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Contents Budget 2012..........................................1 Superannuation 1 School Kids Bonus replaces Education Tax Refund 1 Living Away from Home Allowance (LAFHA). 1 Standard Tax Deduction Scrapped 1 Cancellation Of Interest Income Discount 1 Low Income Tax Offset 1 Income Tax Rates (Residents) 1 The lodgment process – Using a Tax Agent 1
The Tax System.................................. 2 Work-related Expenses CHANGES FOR 2012 AND BEYOND Net Medical Expenses Tax Offset Medicare Levy Senior and Pensioner Tax Offset (SAPTO) Other Individuals Family Thresholds Self Assessment Who needs to lodge a return? Record Keeping Self Lodgment Private Health Insurance Rebate
2 2 2 2 2 2 2 2 3 3 3 3
Income................................................. 4 Salaries and Wages 4 Allowances 4 Sickness and Insurance Payments 4 Lump Sums 4 Rent 4 Dividends 4 Interest 4 Pensions 4 Other Government Allowances 4 Payments, supplements and benefits 4 Capital Gains Tax 5
Business Income Exempt Income
Deductions......................................... 5 Home Office 5 Insurance 5 Bank Fees 5 Travel Expenses 5 Motor Vehicle expenses 5 What is itinerant? 6 Self Education Expenses 6 Gifts and Donations (including School Building Funds) 6 Clothing 7 Managing your tax affairs 7 Other Deductions 7 Rental property expenses 7
Rebates and Offsets........................... 7 Education Tax Offset Low Income Tax Offset Housekeeper Tax Offset Invalid Relative Tax Offset Parent or Spouse’s Parent Tax Offset Dependent Spouse Offset Senior Australians Tax Offset Mature Age Worker Tax Offset Private Health Insurance Rebate Net Medical Expenses Tax Offset Franking Tax Offset Entrepreneur’s Tax Offset Termination Payments Pensioner and Senior Australians Tax Offsets
7 7 7 8 8 8 8 8 8 8 8 8 8 8
Do your 2012 tax NOW!.....................9 NTEU contact details Teacher Tax contact details
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 2012, Published by NTEU ©2012. Written by Teacher Tax. ISBN 978-0-9806500-3-7. Online version at www.nteu.org.au/tax
Budget 2012 The Federal Budget was brought down on 8 May 2012.
Living Away from Home Allowance (LAFHA).
The major aspects of the budget that may be of interest to NTEU members include the following.
This will be limited to employees who maintain a home for their own use in Australia while living away for work for a maximum period of 12 months.
Currently, the superannuation contribution tax rate is 15% regardless of income. From 1 July 2012, individuals with an income higher than $300,000 will have their superannuation contributions taxed at 30%. Currently, the maximum contribution cap is $25,000 for people aged over 50 with a super balance less than $500,000. The proposed higher contribution cap of $50,000 will now be delayed for two years. School Kids Bonus replaces Education Tax Refund
The Education Tax Refund will be replaced by the School Kids Bonus from 1 January 2013. The payment will be $410 per primary student and $820 per secondary student. Currently the Education Tax Refund allows 50% of education expenses to be claimed as a tax refund. As a transitional arrangement, the Education Tax Refund for 2012 will be paid out in full to all eligible families as a lump sum in June 2012.
The changes will not affect genuine “fly in fly out” arrangements and travel and meal allowances. The changes will apply from 1 July 2012 for arrangements entered into after 7:30pm (AEST) on 8 May 2012, and from 1 July 2014 for arrangements entered into prior to that time. Standard Tax Deduction Scrapped
The Government will not proceed with the standard tax deduction for workrelated expenses that was previously announced in the 2011 Budget. Cancellation Of Interest Income Discount
In the 2010 Budget, the Government proposed a 50% tax discount for interest income from 1 July 2013 to encourage saving. This measure will not proceed. Low Income Tax Offset
From 1 July 2012, the tax-free threshold will increase and tax cuts will apply to low and middle-income individuals. This will occur in two phases.
