TAXATION TIPS


TAX RATES FOR RESIDENTS OF AUSTRALIA 2016 - 2017

TAXABLE INCOME TAX ON THIS INCOME
0 To $18,200 Nil
$18,201 To $37,000 19c for each $1 over $18,200
$37,001 to $87,000 $3,572 plus 32.5c for each $1 over $37,000
$87,001 To $180,000 $19,822 plus 37c for each $1 over $87,000
$180,001 and over $54,232 plus 47c for each $1 over $180,000

*Source: www.ato.gov.au

TAX RATES FOR NON RESIDENTS OF AUSTRALIA 2016 - 2017

TAXABLE INCOME TAX ON THIS INCOME
0 To $18,200 Nil
$18,201 To $37,000 19c for each $1 over $18,200
$37,001 to $80,000 $3,572 plus 32.5c for each $1 over $37,000
$80,001 To $180,000 $17,547 plus 37c for each $1 over $80,000
$180,001 and over $54,5470 plus 45c for each $1 over $180,000

*Source: www.ato.gov.au

TAX TIPS FOR DECLARING YOUR TAXABLE INCOME

  • Last day of filing your tax return is 31st every October following the closure of that financial year by June 30th. You may receive a fine or interest penalty charge from the ATO if you lodge your return beyond this date.
  • A Tax File Number (TFN) is required in order to work and be properly recognised for tax purposes in Australia.
  • For tax returns, you should bring with you any PAYG Payment Summaries you have received from employers, dividend statements, bank interest records, income distribution statements, etc. Any receipts, log book, diary records, to substantiate your claims for deductions.
  • If you are missing one of your payment summaries, then you need to contact that employer to obtain it or will have to make a statutory declaration with the accountant or take relevant advise.
  • Include all your payment summaries, even if you've only worked in a job for a couple of weeks.
  • Include all dividends and any other interest earned on bank accounts as income.
  • If you purchase a computer for use in your work or business, you can generally claim a percentage of the depreciation based on your work or business use.
  • Income from Centrelink (Newstart, Austudy) must be declared.
  • The money you bring with you from another country prior to permanently residing in Australia is not taxable. However, the money earned in Australia is taxable.
  • All Australian residents for tax purposes are required to declare their worldwide income accruing from interest dividends, rental income in their Australian tax return and is not required if the Australian Resident has a record of the tax paid certificate, if Australia has a Double Tax Treaty with that country.

TAX TIPS FOR DECLARING YOUR EXPENSE

  • A work related deduction is available for the following, provided you have receipts/documentations to substantiate the expenditure.
  • Outdoor workers who buy sunscreen lotion, sunglasses and hats for use at work
  • Scientific books, trade books, or journals necessary to fulfil your job function or related books to your work.
  • Travel expenses/cost of transport which is incidental to your job (mere travel between home and office will not be allowed). Travel from office to meet clients and/or authorized and travel that is described in your work duties can be claimable, provided necessary documentation is available.
  • If home is a place of business, deductions can be claimed on rent, house insurance, electricity, maintenance, pest control, depreciation, repairs, decoration, cleaning, internet & telephone on a prorate basis with respect to your business usage.
  • Expenses towards mobile phones and telephone used for making business calls, provided you keep receipts
  • Uniforms in the course of employment and if the work uniform is specific and identifiable to your organisation (such as chef's checked pants) or protects you from injury, whilst you are at work and can even claim the maintenance costs such as laundry, dry cleaning & repairs.
  • Fees paid to a registered tax agent for preparation of your return from the pertaining previous year, amendments and all your tax matters are all deductible.
  • Donations to registered charities.

FOR CLAIMING WORK RELATED MOTOR VEHICLE EXPENSE (LOG BOOK METHOD)

  • Maintain a log book recording the petrol expenses
  • Receipts for expenses such as services, repairs, tyres maintenance etc.,
  • Home to work and return travel is generally not claimable except in certain circumstances. Travel between jobs on the same day and travel for work (i.e. visiting clients, doing pick-ups or deliveries) would be claimable. While using public transport, keep all receipts and/or diary records/log book. If you use your own car then you need to keep a record of all business mileage travel. You should also record expenses of the car including petrol, repairs, registration, insurance and interest on a car loan.
  • Credit card slip /Bpay/ email receipts having information like date, supplier, nature of the goods and the amount is accepted as a receipt.
  • Documentary evidence should be kept for five years from the date of lodgement of the tax return in which the claims are made.
  • Maintain records/receipts with regard to the expenses incurred in replacing, insuring and repairing tools and equipment of trade that are used as your main income for claiming expenditure
  • Only study directly related to your current job may be claimed as a self-education expense. (however, the education that gets you a job is not classified as a work related expense).

