Online Tax Return Guide: How to Lodge a Tax Return in Australia

The majority of Australian residents are required to prepare and file a tax return once the financial year is complete. Though there are other options available to you, lodging online is quick and easy. 

If you’re not yet used to the idea of completing online tax returns – or if you need a few answers before you dive in – you’ve come to the right place. In this article, we’ll explain how to lodge tax returns using online services. We’ll also provide information about how to lodge a company tax return online and when to submit a tax return in Australia.

Setting Up Your Online Tax Filing Account

The first thing you’ll need to do is create a myGov account. Find out how: Create a myGov account. 

During the process, you’ll be required to add personal details such as your name, date of birth, and tax file number. You’ll also need to answer a couple of questions to prove your identity (for example, you may be asked to provide your bank account details or add a PAYG payment summary from within the previous two years).

If you don’t have enough information to answer the second question, you’ll need to call the Australian Tax Office (ATO) and ask for a unique linking code. Once all this is sorted, you’ll be able to file your tax returns online.

To be able to lodge an online tax return, your myGov account needs to be linked to the ATO. Find out how to do this here: Create a myGov account and link it to the ATO. 

In the next section, we’ll provide information on how to submit a tax return in Australia.

How to complete a tax return

If you’re an employee, your employer will handle tax withholdings on your behalf by automatically deducting the necessary amount of income tax from your pay. However, even though income tax is withheld for you, you are still required to submit an annual tax return to the ATO. The deadline for individual tax return submissions is October 31 each year.

Your tax return looks at what you’ve earned over the past year and provides details on your total taxable income. From this figure, the ATO can work out if you owe them any tax or if you’re due for a rebate or tax refund (happy days!).

Here, we’ll provide details on how to lodge a tax return in Australia. Keep reading to learn more about:

• Declaring your income 
• Claiming your deductions
• Accounting for investment & working from home expenses

Declaring your income

While most of your income will be pre-filled in your tax return, there are additional income streams you may need to declare manually. It is your responsibility to ensure your income declaration is complete and accurate. 

Be sure to include all income types, including:

• Employment income
• Investment income
• Superannuation pensions
• Annuities
• Government payments
• Foreign income
• Insurance payouts
• Compensation payments

Find out more in this guide: Income you must declare.

Please note: all Australian residents are required to pay income tax on annual earnings above $18,200, which is the tax-free threshold. The income tax rate starts at 19% for income above this threshold, but as your earnings increase, you may move into a higher tax bracket, which means you will owe a larger proportion of your income to the ATO.

Claiming your deductions 

A ‘tax deductible’ expense is a cost that can be subtracted from your total taxable income, reducing the amount of income on which you must pay tax. These expenses are typically related to earning income, such as work-related costs, and must meet specific criteria set by the ATO.

More information about this can be found here: Deductions you can claim.

You’re entitled to claim on a variety of deductions, although you won’t always receive the full cost back. If you’re claiming work-related expenses as a deduction, you need to ensure you spent your own money and did not receive reimbursement. You will need a receipt or record to prove your deduction. If your expenses have personal and work purposes, you can claim for the work-related aspect. 

Examples of deduction you can claim

• If you drive as part of your job, you might be eligible to claim car and travel expenses as deductions. You cannot claim the standard cost of your normal commute. 
• You may be able to claim laundry, dry-cleaning and clothing expenses. Occupation-specific clothing that meets industry safety standards is also deductible, from chefs' whites to hi-vis PPE. 
• In certain circumstances, you may also be able to claim for union fees, income protection insurance, and the cost of paying a tax agent or financial advisor. 
• If you’re studying in relation to your job, you may be able to claim self-education expenses as a deduction. This includes student union fees, internet, course fees, stationery, professional journals, textbooks, and home office expenses.  
• You can claim for equipment or tools you purchase with your money and are not reimbursed for. If it is valued at over $300, you need to claim the cost back over several years as depreciation. 

Investment & working from home expenses 

You may be eligible for various deductions related to investments and working from home.

For investments, you can potentially claim deductions for the interest charged on loans used to purchase investments. Other eligible deductions may include property-related expenses, fees for investment advice, and costs directly associated with earning investment income.

If you work from home, whether as an employee or a sole trader, you may claim deductions for work-related expenses. The ATO provides two main methods to calculate these expenses: the fixed-rate method and the actual cost method. A temporary shortcut method was introduced during COVID-19, but it was only valid for the 2019–20 and 2020–21 financial years.

How to lodge your tax return?

The easiest option is to lodge your tax return online with the ATO’s myTax portal. This is a fairly straightforward process and it’s available 24/7. At the end of the process, the ATO will send you an email confirming that the form has been submitted correctly.

