Completing Your Individual Tax Return Form via myTax

This guide provides a comprehensive breakdown of the key sections and data entry requirements within the Australian Taxation Office (ATO) myTax online system, which is the digital platform for lodging your individual tax return form. Lodging your return electronically requires careful attention to detail, particularly regarding pre-filled information and substantiation for deductions.

Instructions for Completing the Individual Tax Return Form

It is absolutely crucial to verify all pre-filled data against your official hardcopy or digital documents (Income Statements, PAYG Summaries, bank interest statements, and dividend statements).

I. Personal Details and Tax Residency Status on the Individual Tax Return Form

This foundational section determines how your tax will be calculated, with Item 8 (Tax Residency) being one of the most critical and complex fields.

Item 8: Taxpayer Status (Residency)

Your residency status dictates whether you are taxed on your worldwide income and if you are eligible for the tax-free threshold ($18,200). Choosing the wrong status is a frequent cause of large tax debts.

You must declare your residency status for tax purposes for the financial year. The ATO uses four primary tests (though only one needs to be met to be considered a resident):

• The Resides Test (Primary Test): The ATO considers if you reside in Australia based on factors like: intention, family/social ties, business ties, maintenance/location of assets, and continuity of physical presence.

• The Domicile Test: Are you domiciled in Australia and not established a permanent place of abode outside Australia?

• The 183-Day Test: Have you been in Australia for 183 days or more during the year? (Unless your usual home is outside Australia and you have no intention to take up residence here).

• The Commonwealth Superannuation Test: Are you a member of a Commonwealth Government superannuation scheme?

Key Distinction

• Resident: Taxed on worldwide income; receives the tax-free threshold.

• Foreign Resident: Only taxed on Australian-sourced income; no tax-free threshold.

• Temporary Resident: Taxed like a resident on Australian-sourced income, but generally only taxed on foreign income earned from employment while in Australia.

II. Income Sections (Items 1 to 10) - Reporting Gross Income on the Individual Tax Return Form

This is the reported income that forms the basis of your taxable earnings. Be meticulous in checking pre-filled data, especially for interest and dividends.

Net income or income loss from business

1. Employment and Other Primary Income (Items 1 to 10)

This covers your main sources of income such as Salary and Wages (Item 1), Australian Government Payments (Item 2), and Interest (Item 10). You must meticulously check the pre-filled data for Salary and Wages against your final Income Statement, as any discrepancies must be corrected.

For Interest and Managed Fund Distributions (Item 13), ensure all financial accounts, including any closed mid-year or newly opened ones, are reflected. It is common for not all interest data to be automatically pre-filled, making manual verification essential.

2. Item 11: Dividends (Share Income) and Franking Credits

This section is complex as it requires reporting both the cash dividend and the associated franking credits. Franking Credits represent the tax the company has already paid on its distributed profits.

You apply the Gross-Up Principle: you add the Franking Credits to your taxable income and then claim the same amount back as a Tax Offset. This ensures you are taxed at your marginal rate while receiving credit for the company tax already paid.

If your personal tax rate is lower than the company rate (30%), the Franking Credits will likely contribute to your tax refund.

III. Deduction Sections (Items D1 to D10) - Claiming Expenses on the Individual Tax Return Form

Substantiation is key. For every deduction, you must have records (receipts, logbooks, diaries) to support your claim.

Item D1: Work-related Car Expenses - Choosing the Right Method

You must choose one of these two methods, as you cannot mix them for the same car in the same year.

1. Cents per Kilometre Method (Simpler)

   
   

   • What you claim: A set rate (e.g., 85 cents per kilometre for 2024–25) for up to a maximum of 5,000 work-related kilometres.

   • Substantiation: You do not need receipts for running costs (fuel, insurance). You only need to be able to show how you calculated your claim (e.g., a diary noting the frequency and nature of your travel). This method is quick and best for minor work travel.

   
   

2. Logbook Method (More Complex, Higher Claims Possible)

   
   

   • What you claim: The business-use percentage of all your actual car running costs (fuel, repairs, registration, insurance, depreciation/decline in value).

   • Substantiation: MANDATORY: You must keep a 12-week continuous logbook that records all trips (business and private) to establish your business-use percentage. This logbook is valid for five years. You also need receipts for all expenses. This method is best for high-mileage business use.

Work-related Car Expenses

Item D5: Other Work-related Expenses - Home Office & Capital Assets

• High-Risk Area: This section is heavily scrutinised by the ATO, requiring specific compliance for Home Office and asset claims.

1. Home Office Expenses

Fixed Rate Method (Most Common): Claim 67 cents per hour for every hour you work from home.

• What it covers: Energy, internet, stationery, and decline in value of office furniture.

• Substantiation: You must keep a record of the total number of hours worked from home (a diary, spreadsheet, or timesheets). You cannot claim the individual costs (like electricity bills) that are covered by the rate.

  
  

2. Tools and Equipment

If the cost of the asset (tool, laptop, office chair, etc.) is $300 or less, you can claim the full cost as a deduction in the year you bought it.

If the cost of the asset is more than $300, you must claim the deduction over its effective life.

You claim the "Decline in Value," calculating the deduction over several years based on the item's expected lifespan and your work-related usage percentage. You must keep the receipt for the life of the asset.

IV. Tax Offsets, Levies, and Declaration

Tax offsets are much better than deductions because they directly reduce your tax payable (dollar-for-dollar), rather than just reducing your taxable income.

Private Health Insurance Rebate and Medicare Levy Surcharge

The MLS is triggered if your income exceeds certain thresholds ($93,000 for singles, $186,000 for families) and you do not have appropriate private hospital cover.

Verify the PHI data pre-filled from your insurer. If you are subject to the MLS, you will be charged an extra levy (1% to 1.5% of your income), which the PHI rebate is designed to help offset or avoid entirely.

Rebate from private health insuarance

2. General Tax Offsets (LITO/LMITO)

Most non-refundable offsets, such as the Low-Income Tax Offset (LITO) and the recently-retired Low and Middle-Income Tax Offset (LMITO), are automatically calculated by the ATO based on your declared income.

While automatically calculated, you should review the final "Estimated Result" to ensure the myTax system has correctly applied these to reduce your tax payable.

Final Checklist Before Lodgement

In summary, successfully lodging your tax return requires meticulous verification of pre-filled income data and rigorous substantiation of all deductions claimed. Always remember that the ATO holds you responsible for the accuracy of your return.

If your circumstances are complex—for instance, involving investments, multiple employment types, or unusual residency issues—it is highly advisable to consult with a registered tax agent to ensure full compliance and maximize legitimate claims. The myTax system is powerful, but professional advice remains the best safeguard.

Ready to take the next step? Let's start by double-checking your biggest deduction, or for company-specific claims, ensure you've consulted Gordon QC Du & Associates' internal guidance. Alternatively, tell me which section of the myTax form you're completing right now!