Tax in Australia

Tax in Australian can be a complex topic. Here are some reminders when preparing for income tax in Australia:

Income will include:
Gross salary, wages, allowances, benefits, earnings, tips and director's fees, Income from business activities,PAYG payment summary amounts, Any non-cash benefits received, Lump sum and termination payments, Government social security payments, including pensions, unemployment and sicknessbenefits, Capital gains from CGT asset sales (e.g. shares and real estate) [Information relating to dates and costs associated with acquisition and disposal will be required to determine the capital gain (if any). Remember that individuals, companies, trusts and superannuation funds can save tax if they qualify for the various CGT concessions], annuities, including allocated pensions, Income from trusts and partnerships, Rental income, Interest and dividends (franked or unfranked) including any tax deducted, Foreign source (employment and pension) income, Personal services income.

Deductions can include:
Investment and property expenses, Professional subscriptions (not including sporting or social clubs), Expenditure related to a taxpayer's employment, such as work-related motorvehicles, self-education, protective clothing, uniform expenses and home office expenses
Donations of $2 and over, depending on the recipient, Superannuation contributions made by self-employed persons and those without employer superannuation support, Tax agent's fees and other accounting and tax audit fees associated with managing tax affairs, Special deductions (e.g. Australian films, investment shelters and forestry-type schemes),, Bank fees (where the credit or deposit represents assessable income), Un-recouped prior year losses, Non-commercial losses [Individuals must satisfy one of four tests to offset losses from certain non-commercial business activities against other income. Sickness and accident insurance premiums, provided the premium incurred is against the loss of income.

Rebates including:
Details of private health insurance, unless the premium is net of the rebate [Statement from health insurance provider will be required to determine entitlement to rebate], details of superannuation contributions where no tax deduction can be claimed (maximumrebate of $540 for $3,000 superannuation spouse contribution), Any changes in dependants [Income of spouse will be required], Details of any income received in a lump sum which was accrued in earlier income years (e.g. assessable pensions), Details of medical expenses where the total exceeds $1,500 [Tax offset of 20% available], Superannuation co-contri­butions for contributions made by eligible employees, All taxpayers with a dependent child (under 21) or full time dependent student (under 25)should provide full names and dates of birth - Family Tax Benefit might be relevant, Cost of child tax offset, Education Tax Refund.

Same-sex Relationships and Tax

Changes to definitions of ‘spouse’, ‘defacto relationship’, ‘relationship’ and ‘child’ will ensure that you will be treated the same way for tax purposes, including the same access to tax concessions, regardless of your partner's gender.

These changes apply from 1 July 2009 and may affect the information that you need to provide in your 2009-10 tax return.

Some areas that may have changed for you and your family include:

• Dependant tax offset (FREE fact sheet)
• Medicare levy andMedicare loevy surcharge
• Relationship breakdown (eg. Capital Gains Tax Concessions)

(Source ATO)

Tax Returns Online

Preparing your own income tax returns online can be a overwhelming task. Here are some common errors that taxpayers make when preparing their tax returns online:

• Omitting interest income
• Incorrect or omitted dividends and or imputation credits;
• Capital gains/losses incorrect or omitted;
• Understating income;
• Home office expenses;
• Depreciation on rental property fixtures and fittings;
• Depreciation on income producing buildings;
• Borrowing costs associated with negative gearing.
• Tax offsets omitted
• Medicare Levy Surcharge errors
  

We know the common mistakes for taxpayers preparing their own tax returns online because we are often asked to fix them. Additional refunds can often be obtained by submitting amended income tax returns , even from simple mistakes.

There are, however, time limits on amending prior years tax returns. Amendments will now only be processed by the ATO for two years after the date of the original assessment. If you feel you have made a mistake preparing your tax return online, we can review your returns and recommend an appropriate course of action.

Alternatively, our online tax return preparation service drastically reduces the likelihood of errors in your tax returns. My Tax Zone's supportive team has the GENUINE expertise, experience and backup support to attend to all your online income tax needs. Not even the ATO's "etax" can do that.

Same-sex Couples Recognised by Centrelink

From 1 July 2009, recipients Centrelink payments who are in a same sex de-facto or registered relationship will be recognised will be recognised a a couple for social security and family assistance purposes and will be required to advise Centrelink of their relationship.

