Lodging a tax return does not have to be daunting. However, many beginners and even those who have had experience with it find the task challenging. It is best to be prepared, so lodging tax returns is a lot easier.
For those earning income, the Australian Taxation Office advises the citizens to claim their work-related expenses through the ATO website. For more details on the expenses and deductions that you can claim, please check our tax return checklists.
When you lodge your tax return, you need to prepare certain pieces of information and documents, including:
- Tax File Number (TFN)
- A summary of bank account interest (if any)
- Details about your investment income, including managed funds and shares
- Health insurance statement from private agencies
- Child support payments (if applicable)
- Charity donations receipts
- Proof of work-related expenses, such as receipts or diary
You will also need to provide your Bank State Branch and account number. This is where you will receive any tax refund due to you.
When you lodge with the ATO, however, you will notice that it is asking you to register an account with myGov. It is your key to getting your income statement or a payment summary that your employer has created for you. But, is this document essential?
What is an Income Statement?
An income statement is an important document that employers prepare. It is the document where you can see your income for the financial year.
Typically, employers report the income of their employees, along with other information, such as tax and super. It is performed through Single Touch Payroll (STP). If your employer is among them, you will not get a payment summary. You can, however, access the information you require through the myGov service of the ATO.
Payment summaries, on the other hand, may still be given to you if the employer does not report through STP.
Do You Need Your Income Statement for Your Tax Return?
If your employer just asked you to get your income statement, you may think it may be because of your tax return. It has caused a great deal of misunderstanding for many Australians lodging their tax returns.
To clear up any confusion, it is time to get it straight: no, you do not need your income statement when doing your tax return.
Income statements work like Pay As You Go (PAYG). They merely summarise your income and taxes earned for the financial year.
TaxReturn.com.au makes it easy for you to lodge your tax returns. Your income statement will be added straight to your application. This way, you do not have to manually input your details – unless you want to, of course. It’s like a shortcut, so you skip right ahead, which also helps ensure the accuracy of your tax return.
You can forget about entering your PAYG and income statement details when you do your taxes with us.
The link between your income statement and tax return (and refund) does not exist. However, there may still be a few questions that you would like to get answered.
TaxReturn.com.au has compiled frequently asked questions relating to taxes and income statements. See if you can find your questions below:
- If you do not need these documents, what are they for?A while back, the ATO did require PAYG summaries or income statements when lodging tax returns. You could not get a tax refund without any of these documents. In some cases, you could provide your Group Certificate in place of PAYG and income statements.Those days are gone, though. As a taxpayer, you should know you no longer require these documents for your tax return. You can get a tax refund without providing your income statement.
- Why were those documents necessary?You may have noticed the similarities between the three documents. They show your annual income, along with the amount of tax that your employer pays to the ATO.
- What does my employer know about PAYG and taxes?The ATO already informed employers before that they do not have to give their staff income statements. It is why you do not have your PAYG summary delivered to your doorstep. The only way for you to get your income statement is through ATO’s myGov website.
- Do I have to get the summary?As mentioned, since the income statement is not required for your tax return, you do not have to get it from the ATO. Sure, your employer may have told you to register at the site and get the summary from there. You may have also read somewhere in the news or at the ATO’s website that you need the document for your tax return.In reality, it is one way to get you to lodge your return on the website. It means you have to do your tax return on your own – without the help of a tax agent. Many taxpayers end up doing so, limiting the amount of refund they get in the end.
- Why should I lodge my tax return with a tax agent?It’s simple. You want to get more money back from the taxes you have paid, right? If you agree, then you should absolutely hire an agent. TaxReturn.com.au will check your return and boost your refund. No one will do these things for you if you lodge directly from the myGov website.There is even a chance that the ATO will disagree with your refund claims. In this instance, you cannot do anything but accept the changes they have made.In short, a tax agent is a professional who knows the ins and outs of taxes – from lodging to refunds. It would be best if you had guidance so you can get the most out of your claims.
To summarise this post, you do not need your income statement or PAYG summary. What you need is a tax agent. We will take care of your income information for you. When you do your tax return with us, this part of the process is automatic. Complete your tax return with us, and we will check the details for you. Get right into it today!