Tax Return:: Checking your Bank Interest Income

Hello, this is your tax specialist, P&C Tax Professionals.

Did you know that when you lodge a tax return in Australia, you are also obligated to report your Australian bank interest income for the entire financial year in addition to your usual wages/salary?

Today we're going to explain how to report your bank interest income and the additional benefits associated with it.

Every year, Australian banks report their bank interest income details to the ATO. In other words, this means that the ATO is aware of your interest income and if you intentionally decide to omit this income from your annual tax return, you may be subject to additional taxes and fines.

For those of you who only have a small balance of bank interest income, you may think that there is no need to report the interest you received from your bank since it is of minimal value. However, if you happen to have withholding tax on your interest income, you will be entitled to receive an additional tax refund and the amount of your total refund will consequently increase.

From now on, we will guide you through the process of checking your interest income balance for a given financial year by using NAB as an example. Most of the Australian banking systems are similar in nature, so for those of you who hold accounts in one of the other Australian banks, you would also be able to easily navigate through the page in a similar manner.

<How to check your bank interest income when applying for a tax refund in Australia>

First, log into your Australian online bank account.

After logging in, head to the Accounts tab at the very top of the page. Click on the drop down arrow and you should see 'Interest statement' as highlighted in the red box above. This may vary slightly from each bank but there won't be much of a difference.

Once you click on 'Interest statement', you will progress to the above screen.

You can then select the financial year you are looking for from the drop down box under 'Select Financial Year'.

For example, the bank interest income that must be reported this year is the 2020/2021 financial year.

Can you see the 'Resident tax withheld' and the 'Non-resident tax withheld' under the Interest Statements Overview section? This is the withholding tax. Most student visa holders do not provide their TFN to their bank, so if you have any bank interest income in Australia, the bank will tend to provide you with interest after deducting some tax. The tax that is deducted on your interest income from the bank is commonly referred to as 'withholding tax' and you can receive a refund on this bank interest income when you lodge for your tax return. However, keep in mind that you may not have any withholding tax if you have not provided your TFN to your respective bank.

If your total income from your employment + interest income sums up to be less than $20,542, you can get a full refund of the withholding tax when you apply for your tax return.

Well that's all for now and I hope this has helped you in preparing for your tax return. As usual, any further questions or enquiries can be forwarded to our email address at pnctax@naver.com or through our Official Facebook Page (P&C Tax Professionals - Australia).

Thank you.