The same-sex reforms remove discrimination so the same rules that currently apply for oposite sex couples will apply to those in a same-sex de-facto relationship.

Here is a FREE fact sheet summarising the Centrelink changes ==> Centrelink Recognises Same-sex Relationships.

The commitment to removing the discrimination that currently applies to members of same-sex couples and their children will also apply to other areas of the Australian Government, including:

• Taxation
• Superannuation
• Pharmaceutical Benefits Scheme Safety Net
• Medicare Safety Net
• Aged care
• Child support
• Veteran’s Affairs
• Immigration
• Citizenship

For more information about other Government changes related to same-sex reforms, view the Same-Sex Law Reforms section on the Australian Government Attorney-General's Department website.

2009 Tax Return Checklist

2009 TAX RETURN CHECKLIST:

FREE fact sheet ==> Education Tax Refund

FREE fact sheet ==> Deductions Q & A's

Income:

• Gross salary, wages, allowances, benefits, earnings, tips and director's fees
• Income from business activities
• PAYG payment summary amounts
• Any non-cash benefits received
• Lump sum and termination payments [All documentation should be provided, including an ETP payment summary from the employer or fund]
• Government social security payments, including pensions, unemployment and sicknessbenefits
• Capital gains from CGT asset sales (e.g. shares and real estate) [Information relating to dates and costs associated with acquisition and disposal will be required to determine the capital gain (if any). Remember that individuals, companies, trusts and superannuation funds can save tax if they qualify for the various CGT concessions]
• Annuities, including allocated pensions
• Income from trusts and partnerships [Statements of distribution should be provided]
  Rental income eg: Summary from estate agent and period the property was available forrental
• Interest and dividends (franked or unfranked) including any tax deducted [Dividenddistribution statement will be required to confirm the dividend received]
  All papers regarding buy back of public shares e.g. Coles Myer
• Foreign source (employment and pension) income [Details of any foreign tax paid will berequired]
• Personal services income [Individual contractors who operate through a company or trust can potentially be taxed personally on the income instead of income being taxed at the company or trust level]

Deductions:

• Investment and property expenses [Carefully detail interest claims]
• Professional subscriptions (not including sporting or social clubs)
• Expenditure records related to a taxpayer's employment, such as work-related motorvehicles, self-education, protective clothing, uniform expenses and home office expenses
• Donations of $2 and over, depending on the recipient
• Superannuation contributions made by self-employed persons and those without employer superannuation support
• Tax agent's fees and other accounting and tax audit fees associated with managing tax affairs
• Special deductions (e.g. Australian films, investment shelters and forestry-type schemes)
  Bank fees (where the credit or deposit represents assessable income)
• Un-recouped prior year losses
• Non-commercial losses [Individuals must satisfy one of four tests to offset losses from certain non-commercial business activities against other income. A prime example is an employee who seeks to offset hobby-type farming or other business losses against salary or investment income]
• Sickness and accident insurance premiums, provided the premium incurred is against the loss of income

Rebates:

• Details of private health insurance, unless the premium is net of the rebate [Statement from health insurance provider will be required to determine entitlement to rebate]
  details of superannuation contributions where no tax deduction can be claimed (maximumrebate of $540 for $3,000 superannuation spouse contribution)
• Any changes in dependants [Income of spouse will be required]
• Details of any income received in a lump sum which was accrued in earlier income years (e.g. assessable pensions)
• Details of medical expenses where the total exceeds $1,500 [Tax offset of 20% available]
  Superannuation co-contri­butions for contributions made by eligible employees [Assessable income must be less than $58,000]
• All taxpayers with a dependent child (under 21) or full time dependent student (under 25)should provide full names and dates of birth - Family Tax Benefit might be relevant
• Cost of child care since 1st July 2005 from an appropriate supplier and the name of the primary carer registered with Family Assistance Office

By David Maynard

CEO - My TAx Zone

Heavy Duty Backpack

If you are a backpacker traveling in Australia, heavy duty backpacks are an essential item.

The other kind of PACK you will need for backpacking in Australia is a TAX PACK, preferably ONLINE.

