STEP 3: Personalise Return

Author

Benedict Thekkel

Personalise Return

Understanding “Personalise Your Return”

This step customizes your tax return based on your specific circumstances. The ATO uses your selections to: - Show only relevant sections in Step 4 (Prepare Return) - Pre-fill data from employers, banks, and government agencies - Calculate automatic offsets (LITO, SAPTO, etc.)

Key Principle: Self-Assessment

You’re responsible for declaring ALL income and claiming only valid deductions, even if not pre-filled.

1️⃣ Basic Information

Residency Status

Question: Were you an Australian resident for tax purposes from 1 July 2024 to 30 June 2025?

Why it matters: - Residents: Taxed on worldwide income with tax-free threshold ($18,200) - Non-residents: Taxed from first dollar, no tax-free threshold

Common resident indicators: - Live in Australia permanently - Australian citizen/PR holder living here - Stayed 183+ days in Australia

Select: ✅ Yes (if you lived in Australia all year)

Spouse Status

Question: Did you have a spouse at any time between 1 July 2024 and 30 June 2025?

Why it matters: - Affects Medicare Levy Surcharge calculations - Enables spouse super contribution offset - May affect family tax benefits

Spouse definition: Married or de facto partner (including same-sex)

Select: Based on your relationship status

2️⃣ Income Categories

💼 Employment Income

Select if: You received salary, wages, or government payments

Includes: - ✅ Salary, wages, allowances, tips, bonuses (including lump sum payments) - Regular pay from employer (pre-filled from income statements) - Allowances: car, travel, meal, tool, laundry allowances - Bonuses and commissions

  • ⬜ Australian Government payments
    • JobSeeker, Youth Allowance, Austudy
    • Age Pension, Disability Support Pension
    • Parenting Payment, Carer Payment
  • ⬜ Employment termination payments (ETP)
    • Redundancy payments
    • Golden handshakes
    • Early retirement schemes
  • ⬜ Foreign employment income
    • Income from overseas employment (shown on payment summary)
  • ⬜ First Home Super Saver (FHSS) scheme
    • Voluntary super contributions released to buy first home

Your selection: ✅ Salary, wages (you have employment income from Recovery Metrics)

🏦 Superannuation & Annuities

Select if: You received payments from super funds or annuities

Includes: - Super pension payments - Annuity payments - Transition to retirement income streams

Your selection: ⬜ No (you’re still working, not drawing super)

💰 Investment Income

Select if: You had interest, dividends, rent, or capital gains

Sub-options:

Interest

  • Bank account interest (pre-filled)
  • Term deposit interest
  • Bonds and debentures

Dividends

  • Australian company dividends
  • Franked and unfranked dividends
  • Dividend reinvestment plans

Rent (Australian properties)

  • Residential rental income
  • Commercial rental income
  • Can claim expenses: rates, repairs, interest, depreciation

Capital Gains/Losses

  • Select if: Sold shares, property, crypto, or other assets
  • Not from managed funds (that’s a separate category)
  • Can offset capital losses against capital gains

Unapplied net capital losses

  • Select if: You have capital losses from prior years to carry forward
  • But no CGT event this year

Your selection: ✅ Interest (you likely have bank interest to declare)

📊 Managed Funds & Trusts

Select if: You received distributions from: - Managed investment funds - Unit trusts - Family trusts - Distributions that include capital gains or foreign income

Your selection: Based on your CommSec/CMC holdings (check annual statements)

🏢 Business & Personal Services Income

Select if: You’re a sole trader, contractor, or in partnership

IMPORTANT DISTINCTION:

Personal Services Income (PSI)

Select if: - You provide mainly YOUR LABOR/SKILLS - Income mainly from your personal efforts - Examples: IT consulting, trade work, professional services - Your situation: ✅ YES - Your contracting work ($6,762.50) is PSI

Rules: - Stricter deduction rules - Must pass PSI tests (Results Test, 80% Rule, etc.) - Labor hire payments go here

Business Income or Loss

Select if: - You sell products or services - Have employees or significant assets - Generate income from business structure, not just your labor - Examples: Running a shop, manufacturing, business with staff

Your selection: ✅ Personal services income (for your contracting work)

Sub-options: - ⬜ Partnerships - ⬜ Net farm management deposits or repayments

🌏 Foreign Income

Select if: You had income from outside Australia: - Foreign employment - Foreign rental property - Foreign dividends or interest - Foreign business income

Your selection: ⬜ No (unless you have overseas income)

🔄 Other Income

Select if: You had income not listed above

Includes: - Employee share schemes - Sharing economy income (Uber, Airbnb, TaskRabbit) - Cryptocurrency trading - Jury duty payments - Prizes from work-related competitions

