Tax Season 2023: Here’s What Australians Should Know

> Tax season will be here before we know it, and Australians across the country will soon be busy preparing their taxes for the 2023 financial year. While it might seem like tax season is still a ways off, the due date tends to creep up. That’s why it’s a good idea to get a head start now — the sooner, the better. <

> Taxes may not be the most fun thing to think about, but familiarizing yourself with deadlines and changes can make lodging taxes more pleasant. With this knowledge, taxpayers can ensure they only pay what they owe and reduce their taxes as much as possible. Let’s look at things to keep in mind about taxes in 2023. <

> When Is the Tax Deadline in 2023? <

> The deadline to lodge taxes is October 31, 2023. That date remains the same from year to year, except when it falls on a weekend. Then the lodging deadline is the first business day following October 31st. <

> Taxpayers who fail to meet the lodging deadline may face hefty fines. The fine is $222 for every 28 days the tax return is late, costing up to $1,100. So, it pays to keep track of the tax lodging deadline every year. <

> If you owe taxes, then your tax bill is due by November 21, 2023. That date’s vital because the Australian Taxation Office (ATO) applies interest to the amount a taxpayer owes after the payment deadline. <

> 2023 Tax Rates and Income Thresholds <

> The tax rates and income thresholds are among the most pertinent details to know every tax season. In 2023, these rates and thresholds are unchanged from last year. Here’s the breakdown of the five tax brackets for reference. <

> These brackets are expected to change on July 1, 2024. At that point, Stage 3 tax cuts are scheduled to go into effect, rolling the 32.5c and the 37c brackets into a single 30c bracket. Additionally, the income threshold for the 45c bracket is expected to increase to $200,000. <

> Notable Changes to Taxes in 2023 <

> Tax season 2023 in Australia brings with it a couple of notable changes. Firstly, the low and middle income tax offset (LMITO) wasn’t extended. So, taxpayers earning less than $126,000 will no longer get a special tax break of up to $1,500. The government plans to address the rising cost of living in other ways. <

> Secondly, the eligibility age for downsizer contributions has been lowered once again. The eligibility age was reduced from 65 to 60 last year, and this year it’s been reduced to 55. As a result, eligible individuals over age 55 can make a downsizer contribution of $300,000 to their superannuation fund. <

> Be sure to thoroughly research what taxes you’re expected to pay in 2023 and look into possible deductions. That way, you know you’ve reduced your tax burden by as much as possible without missing anything you do need to pay. Using tax software or working with a tax expert are two resources that you may find helpful. <

> Tips To Help Avoid Getting Audited <

> With tax season comes the potential of getting audited by the ATO. While getting audited isn’t always avoidable, taxpayers can take steps to reduce the chances. Audits are time-consuming, so it’s worth taking the time now to get everything in order. <

> Lodging your tax return on time is an important step to take. Staying on top of the process and keeping an eye on the tax deadline gives you adequate time to prepare your returns accurately. After all, last-minute rushing can lead to careless mistakes. <

> Along the same lines, make sure your tax return is easy to understand, with specific explanations for every deduction you claim. Hopefully, you’ve been keeping records of the receipts and documentation you need to back up your claims throughout the year. <

> If your career deals heavily in cash, then you’ll want to keep meticulous records of your payments. That way, you can prove you aren’t under-declaring your income. Cash-based businesses tend to get scrutinized, so it’s good to get your documentation in order. <

> This next one probably seems obvious, but it really is important to only declare the deductions you’re entitled to take. Resist the urge to get “creative.” Finally, review your deductions and check your calculations several times before lodging your 2023 tax returns. <

> Lodging Your Taxes With Confidence <

> Tax season tends to arrive in a hurry, so it’s important to stay informed and understand pertinent details that could affect your tax returns. From deadlines to notable changes in taxation laws, Australians should be aware of all the key details when preparing for this year’s taxes. <

> With some careful planning, you can confidently lodge your taxes before the deadline on October 31st. So, take advantage of this time now by researching and understanding what needs to be done to make sure everything goes smoothly while lodging your tax return. <