w w w. n t e u . o rg . a u / t a x
Contents Budget 2010................................................... 1
Deductions...................................................... 5
Standard deduction option for tax returns 50% reduction in tax on the first $1,000 of interest income Increase of superannuation contributions of employers from 9% to 12% of gross wage Increase in the age of those eligible for compulsory superannuation Medical Expenses Rebate Income Tax Rates (Residents)
Home Office Insurance Bank Fees Motor Vehicle expenses What is itinerant? Self Education Expenses Gifts and Donations (including School Building Funds) Clothing Managing your tax affairs Other Deductions Rental property expenses
1 1 1 1 1 1
The Tax System................................................ 2 Targets for 2010 Changes for 2010 and beyond Self Assessment Who needs to lodge a return? Record Keeping The lodgment process – Self Lodgment The lodgment process – Using a Tax Agent
2 2 2 3 3 3 4
Income............................................................ 4 Salaries and Wages Allowances Sickness and Insurance Payments Lump Sums Rent Dividends Interest Pensions Other Government Allowances Payments, supplements and benefits Capital Gains Tax Business Income Exempt Income
4 4 4 4 4 4 4 4 5 5 5 5 5
5 6 6 6 6 6 7 7 7 7 7
Rebates / Offsets............................................. 8 Education tax offset Low income tax offset Housekeeper tax offset Invalid relative tax offset Parent or spouse’s parent tax offset Private health insurance rebate Senior Australians tax offset Mature age worker tax offset Net medical expenses tax offset Franking tax offset Termination Payments
8 8 8 8 8 8 8 8 8 8 8
Do your 2009 tax NOW!................................... 9 NTEU contact details Teacher Tax contact details
14 14
This guide has been prepared for NTEU members for their information only. Australian Tax Legislation is a complex body of law and members should seek qualified tax advice for their personal situation. While every effort has been made to ensure that the information in this guide is accurate, NTEU or Teacher Tax carries no responsibility for its application. The advice given is to be considered general. We encourage members to contact Teacher Tax on (02) 8006 5020 to discuss their personal situation. NTEU members will be offered a discount rate. NTEU Tax Guide 2010, Published by National Tertiary Education Union ©2010. Written by Teacher Tax. Online version at www.nteu.org.au/tax
Budget 2010 The Federal Budget was brought down on 11 May 2010. The budget at a glance included: • A deficit of $40.8 billion. • A standard deduction option for tax returns from 2012. • A 50% reduction in tax on the first $1,000 of interest income. • An increase of superannuation contributions of employers from 9% to 12%. • An increase in the age of those eligible for compulsory superannuation. • An increase in the low income tax offset and minor alteration of marginal tax rates. • A gradual cutting of the company tax rate. • A mining “super profits” tax. • A change to the rebate for medical expenses. The major aspects of the budget that may be of interest to NTEU members include the following.
Standard deduction option for tax returns This measure will allow tax payers to claim a “standard deduction” for work related expenses on their tax return without the need for receipts. This option will be available for the first time in 2012 – at a rate of $500 per worker. This will increase to $1,000 per worker the following year.
Rate (%)
Year
9.25
2013-14
9.5
2014-15
10
2015-16
10.5
2016-17
11
2017-18
11.5
2018-19
12
2019-20
Increase in the age of those eligible for compulsory superannuation From 1 July 2013, employers are required to make Superannuation contributions on behalf of workers up to the age of 75.
Medical Expenses Rebate The threshold will increase from $1500 to $2000 beginning July 1st, 2010. Any eligible family spending over this amount will be entitled to the offset of 20 cents per dollar.
Income Tax Rates (Residents)
For the many Taxpayers with deductible expenses greater than the standard deduction, they will still be able to claim these higher expenses, in lieu of claiming the standard deduction amount, by lodging a tax return.
2009 – 2010
50% reduction in tax on the first $1,000 of interest income From 1 July 2011 The Government will provide individuals with a 50% tax discount on up to $1,000 earned on interest. This measure also applies to bond, debentures and annuity products. The discount will be available for interest income earned directly as well as indirectly, such as via a trust or a managed investment scheme (MIS).
Increase of superannuation contributions of employers from 9% to 12% of gross wage Employer’s compulsory superannuation contributions will gradually rise from 1st July 2013 – leveling out at 12% in a decade.