Our TAX blog offers TAX resources and solutions for many backpackers traveling in Australia, and are FREE:

• Superannuation for temporary residents
• Backpackers: Tax in Australia
• Eligible Temporary Resident Visas

Also available for backpackers:

LODGE TAX RETURN in as little as 10 minutes ==> START FOR FREE

• No credit card required!
• We can deduct our fees from the refund.

Painters, the ATO and Industry Benchmarks

The ATO is continuing their program of introducing benchmarks for income and expenses for tradies. The latest benchmark to be released is for Painters.

The ATO have worked with trade associations and industry participants to develop input benchmarks for Painters. These benchmarks are now available and indicate an expected range of income for painters based on the labour and materials used when working directly with household customers.

Painters can use the benchmarks to:
compare your performance to the rest of the painting industry, and
check that your tax records accurately reflect your income

These benchmarks indicate an expected range of income for painter based on the labour and materials used. They apply to painters who work directly with household customers.

FREE fact sheet ==> ATO Benchmarks for Painters

3 tips for Home Office Deductions

The way that you work from home will determine what you can claim as a tax seduction. In general, there are three ways that a person can carry out work at home (FREE fact sheets attached):

• Home is the principle place of business - the business is run from home and a room is set aside exclusively for business activities.
• Home work area - a room is set aside primarily or exclusively for business activities but the home is not the principal place of business.
• No specific work area - the work is done in a living area or garage but the home is not the principal place of business and there is not a room set aside primarily or exclusively for business activities.
• Home Office Q & A
  

Why Do I Need a Tax File Number (TFN)

It is not compulsory to have a TFN, however, if you do not have one you may have more tax withheld than you need to or be unable to receive government benefits you are entitled to.

A TFN will help if you:

• lodge a tax return
• ask us about your tax affairs
• apply for income assistance or support payments, such as pensions or benefits from either Centrelink or the Department of Veterans’ Affairs (DVA)
• claim family tax benefit (FTB) – your FTB tax claim cannot be processed without it
• make or receive payments under the pay as you go (PAYG) withholding system
• start work or change jobs
• need to submit a completed Tax file number declaration (NAT 3092) or a Withholding declaration (NAT 3093) form
• have savings accounts or investments that earn income – for example, interest or dividends
• receive a payment under the Higher Education Loan Programme
• join a superannuation fund
• are a member of a partnership or trust
• have an active Child Support Agency case
• are a non-resident living outside Australia with a business interest in Australia
• are a sole trader
• are a company director, trustee or public officer of an entity applying for an Australian business number (ABN)
• are an office bearer for a charity or non-profit organisation applying for an ABN, or
• receive royalty payments.

FREE fact sheet on applying for and using a Tax File Number ==> Tax File Number

What is a Tax File Number

A TFN is a unique number the ATO issue to individuals and organisations to help administer tax and other Australian Government systems.

The ATO only issue one TFN to a taxpayer during their lifetime, even if they change their circumstances such as name or residency. You should keep your TFN secure at all times and advise the ATO if you change your name or address so we can update your details.

FREE fact sheet on applying for or using a Tax File Number ==> TFN Fact Sheet

Tradies, Roof Guttering and the ATO

The ATO is continuing their program of introducing benchmarks for income and expenses for tradies. The latest benchmark to be released is for Roof Guttering.

The ATO have worked with trade associations and industry participants to develop input benchmarks for roof guttering. These benchmarks are now available and indicate an expected range of income for metal roofers based on the labour and materials used when working directly with household customers. roof guttering tradies can use the benchmarks to:

• compare your performance to the rest of the roof guttering industry, and
• check that your tax records accurately reflect your income.

These benchmarks indicate an expected range of income for roof guttering workers based on the labour and materials used. They apply to roof guttering tradies who work directly with household customers.

For a FREE fact sheet on Roof Guttering

Investing in Shares & Tax Obligations

Share trading can be a simple affairs for investors with a small share portfolio and can be come very complex for investors with a large portfolio.

Throughout the holding period there will be dividends earned. When shares are traded there will inevitably be a Capital Gains Tax (CGT) consequence.

Remember to keep proof of all your share transactions from the beginning to ensure you can claim everything you're entitled to.

You can also set up an asset register. Doing so is easy and once you've entered your information into your register, you may be able to throw away those old records you've been keeping.

