One easy way to work out if you need to file a tax return is to check out the ATO’s online tool. Do I need to lodge a tax return?
Use it by inputting information about your personal situation and the income you received during the year from the government, super, and other sources.
To access the tool, log into your ATO Services account from your myGov account.
The online tool will use information the ATO already holds about you from third parties (such as other government agencies and employers) to pre-fill some of the required fields.
Although you are retired, you may be among the many Australian pensioners and self-funded superannuants who are still required to file an annual tax return.
This is probably because you are receiving assessable income from investments or part-time employment.
The rules around this can be confusing, and the best advice is to see an accountant regarding your personal circumstances. However, the following information is a guide.
If you are a self-funded retiree receiving a tax-free superannuation fund pension, generally you are only required to lodge a tax return if you receive additional income from another source, such as investments, that takes you over the Australian Taxation Office (ATO) annual tax-free threshold of $18,200.
Pensioners need to file a tax return if they receive income on top of their regular pension payments.
If the Age Pension is your only source of taxable income and you receive less than $33,000 as a single person or less than $30,500 as part of a couple, you should be exempt from paying tax. That’s due to the Seniors and Pensioners Tax Offset.
If you and/or your partner’s incomes exceed these amounts, or you do not qualify for exemptions, you may have to pay tax.
Pensioners receive a payment summary from Centrelink at the end of the financial year. This information can be used to complete a tax return.
The ATO provides a long list of potential income sources that could require you to lodge a tax return.
Income from wages or salaries.
Income from investments such as dividends or interest from savings accounts or term deposits.
Income from a business. If you run your own business and earn an income in any form, you will need to lodge a tax return.
Lump-sum payments such as inheritances, insurance payments, or compensation. This also includes superannuation that is paid upon retirement.
Age pensioners can still work and earn money but only up to a certain amount before their pension payments decline and/or they have to pay income tax.
The government has loosened these limits, and singles can now earn up to $204 per fortnight and couples up to $360. It is advisable to work with an accountant to understand exemptions and thresholds, so you know the right amount to “pay yourself” or earn while still being able to minimise tax.
More information about the Work Bonus and age pension implications can be found here.
Age pensioners who are fully reliant on pension payments for their retirement income are generally not required to lodge a return, but still need to lodge a form with the ATO – a non-lodgement advice form.
This document informs the ATO you are not lodging a tax return for the financial year, so the ATO won’t chase you for not submitting.
You can complete a non-lodgement advice via your ATO Services account linked to your myGov account, or by filling in a form downloaded from the ATO website (usually available in late June). Or you can get your tax agent to submit it.
You are not required to complete a non-lodgement advice if you have already submitted a tax return, non-lodgement advice form or letter telling the ATO you don’t need to lodge a tax return for all future years.