2010 – 2011
Taxable income
Tax Taxable income Rate
Tax Rate
$1 – $6,000
0
0
$6,001 – $35,000
15% $6001 – $37000
15%
$35,001 – $80,000
30% $37001 – $80000
30%
$80,001 – $180,000
38% $80001 – $180000
37%
$180,001 and over
45% $180,001 and over
45%
$0 – $6000
Also, the low income tax offset has been raised from $1350 in the 2010 year to $1500 in the 2011 year. This will effectively mean that no tax will be payable up to $16,000 earnings in 2011, increasing from $15,000 this year. The Low Income Tax Offset is not available for taxpayers who exceed the following income – 2010 – $63,750 2011 – $67,500
NTEU TAX GUIDE 2010
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The Tax System Targets for 2010 Each year, the ATO announce specific areas they intend targeting. This year, the ATO will be targeting: Specific Occupations
focusing on concealed assets and income that are subject to tax in Australia • foreign residents deriving Australian income, to ensure they meet their income tax obligations
The ATO has identified the following occupations as “high risk” • Truck drivers. • Sales and marketing managers. • Sales representatives. • Electricians.
Changes for 2010 and beyond
Individuals through data matching
Families earning less than $31,196 (up from $30,025) and Individuals earning less than $18,488 (up from $17,794 will not have to pay the Medicare levy.
Advances in technology have meant that the ATO becomes more equipped each year to match data from a number of agencies. These include banks, share registries, other Government Agencies and Health Insurers. Work Expense Claims In relation to work related expense claims, the ATO recently stated: Last year we conducted more than 5,900 audits and reviews resulting in $7.6 million in adjustments. Retail investment products These are managed fund type schemes that have been set up to deliberately minimize tax in an illegal way. International transactions The ATO has stated – This year our support and compliance activities will focus on: • Australian residents deriving foreign source income or claiming deductions and exemptions in respect of cross-border transactions • financial and structural arrangements that rely on the secrecy laws and lack of transparency offered by some international jurisdictions, 2
NTEU TAX GUIDE 2010
Medical Expenses Rebate The threshold will increase from $1500 to $2000 beginning July 1st, 2010. Medicare Levy Exemption
Updated Notice of Assessment and Statement of Account One change that will be noticed after tax is completed is the Notice of Assessment, which outlines either your tax refund or liability. The layout has changed (see below). There has also been the introduction of a Statement of Account that will be sent to some taxpayers under special circumstances.
The ATO states: You will only receive a statement of account with your income tax notice of assessment (NOA) or notice of amended assessment (NOAA) if you: • Incur a penalty or general interest charge as part of the assessment process. • Are due to receive credit interest amounts as part of the assessment process. • Have any credits offset to other debts either other tax debts or debts you have with other government agencies. • Have other amounts payable / refundable on your account included in the opening balance, or • Have lodged returns for multiple financial years on the same day.
Self Assessment Australia has a self assessment taxation system. This means that your return is accepted initially by the Australian Taxation Office as truthful. This does not mean, however, that the ATO will not, from time to time, check the validity of your claims. This can occur, for example, by data matching and auditing.
How extensive is this? In a report published by the ATO, the following facts were revealed in relation to the 2009 Financial Year: • We amended 368,100 individuals’ assessments, while individuals self-amended 233,800. • We reviewed 28,400 returns in relation to high risk refunds resulting in revenue adjustments of $65.1 million. • We raised $44.0 million in revenue adjustments from 410 reviews and audits of executives and directors. • We sent educational letters to 422,000 individuals about claiming work-related expenses. • We sent educational letters to 134,800 individuals about rental income and expenses and capital gains tax. • We wrote to 65,000 individuals asking them to review their claims. About 4,400 reviews or audits were completed resulting in revenue adjustments of $9.6 million. • We reviewed or audited 2,700 people concerning capital gains tax resulting in revenue adjustments of $16.5 million. • We compared third-party information against returns. 403,600 income and benefits discrepancies resulted in revenue adjustments of $259.9 million. • We undertook 310 compliance focused visits to tax agents. • We acquired and processed an additional 33 million share transactions in 2008–09, bringing the total share transactions we use in data matching to 166 million. We also received an additional 2.8 million property records, bringing the total number of processed real property transactions used in our matching activities to 22.9 million.
