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I have a tax bill | Gotax 2024

June 14, 2024

Understanding Why You Might Receive a Tax Bill: Key Reasons Explained

There are several reasons you might not have had enough tax withheld throughout the year. We’ve compiled a list of common reasons below:

1. Employer Error

One basic reason could be an error made by your employer. Sometimes, employers may look up the wrong tax tables, resulting in insufficient tax being deducted from your weekly pay.

Why did I get a Tax Bill2. Multiple Employers

If you had multiple employers during the year, this could impact your tax withholding. Whether you worked multiple jobs simultaneously or consecutively, the combined tax withheld might not be enough. Ensure you only claim the tax-free threshold from one employer to avoid this issue.

3. HECS/HELP Debt Not Reported

Another reason could be related to a HECS/HELP debt. If you crossed the repayment threshold but did not inform your employer about your debt, they wouldn’t have withheld the extra amount needed for the compulsory repayment.

4. Variable Pay Due to Overtime or Bonuses

Fluctuating pay amounts, such as those caused by overtime or bonuses, can also affect the amount of tax withheld. Irregular pay patterns can lead to discrepancies in tax withholding, resulting in a tax bill at the end of the year.

Additional Factors Affecting Your eTax Return

In addition to the reasons mentioned above, the following factors can also impact your eTax income tax return:

5. Bank Interest Income

If you have some cash in the bank and earned interest on it, this income is added to your eTax return. Generally, no tax is withheld on this interest during the year, so the taxation office will require its share when you file your return.

6. Positively Geared Rental Property

If you have a rental property that is positively geared (earns more than it costs), you will need to pay tax on the profit generated.

7. Work Under an ABN

Any work performed under an Australian Business Number (ABN) also impacts your tax return. Ensure you account for this income, as it typically has no tax withheld during the year.

8. Medicare Levy Surcharge

If you exceeded the Medicare levy surcharge threshold and did not have private health cover, you will be charged the Medicare surcharge. This can turn a potential tax refund into a payable amount.

These are just some of the reasons why you might find yourself with an unexpected tax bill. In many cases, it can be a combination of factors. While this information wont soften the blow of receiving a tax bill, it can help you better understand why it happened.

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