Here is a FREE fact sheet that will help ==> What Share Investors Need to Know

Tax Bonus Payments for Lodgements After Mid March 09

Announcement from the ATO:

In late February we asked you to elect if you wanted your client's tax bonus payment sent directly to clients who had already lodged their 2008 returns. If you elected to 'opt out' of administering the tax bonus for all clients:

• tax bonus payments will not be forwarded to your trust bank account. This includes eligible clients whose income tax returns are lodged after the election was made, and
• clients who lodged their 2008 returns prior to mid March will be sent cheques to their residential address.

Where returns have been lodged after mid March, tax bonus payments will be forwarded directly to the postal address on your client's 2008 return, or their bank account where they have contacted us to change their details. Where your practice address has been given as the postal address on tax returns, tax bonus cheques will be sent to your practice.

Updating your Name and Address for Tax

The governments economic stimulus package and tax bonus payment of $900 has been a good reminder to keep your contact details up to date with either your accountant or the ATO. We have received many phone calls from clients recently to let us know they have changed either their address or bank account details in order to receive the tax bonus payment.

In some cases the call has come too late, causing delays in receiving the tax bonus payment. To update your name or address details with the Tax Office:

• phone 13 28 61 between 8.00am and 6.00 pm, Monday to Friday, or
• if you are calling from overseas phone +61 2 6216 1111 between the hours of 8.00am to 5.00pm and ask to be transferred to ‘Personal tax enquiries’.
  

When you phone the ATO, you will need to establish your identity by providing details of three of the following items:

• your date of birth
• your business, residential, postal or email address (maximum of one address)
• your bank account number (BSB number not required), and/or
• details from a Tax Office generated notice (maximum of two different notices, for example, the sequence number from any notice of assessment issued to you).
  

To assist with your enquiry you may also quote your tax file number (TFN). It is not an offence not to quote your TFN but quoting it reduces the risk of administrative errors that may delay the processing of your enquiry. If you would like another person such as a friend, family member or tax practitioner to update your details on your behalf, they must be listed as an authorised contact on your account.

Business Activiity Statements (BAS)

Businesses report and pay most of their taxes through their activity statement and income tax return. Some businesses may have to lodge other forms, such as a fringe benefits tax return.
Businesses use an activity statement to report and/or pay:

• PAYG instalments
• PAYG withholding
• GST and related tax obligations
• fuel tax credits
• fringe benefits tax instalments, and
• some company and superannuation fund instalments.

When you apply for an ABN you notify the ATO of your expected start date for your business or sub-contracting operation. The ATO will then send you the appropriate activity statement for the reporting period in time for you to complete and lodge it. It will be sent to the postal address you have elected for activity statements purposes.Remember to notify the ATO if your postal address changes.

Your activity statement is personalised, with some parts already filled in to save you time. It generally shows only the obligations that relate to you. For example, if you do not have a PAYG withholding obligation, this section will not appear on your activity statement.

For a FREE sample of a BAS ==> BAS Sample

How long will e-tax 2008 be available?

e-tax 2008 will be available from 1 July 2008 to 28 February 2009. However, e-tax will remain available until 31 May 2009 to assist you in meeting the eligibility criteria for receiving the Tax bonus payment as announced by the Prime Minister on 3 February 2009.

Alternatively, at My Online Tax, 2008 and prior years tax returns are permanently available for taxpayers wanting to prepare their 2008 or prior years tax returns online.

Visit our site at ==> My Tax Zone

Taxi Drivers, the ATO & Industry Benchmarks

The ATO is continuing their program of introducing benchmarks for income and expenses for taxi operators and drivers.

The ATO have worked with industry participants to develop input benchmarks for taxi operators and drivers. These benchmarks are now available and indicate an expected range of income.

Taxi operators and drivers can use the benchmarks to:

• compare your performance to the rest of the bricklaying industry, and
• check that your tax records accurately reflect your income

These benchmarks indicate an expected range of income for taxi drivers based on the labour a. They apply to concreters who work directly with household customers.

FREE fact sheet ==> ATO Benchmarks for Taxi Drivers

Metal Roofing, the ATO and Benchmarks

The ATO is continuing their program of introducing benchmarks for income and expenses for tradies. The latest benchmark to be released is for Metal Roofing.