In line with this, the ATO outlines the following responsibilities of taxpayers: 1. Be truthful in your dealings with us 2. Keep records in accordance with the law 3. Take reasonable care in preparing your tax returns and other documents and in keeping records 4. Lodge tax returns and other required documents or information by the due date 5. Pay your taxes and other amounts by the due date 6. Be cooperative in your dealings with us. In return, the ATO promise to work within the following service charter 1. Treat you fairly and reasonably 2. Treat you as being honest in your tax affairs unless you act otherwise 3. Offer you professional service and assistance to help you understand and meet your tax obligations 4. Accept you can be represented by a person of your choice and get advice about your tax affairs 5. Respect your privacy 6. Keep the information we hold about you confidential in accordance with the law 7. Give you access to information we hold about you in accordance with the law 8. Give you advice and information you can rely on 9. Explain to you the decisions we make about your tax affairs 10. Respect your right to a review 11. Respect your right to make a complaint 12. Administering the tax system in a way that minimises your costs of complying 13. Be accountable for what we do.
Who needs to lodge a return? In general, if you have earned income over $6,000 in the financial year, you
must lodge a return. Also, you will need to lodge a return if you have paid any tax at all. Even if you haven’t been employed, you may have been credited bank interest and paid withholding tax. Special rules apply to Senior Australians (a male aged 65 years or more or a male veteran or war widower aged 60 years or more who met the veteran pension age test. A female aged 63 years or more or a female veteran or war widow aged 58 years or more who met the veteran pension age test.) Check with your tax agent. Even if you’re not required to lodge a return, in some cases, you need to advise the ATO by filling out the prescribed Non Lodgment Advice.
Record Keeping Because the tax system is self assessment, it is essential that taxpayers be able to substantiate their income and expenses. In general, records should be kept for a period of five years from the date you receive your notice of assessment. Records should be kept in such categories as: • Payments you have received. • Expenses related to payments. • Acquisition or disposal of an asset – such as shares or a rental property. • Tax deductible gifts or donations. • Medical expenses. If you’re not sure whether or not to keep a record, the best advice is to err on the side of caution. It is better to have too many records than not enough.
The lodgment process – Self Lodgment Tax returns are submitted either by individuals or their tax agent to the Australian Tax Office on an annual basis. If you are doing the return yourself, it must be lodged by 31 October. The ATO has the power to fine the taxpayer up to NTEU TAX GUIDE 2010
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$110 for every 28 days the return is late to a maximum of $550. Interest on any tax payable may also be charged. Our advice is to get it in on time and save the stress and hassle.
(See page 2 for details regarding the new format of these Notices) If you have any objections to your Notice of Assessment, you need to call the ATO as soon as possible.
The return is assessed by the ATO and you are issued with a Notice of Assessment.
The lodgment process – Using a Tax Agent
The Notice of Assessment will summarise your taxable income for the year. It may include a tax refund or an amount payable.
If you lodge through a Tax Agent, you may be able to avail yourself of the general extension of time granted to Tax Agents (usually 31st March 2011).
To avoid penalty however, you must be registered as a client with that tax agent by 31 October 2010. There are other advantages of using a Tax Agents. These can include: • A quicker turnaround for refunds. • A thorough and professional check to ensure all information is correct. • Advocacy in the case of audit / dispute. • Tax planning to reduce tax.
Income In general, income tax is calculated by subtracting allowable deductions from assessable income. Assessable income can be obtained in a variety of ways. The income we are likely most familiar with is that which is paid in return for our labour (employment income). It should be noted that payments received through the Governments various Economic Security Payments this financial year are generally not counted as assessable income. Assessable Income could include:
Salaries and Wages Salary and wages are the main forms of payments made to an employee. Generally they are considered to be payments made: • to an individual • as remuneration for services, and • provided under a contract of service (employment contract).
• dirt, height, site, risk, meal or entertainment allowances • allowances for qualifications – for example, a first aid certificate
Sickness and Insurance Payments Any payment you received under such a policy for loss of your income is usually considered assessable.
Lump Sums Certain payments in respect of unused annual leave and long service leave are entitled to concessional tax treatment when you terminate your employment. That is why the amounts are separately recorded on your payment summary and separately recorded on your tax return. We suggest that you obtain professional advice if you have any lump sum payments labeled A B C D or E on your payment summary.
• d ividends paid directly to you • dividends applied under a dividend reinvestment plan • dividends that were otherwise dealt with on your behalf, and • bonus shares that qualify as dividends
Interest • I nterest earned from financial institution accounts and term deposits unless you were a non-resident and have paid, or should have paid, non-resident withholding tax on that interest. • Interest the Tax Office gave you or credited you with. • If you opened or operated an account for a child and the funds in that account belonged to you, or you spent or used the funds in the account as if they belonged to you, you must include any interest from the account.
