Are you an international student studying in Australia? If you have been studying in the country for about six months, you may have heard about student taxes. It is a topic that causes a lot of confusion for foreign students, perhaps rightfully so.
Let’s face it: paying taxes and lodging tax returns are both challenging and daunting, especially if it is your first time.
However, once you understand the process, you will not only know how it works, but you’ll also be entitled to some benefits, including tax offsets, lower rates, and tax-free thresholds, among others.
Working Student Tax Advice
Working Student Tax Advice
If you are an international student and have stayed in the country for six months or more, the law considers you an Australian resident for tax purposes.
The Australian Taxation Office has proclaimed that residing in Australia for more than six months lets you perform the same routines and acquire behaviours of individuals in the country for tax purposes.
Are you unsure if you’re a tax resident? Don’t worry; you can get in touch with our tax agents, and we’ll help you find the answers.
And if you are indeed a tax resident in the country, you should consider a few tax implications.
- A taxable income of $18,200 or below means that you belong to the tax-free group. In this threshold, you are not required by law to pay any income tax each financial year.
- If you worked part-time and your employer deducted from your salary the income tax, you most likely qualify for a refund. That is, if your total taxable income from this job was $18,200 or lower.
- You should pay your tax no matter where your assessable income for the year ending on 30 June comes from.
- If you paid inadequate tax or your employer deducted less than the tax you owe from your assessable income, you are legally required to pay the remaining amount.
Please note that the Australian financial year starts from 1 July to 30 June the next year.
What if your course runs for less than six months? If you wish to leave Australia once you have completed your course, which lasts for less than six months, you will still have to lodge a tax return for the income you have earned whilst in the country. However, since you are not viewed as a resident for tax purposes, you will not be entitled to the tax-free threshold. It signifies that you have to pay a much higher tax, which is an obligation of all non-residents.
Tax Return Lodging Guide
Most of the time, international students are not fully aware that they can claim tax returns. Those who have low-income jobs, as well as those working part-time, pay more than what the law actually requires. By lodging a tax return, you ensure that you get the tax refund that you deserve.
Ready to lodge a tax return? Here’s what you need to do:
Remember that the tax year ends on 30 June. Make sure that you lodge your tax return on or before 31 October. However, if you need more time, we can help you out, so your deadline is extended. If it is your first time to lodge a tax return, we highly suggest that you read our guide.
What if you’re leaving Australia soon? The good news is that you can still claim your tax returns even if you leave the country before the financial year ends. All you have to do is to lodge your returns early and file a paper return. It does take some time, which is why it makes sense to file as early as you can. However, if you do not have enough time left to file a paper return, you can do it online after 30 June, even if you’re already in your home country.
Requirements in Lodging a Tax Return
All taxpayers should have a Tax File Number or TFN. If you are an international student, you are not exempted from this rule. You can still lodge a tax return without a TFN. However, you could get taxed at an even higher rate if you do not have it. You can get your TFN through the ATO website.
Alternatively, you can visit the Australian Taxation Office and get the application form there. You can send it back, along with the requirements to any tax office. These requirements include:
- Your bank statements, which should show the interest you received
- Dividend slips that show payments from organisations where you have shares
- Payment summary, which you can get from your employer and contains the tax withheld and total income earned
- Photo ID
- Receipts, work-related expenses, and other invoices
If you are sure that you will receive a tax refund, be ready with your bank account information. That way, the refund will be deposited right away.
Income and Deductions
Tax time can be a stressful time for many Australians. Whether it’s your first time to lodge or you’re a seasoned tax veteran, it can still seem like an inconvenience. The rules can be obscure. For example, what you can claim as expenses or what you need to declare.
This is where TaxReturn.com.au wants to make things easier for you.
- A taxable income of $18,200 or below means that you belong to the tax-free group. In this threshold, you are not required by law to pay any income tax each financial year.
- If you worked part-time and your employer deducted from your salary the income tax, you most likely qualify for a refund. That is, if your total taxable income from this job was $18,200 or lower.
- You should pay your tax no matter where your assessable income for the year ending on 30 June comes from.
- If you paid inadequate tax or your employer deducted less than the tax you owe from your assessable income, you are legally required to pay the remaining amount.
You can claim deductions to reduce your taxable income. Deductions are claimable amounts that you spent on purchases or any payments that directly relate to your income or how you earn it. Deductions can either be self-education, work-related, or personal.
Some of the most common deductions you can claim include:
- Purchase of protective clothing, uniforms, and other compulsory work garments
- Work-related expenses on phone and Internet
- Travel expenses incurred between work sites (but not between home and work)
- Home office expenses, such as printers, computers, heating and cooling, and lighting
- Union fees
- Subscription fees related to work
If you have briefcases, calculators, and other tools of the trade, you may be able to claim deductions for them. However, they should only cost less than $300. Claiming a deduction is made easier if you have receipts, bank statements, invoices, and other records.
Do You Have More Questions?
International students may want to do their taxes on their own using ATO’s myTax. However, the system can be quite confusing, and it is not always best for everyone. If you need expert assistance, you can contact TaxReturn.com.au. We will help ensure that you have included all the deductions you are eligible for and check your tax return’s accuracy.
Start your tax return or talk to us today on 0499 829 829.
