How to Lodge Your Tax Return for Free in Australia

In this blog post, I’m going to show you how you can easily lodge your own tax return for free using MyTax. If this is your first time lodging your tax return in Australia, it may feel intimidating, but trust me, it’s actually very easy once you know how to do it.

What is MyTax?

MyTax is a free program provided by the ATO (Australian Taxation Office). The best thing about MyTax is that it’s free and you don’t have to download any software onto your computer. It’s a program that works straight on your internet browser. You just need internet access and a MyGov account.

Create a MyGov Account

If you already have a MyGov account, then feel free to skip ahead to the part about MyTax. If you don’t have a MyGov account, then you need to sign up for one.

1. Go to Google and type in “MyGov”.
2. Click on the first link that comes up.
3. Click “Create Account”.

There, you’ll have two options to create your MyGov account: through email or by digital identity. I would strongly recommend signing up for MyGov ID because you’ll eventually need it to link your MyGov account to the ATO and other government services like Medicare and Centrelink.

If you don’t want to sign up for MyGov ID right now, you can select “Continue with Email”. Agree to the terms and conditions, provide your email address, and follow the prompts to create your account.

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Link Your MyGov ID to MyGov Account

Once you have your MyGov account, log in and click “Profile” and then “Connect Digital Identity”. Provide your MyGov ID details and follow the prompts on the screen to connect your MyGov ID details. Then, go back to your profile page, select “Link Services”, and link the Australian Tax Office (ATO) to your account.

Check Payroll Details

Before starting your tax return, make sure you receive an email from the ATO stating that your employer has uploaded your payroll details for the year. This ensures that all the prefilled items on MyTax are up to date. You don’t want to do your tax return right on the 1st of July because if your tax figures change, you’ll have to do a tax adjustment.

Using MyTax

Click “MyTax” and it should take you to the MyTax page. If this is your first time using MyTax, they will ask you for your personal details, bank details, and tax residency status. Fill in the required information and make sure it’s correct.

Next, they will ask if you use the ATO’s app called “MyDeductions”. If you haven’t used it, consider setting it up for next year’s tax return. It’s a useful tool to track all your receipts and invoices for deductions.

In the next part, you’ll need to select what you want to claim or report. Take your time and select the lines that are relevant to you. The most common ones are salary, wages, and income.

Once you have selected the relevant options, you can proceed with filling in the specific details for each category. Take your time and double-check everything before submitting your tax return.

Tax Return Instructions

• If you have an investment that pays you rent, click the corresponding box.
• Click the box for managing fund distributions, which includes ETFs that pay dividends.
• If you sold any stocks for a profit or loss during the year, click the box.
• If you have unapplied net capital losses from earlier years to carry forward, click the box.
• If you are a sole trader or have a business, skip this part for now.
• Foreign income should be selected if you own an investment like a house in another country and sold it for a profit.
• Click the box for other income if applicable.
• If you want to claim deductions to reduce your overall tax bill, click the deductions box.
• Ignore the last two options as they are unlikely to apply to you.

Once you are happy with your selections, click the “Next” button to proceed.

Completing Your Tax Return

Wait until mid-July to give your employers enough time to enter your data into MyTax. Once it’s ready, you will receive an email from the Australian government to confirm.

Check your salary or wages, which should already be prefilled in MyTax. Verify that it is correct.

MyTax will help you calculate whether you need to pay more tax or receive a refund based on the tax you have already paid.

Example 1: Simple Tax Return

Scenario: You are single, earn $70,000 per year, and have no investments. You want to claim work deductions without receipts.

• Leave your salary as it is.
• Scroll down to deductions and click “Add”.
• Select the deduction you want to claim (e.g., laundry expenses for work) and enter the maximum total deduction allowed without a receipt ($300 in this case).
• Click “Save” and continue.

The deduction will reduce your taxable income from $70,000 to $69,700.

Provide your Medicare details and answer the remaining questions.

Click “Save” and continue.

Click “Calculate Tax Estimate” to see your estimated tax refund.

Example 2: More Complex Tax Return

Scenario: You are single, earn $120,000 per year, have investments, and work-related expenses with receipts.

• Verify your salary and total tax withheld.
• Answer the relevant questions based on your situation (interest income, dividends, stock sales).
• Click “Save” and continue.

Once you have double-checked everything, click “Lodge” to complete your tax return.

Keep in mind that these instructions are for relatively simple tax returns. If you have a more complex situation, it is recommended to consult a professional tax accountant.

Interest

When reporting your interest, enter the amount of interest you received from your bank. Most banks provide a summary of your interest earned for the year. Log into your account and find the account information section to see the summary. Enter your bank name, account number, and the gross interest amount. If you did not provide your tax file number (TFN) to your bank, there may be another summary showing the total TFN amounts withheld. If you did provide your TFN, you can leave this as zero. Click “Save and Continue” when you’re done.

Dividends

Declare any dividends you received from individual companies in this section. This does not include ETFs. Enter the name of the company exactly as it appears on the dividend statement. Click “Save and Continue” when you’re done.

Managed Fund Distributions

Declare the dividends you received from your ETFs in this section. Find the annual tax statement provided by the ETF issuer (e.g., Vanguard) and copy and paste the required information as per the labels provided. Click “Save and Continue” when you’re done.

Capital Gains or Losses

Enter the total capital gains for the year in this section. Keep a record of all stocks sold during the year and calculate the profit or loss for each trade. If you have any net capital loss from previous years, you can enter it here to reduce your current year capital gains. However, note that you can only use capital losses to offset capital gains, not reduce your overall tax payable. Click “Save and Continue” when you’re done.

Deductions

In this section, you can claim deductions to reduce your taxable income. For example, you can claim work-related car expenses if your job requires you to travel to see clients. Enter the total kilometers traveled and select the appropriate deduction method. You can also claim self-education expenses if it’s related to your profession and likely to increase your income in the future. Enter the details of the course and the amount paid. Make sure to read the information provided to confirm eligibility for each deduction. Click “Save and Continue” when you’re done.

Income Tests

Fill out the relevant information in this section based on your case. For example, if you receive tax-free government pension, enter the amount. If you have any foreign income or pay child support, enter the appropriate amounts. Click “Save and Continue” when you’re done.

Medicare Details

Enter your Medicare details in this section. If you have dependent children or qualify for any exemptions, enter the relevant information. Based on your income, you may have to pay the Medicare levy surcharge. If you have private health insurance, select “Yes” and enter the details. Click “Save and Continue” when you’re done.

Once you have completed all sections, click “Calculate” to see your tax refund. Double-check all the information before submitting. Click “Lodge” when you’re ready to submit. Your refund will be transferred to your bank account within approximately 14 days.