The ATO have worked with trade associations and industry participants to develop input benchmarks for metal roofers. These benchmarks are now available and indicate an expected range of income for metal roofers based on the labour and materials used when working directly with household customers.

Bricklayers can use the benchmarks to:

• compare your performance to the rest of the metal roofing industry, and
• check that your tax records accurately reflect your income

These benchmarks indicate an expected range of income for metal roofers based on the labour and materials used. They apply to metal roofers who work directly with household customers.

FREE fact sheet ==> ATO Benchmarks for Metal Roofers

Concretors, the ATO and benchmarks

The ATO is continuing their program of introducing benchmarks for income and expenses for tradies. The latest benchmark to be released is for Concretors.

The ATO have worked with trade associations and industry participants to develop input benchmarks for concreters. These benchmarks are now available and indicate an expected range of income for concretors based on the labour and materials used when working directly with household customers.

Concretors can use the benchmarks to:

• compare your performance to the rest of the concreting industry, and
• check that your tax records accurately reflect your income

These benchmarks indicate an expected range of income for concreters based on the labour and materials used. They apply to concreters who work directly with household customers.

FREE fact sheet ==> ATO Benchmarks for Concretors

Tax Concessions for Small Bussiness

A small business with turnover of less than $2 million is eligible for a range of concessions. The new concessions for "small business entities" replaces the Simplified Tax System (STS).
Eligible businesses can pick and choose the concessions that best suit their needs, helping them to reduce red tape and compliance costs. In most cases, if you are currently using these concessions, these changes won’t affect your eligibility or how you continue to access them.
Small businesses with less than $2 million turnover may be eligible for the following concessions from 1 July 2007:

• choice to account for GST on a cash basis
• choice to pay GST by instalments
• annual apportionment of GST input tax credits
• simplified trading stock rules
• simpler depreciation rules
• entrepreneurs' tax offset
• CGT 15-year asset exemption
• CGT 50 per cent active asset reduction
• CGT retirement exemption
• CGT roll-over provisions
• PAYG instalments based on GDP-adjusted notional tax
• two-year period for amending assessments (exceptions may apply)
• immediate deductions for certain prepaid business expenses, and
• FBT car parking exemption (will apply from 1 April 2007).

Eligibility for some of these concessions will be dependent on satisfying some additional conditions. For more information on each concession affected by the change, see this FREE fact sheet ==> What are the small business concessions?

New Queensland Tenancy Laws

Changes to some of the rules for renting houses, units, townhouses, caravans and other moveable dwellings will start on 1 July 2009.

Key Changes

There are four major areas the changes can affect:

• before tenancy
• tenancy agreements
• rent and rent increases
• entry to the property
  

There will be new challenges for property managers and most definitely if you are a manager/landlord. The details are out now and your property manager should be getting training as to what to do and what not to do.

Changes include:

• Rental properties must be advertised at a fixed price
• Deposits from prospective tenants
• New tenancy agreement forms
• Changes in notice periods
• Disputing significant changes between agreements
• New requirements if rent is to be paid in a way not listed in the Act (e.g. rent card)
• Rent increases limited
• Change to notice period for rent increases
• Entry during a 2 hour period
• Entry times
• Privacy for tenants
• New grounds for entry

For a detailed summary of the changes clients can download this FREE summay (pdf format):

FREE Fact Sheet ==> New Queensland Tenancy Laws

Online Tax Refund Calculator

You can use this calculator to estimate your tax refund or debt for 2006, 2007 and 2008 income years.

It will estimate your tax payable and will also calculate:

• Medicare levy
• Medicare levy surcharge
• Higher Education Contribution Scheme (HECS) debt
• Student Financial Supplement Scheme (SFSS) debt, and
• any tax offsets that may apply.

It will take these, along with other tax credits, into account in estimating your tax refund or debt.

