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4 tax return tips for university students

 In addition to opening a bank account or starting a part-time job, paying taxes is another sign you have reached financial maturity. The task of filing an income tax return can seem daunting for most people. How do you determine if you need to file one?

Mark Morris, Professor at La Trobe University and Professor of Practice In Taxation, are here to guide you through tax season. Here are the top 10 tax questions that you should be asking as an Australian university student. These questions will help you decide whether or not you must file an income tax return for the tax year ending 30 June 2018. If you do, you can also learn how to prepare one.







1. Are you an Australian tax resident first?

 Determine if you are an Australian resident to calculate your Australian income tax.

If you are born in Australia and live there for income tax purposes, you will be considered an Australian resident. Importantly, international students can be considered tax residents of Australia if they are Australian students. That's because the Australian Taxation Office (ATO) generally takes the view that by living in Australia for six months, your behavior and routines are consistent with a person residing here for tax purposes.

One of the binding public taxation rulings by the ATO held that an international student, who arrived in Australia to study at a four-year university course, was an Australian tax resident. This despite having left six months later to return to Australia after a family member's death. Why? Why? Because his living and work arrangements while in Australia were the same as those of someone who lives here every day. (To learn about the ruling in more detail, check out Example 10 of Taxation Ruling TR98/17).

To find out if you are an Australian resident, contact the ATO (or a registered tax agent) to get more information.




Tip - Remember that being a resident of Australia for tax purposes does not mean you are a permanent resident for Australian immigration purposes.


2. What documents do I need to file a tax return?

Everyone who lodges an income tax return needs a tax file number (TFN). A TFN is likely already issued to you if you are employed.

If you need a TFN but are filing a return for any reason, you will need to apply directly for one at the ATO or through a registered tax agent.

The next step is to gather information for your income tax return. This information includes things such as your:

  • Summary of payment statement issued by your employer at the end of each financial year. It shows how much income you received and how much tax was withheld.
  • Bank statements show any interest you have earned.
  • Dividend slips to show payments made to companies in which you hold shares; click here.
  • Invoices and receipts.

Assuming you have a TFN and your tax affairs are reasonably simple, you may consider preparing and lodging your income tax return online using the ATO's myTax product.

If you don't know what to do, contact an ATO registered tax agent to make sure you know your entitlements and prepare your income tax return.




Tip - If you are expecting to receive a refund for your tax, you will need your bank account details to determine where the refund will be deposited.


3. Which types of income should you include in your tax return?

When you prepare your tax return, you'll need to declare all the assessable income you've earned this financial year. Income can be more than just money. It can also come from many sources such as:

  • Wages and salary for full-time, casual, or part-time employees
  • Bonuses and allowances
  • Tipps and gratuities such as those earned in hospitality jobs, are also accepted.
  • As an independent contractor, fees
  • However, business income is not earned as a hobby.
  • Payments and allowances from the government, such as Newstart Allowance, Youth Allowance and Austudy payments, are among others.
  • Bank interest can bring you income
  • Dividend income
  • Distributions from a family trust, or as a partner in partnership,
  • Capital gains from the sale of assets is a complex area that requires specialist expertise.

4. Is it legal to pay for self-education?

You can claim self-education expenses if you are enrolled in a course that will improve or maintain your current skills. You can also claim course fees, textbooks and stationary costs, as well as travel expenses and depreciation on items such laptops, tablets, and printers.

You cannot claim costs associated with study if you have not yet begun a career. As an example, a student in college cannot claim the costs of obtaining your first academic qualification. This logic also applies to those who have decided to change careers. You can't claim costs associated with learning a new skill. Higher Education Loan Program (HELP), repayments are also not available.



Tip: For specific examples of when self-education expenses can be claimed, see Taxation Ruling TR98/9.

Disclaimer: La Trobe University used reasonable care and skill to compile this general commentary. It should not be regarded as advice and neither the University nor the author can guarantee the accuracy or completeness of the materials. We disclaim any and all liability to anyone for relying on the information in these materials. Professional advice should be sought from a qualified registered tax agent if required.

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Location: Perth WA, Australia

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