TAX OFFSETS

The following definitions will help you determine whether you are eligible for this tax offset. Your ‘spouse’ includes another person (whether of the same sex or opposite sex) who:

  • you were in a relationship with that was registered under a prescribed state or territory law,
  • although not legally married to you, lived with you on a genuine domestic basis in a relationship as a couple.

A housekeeper is someone who kept house for you full time and also cared for your dependent children, students or invalid relatives, or your dependent spouse who received a disability support pension. A child-housekeeper is your child who kept house for you full time. Your child includes your adopted child, stepchild, ex-nuptial child or child of your spouse. However a child who is a full-time student or a full-time employee is not considered keeping house full time. Keeping house means more than simply child-minding or performing domestic duties. It includes having some responsibility for the general running of the household.

  • To be eligible to claim a spouse tax offset, your taxable income, as the primary income earner, should not exceed $150,000 for the financial year.
  • You may be eligible to claim a spouse offset if your spouse's income is less than $9254 in the financial year.
  • A Medicare reduction may also be available.
  • Your tax offset is also dependent to the period of the relationship was present. For example, if you did have your spouse for a part of the year, you would be only eligible to claim the offset on a prorate basis.
  • You will NOT be eligible for a spouse tax offset if you or your spouse are availing the FTB A or FTB B from Centrelink or Family Assistance Office.

INFORMATION REGARDING EDUCATION TAX REFUND (ETR)

The education tax refund (ETR) helps eligible families and independent students meet the cost of primary and secondary school education. You can claim the ETR for education expenses you incur while your child attends primary or secondary school. Families and approved care organisations can claim 50% of their eligible educational expenses if either of the following apply:

  • they received family tax benefit (FTB) Part A for the child.
  • a payment was made for the child that stopped them from receiving FTB Part A for that child.

Independent students may also be eligible to claim the ETR.
For the period 1 July 2009 to 30 June 2010 you can claim up to:

  • $780 for each eligible child in primary school – that is, a refund of $390
  • $1,558 for each eligible child in secondary school – that is, a refund of $779.

If your expenses exceed your refund limit for the year, any excess can go towards your following year’s refund claim, as long as you are still eligible.
Eligible education expenses include:


  • laptop computers, home computers and associated costs, including the repair and running costs of computer equipment
  • computer-related equipment such as printers, USB flash drives, and disability aids to assist in the use of computer equipment for students with special needs.
  • home internet connections, including the costs of establishing and maintaining them
  • computer software for educational use.
  • word processing, spreadsheet, database and presentation software, and internet filters and antivirus software
  • school textbooks and other paper-based school learning material, including prescribed textbooks, associated learning materials, study guides and stationery – for example, pencils, pens, compasses and glue, and
  • prescribed trade tools.

Expenses that are NOT eligible for the Education Tax Refund include:

  • school fees
  • school uniform expenses
  • tutoring costs
  • waiting list fees
  • student attendance at school-based extra curricular activities such as excursions and camps
  • musical instruments
  • sporting equipment
  • library book fees
  • transport
  • school subject levies – for example, payment for consumables for particular subjects such as woodwork, art or home science
  • photos
  • donations
  • tuck shop expenses
  • membership fees
  • computer games and consoles.

keep all of the eligible education expenses receipts to claim education tax refund: You need to keep records to help you or your tax agent prepare your tax return or your Education Tax Refund claim. You will also need receipts to ensure that you are able to prove your expenses claimed if we ask you to substantiate them. Eligible education expenses must be listed separately on invoices.

USEFUL TAX TIPS REGARDING BABY BONUS

From 1 July, 2004 a maternity payment, also known as a Baby Bonus is paid to families having a baby or adopting a child. This maternity payment can only be claimed directly from the Family Assistance Office. The amount is indexed annually and from 1 July, 2008 will be $5,000. From 1 January, 2009 the baby bonus will be paid to families whose income is not greater than $75,000 in the six months following the birth and it will be paid in fortnightly instalments over a six month period.

USEFUL TIPS ON CAPITAL GAINS / LOSSES

Offset capitals gains with capital losses:
Profits from selling shares or investment properties bought after 1985 will be charged capital gains tax at your marginal tax rate. Losses made on these kinds of investments can offset profits and cut your capital gains tax bill. For instance, if you made a big profit on the sale of one investment this financial year, consider selling some of your bad ones.