Reasons I Awo Money to ATO Instead Getting a Tax Refund?
As an Australian, when you file a tax return, you probably expect a refund. However, a refund is not guaranteed, but you might owe additional tax to the ATO. This could be the situation that forces you to think, how is this possible? Well, an ATO Tax Bill Epping notice can bother you, but the authority computes tax liability before issuing it. The theory is simple: if you have paid less than required, you have a tax bill. If you have paid more than required, you will have a tax refund. But it is essential to know the reasons why you owe money to the ATO. Those are listed below by Kirpa Tax Accounting Firm for taxpayers.
- Not Enough Tax Withheld
If you are a salaried person, tax liability can increase when not enough pay is withheld from your salary. Your employer has to deduct tax from your wages throughout the financial year. During tax filing, the ATO compares the amount withheld with your tax liability. If the amount deducted is too low, you are liable to pay the difference. This probably happens when your income has increased during the year, or bonuses received.
- You have Multiple Incomes
Tax Owing to ATO Epping occurs when you have multiple income streams. Having multiple jobs can sometimes result in insufficient withholding. Suppose you are doing a full-time job plus earning income from freelance work. If the tax-free threshold doesn’t fit correctly with your income sources, the combined withheld amount may not cover tax liability. Eventually, you have to pay tax to the ATO because your total tax withheld amount remains lower than required.
- Taxable Income from Property
Your tax liability towards the ATO can change when you own an investment property. If rental income of your property exceeds total expenditure, it results in taxable income. Even if your rental estate has insurance, repair expenses, loan interest, etc., tax calculation can result in taxable income. Thus, when you prepare a tax return, keeping proper records of property-related expenses is necessary. Also, you must consider legitimate deductions while lodging a tax return.
- Medicare Levy Tax Adjustments
It accounts for one of the reasons for ATO Tax Debt Epping for taxpayers. It applies when your income exceeds 93k AUD as a single or 186K AUD for a family. Suppose on an income of 97k, you have to pay from 970 to 1455 as tax. Your employer cannot withhold this, so you get a tax bill from the ATO instead of a refund. MLS can change your tax accountability during EOFY tax computation.
- You have Government Debt
You may expect a tax refund but have not received it from the ATO due to an existing debt. Government agencies can recover debt from your tax refund. For instance, the government can recover eligible debts like child support and certain Centrelink through the tax refunds. Thus, you should check your ATO and other account information if your existing refund won’t match the amount calculated. This is another reason you owe tax to the ATO.
Consult a Registered Tax Professional Epping of Kirpa Tax Accounting Firm if your tax situation is complex.
FAQ’s
Why do I pay the ATO when I always have a tax refund?
You may have untaxed side income, or may have less withholding by your employer. Thus, you may have an ATO Tax Bill Epping instead of a refund.
Does owing tax to the ATO mean my tax filing is wrong?
A tax bill doesn’t always mean that you have done something wrong. It may happen due to insufficient tax paid to tax authorities.
Can a tax bill occur if I have two employments?
Multiple jobs can cause Tax Owing to ATO Epping due to inadequate PAYG withholding. Especially when your withholding arrangement won’t account for combined income.
Can rental income from property increase my tax bill?
Yes, after deductions, if your rental income produces taxable income, you owe the ATO. Income shown after deductions can increase overall tax liability.
Can I ask my boss to withhold more tax from salary?
If eligible, you can request your boss to withhold more tax than usual. This can reduce your ATO Tax Debt Epping at the end of the financial year.
What happens if I don’t pay my due tax to the ATO?
You can review the payment options if unable to pay the full amount to the ATO. As an eligible taxpayer, you can make an easy payment arrangement.
Do I need to consult a tax specialist in Epping?
If your tax affairs are complex and you are unable to assess income, consult. Kirpa Tax Registered Tax Professional Epping can help you with it competently.