Investment Income could include:
Government Income could include:
Allowances
Rent
Pensions
Allowances and earnings from your payer may include: • car, travel or transport allowances • allowances for tools, clothing or laundry
This is the amount of money you earn when you rent out your property.
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NTEU TAX GUIDE 2010
Dividends May include:
• • • • •
A ge pension Widow B pension Age service pension Partner service pension Disability support pension and you
have reached age-pension age • W ife pension and either you or your partner was of age-pension age • Invalidity service pension and you have reached age-pension age.
Other Government Allowances These may include such income as: • Newstart allowance • Youth allowance • Mature age allowance • Partner allowance • Sickness allowance • Widow allowance • Bereavement allowance • Training for Employment Program allowance; New Enterprise Incentive Scheme allowance.
Payments, supplements and benefits • • • • • •
A ustudy payment Carer payment Education entry payment Parenting payment (single) Parenting payment (partnered) Exceptional circumstances relief pay-
ment or farm help income support • Education payment of any of the following and you were aged 16 years or older • ABSTUDY living allowance • payment under the Veterans’ Children Education Scheme • Income support supplement.
• You grant an option to someone to buy an asset that you own. • You receive a non-assessable payment from a unit trust or managed fund. • You dispose of a depreciating asset that you used for private purposes, or • You stop being an australian resident.
Capital Gains Tax
This is a complex area of Tax law and we recommend you consult a tax professional.
Capital Gains income could include any capital gain or capital loss on the disposal of certain assets.
Business Income
Some relatively uncommon events or situations that may produce a capital gain or capital loss are: • An asset you own is lost or destroyed (the destruction may be voluntary or involuntary). • You give an asset away. • You enter into an agreement not to work in a particular industry for a set period of time. • Shares you own are cancelled, surrendered or redeemed. • A liquidator or administrator declares that shares or financial instruments you own are worthless.
Business income must also be included on your tax return. This may include earnings from you operation through a Sole Trader, Partnership, Trust or Company structure. The ATO makes a distinction between what is considered a business and what is a hobby.
expenses that can be claimed for this as well.
rata basis (apportioned for private and work use): • Calculators and electronic organisers. • Computers and computer software. • Answering machines. • Telephones. • Facsimile machines. • Mobile phones. • Pagers. • Hiring equipment. • Technical or professional publications. • Teaching aids. • Work-related telephone calls.
Exempt Income There is a wide range of income that is not assessed for tax purposes. In general, some types of Government pension’s allowances and other payments may not be deemed as assessable.
Deductions Deductions are allowable expenses or outgoings that have been incurred in earning any assessable income. An expense must be incurred, that is either paid, or definitely committed to be paid, Such as holding the Invoice. You must have written evidence to prove your claims if your total claims exceed $300. Deductions can fall into the following broad categories:
Home Office Some employees carry out work activities in the home office. There are many
These may include: • The decline in value of and repairs to your home office furniture and fittings. • Heating, cooling, lighting and cleaning. Alternatively, the ATO have set a fixed rate of 26 cents per hour for home office expenses for heating, cooling, lighting and the decline in value of furniture instead of keeping details of actual costs. Added to the expenses above, the following may be claimed on a pro
NTEU TAX GUIDE 2010
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Insurance Insurance against the loss of income is usually a legitimate expense. It should be noted that this does not include Private Health insurances and the like.
Bank Fees If you have fees incurred in the direct credit of salary into a bank account, these fees are normally deductible. Travel Expenses If you have to travel away for work, then certain expenses may be deductible: These may include: • Air, bus, train, tram and taxi fares • Bridge and road tolls • Parking • Car hire fees • Meals • Accommodation. For a guide on the amounts that can be claimed, access www.ato.gov.au.
Motor Vehicle expenses These are claimed when you have used your vehicle for work purposes. It does not include travel between work and home. However, the following trips may be included: • Travel directly between two separate workplaces. • Travel for work-related purposes from your normal workplace to an alternative workplace and back to your normal workplace or directly home. • Travel between two workplaces or between a workplace and a place of business. • Are classed as itinerant.
What is itinerant? Essentially, you can claim travel expenses when you have a “shifting workplace”. 6
NTEU TAX GUIDE 2010
The case of Wiener (a School Teacher) and the ATO sheds some light on this.
Method 3 – One-third of actual expenses
Weiner was required to teach at a minimum of four different schools (‘web’ of work places) each day, and comply with a strict timetable that kept her on the move throughout each of these days.
