Tax time has arrived, and individuals, sole traders and business owners across Australia are now preparing to lodge their 2025–26 tax returns. With myTax and already-filled-out information, lodging accurately still requires complete financial records, knowing what income you must declare and which deductions you are eligible to claim. Preparing in advance helps avoid processing delays, unnecessary amendments, and correspondence with the Australian Taxation Office (ATO).
Whether you lodge your return yourself or via a registered tax agent, you need to know your lodgement options, important deadlines and ATO requirements. This guide walks you through the record preparation, 2025-26 tax form, claiming eligible deductions and tracking your return once lodged.
1. Choose Your Lodgement Method
The ATO has three ways you can lodge an annual tax return. The method you select affects your preparation time and final submission deadline.
- Self-Lodging Online via myTax: Accessing myTax requires a myGov account securely linked to the ATO online services portal. Most standard returns submitted through myTax take two weeks.
- Engaging a Registered Tax Agent: If your financial circumstances involve investment properties, capital gains events or multi-entity business structures, you may appoint a registered tax agent. Registered tax agents are the only professionals legally permitted to charge a fee for preparing and lodging tax returns.
- Lodging a Paper Tax Return: Taxpayers who prefer a manual process can submit a paper individual tax return via mail using the official Individual Tax Return 2026 form. The ATO will process paper returns manually, and refunds or notices of assessment may be processed within 10 weeks.
2. Gather Your Documents and Wait for 'Tax Ready' Status
Gather your income and deduction records before you lodge your tax return. Many taxpayers wait until late July or August to submit information to the ATO, often because employers, banks, health insurers and other organisations have until then to submit information. Under Single Touch Payroll (STP) rules, most employers finalised STP income statements by 14 July, although timing may have varied depending on the employer. Check your myGov income statement and wait until it is marked “Tax Ready” before lodging. If you lodge early using temporary payslips and the final employer figures differ, you will need to lodge a formal amendment, which could delay your refund.
Documentation Checklist
- Income Statements: All finalised employer statements for the financial year.
- Investment Income: Include statements for share dividends, managed fund distributions, and cryptocurrency transaction records.
- Health Insurance: You must review your private health insurance statement annually for Medicare Levy Surcharge exemptions.
- Deduction Receipts: Invoices, receipts, and logbooks relating to work expenses.
3. Step-by-Step Guide to Lodging Through myTax
If you self-lodge online via the government standard portal, complete the following procedural sequence for your return:
- Sign in to myGov: Log in with the official myGov account on the site or app and click the link to the Australian Taxation Office (ATO).
- Open ATO Online Services: Go to the tax section of the ATO home screen and select your 2025-26 tax return if it is available.
- Select Prepare: Click the ‘Prepare’ button to get started on the guided online form for the 2025-26 tax return.
- Review Pre-Filled Information: Check your personal details, bank account details and the automatic data that employers, banks and health funds upload.
- Add Income and Deductions: Enter additional income sources manually and enter eligible work-related expense/sole trader deductions.
- Review the Summary: See the last breakdown page that estimates your tax refund or tax debt to the government.
- Submit the Return: Accept the declaration if all the information is correct, then click Submit.
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4. Claim Eligible Deductions
Accurate reporting requires balancing your declared gross income against eligible, substantiated deductions to determine your final taxable income.
Work-Related Expense Rules
To claim a deduction, a work-related expense must satisfy three criteria the ATO has set out.
- You must have paid the expense yourself. and never got it refunded by your employer.
- The expense must directly relate to earning your income.
- You must have written evidence of the expense like a receipt or invoice.
Working from Home (WFH) Deductions
Taxpayers who claim working-from-home expenses have two approved calculation methods:
- The Fixed Rate Method: Allows a claim of 70 cents an hour for every hour worked from home, including electricity, gas, internet, phone and stationery. You must keep a running record of all hours actually worked, such as a daily timesheet or diary log, to use this method. Estimates or representative two-week samples are not accepted.
- The Actual Cost Method: This method requires you to calculate the extra running costs of directly working from home. This involves detailed calculation of energy consumption per appliance, floor area calculations, and itemised bills.
Key 2026 Change for Interest Deductions
5. Check Everything Before You Submit
Before pressing the final submit button on your tax return, run through this baseline checklist to prevent processing delays:
- Bank Account Details: Verify that your BSB and account number are current so any refund is routed correctly.
- Medicare Information: Check that your Medicare and private health insurance are correct.
- HECS/HELP Debt: Verify that your compulsory higher education loan repayments are based on your total repayment income.
- Income and Deductions: Verify that all reported numbers match your physical receipts and tax-ready statements.
- Save a copy: Download and store a PDF copy of your completed lodgement summary for your personal compliance records.
Our guide on Bookkeeping for Small Business explains bookkeeping best practices for businesses to stay organised, prepare for EOFY and support accurate tax reporting.
6. Understand Key Deadlines and Penalties
Failure to submit your tax return or register an extension by the legislated cutoff date could incur financial penalties from the ATO.
The 2026 Lodgement Calendar
- Self-Lodger (Online or Paper): 2 November 2026: The standard 31 October deadline falls on a Saturday, extending the self-lodgement window to the next business day.
- Tax Agent Registration: 31 October 2026: To use extended lodgement deadlines, you generally need to engage a registered tax agent by 31 October and be on their client list.
- Extended Agent Program: 15 May 2027: Final deadline for most individual and small business returns managed through an agent, provided they have a clean compliance history.
Failure to Lodge (FTL) Penalties
If you miss that self-lodger cutoff without using a tax agent, the ATO can apply Failure to Lodge penalties. These penalties accumulate in 28-day blocks starting on the due date up to a statutory maximum cap. Also, a General Interest Charges accrue daily on unpaid tax debts to the government.
7. What Happens After You Lodge
After submitting your return, you can track the progress of your tax return through the ATO online services portal, where the status will shift from “In Progress” to “Issued.”
Notice of Assessment and Refunds
Once processing is complete, the ATO issues a formal Notice of Assessment (NOA). This document provides a detailed breakdown of your taxable income, the amount of tax calculated on that income, and any offsets or credits applied. For most online returns, refunds are generally issued within two weeks, with no further review required.
Amending a Return
If you discover an error after submitting your return, do not attempt to lodge a completely new tax return. Instead, wait until your original return has finished processing and you have received your Notice of Assessment. Once issued, you can log back in to myTax and select the ‘Amend’ option to correct the specific data entry error.
Final Thoughts
Preparing your 2025-26 tax return begins with tracking your financial records and understanding the ATO lodgement requirements. When your income information is marked ‘Tax Ready’, organise supporting documents and review deductions to avoid errors and unnecessary amendments or processing delays. Yearly bookkeeping simplifies tax time for sole traders/small businesses and supports ongoing compliance.
How Befree Can Help
A tax return is easier if your financial records are accurate throughout the year. Befree provides bookkeeping, accounting and payroll outsourcing services to businesses to help them keep organised financial records, reconcile transactions, manage payroll and prepare documentation for year-end reporting. With accurate financial information available anytime, businesses can approach tax time with confidence and reduce the administrative burden of annual compliance. Contact us today to discuss how our team can help with your ongoing financial administration and tax reporting requirements.