A lot of residents and workers in Australia lodge tax returns at the end of the fiscal year. This usually means applying with a claim for a refund to the ATO, or the Australian Tax Office. The result of this is that you typically get some money back on your taxes from the government. In fact, the vast majority of people who apply for a return get paid back taxes by the government. However, there are also some people who have to actually pay extra tax to the ATO! Other people are talking about how their refund is awesome and how they got thousands of dollars in returns. You, on the other hand, are fuming because you actually had to pay more tax.
What Type of Tax System Exists in Australia?
In Australia, just like for most other countries that charge taxes from the people, there is a PAYG system in place. This is an acronym for Pay As You Go, which means that you pay taxes based on how much you earn and spend over time. Usually, the taxes are deducted from your paycheck before you are paid each month. If your income tax total is lower than what your employer has deducted from you at the end of the year, you are eligible to claim the difference from the ATO as a refund. The point of the system is to get as close to breaking even as you can, so that neither party has to pay each other at the end of the year. This is usually the case, and big refunds are rarer than legendary Pokémon.
What Circumstances Give You Bigger Refunds?
If you are on the prowl looking for bigger refunds than just $20 or so, you are going to have to be involved in a certain situation. For example, you need to have a lot of deductions to claim in the same year, or you need to have deductible losses on your investments over the course of the year. The last is that you need to have overpaid your tax every single time you paid it for the entire year. This is probably the most common reason for people to get big returns on their paid taxes.
Tax returns are like getting change when you go to a shop. If you tell the shopkeeper to keep the change on your tab and then collect all of the change at the same time at the end of the year, it is a little like you collecting your tax refunds at the end of the year as well. You can use a calculator for online tax Australia to figure out how much you can earn via refunds.
Some people actually choose to overpay their tax each month so that they will be guaranteed a refund throughout the year. This is a good idea for people who have a hard time actually saving up their wages. If you can be sure of getting a bonus of sorts during the year, there is no reason for you not to overpay your taxes, as long as you can prove it to the ATO afterwards and get your return.