Method 4 – Logbook
Smith J, in the Supreme Court of Western Australia, concluded that travel was inherent in her employment because the nature of the job itself made travel in the performance of her duties essential, and said (ATC at 4010; ATR at 339):
The expenses that you incur in completing training provided by a school, college, university or other place of education. You must have undertaken the course for use in carrying on a profession, business or trade or in the course of employment.
‘...that travel was a fundamental part of the taxpayer’s work, is not open to challenge. Viewed objectively, it does not seem to me to be open to question that the taxpayer would not have been able to perform her duties without the use of her motor vehicle. ...it was a necessary element of the employment that on those working days transport be available at whichever school the taxpayer commenced her teaching duties and that transport remained at her disposal throughout each of those days.’
It MUST relate to your work as an employee at the time you were studying.
Expenses can be claimed using one of four methods: Method 1 – Cents per km This is the most common method, allowing a claim of up to 5000 business km at set rate. The table below shows the applicable rate, depending on your car’s engine capacity. The other three methods are: Method 2 – 12% of original value.
It is suggested that you seek the advice of a Tax Agent prior to selecting a method.
Self Education Expenses
Such expenses may include: • Textbooks • Student union fees • Stationery • Course fees • Travel expenses • Decline in value of equipment There has been, however, some confusion of the deductibility of “Success Seminars”, often which involve elements of personal motivation and empowerment. Whilst they vary from course to course, in general, the costs associated with this type of training are not tax deductible. The ATO’s view is that “the material covered in seminars of this type is too general to be classed as relating specifically to income-producing activities.” It is also important to remember that usually the first $250 of these expenses is not claimable.
Engine capacity (ordinary car)
Engine capacity (rotary engine car)
Rate (cents per km)
1,600cc / 1.6 litre or less
800cc / 0.8 litre or less
63
1,601–2,600cc / 1.6–2.6 litre
801–1,300cc / 0.801–1.3 litre
74
2,601cc / 2.601 litre or more
1,301cc / 1.301 litre or more
75
Gifts and Donations (including School Building Funds) Gifts and donations to can be claimed if they meet certain conditions. Firstly, they must be made to a Deductible Gift Recipient: a list of such organisations can be found at www.abn.business.gov.au Gifts can include • $2 or more - money • Property < 12 months - property purchased during the 12 months before the gift was made. • Shares ≤ $5,000 - listed shares valued at $5,000 or less, and acquired at least 12 months before the gift was made. • Trading stock - trading stock disposed of outside the ordinary course of business. • Cultural gifts - property under the Cultural Gift Program. • Heritage gifts - places included in the National Heritage List, the Commonwealth Heritage List or the Register of the National Estate. Examples of payments that are not gifts include: • Purchases of raffle or art union tickets. • Purchases of chocolates, pens etc. • The cost of attending fundraising dinners, even if the cost exceeds the value of the dinner (you can claim the lesser of $150 or 20% of the market value and certain auction items). • Membership fees. • Payments to school building funds as an alternative to an increase in school fees. • Payments where the person has an understanding with the recipient that the payments will be used to provide a benefit for the donor. Contributions to school building funds can also be deductions. The ATO state: A school building fund has the follow-
ing characteristics: • the fund is a public fund • the public fund is established and maintained solely for providing money for the acquisition, construction or maintenance of a building • the building is used, or is to be used, as a school or college, and • the building is used for that purpose by: • a government • a public authority, or • a non-profit society or association.
Clothing You can claim the cost of clothing if it falls into one of the following categories: • A compulsory uniform - a set of clothing that, worn together, identifies you as an employee of an organisation having a strictly enforced policy that makes it compulsory for you to wear the uniform while at work. • A single item of distinctive clothing, such as a jumper or tie, if it is compulsory for you to wear it at work. Generally, clothing is distinctive if it has the employer’s logo permanently attached and the clothing is not available to the general public. • A non compulsory BUT registered uniform • The cost of buying, hiring, replacing or maintaining protective clothing. You can also claim a deduction for the cost of clothing that you use at work to protect your ordinary clothes from soiling or damage – for example, laboratory coats or art smocks. Also, you are allowed to claim for Sunscreen, Sunglasses and Sunhats.
Managing your tax affairs The cost of managing your tax affairs is a tax deductible expense in the year
that it is incurred (e.g. this year, you can claim last year’s costs). These expenses must relate to a qualified tax advisor. They can include the preparation and lodgment, advice, costs of travel to and from the advisor and obtaining reference works.
