Before lodging your client's tax returns you should:
- consider how their tax residency status and foreign income affects tax payable in Australia
- use the pre-filling service to check information is accurate
- ensure work-related expense claims are correct and meet the rules
- help prevent delays in processing returns by checking for common errors before lodging.
Processing may be delayed if there are incorrect or incomplete details in returns.
Medicare levy
If your client is claiming the Medicare levy exemption they will need to obtain a Medicare Entitlement Statement from Services Australia before lodging their tax return. They need to complete this form each year they wish to claim the exemption.
If your client does not qualify for an exemption, they will be subject to a Medicare levy of 2% of their taxable income. This applies regardless of whether or not they have private health insurance.
In addition to the Medicare levy, your client may have to pay the Medicare levy surcharge. This applies if their household income is above the relevant threshold and they do not have the appropriate private patient hospital cover for any period during the financial year.
Note: The net medical expenses tax offset was abolished from 1 July 2019.