally considered an Australian resident for tax purposes. Simple as that! Now, here’s the interesting part: You are still classified as an Austraian resident even if you are an international student. But How? The Australian Taxation Office (ATO) considers international students who stay in Austrlia longer than six months as Austrlian citizens who must meet all tax obligations. www.taxly.ai

3. What are my Student Tax Obligations? Australian students must report all income including wages from part-time jobs in Australia or interest income from your home country. Obtain a Tax File Number (TFN) from the Australian Taxation Office (ATO) and provide it to your employer to ensure correct tax withholding. If your income exceeds the tax-free threshold ($18,200 for the 2023-24 financial year), you must lodge a tax return and report your income. You can claim any applicable student tax deductions or offsets. Keep track of any work-related expenses or self-education expenses that you can claim as As an Australian resident, you may be required to pay the Medicare Levy, which supports the country’s healthcare system. www.taxly.ai

4. Income and Student Tax Deductions: What types of income is included in tax return? When filing your tax return in Australia, you are required to include various types of income. Here are the common types of income that need to be reported: Employment Income including salary, wages, tips, bonuses, and allowances from your job or part-time work. Investment Income generated from interest earned from bank accounts, dividends from shares, rental income from properties, and capital gains from the sale of assets. If you’re self-employed or run a business, you need to report the business income earned from your business activities. (no need to include income from hobbies) Government Payments such as JobKeeper, JobSeeker, or Youth Allowance need to be included as taxable income. www.taxly.ai

5. Student Tax Deductions and Returns What self-education expenses are eligible for tax deduction claims? If you’re studying a course to maintain or enhance your skills in your current occupation, you can claim the expenses as self-education costs. This includes course fees, textbooks, stationery, travel expenses, and the depreciation of items like laptops, tablets, or printers used for your studies. You can’t claim study costs if you are not pursuing a specific career yet. For example, an undergraduate student can’t claim expenses for initial academic qualification. www.taxly.ai

6. Oops! I made a mistake on my tax return. What Happens Now? First of all, no need to panic! You made a mistake on your tax return – it’s alright, it happens to the best of us! Now, Here’s what you should do: Assess the Error: Figure out where you made the mistake and How significant is it? Lodge an Amendment with the ATO: Correct the mistake by requesting an amendment online or through a tax agent. Follow Time Limit: You will have two years from the date of the original notice of assessment to make amendments. Seek Professional Advice: If you’re unsure about what to do, consult a tax agent for guidance. They’ll help you through the process according to ATO rules. www.taxly.ai

7. Are there any traps you should be aware of? If you’re under 18 years old on the last day of the tax year, special rules come into play to discourage your parents from splitting income with you. This means that you may be subject to penalty tax rates upto 45% on any dividends, interest, rent, royalties, or a distribution you receive from a family trust. However, these rules do not apply if you are a MINOR (under 18 years old) and fall under any of the following categories: Engaged in full-time work or running a business Receiving a carer allowance, disability support pension, or double orphan pension www.taxly.ai

8. The Bottomline Stepping into adulthood finances can be daunting – especially for students. But with proper guidance and support, you can oblige by local tax guidelines. Follow ATO strictly for student tax return updates and seek professional advice as needed. www.taxly.ai

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