If you prefer a paper-based approach, you can complete a paper tax return form and mail it to the ATO, though this method takes longer to process. 

Alternatively, you can use a registered tax agent or an online accountant to assist with preparation and submission. Tax laws are often complex, so it pays to speak to an expert who can make sure you’re only paying as much tax as you legally owe. Following professional advice, you can either lodge your own tax return online or you can ask them to lodge your return for you.

Regardless of the method, make sure you gather all necessary documents, including income statements, receipts for deductible expenses, and investment records, to complete your return accurately by the October 31 deadline.

Next, we’ll explain how to lodge a company tax return.

How to lodge a business tax return

Do you need to lodge a tax return for your business income? If you’re unsure how to submit a tax return in Australia, the following information applies to sole traders and Australian Business Number (ABN) holders.

There are various types of business structures, so there’s no one-size-fits-all approach to lodging tax returns for businesses. What you need to report – particularly at the end of the financial year (EOFY) – and how you lodge your tax return in Australia will depend on your business entity type (such as sole trader, partnership, company, or trust).

So, let’s look at how this varies across the different types of businesses:

Not-for-profits and companies

Some not-for-profit (NFP) clubs, societies, and associations are subject to income tax. Examples of taxable NFPs include social clubs, professional associations, and political parties.

For income tax purposes, taxable NFPs are classified as either nonprofit companies or other taxable companies:

• Nonprofit companies: If a nonprofit company earns taxable income over $416 per year, it must lodge a company tax return.
• Other taxable companies: These entities are taxed on every dollar of taxable income and must lodge an income tax return annually, regardless of their level of taxable income.

Taxable companies are required to pay tax at company tax rates, which may be 27.5% (small business company tax rate) or 30% (general company tax rate), depending on eligibility. If your company makes payments to you as an individual (e.g., salary, dividends), these must be reported in your personal income tax return. For specific advice, consult a tax professional.

Even if your organisation operates as a not-for-profit, you may still need to lodge a company tax return online. Find out more here: Instructions to complete the company tax return 2024.

Sole traders

This is the simplest business structure. It simply refers to an individual running a business. Sole traders own the business, control and manage the business by themselves, and are legally responsible for all aspects of it. 

As a sole trader, you:

• Lodge your income tax return with the ATO using your individual tax file number (TFN).
• Pay tax at the same income tax rates as individuals, and you may be eligible for the small business tax offset if you meet the criteria. 
• Have the option to pay income tax in quarterly pay-as-you-go (PAYG) instalments. Generally, you’ll need to pay instalments if your latest tax return reported $4,000 or more in business or investment income, although some exceptions apply.
• Report all income and expenses in your individual tax return under the section for business items.
• Claim tax deductions for eligible business expenses or personal superannuation contributions you make during the relevant financial year.

As a sole trader, you cannot employ yourself, but you can employ others. This means the amounts you withdraw from your business for personal use are not considered wages for tax purposes, and you cannot claim deductions for these withdrawals. However, wages paid to employees are deductible as business expenses, which could reduce your overall tax bill.

If you earn personal services income (PSI) – income primarily generated from your personal efforts, skills, or expertise – your income may be treated differently. For example, you cannot claim deductions for wages paid to support staff performing administrative tasks (like secretarial work), and you must complete the PSI question in your individual tax return.

Filing your tax return online is straightforward for sole traders. Simply gather your TFN, visit the ATO website, report your income and expenses, and claim all allowable deductions.

Partnership

A partnership is when more than one person owns and runs a business. Between you and your partner or partners, you control and manage the business and are legally responsible for all aspects of it. The partnership’s profits are shared among the partners in a legally agreed-upon manner.

A partnership doesn’t pay tax on its income, but it must lodge a partnership tax return with the ATO, declaring all income earned and listing all deductible expenses. The partnership tax return should also show how the net income or loss was distributed between the partners, and each partner must declare their individual share of the partnership’s net income or loss in their individual tax return.

Furthermore, each partner owns a proportion of any asset that is liable for capital gains tax (CGT). Capital gain (after applying any CGT exemptions) is included in the individual partner's income tax return.

Partners can choose to pay their tax using the PAYG instalment system, too. This guide contains instructions for calculating the proportion of the partnership’s income that you need to include in your total instalment income: Instalment income from a partnership.

Let’s briefly run through the key takeaways to filing your partnership’s online tax return:

1. Fill out the partnership tax return by October 31.
2. Declare your total annual income and expenses.
3. Show how the net income or loss was distributed amongst partners.
4. Include the proceeds from anything that’s eligible for CGT.
5. Include all this on your individual income tax return.