Your selection: Based on whether you have these income types

3️⃣ Deductions

🎁 Gifts, Donations, Interest, Dividends & Tax Affairs

Select if: You made donations or have tax management costs

Includes:

Gifts & Donations

  • Must be to registered DGR (Deductible Gift Recipient)
  • $2+ requires receipt
  • Political donations have separate rules

Interest on Investments

  • Interest on loans to buy shares/property
  • Margin lending interest
  • Only deductible if investment produces assessable income

Dividends

  • Deduction for franking credit adjustments
  • Uncommon for most taxpayers

Cost of Managing Tax Affairs

  • Tax agent fees
  • Software subscriptions (e.g., Sharesight)
  • ATO interest charges
  • Your items: Could include accounting software

Your selection: ✅ Yes (you likely have some tax management costs)

🛡️ Income Protection Insurance

Select if: You paid premiums for income protection insurance

What qualifies: - Insurance that replaces income if you can’t work - Paid from your own money (not super fund)

What doesn’t qualify: - Life insurance - Trauma insurance - Total & Permanent Disability (TPD)

Your selection: Based on whether you have this insurance

📋 Other Deductions

Select if: You have deductions not covered above

Includes: - Election expenses (for union/company positions) - Interest on money borrowed to pay existing tax debt - Legal fees for tax matters - Certain Australian film industry deductions

Your selection: ⬜ Unlikely for most employees

📉 Tax Losses from Earlier Years

Select if: You have business losses from previous years

Rules: - Can offset against current year income - Must be from actual business activity - Specific carry-forward rules apply

Your selection: ⬜ No (not applicable for employment/PSI in first year)

🎯 Tax Offsets or Adjustments

Select if: You’re claiming specific offsets

Common offsets (automatically calculated): - ✅ Low Income Tax Offset (LITO): Auto-calculated if income <$66,667 - ✅ Medicare Levy Reduction: Auto-calculated if applicable - ⬜ Seniors & Pensioners Tax Offset (SAPTO): Age pension age

Offsets you might claim: - Spouse super contribution offset - Zone/overseas forces offset - Private health insurance rebate adjustment

Your selection: Most offsets are automatic; select if claiming specific offsets

4️⃣ Important Notes

💡 Sharing Economy Income

Income from digital platforms is assessable: - Ride-share (Uber, DiDi) - Short-term accommodation (Airbnb) - Task services (Airtasker, TaskRabbit) - Delivery services (Uber Eats, DoorDash)

Where to report: - Employment/PSI: If labor-based (driving, tasks) - Business: If operating as a business - Other income: One-off or irregular

💵 Cash Income

CRITICAL: Cash payments MUST be declared - Just because you’re paid in cash doesn’t make it tax-free - The ATO has data-matching programs - Penalties apply for non-disclosure

🏥 Automatic Inclusions

These appear automatically in Step 4: - Medicare Levy (2% of taxable income) - Medicare Levy Surcharge (if high income, no private health insurance) - Private Health Insurance Statement (pre-filled) - Low Income Tax Offset (auto-calculated)

🔍 Pre-Fill Data Sources

The ATO receives data from: - Employers: Salary, wages, PAYG withheld - Banks: Interest payments - Share registries: Dividend payments - Centrelink: Government payments - Health funds: Private health insurance - Super funds: Contributions and payments

Timing: Data may take weeks after June 30 to appear

⚠️ Can’t Remove Pre-Filled Selections

If a checkbox is locked (⚠️), it means: - Data has been pre-filled by ATO - Or you entered data in a previous step - Delete the data in Step 4 if incorrect

📝 YOUR PERSONALISED SELECTIONS (Based on Tax Analysis)

Based on your employment and contracting situation for FY 2024-25:

# Your Personalised Return Selections for FY 2024-25

selections = {
    "basic_info": {
        "australian_resident": True,
        "reason": "You lived and worked in Australia (QLD) full year",
        "had_spouse": False,  # Update if applicable
    },
    
    "income_categories": {
        "salary_wages": {
            "selected": True,
            "reason": "Employment income from Recovery Metrics: $55,566.80",
            "sub_items": [
                "✅ Salary, wages, allowances (pre-filled from payslips)",
                "⬜ Government payments",
                "⬜ Employment termination payments",
                "⬜ Foreign employment income",
                "⬜ FHSS scheme"
            ]
        },
        
        "superannuation": {
            "selected": False,
            "reason": "Not receiving super payments (still accumulating)",
        },
        
        "investment_income": {
            "selected": True,
            "reason": "May have bank interest, check statements",
            "sub_items": [
                "✅ Interest (from bank accounts)",
                "⬜ Dividends (check CommSec/CMC annual statements)",
                "⬜ Rent",
                "⬜ Capital gains/losses",
            ]
        },
        
