What International Students Should Know About Tax Returns in Australia?

03 November

International students can choose to work in Australia, but they also have tax responsibilities. The majority of overseas students studying in Australia are eligible to apply for a tax refund at the end of the year, which is fantastic news for the students. On any income you make while you're a student there, you will still have to pay taxes. The average income tax rate for Australian students who work part-time is 15.5%. This will, of course, depend on particulars that are relevant to you, such as whether or not you are regarded as a resident or non-resident for tax purposes.

No matter the amount of income made, anybody who works in Australia is required to file a return at the end of the fiscal year. International students with income earned in Australia are especially subject to this responsibility. A tax return can intimidate many international students, but the good news is that you can get your tax refund by filing your return!

Furthermore, by submitting a return, you may make sure that your tax affairs are in order, which is crucial when applying for a future Australia visa.

When do I submit an Australian tax return application?

Before you may request a tax refund from Australia, you must have been living there for at least six months. Every year, the Australian financial year runs from July 1 to June 30. The last date for filing your tax return and requesting a tax refund is October 31. If you file your return through a tax agent, you can extend the filing deadline if you miss it.

For Australian tax reasons, you will probably be regarded as a non-resident if your enrolled course lasts less than six months and you intend to leave Australia when it is over. The tax-free level won't apply to you, but you will still need to file a tax return stating any Australian income you received while you were in the country. Since you are a non-resident, you must pay tax at the higher rates that are in effect.

Documents needed to lodge a tax return

To file your tax return, you will require the following documents and information:

  • TFN or Tax File Number: You received a tax identification number when you initially started working. Ask your employer if you have any queries; they ought to be able to provide an answer.
  • If you are a sole proprietor, independent contractor, or work for yourself, you will also need an ABN (Australian Business Number).
  • Your PAYG Report: This is usually given to you after the fiscal year ends or submitted directly to the ATO by your employer.
  • Proof of any tax deductions you want to claim, such as invoices, receipts, and supporting letters.
  • A photo ID is required if you're having a tax agent submit your return. Examples of acceptable photo identification include a passport or driver's license.

How to file a tax return step by step?

Here are the simple steps you need to follow when filing your Australian tax return.

  • Verify whether you need to submit an Australian tax return

You will probably need to file a tax return if you are an international student who works and earns money in Australia.

You won't necessarily owe more money as a result of this, though. The good news is that thousands of international students in Australia are eligible for tax refunds each year. By submitting your return, you can request a tax refund. With Taxback.com, the typical tax refund for overseas students is $2,600.

  • The status of your residency

International students who stay in Australia for more than six months are treated as residents for tax purposes. You must file a tax return if this pertains to you and you want to report your income.

Once you are regarded as a resident for tax reasons, you will be qualified for the $18,200 tax-free threshold. You can apply for a tax refund for the fiscal year ending June 30th if you have less than $18,200 in annual income and your employer had deducted tax from your payslip.

  • Recognize the income you must report

Foreign income is not required to be disclosed on tax returns by international students studying in Australia. All of the income they get in Australia must be declared.

  • Amass the paperwork and data you'll need to submit a return

The Tax Return for Individuals is often all that is required to submit an Australian tax return, either on paper or electronically. However, you'll want to have these things on hand:

  • Your Tax File Number (TFN)
  • Your passport
  • Your payslips
  • Expense receipts
  • Submit your paperwork before the deadline

Once you have the aforementioned records and data at your disposal, the time has come to file by the deadline of October 31. After the Australian tax year ends on June 30th, be sure to file by this date. Setting up a MyGov account and applying through MyTax while in Australia are the first steps for international students in Australia. You can check ATO forms and instructions for more information or get personal guidance from a tax expert.

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