What International Students Should Know About Tax Return in Australia

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With the option of working while studying in Australia comes the duty of paying income taxes for international students. It is usually a must to pay tax on the income that you earn when in Australia if it is more than the $18,200 threshold. However, almost every international student working in Australia can claim an income tax refund as the financial year comes to a close. If you are working for 20 hours per week in Australia with a student visa, you may be earning less than the tax-free limit of $18,200 here.

If you fail to file the document by the tax return deadline Australia, you might have more time to submit it if you seek the help of an agent in this regard. Here, we will discuss some more important pieces of information that international students have to know about tax return Australia. 

Should You File a Tax Return When on a Student Visa in 2022?

If you earn money in Australia, you may have to submit an income tax return. You should do it if your income exceeds the tax-free threshold in Australia. If you make $18,200 or less in a financial year, and your employer does not deduct tax out of your salary, you may not have to submit a return. There is only a limited number of cases where you may not need to file it. To discover whether you should file it or not, you could use the purpose-built tool on the Australian Taxation Office's website.

If you earn taxable income, how much you would have to pay, depends on whether you are a resident of Australia or not. Have you lived for 183 days in Australia? If so, you would be considered a resident of Australia for tax-related purposes. Have you signed up for an Australian course lasting over 6 months? If so, you would be regarded as a resident.

If the course duration is under six months, however, you would be deemed a non-resident, and the tax-free limit would not apply to you. Consequently, you would have to pay income tax at relatively higher rates than the rates applicable to residents.

Besides claiming a refund, filing an Australia tax return will also allow you to confirm that everything is in order as far as your income tax affairs are concerned. It would be important to keep it all in order when you apply for an Australian visa in the future.

The Australian Taxation Office may penalise an international student who does not file an income tax return. Failing to file it can also result in you being deprived of a refund, which possibly means much money lost.

There is also a progressive tax system in Australia, meaning the higher you earn, the higher your tax rate will be. The lowest rate of tax is 19% in Australia, which applies to every dollar you get over the aforesaid threshold. The highest rate of tax may be 47% in Australia but is charged only on the income one earns over the threshold. Almost everyone in Australia pays 19 to 47% of their income as tax.

Approach a tax agent or use a tax return calculator Australia tool to know how much you will have to pay as an international student in Australia.

Do You Know When to File Tax Returns in Australia

The financial year is from July 01 to June 30 in Australia. On the other hand, October 31 is usually the last Australia tax return date. However, if you are filing the return with the help of an Australian tax agent and registered with the Australian Taxation Office as a customer of that agent by October 31 your tax return deadline Australia would be extended. 

Do you Know How to File Tax Returns in Australia

You can either do it on your own or through a registered tax agent in Australia. It pays to use an agent since they can aid you in ensuring that your return contains accurate information, including the deductions that you are eligible to get. The Australian Government will allow you to claim what you spend on the agent for their service in your subsequent year's tax return. You can use the Tax Practitioners Board's online site for information about the registered agents. 

Filing Your Tax Return with myTax

The ATO offers a service, known as myTax, to enable filing tax returns in Australia. The service allows filing tax returns from July 01 to October 31. If you file it with myTax, the ATO would prefill almost all the details in your return, thereby reducing the possibility of omissions and simplifying the process. The process of filing tax returns with myTax is almost the same for first-timers, people who want to do it before they leave Australia temporarily and those who wish to do it from outside the country.

Are you doing it from another nation? If so, be sure to have myGov log-in options accessible from that country and a bank account in Australia for any amounts of refund.

Here, we will give a rundown on the steps to file tax returns for your income in Australia.

  1. Create your myGov account with the website of Services Australia, and link the account to the Australian Taxation Office. There are only basic steps to create the account.
  2. Sign in to your myGOV account.
  3. Click Prepare from the homepage of the ATO's online services.
  4. Confirm and update your financial institution and contact details.
  5. Choose the checkboxes applicable to you, which include your investments, income, deductions, and government payments. Then, myTax will customise your income tax return.
  6. Certain pieces of information may be prefilled, but you can include missing details with the respective Add/Edit options. You may have to add or edit details if you are filing an early tax return. There are built-in options in myTax that will aid you in avoiding making simple errors.
  7. Click Save and continue after you add in all the relevant information.
  8. Look at the estimate of your refund and ensure that everything is in order.
  9. Select the small checkbox above Back, Cancel, and Print-friendly version.
  10. Click Lodge, and you are good to go.

Is Foreign Income Taxable in Australia?

Are you in Australia with a student visa? If so, the ATO would consider you a temporary resident, meaning you would not have to pay tax on the income. The ATO only requires you to disclose the income you earn in Australia, besides any income from a job you did overseas for a short period as a temporary resident. 

How Long Will It Take for You to Get a Refund?

It depends on how you filed your return. If you did it online, you may get a refund in around two weeks. Conversely, it would take around ten weeks if you lodged it by mail. Remember that those are only estimates; the processing time is perhaps longer because of a high volume of local and international student tax return submissions.

Found it helpful? We can help you take it further. Contact us and get all your queries on PR, visas, migration, scholarships, and others answered today! 

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