Lodging your first tax return

That time of year is closely sneaking up on us, yes its getting close to tax time and end of financial year.

For many Aussies this July they will need to lodge their first income tax return. For those of you who will be lodging your first income tax return, here are some tips to help you through the minefield of tax time.

Group certificates will start being issued in July and these are a summary of how much money and tax your employer has paid on your behalf during this financial year. If you have had a couple of jobs, you should receive a group certificate from each employer so make sure they all have your current mailing address so you receive them on time.

Personal income tax returns are due by 31st October each year so you have a bit of time to get your finances organised before you lodge your return.

There are a few online tax return options available for you to use. The tax office have etax which is a free program you can download from their site. This software is fairly easy to use following the same step by step guide that the paper returns use. You can also do a pre-download of any information already held by the tax office including your medicare summary and some company shaer dividends to make lodging your return easier.

Then there are the online tax returns you can use where you pay for the service. Some of these services offer you the chance to have a qualified accountant look over your return to make sure you get the most tax back possible.  This sounds great in theory but a couple of years ago I spoke with someone who worked at one of these firms and I asked the question, who do you get o check all of these online returns as tax accountants are flat out at this time of year. He told me that they get the younger tax accountants who want to earn a bit of extra money during the busy season and they check the returns after hours. My next question, how much do you pay them to check the returns. His answer '$9 per return'. Yep you read that right, they were paying $9 per return to have these checked by accountants just starting out or wanting to make a bit of extra cash.

Now for $9 I'm not sure how thorough or personalised this checking process is so if you are going to spend some money on preparing your tax return, here are some alternatives.

Come tax time you'll see those pop-up tax return people at major shopping centers. These guys usually pay a fee to do a training course through the company they are representing to ensure they are up to date with their tax knowledge and the process. These guys are an option and yes you can ask them what their experience is before you commit.

For your first tax return it is worth considering having a tax accountant help you prepare your income tax return so that you can learn what deductions are applicable to your job and keep this in mind for next year.

A good tax accountant will step you through what deductions are available to you and why. Often you will save their fee with the tax they can save you and if you are getting a tax refund that's even better as it'll mean more cash in your hand.

Like the pop-up guys, tax accountants will have set fees they charge for income tax returns so feel free to ring up a couple who have been recommended to you and ask how much they'll charge before you commit.

With so many options available it can get confusing for your first lodgement. Take your time, you've got until the 31st October and see what options fit into your budget and suit you.  You may be confident with the knowledge you have and the help of some family or friends to lodge your own return. Although this can be a tricky option for your income tax return, call on any family members or friends who may be in the tax industry and ask them for their help.

The worst they can say is 'that's out of my area, go see an accountant' and that's not such a bad thing.

If you are due for a refund, take some time to plan how you are going to Spend your tax refund. It can sometimes feel like a windfall so take time to plan this carefully.

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