        "managed_funds": {
            "selected": True,  # Check your CMC/CommSec statements
            "reason": "You have CMC/CommSec accounts - check if you received distributions",
            "action_required": "Review annual tax statements from CMC/CommSec"
        },
        
        "business_psi": {
            "selected": True,
            "reason": "Contracting income: $6,762.50",
            "type": "Personal Services Income (PSI)",
            "sub_items": [
                "✅ Personal services income ($6,762.50 from contracting)",
                "⬜ Business income or loss",
                "⬜ Partnerships",
            ]
        },
        
        "foreign_income": {
            "selected": False,
            "reason": "No overseas income reported"
        },
        
        "other_income": {
            "selected": False,
            "reason": "No share schemes or sharing economy income"
        }
    },
    
    "deductions": {
        "work_related": {
            "selected": True,
            "reason": "Multiple work-related expenses",
            "items": [
                "✅ Working from home: $987.52 (1,472 hours × $0.67)",
                "✅ AI subscriptions: $1,128.04 (ChatGPT + GitHub Copilot)",
                "✅ Equipment: Laptop, monitors (check actual purchases)",
            ]
        },
        
        "gifts_tax_affairs": {
            "selected": True,
            "reason": "Tax management costs",
            "items": [
                "✅ Cost of managing tax affairs",
                "⬜ Donations (if any made)",
            ]
        },
        
        "income_protection": {
            "selected": False,
            "reason": "No income protection insurance identified"
        },
        
        "other_deductions": {
            "selected": False,
            "reason": "No other deductions applicable"
        }
    },
    
    "offsets_losses": {
        "tax_losses": {
            "selected": False,
            "reason": "No prior year losses"
        },
        
        "offsets": {
            "auto_calculated": [
                "✅ Low Income Tax Offset (LITO) - automatic",
                "✅ Medicare Levy - automatic (2%)",
            ],
            "manual_claim": []
        }
    }
}

# Print summary
print("=" * 70)
print("PERSONALISED RETURN SELECTIONS - FY 2024-25")
print("=" * 70)
print()

print("📋 BASIC INFORMATION:")
print(f"  Australian Resident: {'✅ Yes' if selections['basic_info']['australian_resident'] else '❌ No'}")
print(f"  Had Spouse: {'✅ Yes' if selections['basic_info']['had_spouse'] else '❌ No'}")
print()

print("💰 INCOME SELECTIONS:")
for category, details in selections['income_categories'].items():
    if details['selected']:
        print(f"  ✅ {category.replace('_', ' ').title()}")
        print(f"     → {details['reason']}")
print()

print("📉 DEDUCTION SELECTIONS:")
for category, details in selections['deductions'].items():
    if details['selected']:
        print(f"  ✅ {category.replace('_', ' ').title()}")
        print(f"     → {details['reason']}")
print()

print("🎯 TAX OFFSETS:")
for offset in selections['offsets_losses']['offsets']['auto_calculated']:
    print(f"  {offset}")
print()

print("=" * 70)
print("⚠️  ACTION ITEMS:")
print("=" * 70)
print("1. Check CMC/CommSec annual tax statements for managed fund distributions")
print("2. Verify bank interest amounts (pre-filled from banks)")
print("3. Confirm all equipment purchases for deduction claims")
print("4. Review AI subscription receipts (ChatGPT, GitHub Copilot)")
print("5. Update spouse status if applicable")
print("=" * 70)
======================================================================
PERSONALISED RETURN SELECTIONS - FY 2024-25
======================================================================

📋 BASIC INFORMATION:
  Australian Resident: ✅ Yes
  Had Spouse: ❌ No

💰 INCOME SELECTIONS:
  ✅ Salary Wages
     → Employment income from Recovery Metrics: $55,566.80
  ✅ Investment Income
     → May have bank interest, check statements
  ✅ Managed Funds
     → You have CMC/CommSec accounts - check if you received distributions
  ✅ Business Psi
     → Contracting income: $6,762.50

📉 DEDUCTION SELECTIONS:
  ✅ Work Related
     → Multiple work-related expenses
  ✅ Gifts Tax Affairs
     → Tax management costs

🎯 TAX OFFSETS:
  ✅ Low Income Tax Offset (LITO) - automatic
  ✅ Medicare Levy - automatic (2%)

======================================================================
⚠️  ACTION ITEMS:
======================================================================
1. Check CMC/CommSec annual tax statements for managed fund distributions
2. Verify bank interest amounts (pre-filled from banks)
3. Confirm all equipment purchases for deduction claims
4. Review AI subscription receipts (ChatGPT, GitHub Copilot)
5. Update spouse status if applicable
======================================================================