Other Deductions Any expense incurred in earning income is usually deductible, so it is impossible to compile an exhaustive list. The following are examples of “other” expenses that may be deductible for Educators: • Excursions, school trips and camps. • First aid courses. • Union and professional association fees. • Dedicated stopwatches.
Rental property expenses You can claim expenses relating to your rental property but only for the period your property was rented or available for rent – e.g. advertised for rent. Expenses could include: • advertising for tenants • bank charges • body corporate fees • borrowing expenses • council rates • decline in value of depreciating assets • gardening and lawn mowing • insurance • land tax • pest control • property agent fees or commissions • repairs and maintenance • stationery • telephone • water charges • travel undertaken to inspect the property or to collect the rent. If only part of your property is rented out, these expenses must be apportioned. NTEU TAX GUIDE 2010
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Rebates / Offsets Rebates are different to deductions. Deductions reduce your assessable income, whereby rebates directly reduce the tax payable. They are also known as tax offsets. Usually, tax rebates can only reduce your tax payable to zero, with the exception of franking, baby bonus and private health insurance. This is a complicated area of tax. Seek professional guidance. Below is a basic outline of the major rebates.
Education tax offset The thresholds are up to $750 per Primary School students and up to $1500 per Secondary School student.
Low income tax offset Low income earners can have their tax offset by a maximum of $1350. That means that, if the taxpayer earns $15,000 or under, they effectively do not pay any tax.
Housekeeper tax offset A housekeeper is a person who worked full time keeping house for you and cared for: • A child of yours aged under 21 years. • Your invalid relative. • Your spouse who received a disability support pension. This is a complicated area of tax. Seek professional guidance for your particular circumstances.
Invalid relative tax offset In previous years, your taxable income and the separate net income of your dependant was used to assess your eligibility. From the 2009-10 income year, your and your dependant’s adjusted taxable income will be used. All other eligibility requirements apply, and remain unchanged. 8
NTEU TAX GUIDE 2010
Parent or spouse’s parent tax offset
Net medical expenses tax offset
If you maintained your parent, your spouse’s parent you may be entitled to a tax offset. The maximum tax offset is $1,489 for each dependent parent or spouse’s parent. For the 2008-09 income year, you are not eligible for the parent or spouse’s parent tax offset if your taxable income is over $150,000.
If net medical expenses for your family were over $1500 in the financial year, you can claim a rebate for 20 cents in every dollar greater this.
From 1 July 2009 (2009-10 income year), instead of using your taxable income to determine your eligibility to claim this offset, your adjusted taxable income will be used. Adjusted taxable income includes your taxable income plus additional income components. You will not be eligible for this offset if your adjusted taxable income is over $150,000.
Private health insurance rebate If you have private health insurance, you are entitled to a tax rebate. Most people claim this throughout the year in the form of a premium reduction. You are usually entitled to a rebate if there is an amount listed at Section G on your yearly statement. Age
Amount of rebate
< 65 yr
30% of premium paid
65– <70yr 35% of premium paid > 70 yr
40% of premium paid
Senior Australians tax offset Males aged over 65 and females aged over 63 are usually entitled to a tax offset.
Mature age worker tax offset To encourage people to stay in the workforce, the ATO provide a maximum $500 tax offset for workers over 55 who meet certain conditions. This offset does not apply to people who earn net income greater than $63,000 pa.
Net medical expenses are calculated by adding your out of pocket expenses and deducting any refunds (e.g. by Medicare or Private Health Insurance). This threshold will rise to $2,000 next year.
Franking tax offset If you have been a shareholder, you usually receive dividends which have already had tax paid on them by the company. These are called franking credits. It is important to keep all share transactions record in a safe, orderly manner to allow for these calculations.
Termination Payments An Eligible Termination Payment (ETP) is a form of lump sum payment paid by an employer or a superannuation fund. These payments are taxed at a lower rate. As each ETP is very different, a registered tax agent should help you if you have received an ETP. They may include: • A payment in lieu of notice. • A payment for unused sick leave. • A payment for unused rostered days off. • A ‘golden handshake’ whether paid under contract, industrial award obligation or the employer’s desire to recognise past service. • Compensation for loss of job. • Compensation for wrongful dismissal. • Redundancy payment that exceeds the tax-free limit.* • A payment because of the employee’s permanent disability. • Payment under an approved early retirement scheme that exceeds the tax-free limit.