Start Comprehensive tax calculator 2008

Start Comprehensive tax calculator 2007

Start Comprehensive tax calculator 2006

Family Tax Benefit and Residency Requirements

To be paid Family Tax Benefit you must be:

• an Australian resident; OR
• a Special Category visa holder residing in Australia; OR
• the holder of a Criminal Justice Stay visa; OR
• a holder of a temporary visa subclass 070, 309, 310, 447, 451, 695, 785, 786, 787, 820 or 826.

subclass 070 - bridging (removal pending)
subclass 309 - spouse (provisional)
subclass 310 - interdependency (provisional)
subclass 447 - secondary movement offshore entry
subclass 451 - secondary movement relocation
subclass 695 - return pending visa
subclass 785 - temporary protection
subclass 786 - temporary (humanitarian concerns)

subclass 787 - temporary witness protection (trafficking)

subclass 820 - spouse (provisional); and
subclass 826 - interdependency (provisional).

The child must also meet these residency requirements:

• be an Australian resident; OR
• be a Special Category visa holder residing in Australia; OR
• be living with you.

Family Tax Benefit may be stopped if you leave Australia without notifying the Family Assistance Office.

(Source: Family Assistance Office)

Education Tax Refund - Fact Sheet

If you’re eligible for the Education Tax Refund you could get 50% back on a range of primary and secondary school education expenses.

Want to know:

• about the Education Tax Refund
• are you eligible

Read more >

Baby Bonus Caclulator

Here's a FREEbe for mum's to be ==>  Win a $500 Huggies Voucher

NEW ==> find out about Paid Parental Leave Fact Sheet

The baby bonus is a refundable tax offset – even if you do not pay tax, do not have any income or do not have to lodge a tax return you can still claim it. The baby bonus is paid whether or not you currently get any other family benefits.

Who is it for?

If you had a baby or you gained legal responsibility of a child aged under five (for example, through adoption), on or after 1 July 2001 and before 1 July 2004 – whether or not you already have other children – you could receive the baby bonus. Usually, it is the mother of the child who is eligible for the baby bonus.

How much will you get?

How much baby bonus you get depends on your own taxable income each year. If your taxable income is $25,000 or less you will be entitled to a minimum annual amount of $500. You may get less in the first year, as the baby bonus is calculated from the baby's date of birth (or the date you gained legal responsibility for your child). If your taxable income is more than $25,000 when you claim you will only get the baby bonus if your income has reduced. You may get more than $500 if there has been a significant reduction in your taxable income.

Adoptive parent

You may be entitled to claim from the date the adopted child came into your care.

Information you will need

• Your taxable income for the year you're claiming.
• Your taxable income for the year the child was born.

You may require additional information depending on your circumstances.

Link to FREE ==> Baby Bonus Calculator

(source ATO)

Family Tax Benefit Part B - Income Thresholds

Two parent families with one main income
The parent earning the higher amount can earn $150,000 or less for that financial year. If the primary earner's income is under that limit, an income test is then applied to the parent earning the lower amount. The parent earning the lower amount can earn up to $4,526 for the financial year before it reduces the rate of Family Tax Benefit Part B payable.

Please Note: Family Tax Benefit Part B is not payable to families if the primary earner's income is more than $150,000.

Single Parent Families
If you are a single parent, you can get the maximum rate of Family Tax Benefit Part B provided your income is $150,000 per year or less.

Please Note: If you share the care of your child, there are special rules about how much Family Tax Benefit Part B you can be paid. Family Tax Benefit Part B is not payable to single parents if the primary earner's income is more than $150,000.
FREE fact sheet ==> Family Tax Benefit Part B

(Source: Family Assistance Office)

Family Tax Benefit Income Thresholds

Income thresholds for Family Tax Benefit vary for part A and part B and are adjusted annually.

For Financial Year 2009:

Income Thresholds for Family Tax Benefit:

• For maximum rate: Family income can be $42,559 a year before payment is affected.
• For part rate: If your income is more than $42,559 a year, payments will reduce by 20 cents for each dollar above $42,559 until the base rate is reached. It is paid at this level until family income reaches $94,316 a year (plus an additional $3,796 for each dependent child after the first). Payments will then reduce by 30 cents for every dollar over that amount until the payment reaches nil.

To receive some Family Tax Benefit Part A, the maximum income levels are:

• $100,801 a year for a family with one dependent child under 18; and
• $102,249 a year for a family with one dependent 18-24 year old.

These thresholds are lifted by:

$3,779 for each additional dependent child under 18; and

• $3,835 for each additional dependent 18-24 year old.

