Do you wish to know about tax file numbers? Here’s a guide to help you through all your doubts and confusions.
What is a TFN?
A Tax File Number is a distinct nine-digit number that serves as identification proof for specific occasions. It is provided by the ATO (Australian Taxation Office). Tax file numbers are usually offered to businesses, sole traders and individuals applying for deductions or accessing certain funds. Employees not providing their TFN details to employees may result in the former having to pay higher taxes. A tax file number can help one access limited tax deduction as well.
Importance of Tax File Numbers
It is essential not to share your TFN with anyone. Only pass it on to establishments or individuals who have the authority to ask for your tax file number. There are numerous benefits to applying and receiving a tax file number. Below enlisted are the events that require your TFN details.
- Tax Return Filing – Already have an agent to look after your company tax return and finance-related records? There are high chances you already know how vital a TFN is for lodging tax-related reports. In case you are still looking for a tax agent in Perth, choose the most compatible one. A reliable and efficient agent can help you with accurate tax return records. He can also aid in the TFN application process. All businesses are required to report their tax returns every year to the Australian Taxation Office. A TFN ensures that you do not pay more taxes than necessary.
- Employment – You require a TFN if you are going to start working or change jobs. As an employee, you need to provide your employer with your tax file number. Although a TFN is not mandatory for an employee, it is beneficial to avoid huge unnecessary taxes. A TFN lets you access the tax-free threshold. This is only available for individual taxpayers. It is important to remember to select the tax-free threshold only when working under a single employer. Trying to avail this benefit from multiple employers can result in insufficient tax payments. This will consequently result in the employee having to pay more taxes during the incoming financial year-end.
- Business – If you a business owner, you need to file for an Australian Business Number (ABN). ABN is compulsory to run a company in Australia. However, to apply for an ABN, you need to submit your Tax File Number. This is because you are working in Australia, and TFN is a mandatory requirement. With a tax file number, you can easily lodge your tax returns and avail tax deductions.
- Loan – A TFN also qualifies you to apply for certain education loans. You can avail a Higher Education Loan Program (HELP) that the Australian Government offers. HELP includes three main loan options. HECS-HELP provides support to students for paying off their student contributions while in Australia. FEE-HELP/ VET FEE-HELP assists students in paying off their tuition fees for vocational education and training courses. OS-HELP offers assistance to students for paying off their overseas study expenses.
- Family Tax Benefit – In order to avail FTB, one needs to provide income details, tax file numbers and residential details. A family tax benefit provides you with a certain amount necessary to run your family. This amount is decided according to the current income situation and number of children. The benefit plan is divided into two parts. Part A is calculated as mentioned above. Part B is allotted on a per-family basis. The latter helps single parents and couples with one income stream to run and manage a home decently.
- Payments – Every employee is provided with a TFN declaration form. The form is used to determine the amount of money that needs to be withheld from your payments. This system is known as Pay as You Go Withholding/ PAYGW.
- VA Benefits – If you wish to avail assistance from the Department of Veterans Affairs, you need to provide your tax file number. Your TFN is used to view your recent tax return and decide eligibility. The Veteran Assistance benefits provide compensation and pension support for disabilities to the veteran or their family.
- Centre Pay – Centre-pay is a free bill paying service for Centrelink users. Centrelink provides assistance in the form of advice to manage user expenses. Once a user allows authorization, Centrelink makes routine deductions from client welfare payments. It includes information regarding specific allowances and payments that one can avail if eligible. When you submit an application for payments through Centrelink, providing your tax file number is necessary.
How to apply for one?
The most convenient way to apply for a TFN is through the Australia Post. You need to visit the official ATO website first and then fill up the application form. Next, you need to wait for 30 days for confirmation. It is recommended to not apply again within 30 days in order to avoid delay. Students can also approach a relevant school authority and get in touch with a secondary school TFN program. Check the ATO website for eligibility requirements. You may consult an individual tax return agent to get detailed and full-time assistance regarding the TFN application.
How to find your existing TFN?
If you have misplaced the letter containing your TFN, it is no issue. There are other easy ways to find it;
- The ATO’s response notice to the last filed tax return report.
- Superannuation fund statements
- Payment slips/receipts
- Ask your tax file number from your employer
- Consult the bank for assistance
- Check with the ATO
Who can ask for your Tax File Number?
Do not share your TFN with anyone unless there is a legitimate reason for the same. You may provide only the following individuals/organizations with your tax file number;
- Australian Taxation Office
- Current employer
- Centrelink or other credible organizations if you wish to receive benefits or allowances.
Since you are thoroughly updated on the importance of tax file numbers, apply for one if you haven’t already. Enjoy tax deductions and fuel up your business! Expand your business branches with a credible tax advisor Perth. They can provide you with effective plans to manage your finances efficiently.