Do your 2010 tax NOW! At Teacher Tax, we offer competitive rates on tax returns. Our system has been designed BY Teachers FOR Teachers. There are 3 main ways of doing your tax with us:
Email Simply send your details to info@teachertax.com.au
By Phone Call us on (02) 8006 5020 or contact our nearest office and discuss your details. We can then guide you through our easy step by step process.
By Post Use this form and send us your documents. We have included a price guide below to let you know your fee.* Simply fill in the personal details and as many other details as possible and post to Teacher Tax, PO BOX 524, Macksville NSW 2447 * We guarantee the price of $99 (incl GST) per individual tax return. This is for individuals with relatively simple tax affairs. This includes all the deductions listed overleaf and if you answer questions 1 â&#x20AC;&#x201C; 7 only. If you answer questions 8 onwards, please send us your documents, but weâ&#x20AC;&#x2122;ll confirm a quote before processing. No obligation.
Personal Details First Name Middle Name(s) Last Name D.O.B. T.F.N. Street Address Suburb Postcode State Email Address Home Phone Mobile Fax Proceed to questionnaire overpage... Liability Limited by a scheme approved under professional standards legislation. NTEU TAX GUIDE 2010
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QUESTIONS
DETAILS
PROOF REQUIRED
Who is your employer? Include any business who has given you a PAYG Summary. D1
Were you required to use your vehicle for work purposes?
PAYG Payment Summary YES / NO
If YES, place the approx km next to the appropriate box and complete D1A
# Travel directly between two separate workplaces because you have two different employers – for example, you have a second job
#
Travel for work-related purposes from your normal workplace to an alternative workplace and back to your normal workplace or directly home – for example, if you need to go to a regional meeting/ excursion
#
Travel between two workplaces or between a workplace and a place of business – for example, between two schools or between your school and the Exam Marking Centre
#
Any other reasons? Please outline.
#
D1A
Give the details of your car (incl number plate, make/model and engine capacity)
D2
Did you have any other travel expenses? (You cannot claim costs met by the school or costs that are reimbursed)
YES / NO
#
D3
Did you have any “work related clothing” expenses?
YES / NO
#
If YES, place the cost next to the appropriate box (write details below)
#
A compulsory uniform – a set of clothing that, worn together, identifies you as an employee of an organisation having a strictly enforced policy that makes it compulsory for you to wear the uniform while at work.
#
A single item of distinctive clothing, such as a jumper or tie, if it is compulsory for you to wear it at work. Generally, clothing is distinctive if it has the employer’s logo permanently attached and the clothing is not available to the general public.
#
A non compulsory BUT registered uniform
#
The cost of buying, hiring, replacing or maintaining protective clothing. You can also claim a deduction for the cost of clothing that you use at work to protect your ordinary clothes from soiling or damage – for example, laboratory coats or art smocks.
#
# Expense must be able to be proved if audited 10
NTEU TAX GUIDE 2010
QUESTIONS D4
Have you incurred a self education expense? (There MUST be a direct connection between your selfeducation expense and your work as a teacher)
DETAILS
PROOF REQUIRED
YES / Please give brief description of course. NO
#
If YES, place the cost next to the appropriate box.
Textbooks
#
NOTE - You cannot claim costs met by the school or costs that are reimbursed
Student union fees
#
Stationery
#
Course fees
#
Travel expenses
#
Decline in value of equipment
#
D5
Have you made any donations to registered charities?
YES / NO
#
D6
If you used a tax agent last year, how much were you charged? (claimable expense).
YES / NO
Please provide the agents name and address.
If you have incurred the following expenses, provide brief details (as well as cost) D7
Calculators and electronic organisers
YES / NO
#
D8
Computers and computer software YES / This is usually a pro rata expense - apportioned for NO private and work use.
#
D9
Answering machines, telephones, facsimile machines, mobile phones, pagers and other telecommunications equipment
YES / NO
#
D10
Excursions, school trips and camps
YES / NO
#
D11
First aid courses
YES / NO
#
D12
Hiring equipment
YES / NO
#
D13
Technical or professional publications
YES / NO
#
D14
Seminars, conferences and training courses
YES / NO
#
D15
Teaching aids
YES / NO
#
# Expense must be able to be proved if audited NTEU TAX GUIDE 2010
11
QUESTIONS
DETAILS
PROOF REQUIRED
D16
Work-related telephone calls.