Trusts

A trust is not a separate taxable entity, but the trustee is required to lodge a tax return on behalf of the trust. In general, trust beneficiaries declare the amount of the trust’s income they are entitled to on their own individual tax returns and pay tax on it.

However, a trust distribution doesn’t need to be declared if the family trust distribution tax has already been paid. Trust beneficiaries can pay their income tax in quarterly PAYG instalments in the same way as a sole trader, although you will first need to work out your portion of the trust’s instalment income.

Fortunately, the process of filling out the trust tax return online is fairly straightforward.

How long does a tax return take?

Typically, tax returns are usually processed within 14 business days, whereas paper forms may take up to 50 business days (10 weeks). However, certain tax returns may require a manual check, which may extend the processing time beyond the standard timeframe.

Track the process of your tax return

Tracking the progress of your tax return is an important aspect of managing your finances. There are various ways to do this. 

You can check the process on:

• ATO online services: By linking your myGov account to the ATO, you can utilise their online services to monitor the status of your tax return or any amendments you may have made.
• ATO app: You can use the ATO app to check the current status of your return.
• By phone: Phone 13 28 65 and have your tax file number ready.
• Tax agent: Once you submit your tax return through a registered tax agent, you or your agent can monitor its progress at any time by logging into the ATO's online services.

Status of your tax return 

Upon utilising the ATO’s online services to track the progress of your tax return, you may encounter one of the following statuses:

In process – processing

This status may appear at two stages of processing. The first is when the ATO receives your tax return and begins processing it. The second is when they have completed processing your return and are issuing a notice of assessment.

In process – information pending 

You will see this if the ATO requires additional information to finalise your tax return. They may reach out to you to collect the necessary data.

In process – under review

Before finalising your tax return, the ATO may conduct a manual review to ensure that all information is accurate. This review may also include an evaluation of your previous year's returns.

In process – balancing account 

To determine whether you owe taxes or are eligible for a refund, the ATO will balance the result of your tax return with your accounts with other Australian Government agencies.

Extra processing time is required

You’ll see this message if additional time is necessary to complete the processing of your tax return.

Issued – $ Amount

Once your notice of assessment is available online, you can view the amount owed or refunded, along with the payment due date.

Common reasons for a tax refund delay

While the majority of tax returns filed online will be processed within two weeks, there are situations where processing time may be longer. These could include:

• You only need to lodge your tax return once. If you attempt to lodge it again, the processing time will be delayed as details will need to be manually checked.
• If you make an amendment before the ATO has finalised your original return or any previous amendments, it will delay the processing time.
• Lodging several years of tax returns at once can cause delays.
• Having a tax debt or unresolved debt with the ATO may also delay the processing time.
• If you are under insolvency administration, such as a bank or debt arrangement, your insolvency advisor will inform the ATO of your situation before you lodge your return.
• If your nominated financial institution details are not up to date, it may cause a delay.
• The ATO may manually check details on your tax return, such as contacting your employer, financial institution, or private health insurer, or cross-checking the information you have provided.

Keep Everything Organised for Tax Time

Putting aside money for your tax bill is incredibly important, and even more so in your first year of business. During your first year, you can also pre-pay tax into your tax account or pay voluntary instalments.

Once you know how to lodge a company tax return, the process should be smooth. You will automatically enter the PAYG instalment system after you have lodged your first income tax return and reported a tax-assessable amount above the relevant threshold. 

Most of your business reporting can be done online. There, you can file your income tax return – reporting your business income and personal income, and claiming expense and superannuation deductions.

Plus, you can handle your Business Activity Statement (BAS) online if you’re registered for goods and services tax (GST).

Using QuickBooks Tax Software provides an easy way to track your GST and prepare your BAS for lodging. If you’re self-employed, learn how to pay taxes as a sole trader so you can be better prepared at tax time.

By keeping everything online, not only do you save yourself from having to hoard endless mountains of documents, but you also set yourself up for quicker, more efficient tax returns going forward.

QuickBooks Taxes can help

All Australian tax returns are due by the end of October. However, if you use a tax agent, it is possible to secure an extension. If you know your return will be late, it's wise to enlist a tax agent to apply for an extension before you miss the deadline. However you choose to lodge your return, you hold the ultimate responsibility for the figures and information you submit to the ATO. 

QuickBooks Tax Software can save you hours on preparing your tax filing. Tax time doesn't need to be as stressful as it was in the financial years gone by. With QuickBooks Tax, all of the information you need for your tax return is a click away.