Income Tax Rates (Residents)
2010 - 2011
2012 - 2013
Tax Rate Taxable income
$0 - $6000
$0 - $18,200
$6,001 - $37,000
$18,201 - $37,000
$37,001 - $80,000
$37,001 - $80,000
$80,001 – $180,000
$80,001 - $180,000
Phase 1 - From 1 July 2012, the tax-free threshold will rise from $6,000 to $18,200, and the maximum value of the Low-income tax offset (LITO) will be reduced from $1,500 to $445. The first marginal tax rate will be increased from 15 per cent to 19 per cent, and will apply to that part of taxable income that exceeds $18,200 but does not exceed $37,000. The second marginal tax rate will be increased from 30 per cent to 32.5 per cent, and will apply to that part of taxable income that exceeds $37,000 but does not exceed $80,000. Phase 2 - From 1 July 2015, the tax-free threshold will rise from $18,200 to $19,400, and the LITO will be reduced from $445 to $300. The second marginal tax rate will increase from 32.5 per cent to 33 per cent and will apply to that part of taxable income that exceeds $37,000 but does not exceed $80,000.
The lodgment process – Using a Tax Agent
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 31 March 2013). To avoid penalty however, you must be registered as a client with that tax agent by 31 October 2012. 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. NTEU TAX GUIDE 2012
The Tax System The Australian Taxation Office (ATO) has revealed its targets for the 2011-2012 financial year. They include small business benchmarks, wealthy individuals, sham contracting, work-related expenses and employer obligations for SMEs. This year fields as diverse as real estate, hospitality, carpentry, medicine, football and aviation will be in focus. Work-related Expenses
The ATO says there has been a 16% increase in work-related expenses since 2007. Advisory letters are being issued to help people understand their obligations and correctly claim expenses. Workers in the following fields will be targeted in 2011-2012: • Real estate employees. • Carpenters and joiners. • Earthmoving plant operators. • Flight attendants. “The most common mistakes for many occupations include insufficient documentation to support motor vehicle and travel expenses, and incorrectly claiming home office, mobile phone and internet expenses.” CHANGES FOR 2012 AND BEYOND Net Medical Expenses Tax Offset
The threshold will increase from $2,060 to $5,000 beginning July 1st, 2012. Any eligible family spending over this amount will be entitled to the offset of 20 cents per dollar. Medicare Levy
From 1 July 2012, the low-income threshold amounts and phase-in limits will be raised to ensure individuals do not have a Medicare levy liability where they face no income tax liability. 2
NTEU TAX GUIDE 2012
The effects are listed on the top of p.3.
Senior and Pensioner Tax Offset (SAPTO)
Australia has a self assessment taxation system. This means that your return is accepted initially by the ATO 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.
The low-income threshold for individuals entitled to the new SAPTO will be $32,279. The phase-in limit for recipients will increase from $36,100 to $37,975. The same threshold of $32,279 will apply for calculations regarding PTO and SATO recipients who will now be under the new SAPTO. Persons entitled to both the SAPTO and the Beneficiary Tax Offset (BTO) will only be able to claim one of the offsets, whichever is the greatest in value. Other Individuals
The low-income threshold amount for a single individual with no dependents will increase from $18,839 to $20,542. The phase-in threshold limit for recipients will increase from $22,163 to $24,167. Family Thresholds
The family threshold for individuals with a spouse and/or dependents who are entitled to a SATO offset will increase from $44,500 to $46,000, with both seniors and pensioners entitled to the new SAPTO. The phase-in threshold limit for recipients will increase from $52,352 to $54,117. The family threshold for other families (known as non-SATO families) has not increased. The lower threshold limit remains at $31,789. The phase-in threshold limit remains at $37,398, with the up-lift factor for each additional child remaining at $2,919. Further future changes have been outlined in the relevant sections in this guide.
In a report published by the ATO, the following facts were revealed about data matching activities. The ATO received and processed some: • 238 million share ownership and disposal transactions. • 97 million investment, employment and health transactions. • 42 million Australian Electoral Commission transactions. • 29 million superannuation transactions. • 25 million property ownership and disposal transactions. • 12 million Australian Transaction Reports & Analysis Centre transactions. • 449,000 employee share schemes transactions. • 93 million other transactions. The ATO state that they use this data to: • Provide pre-filling information to taxpayers and their agents to help them correctly complete their income tax return first time. • Identify discrepancies between information reported by taxpayers in their tax returns against details reported by third parties. • Identify particular non-compliant behaviour within selected target groups, or to conduct risk assessments. • Assist in administration of the relevant legislation with other government departments through data exchange. • Exchange with treaty partners.