YES / NO
#
D17
Union and professional association fees (usually listed on your group certificate â&#x20AC;&#x201C; in which case, disregard)
YES / NO
#
D18
Dedicated stopwatches
YES / NO
#
Please answer the following questions about your tax affairs Q1
Have you earned interest from any source?
YES / NO
Bank interest - Call your bank to obtain the exact amount or use your July bank statement
Q2
If you have school children, did you have any eligible education expenses?
YES / NO
Receipts
Q3
Do you have a HECS or tax debt? If so, how much?
YES / NO
HECS Statement
Q5
Do you receive any Government pensions or allowances incl FTB?
YES / NO
Centrelink Statement of Benefits including Pensions, Job Start, etc
Q6
Do you have Private Health OR Income Protection Insurance (please specify)?
YES / NO
Private Health Insurance Statement
Q7
Has you family had net medical expenses of greater than $1500?
YES / NO
Details of expense and Medicare number.
Q8
Have you sold an investment property this year?
YES / NO
Purchase details and settlement details
Q9A
Do you own shares?
YES / NO
Dividend Statements
Q9B
Have you sold any shares this year? YES / NO
Sales Certificates
Q10
Do you have another source of income (e.g. second job/business)?
YES / NO
PAYG Payment Summary
Q11
Have you been charged any deductible interest? (e.g. investment loan, tax debt)
YES / NO
Bank Statements
# Expense must be able to be proved if audited 12
NTEU TAX GUIDE 2010
QUESTIONS
DETAILS
Q12
Have you made any personal superannuation contributions on behalf of yourself or a spouse?
YES / NO
Q13
Is there any other information that you feel will assist with the preparation of your return?
YES / NO
Q14
Do you have dependant children? (please provide dates of birth and names)
YES / 1 NO
PROOF REQUIRED Superannuation Statement
2 3
Q15
Do you have (or a share in) an investment property?
YES / If YES, please provide details on a separate sheet. NO We will call you at a convenient time to discuss specific details.
AGREEMENT â&#x20AC;&#x201C; Please sign and send I, ___________________________________, of _________________________________________, Name Address hereby direct & instruct Teacher Tax to provide the following services and carry out the following work and to advise on my behalf, from time to time, as and when they fall due or as requested by me. 1. Accounting and management services. 2. Taxation planning. 3. Income tax returns. I personally undertake and guarantee to pay all professional fees and disbursements as agreed on behalf of myself or any entity previously mentioned. This does not diminish my rights.
AUTHORITY TO DEDUCT At my request and in consideration of not being required to pay in advance, I hereby direct and authorise Teacher Tax to receive, to bank and to deduct from ANY tax refund cheques or any other monies received from me (including third party cheques) or on my behalf, all fees in regards to tax returns prepared, accounting work performed, advice provided, disbursements, and any other fees incurred on my instructions, or the instructions of any person or entity listed below, such as solicitors fees, barrister fees, valuers fees, and any fees
or premiums paid on behalf of; 1. Myself. 2. Any of my relatives, including my husband/wife (defacto or otherwise), son, daughter, brother, sister, mother, father, mother-in-law, father-in-law etc. 3. Any other person or entity who may be related to me or of which I may be connected or associated with. I understand that a service fee as set by Teacher Tax at the appropriate time will be charged.
I warrant that I have authority to give the above undertakings and authorities with regard to payment of your fees. I understand that Teacher Tax will remit the balance of all monies due to me after deduction of each of the fees paid, etc as described above as soon as is practicable after the relevant bank clearance has been obtained. This authority shall remain in force in respect of future years unless revoked in writing. This does not diminish my rights. Signed Client _______________________________________________ Date ______________________ Liability Limited by a scheme approved under professional standards legislation. NTEU TAX GUIDE 2010
13
Teacher Tax contact details NSW & National PO Box 524, Macksville NSW 2447 Phone: (02) 8006 5020 Fax: (02) 8580 5073 (central fax system) Email: info@teachertax.com.au Web: www.teachertax.com.au
NTEU contact details
Victoria
National Office
PO Box 550W, Ballarat West VIC 3350
Phone: (03) 9254 1910
Phone: (03) 9014 9590
Fax:
(03) 9254 1915
Address: PO Box 1323, South Melbourne VIC 3205
Western Australia
Email: national@nteu.org.au
Phone: (08) 6102 0560
Web:
www.nteu.org.au Head Office
Branch & Division contact details available at www.nteu.org.au
PO Box 831, Campbelltown NSW 2560