What Is an Individual Tax Return? A Simple Guide for Beginners

Taxes might seem complicated, especially if you're filing for the first time. But understanding your individual income tax return doesn’t have to be stressful. In this beginner-friendly guide, we’ll walk you through what an individual tax return is, why it matters, and how to file one with confidence — whether you’re doing it yourself or using a tax agent.

What Is an Individual Tax Return?

An individual tax return is a form you send to the Australian government every year. It shows how much money you earned, how much tax you already paid, and if you can get any money back — or if you still owe more. This form is a big part of your personal tax return, which is a record of all your earnings and expenses for the financial year (from July 1 to June 30). The government uses this information to check if you paid the right amount of tax.

You include things like:

• Your job income
• Any money from side jobs or business
• Investment earnings (like interest or rent)
• Work-related expenses you want to claim as deductions

When you lodge your personal tax return, the Australian Taxation Office (ATO) uses it to work out if you should get a refund or need to pay more tax.

Who Needs to File a Tax Return? (Explained Simply)

If you make money during the year, you may need to tell the government how much you earned. You do this by lodging (submitting) a personal tax return to the Australian Taxation Office (ATO).

You must lodge a tax return if any of these apply to you:

You earned more than the tax-free threshold

• In Australia, you don’t pay tax on the first $18,200 you earn in a year.
• If you earn more than $18,200, you need to lodge a tax return.

You had tax taken out of your pay

• If you work and your boss takes tax out of your paycheck, you need to lodge a return.
• This is how the ATO checks if they took out the right amount — you might get some of it back as a refund.

You got government payments (like Centrelink)

• If you received welfare, support, or pension payments, you usually need to report them on a tax return.

You ran a small business or did freelance work

• Even if it’s just a side job, like driving for Uber, selling online, or doing odd jobs, you need to include that income in your tax return.

You earned money from investments or property

• This includes interest from savings, dividends from shares, or rent from a property you own.

Even If You Earned Less Than $18,200 – Should You Still Lodge?

Yes, sometimes you should lodge a return even if your income was low, because:

• You might be owed a refund (if tax was taken from your pay).
• It helps you get government benefits or tax offsets.
• You stay compliant with the ATO.

Example:

Emma is a student and earned $16,000 from a part-time job. Her boss took out some tax from her pay. Even though she earned under the tax-free threshold, Emma lodges a tax return — and gets a full tax refund!

Key Terms You Should Know

Before diving deeper, here are a few common terms:

• Income – Money you earn from jobs, business, or investments.
• Deductions – Work-related or approved expenses that reduce your taxable income.
• Taxable Income – Your total income minus deductions.
• Tax Offset – A reduction of the amount of tax you owe.
• Refund – Money returned to you if you paid more tax than needed.

What Information Do You Need?

When preparing your personal tax return, gather the following:

1. Personal Details

• Tax File Number (TFN)
• Bank account details (for refunds)

2.Income Documents

• PAYG summaries from employers
• Bank interest statements
• Investment income reports
• Business or freelance income records

3.Deduction Records

• Work-related expenses (tools, uniforms, training)
• Vehicle and travel logs (for work purposes)
• Receipts for donations
• Self-education expenses

4.Private Health Insurance Statement

How to Lodge Your Tax Return

You can lodge your tax return in three main ways:

1. My Tax (Online via ATO)

• Free and easy if your finances are simple
• Available through your myGov account
• Most of your income information is pre-filled

2.Registered Tax Agent

• Helpful if your tax situation is complex
• They ensure your personal tax return is accurate and compliant
• Fees may be tax-deductible

3.Paper Lodgement

• Rarely used, slower process
• Must be sent by post using the ATO’s form

Most Australians lodge between July 1 and October 31 for the previous financial year (July to June).

What Can You Claim as Deductions?

Claiming deductions correctly can lower your taxable income and increase your refund. Here are examples:

• Home office costs (if you work from home)
• Travel expenses (for work, not commuting)
• Work uniforms and safety gear
• Professional subscriptions and union fees
• Courses and seminars related to your job

Always keep receipts and records for at least five years. Your tax agent can guide you on what’s claimable and help ensure compliance.

What Happens After You Lodge?

Once you submit your personal tax return:

1. The ATO processes your information.
2. If everything checks out, they issue a Notice of Assessment.
3. You’ll either receive a refund, need to pay extra tax, or have a zero balance.

Processing usually takes 2–3 weeks if you lodge online.

Common Mistakes to Avoid

Here are a few errors beginners often make:

• Not including all sources of income
• Claiming ineligible deductions
• Forgetting to keep receipts
• Missing the lodgement deadline
• Not checking pre-filled information

Double-check everything before you submit!

Do You Need Help Filing?

If you’re unsure about any part of the process, it’s okay to ask for help. Options include:

• Registered tax agents – Ideal for complex tax situations.
• ATO’s help services – Free support by phone or online.
• Community Tax Help Programs – For low-income earners.

Final Thoughts

Filing your individual tax return doesn’t have to be intimidating. With the right information and preparation, it can be a straightforward task. Whether you’re a student, employee, freelancer, or small business owner, understanding how tax returns work — and when to seek a tax agent’s help — can save you money and stress.

Don’t forget — your personal tax return is your chance to get money back and stay on the right side of the law. So gather your documents, lodge on time, and claim what you’re entitled to!

FAQ Questions and Answers

1. What is an individual tax return?

An individual tax return is a form you submit to the Australian Taxation Office (ATO) each year to report your income, expenses, and taxes paid. It helps determine if you need to pay more tax or are eligible for a refund.

2. Do I have to lodge a tax return if I earned less than $18,200?

If you earned under $18,200 and no tax was taken from your pay, you may not need to lodge. But if tax was deducted or you received government payments, it’s a good idea to lodge a personal tax return — you might get a refund.

3. Can I lodge a tax return myself?

Yes, you can lodge it online through the ATO’s myGov system. If your tax situation is complex or you want expert help, you can use a registered tax agent.

4. What happens if I don’t lodge my tax return?

If you’re required to lodge a return and don’t do it, the ATO may charge penalties or interest. It's best to stay up to date, even if you missed a deadline.

5. What can I claim as a deduction in my personal tax return?

You can claim work-related expenses, such as tools, uniforms, travel for work, home office costs, and some education expenses, as long as you have receipts.