🎓 Key Concepts Explained

Personal Services Income (PSI) vs Business Income

This is one of the most confusing distinctions. Here’s how to know:

You Have PSI If:

  • Income is mainly from YOUR personal skills/labor
  • Client pays for YOU specifically (not your business)
  • Income would stop if you stopped working
  • You don’t have employees doing the work
  • Examples: IT consulting, contracting, freelance work

You Have Business Income If:

  • Income comes from business structure/assets
  • You have employees generating income
  • You sell products (not just services)
  • Business could operate without you
  • Examples: Shop, manufacturing, business with staff

Why It Matters:

  • PSI has stricter deduction rules
  • Can’t claim deductions for things like:
    • Rent for business premises (in most cases)
    • Payments to associates unless actually working
    • Superannuation for associates
  • Must pass one of the PSI tests:
    • Results Test: Paid for results, not time (best outcome)
    • Unrelated Clients Test: 80%+ from 2+ unrelated clients
    • Employment Test: Have employees
    • Business Premises Test: Separate business premises

Your situation: Contracting work is PSI because it’s your personal labor/skills

Work From Home Deductions

Two methods available:

2. Actual Cost Method

What you can claim: - Actual % of running costs (electricity, gas, internet) - Phone usage (work portion only) - Depreciation on furniture/equipment - Cleaning (if dedicated work room)

Requirements: - Keep ALL receipts - Calculate work-use % - Apportion based on floor area for home costs - More record-keeping but potentially higher deduction

When to use: If your actual costs exceed fixed rate (rare)

Student Loan Repayments (HELP/HECS)

IMPORTANT: These are NOT tax deductible!

What they are: - Compulsory repayments based on income - Calculated automatically by ATO - Added to tax bill (or reduce refund)

Your situation: - Total SFSS/Student Loan withheld: $934.00 - This is a repayment, not a deduction - Already taken from your pay (like PAYG tax)

Repayment thresholds 2024-25: - Below $54,435: 0% - $54,435-$62,850: 1% - $62,851-$66,620: 2% - (increases with income)

Superannuation

Your employer’s SGC contributions ($6,390.13): - ❌ Not your income (employer pays separately) - ❌ Not a deduction (you didn’t pay it) - ✅ Increases your super balance - ✅ May be taxed in super fund (15% contributions tax)

Voluntary super contributions: - Can make after-tax contributions - May claim as deduction if notify fund - Reduces taxable income - Super cap: $30,000/year (2024-25)

Tax Offsets vs Deductions

Deductions:

  • Reduce your taxable income
  • Value depends on tax rate
  • Example: $1,000 deduction saves:
    • $190 if in 19% bracket
    • $325 if in 32.5% bracket

Offsets:

  • Reduce your tax payable directly
  • Dollar-for-dollar reduction
  • Example: $1,000 offset saves $1,000 in tax

Common offsets: - LITO: Up to $700 (income <$66,667) - SAPTO: Seniors/pensioners - Spouse super: Contribute to spouse’s super

📊 Quick Reference: What to Select

✅ Definitely Select (Based on Your Situation)

Category Reason
Australian Resident You lived in QLD all year
Salary/Wages Employment: $55,566.80 from Recovery Metrics
Personal Services Income Contracting: $6,762.50
Interest Likely have bank interest (check statements)
Work-Related Expenses WFH, AI subscriptions, equipment
Gifts/Tax Affairs Tax management costs

❓ Check & Select If Applicable

Category Action Required
Managed Funds Check CMC/CommSec annual tax statements
Dividends Check if you received dividends from shares
Capital Gains Did you sell any shares/crypto/property?
Donations Made any charitable donations $2+?

❌ Probably Don’t Need

Category Why Not
Superannuation Income You’re accumulating, not drawing super
Foreign Income No overseas income identified
Rental Property No rental properties owned
Business Income Your contracting is PSI, not business
Other Income No share schemes or sharing economy

🚀 Next Steps

  1. Complete Step 3 in myTax using the selections above
  2. Gather supporting documents:
    • Payslips (already extracted: 25 slips)
    • Bank interest statements
    • CMC/CommSec annual tax statements
    • AI subscription receipts
    • Equipment purchase receipts
    • Contracting invoices
  3. Move to Step 4: Prepare Return to enter actual amounts
  4. Review pre-filled data - ATO may have already filled some amounts
  5. Lodge your return after final review

💡 Pro Tips

  • Don’t skip categories just because you’re not sure - you can delete data later
  • Pre-fill takes time - Data may appear weeks after June 30
  • Keep receipts - ATO can audit up to 5 years
  • Round to nearest dollar - You must round all amounts
  • Student loans aren’t deductions - They’re compulsory repayments
  • Check franking credits - Often pre-filled but verify accuracy
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