Extra Payments Available

• Families receiving Family Tax Benefit Part A may also be eligible for extra payments:
  Rent Assistance (if renting privately)
• Large Family Supplement (for third and each subsequent child); and
• Multiple Birth Allowance (for three or more children born during the same birth).
• Rates in this Fact Sheet are current as at 1 July 2008.

Historical Thresholds:

For a FREE fact sheet ==> FTB Part A Historical rates

(Source Family Assistance office)

Family Tax Benefit Part A Explained

Family Tax Benefit Part A is the most common payment to help you with the cost of raising your children. It is worked out on your actual annual family income, the ages and number of dependent children in your family and is paid per child. 

Read more >

Rental Property Deductions - Know What to Claim

Over 1.5 millon people claimed more than $24 bilion in rental deductions in their 2007 tax returns, with almost 170000 people claiming rental deductions for the first time.

It is no wonder the ATO will contimue its focus on rental property deductions, including writing to first time property investors about the do's and don'ts of claiming rental property deductions.

To help clients keep on top of their taxation obligations in relation to investment properties and to make sure they claim ALL ENTITLEMENTS to deductions, My Tax Zone has provided this FREE summary list of allowable rental property deductions:

Link to FREE summary (pdf file) ==> Taxation & Investment Properties Explained

PAYG Tax Calculator - Online

Online PAYG Tax Calculator:

This is one of the most searched tax calculators. Clients often use it to check their employers are deducting the correct amount of tax or HELP from their pay or to check the amount of tax they pay on overtime.

Here is a link directly to the ATO's online PAYG Caclulator:

Link ==> PAYG Tax Calculator

It is really simple to use, and very quick.

David Maynard

Super Co-contributions Calculator

The Super co-contribution calculator is a tool to help individuals and the self-employed estimate their co-contribution entitlement and eligibility, based on information provided about:

• income, and
• personal super contributions.

Information you need
You must enter the amounts of your:

• personal super contributions
• employment and/or business income including partnership distribution,
• any reportable fringe benefits amounts, and
• any other income.

For individuals with business income, you must also enter the amount of business related deductions.

Link ==> Super Co-contributions Calculator

Family Tax Benefit Calculator

See our new post on ==> Paid Parental Leave Commencing Jan 2011

What is FTB?
FTB is a payment to help you raise your dependent children. On 1 July 2000 FTB replaced family tax benefit Part A and Part B, dependent spouse rebate (with a child), and sole parent rebate. Some social security payments were also replaced: family allowance, basic parenting payment, guardian allowance and family tax payment Part A and Part B.

Read more >

High Court says "yes" to Tax Bonus Payment

Following the High Court’s decision, the Tax Office today said 7.4 million people who have already lodged their 2007-08 tax return will begin receiving their tax bonus payments from next week.

Tax Commissioner Michael D’Ascenzo said if people have lodged their 2007-08 tax return and meet the eligibility criteria they don’t need to do anything else to receive the payment.
“We will be progressively sending payments to the address or bank account people nominated as their preference in their 2007-08 tax return – unless they updated those details since then,” Mr D’Ascenzo.

“Eligible people who have received their 2007-08 notice of assessment before 27 March 2009 can expect to receive their payment between next week and 16 May 2009.

“Those who received their notice of assessment after 27 March 2009 can expect their tax bonus payment around four weeks after they received their notice of assessment.

“Please be patient if you don’t receive the payment immediately.

“We are working closely with Australia Post and the Reserve Bank to distribute around 7.4 million payments over the next six weeks.

“Due to the large number of payments we ask that people don’t call us about the progress of individual payments while we are still distributing them.

“However our call centres will be open seven days a week from the 16 May 2009 to resolve any tax bonus payment issues.”

It is not too late for people whose returns are still outstanding, but they must lodge by 30 June 2009 to be eligible unless they’ve already have an extension.

Taxpayers who have not yet lodged their 2008 tax return can use our online tax return preparation service "My Online Tax" and obtain all the benefits of doing it yourself and obtaining professional support.

Our supportiveteam has the GENUINE expertise and experience to make sure you receive all your entitlements.

