The 2017/2018 tax-free threshold is $18,200.
Simple right? Now you know the answer and we get to write the shortest article ever.
Except with tax, nothing is ever that easy. There are a bunch of intricacies and technicalities that will dictate whether or not you need to fill in a tax return, or something called a non-lodgement advice.
That’s right, just like the uncle you don’t really know but still send Christmas cards to every year, the ATO wants something from you. In a way, it’s really nice, but in another far more accurate way, it can be incredibly confusing.
Don’t worry, we’ve got your back with the following easy to understand breakdown of the tax-free threshold.
Option 1 – I earned over $18,200
We don’t have a lot to discuss. You earned more than the tax-free threshold and must fill in a tax return. What are you still doing here? Jump on to the POP and get it done.
Option 2 – I earned less than $18,200 and didn’t pay any income tax.
While you don’t have to fill in a tax return, you do need to complete something called a non-lodgement advice. This document basically says that you are not going to complete another document, and so are completing this document instead. Seriously.
It is a bit weird, but you still have to do it. You see, the ATO uses these forms to remove you from a list of people who haven’t completed their tax return. So by filling in a non-lodgement advice, you are completing your obligations, helping the Australian government destroy even more trees and keeping Australia Post relevant for at least another year.
So there we go, the tax-free threshold is $18,200, which, logically, should be all you need to know. However, if you paid income tax during the year, you still need to lodge a tax return but will likely get all the money you paid back. Finally, if you fell under the tax-free threshold and didn’t pay any tax, you don’t need to lodge a tax return, but do need to lodge a non-lodgement advice.
Now I have a headache, so I’m going to lie down.