Before You Lodge Another Tax Return, Read This
Most people think tax time means paying tax on everything they earned—but that’s not exactly true.

🧾 You don’t pay tax on your total income. You only pay tax on your taxable income—and there’s a big difference.

Let’s break it down.

👥 What is Individual Income?
If we asked someone what individual income tax is, even someone who doesn’t know much about taxes would probably have heard of it. It’s the most common type of tax—and it applies to the total of these five types of income:

1. Employment Income
   What you earn from your job—your wages or salary.
2. Business Income
   If you run a business, you’re taxed on your profit, not your total income. That’s what’s left after you deduct all your expenses.
3. Investment Income
   This includes interest from savings, dividends from shares, and rental income from property.
4. Capital Gains
   When you sell an asset (like shares or an investment property) for more than you bought it, the profit is a capital gain. (Your main home is usually exempt.)
5. Other Income
   Any other income not covered above, like insurance payouts, crypto currency, or overseas earnings.

👉 So your individual income is the total of these five sources. But remember, you may be entitled to deductions and offsets that reduce how much tax you pay on this income.

If you need to know anything else about tax, or if you’d like help with any tax-related service, contact Gippsland Accounting and Financial Services—we’re here to help! We offer a free consultation to get you started. Call us now on (03) 5622 1947, or simply fill out the form at the bottom of this article, and we’ll give you a call.

Understanding what makes up your income is just the beginning. Next, let’s walk through the essentials—like how much tax you actually need to pay, what deductions and offsets you can claim, and the deadlines to keep in mind. It might save you more than you think!

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🧾 Australian Tax Basics

👤 1. For Individuals

• Tax-Free Threshold: The first $18,200 you earn each year is tax-free.
• Income Tax Rates (2024–25):
  • $0 – $18,200: 0%
  • $18,201 – $45,000: 19%
  • $45,001 – $120,000: 32.5%
  • $120,001 – $180,000: 37%
  • $180,001+: 45%
• Medicare Levy: Usually 2% of your income, unless you’re exempt (e.g. low income or certain visa holders).

📝 Most people file their tax return between July 1 and October 31 each year for the previous financial year.

🧾 2. For Sole Traders / Freelancers

You still pay individual income tax rates.

• You must:
  • Apply for an ABN (Australian Business Number)
  • Keep records of all income and expenses
  • Lodge your BAS (Business Activity Statement) if you’re registered for GST
  • Pay superannuation for yourself (optional, but recommended)

🏢 3. For Businesses / Companies

• Company tax rate:
  • 25% for most small businesses (base rate entities)
  • 30% for larger businesses
• Must register for:
  • ABN (Australian Business Number)
  • TFN (Tax File Number)
  • GST if turnover is $75,000+
• You’ll lodge:
  • Business Activity Statements (BAS) – monthly or quarterly
  • Annual company tax return

💰 4. GST (Goods and Services Tax)

• 10% tax on most goods and services
• You must register for GST if your business earns $75,000+ per year
• Collected from customers and paid to the ATO

🗓️ 5. Key Dates

July 1 – Start of financial year

October 31 – Deadline to lodge your individual tax return

Quarterly BAS Due Dates:
Q1: Nov 25
Q2: Feb 25
Q3: May 25
Q4: Aug 25

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✅ATO Tax Relief Options

1. Tax Deductions (Reduce Your Taxable Income)

You can claim deductions for expenses directly related to earning your income. Common ones include:

🧍‍♂️ For Individuals:

• Work-related expenses (uniforms, tools, home office)
• Vehicle and travel expenses (if used for work)
• Donations to registered charities
• Self-education expenses
• Accounting fees

👩‍💼 For Sole Traders / Businesses:

• Business-related tools, software, and supplies
• Rent or home office expenses
• Advertising and marketing
• Subscriptions and memberships
• Internet and phone used for business
• Depreciation on assets

💰 2. Tax Offsets (Directly Reduce Tax Payable)

Common Offsets:

• Low and Middle Income Tax Offset (LMITO) (phasing out): previously reduced tax for incomes under $126,000.
• Low Income Tax Offset (LITO): still available, worth up to $700
• Private Health Insurance Rebate: reduces tax if you have eligible cover
• Franking credit offset: for dividends from shares
• Spouse or dependent tax offset (if supporting someone with low income)

💼 3. Business Tax Relief / COVID Relief (If Applicable)

While most COVID-era support has ended, some relief options still apply in hardship cases.

Temporary Full Expensing (ended 30 June 2023):

• Businesses could claim the full cost of eligible assets in the year they were purchased.

Current Small Business Relief:

• Instant asset write-off (as of 2024–25: threshold is $20,000 per asset)
• Simplified depreciation rules
• GST cash accounting method (helps with cash flow)

📅 4. Payment Assistance / Deferrals

If you can’t pay on time, the ATO may offer:

• Payment plans (weekly/monthly instalments)
• Interest-free payment plans (for small businesses under hardship)
• Deferrals during natural disasters or other emergencies
• Remission of penalties or interest

You can apply online via myGov or call the ATO to request support.

🌱 5. Superannuation Relief

• If you’re facing financial hardship, you might be eligible to access super early (only in very specific cases).
• Employers struggling to pay super guarantee can contact the ATO for a Super Guarantee Charge deferral.

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If you’d like support with your tax return or have any questions about your individual or business tax obligations, Gippsland Accounting and Financial Services is here to help. We offer a free consultation to get you started. Simply call us on (03) 5622 1947 or fill out the form below, and one of our friendly team members will be in touch.