David Maynard

New Rules for Deducting Personal Super Contributions

Changes that took effect from 1 July 2007 means the rules for deducting personal contributions have changed. The basic rules are similar but have some important differences:

You are eligible to claim a deduction if:

• you satisfy the ‘maximum earnings as an employee’ condition
• you meet the age-related conditions
• you made personal contributions to a complying super fund or a retirement savings account (RSA)
• you made the contributions in order to obtain super benefits for yourself, or for your dependants in the event of your death
• you have written to your super fund or RSA provider, in the approved form Deduction for personal super contributions (NAT 71121), and advised them of the amount you intend to claim as a deduction, and
• your super fund or RSA provider has acknowledged your notice of intent and agreed to the amount you intend to claim as a deduction.

What is the ‘maximum earnings as an employee’ condition?

You can claim a deduction on personal contributions, even if you receive some income as an employee, as long as you satisfy the ‘maximum earnings as an employee’ condition.
Under this condition, the amount you earn as an employee must be less than 10% of your combined assessable income and reportable fringe benefits for that income year. This is the case regardless of whether you your employer has paid super on your behalf.

(source ATO)

Employee Share Scheme Changes

Employee share schemes – election requirements from 01/07/08:

The first change is to the election requirements to access one of two tax concessions available to taxpayers who acquire qualifying shares or rights under an ESS. This change improves the integrity of the law by ensuring taxpayers appropriately report income in their tax returns.

The election procedures have changed so that a taxpayer who wishes to make an election to be assessed under the taxed-upfront concession, must make the election and include the value of the discount in their income tax return for the year of income the shares or rights are acquired. If the value of the discount is $1,000 or less, and the taxpayer is eligible for the $1,000 exemption available under the taxed-upfront concession, the taxpayer will be taken to have made the election.

If the $1,000 exemption does not apply, or the value of the discount is more than $1,000, taxpayers will be taken to have chosen to be taxed under the tax-deferred option if:

• they do not make an election in the income tax return in the year the shares or rights are acquired, and
• they do not include an amount in their income tax return in the year the shares or rights are acquired.

The change removes the ability for taxpayers to manipulate the taxing point and ensures that discounts provided on shares or rights under an ESS are properly included in their assessable income.

The measure takes effect with respect to shares and rights acquired from 1 July 2008 for the 2008–09 income year.

Latest "Tax Scams" and Missuse of ATO

There are a number of scams being reported using the Tax Bonus, the ATO or Centrelink as a subject.

The ATO says "There are many different types of scams – online, phone, mail and face-to-face. Online scams, such as email ‘phishing’ scams are on the rise and are designed to trick you into giving away your money, passwords and/or personal details (such as your tax file number - TFN)."

"...under no circumstances should you give personal information including credit card or banking details to these callers or in response to unsolicited emails. Anyone who has received a suspicious phone call or email should contact us [the ATO] immediately."

David Maynard

ATO Income Benchmarks for Bricklayers

The ATO is continuing their program of introducing benchmarks for income and expenses for tradies. The latest benchmark to be released is for Bricklayers.

The ATO have worked with trade associations and industry participants to develop input benchmarks for bricklayers. These benchmarks are now available and indicate an expected range of income for bricklayers based on the labour and materials used when working directly with household customers.

Bricklayers can use the benchmarks to:

• compare your performance to the rest of the bricklaying industry, and
• check that your tax records accurately reflect your income.

Some of the benchmarks are:

• Income - per 1000 bricks (labour only): $800 to $1000
• Bricks required - number of standard single bricks required per square metre: 50
• Cost of materials (sand, cement, lime) - % of cost per job: 10% - 15%

For a FREE fact sheet ==> more ATO information.

David Maynard

Rental Properties - Claiming Borrowing Expenses

The types of borrowing expenses you can claim as income tax deductions for taking out a loan to purchase a rental property.

What can you claim?

You can claim all of the following:

• stamp duty charged on the mortgage
• loan establishment fees
• title search fees charged by your lender
• costs for preparing and filing mortgage documents
• mortgage broker fees
• fees for a valuation required for loan approval, and
• lender's mortgage insurance, which is insurance taken out by the lender and billed to you.

When the total of these costs exceed $100, they must be apportioned and deduced over five years or the term of the loan (whichever is shorter).