But there’s so much more to it than that.
Your TFN is with you for life, which means even if you haven’t used yours for a while or can’t remember what it is, it will always remain the same. A tax file number will help make sure you don’t pay more tax than necessary, and is an important part of helping you lodge your tax return.
You may be surprised to learn that a TFN is not, however, compulsory. Nor is there a law that says you have to provide your TFN to organisations or individuals who request it. In fact, you can even earn employment without one. The downside? Without a TFN to keep track of your income, you’ll always be charged the maximum amount of tax payable… not ideal!
There are many situations you may be asked to provide your TFN, however not everyone is entitled to this information. Be careful who you provide your TFN to and ensure you always keep your personal information in a safe, secure place to avoid identity fraud.
Who can ask for your TFN?
- The ATO
- Superannuation funds
- Banks or financial institutions
- The Department of Human Services (e.g. Centrelink, Medicare).
While it’s not mandatory, having a TFN and providing it in the right circumstances will ensure you pay the correct amount of tax and your tax return process each year is as seamless as possible.
If you’d like help applying for a TFN, lodging a tax return or just want to speak to a professional, don’t hesitate to contact us. Call our friendly tax professionals today on 1300 555 773 or book in an appointment here.