‘Lose-lose situation': Young Aussie worker cops $32,000 tax bill

News.com.au

4 hours ago

A young Aussie has left people gobsmacked after being hit with a more than $32,000 tax bill, revealing she feels as if she is in a 'lose-lose' situation.
Kristy recently took to TikTok after completing her tax return and discovering she owed the Australian Taxation Office (ATO) a staggering amount of money.
'Apparently I owe $32,459, they defs meant to say that's my refund right,' the young worker said in the caption of the video.
The clip sparked multiple shocked comments, with one person questioning how she could owe that much money.
'I work a lot,' Kristy responded in the comment section.
Another person was in disbelief, asking if she was being serious, before branding the tax bill a 'rip off'.
Speaking to news.com.au, the 21-year-old Queensland local revealed she works in the event management and promotional marketing space.
Given the nature of her work, she wasn't overly surprised to see that she owed the ATO money, however, the figure did catch her slightly off guard.
'I make a decent amount of money so wasn't too shocked to see the bill. I usually have a tax bill but it hasn't been this large,' Kristy said.
Thankfully, the young woman puts away a percentage of her earnings throughout the financial year to prepare for tax time, so she isn't concerned about being able to pay the debt.
However, Kristy said it is disheartening to see how much more of her income goes towards tax now that she is earning a higher salary.
'I end up making pretty much the same net income as years where I was working less so it feels like a bit of a lose-lose situation,' she said.
The 21-year-old is far from the only Aussie complaining about their tax return – or lack thereof – this year.
We are only a few days into the new financial year and already social media had been flooded with posts from people taking issue with the ATO.
'I owe $3300,' one person said, with another saying they were 'still paying off last year's debt'.
'I work casually and still owe $2k. Like no I barely get $350 a week – make it make sense,' another wrote.
One added: 'I had a three grand bill last year. I'm too scared to do this years'.
'I'm 100% just not doing my tax return anymore,' another claimed.
There are multiple reasons someone may receive a tax bill.
One reason may be your employer not withholding your HECS-HELP repayments, which means that, at tax time, you are left with a big chunk of money you need to pay towards that debt.
Sole traders can also receive a debt if they haven't paid enough in instalments through the pay as you go (PAYG) system
The Medicare levy surcharge income threshold, which is $97,000 for individuals and $194,000 for couples, is another area where people tend to get tripped up.
Speaking to news.com.au last year, Australian tax lawyer Harry Dell said people can get stuck with bills because they are just over threshold, don't include their partners income when lodging their return or have the wrong private health cover.
He said that not budgeting for capital gains tax is another area people need to look out for.
'This could be crypto, shares, or anything, as amounts aren't withheld for tax like your salary and wages,' he said.
For people that lodge their return and find out they have been hit with a bill, Mr Dell said the priority needs to be finding out why they owe money.
'The Pay As You Go Withholding system is designed so you overpay a little and get a refund at the end of the year – without any deductions,' he said.
'If you can't see why enough wasn't withheld, get a professional to explain your tax return and what caused the surprise bill.'