Private Health Insurance Rebate
On 1 July 2012 the 30% rebate for health insurance will be means tested. That means instead of 30% rebate you he may only get 10% or 0% depending on final income. If you prepay next year’s health insurance (2012-2013) before 30 June you will not be means tested (for next year). This could save you up to $1500. 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
Aged 65-69 35%
Aged 70 +
Rebate Aged < 65
Medicare levy surcharge Rates
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 (this will change to $18,200 next year) 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 a male veteran or war widower aged 60 years+ who met the veteran pension age test. A female aged 63 years+ or a female veteran or war widow aged 58 years+ 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. 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 $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. The return is assessed by the ATO and you are issued with a Notice of Assessment. The Notice of Assessment will summarise your taxable income for the year. It may include a tax refund or an amount payable. If you have any objections to your Notice of Assessment, you need to call the ATO as soon as possible. NTEU TAX GUIDE 2012
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).
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. INVESTMENT INCOME COULD INCLUDE:
ASSESSABLE INCOME COULD INCLUDE:
Salaries and Wages
This is the amount of money you earn when you rent out your property.
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. • Provided under a contract of service (employment contract). Allowances
Allowances and earnings from your payer may include: • Car, travel or transport allowances. • Allowances for tools, clothing or laundry. • 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 4
NTEU TAX GUIDE 2012
May include: • Dividends paid directly to you. • Dividends applied under a dividend reinvestment plan. • Dividends that were otherwise dealt with on your behalf. • 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 ATO 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. GOVERNMENT INCOME COULD INCLUDE:
• P artner service pension. • Disability support pension and you have reached age-pension age. • Wife 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
• • • • • •
Austudy payment Carer payment Education entry payment Parenting payment (single) Parenting payment (partnered) Exceptional circumstances relief payment 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. Capital Gains Tax
Capital Gains income could include any capital gain or capital loss on the disposal of certain assets.
• A ge pension. • W idow B pension. • Age service pension.
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. • 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. This is a complex area of tax law and we recommend you consult a tax professional. Business Income
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. 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.
Business income must also be included on your tax return. This may include
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 expenses that can be claimed for this as well. 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 34 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 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. 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.
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. NTEU TAX GUIDE 2012
What is itinerant?
The other three methods are:
Essentially, you can claim travel expenses when you have a ‘shifting workplace’.
Method 2 – 12% of original value.
The case of Wiener (a School Teacher) and the ATO sheds some light on this: 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. 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): ‘...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.’ 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.
Method 3 – One-third of actual expenses. Method 4 – Logbook. It is suggested that you seek the advice of a Tax Agent prior to selecting a method. Self Education Expenses
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. It MUST relate to your work as an employee at the time you were studying. 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
1,601–2,600cc / 1.6–2.6 litre
801–1,300cc / 0.801–1.3 litre
2,601cc / 2.601 litre or more
1,301cc / 1.301 litre or more
NTEU TAX GUIDE 2012
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 following 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.
Rebates and 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 credits, baby bonus and private health insurance.
Education Tax Offset
This is a complicated area of tax. Seek professional guidance. Below is a basic outline of the major rebates.
The low income tax offset is automatically calculated by the ATO and can be up to $1500.
The thresholds are up to $794 per primary school student and up to $1588 per secondary school student. This will be replaced by the School Kids Bonus in 2012-13. Low Income Tax Offset
From 1 July 2012, the tax-free threshold will rise from $6,000 to $18,200, and the maximum value of the Low-income tax offset (LITO) will be reduced from $1,500 to $445. 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. NTEU TAX GUIDE 2012
• Y our 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
You and your dependent’s adjusted taxable income will be used to ascertain eligibility. The maximum offset is $864. Parent or Spouse’s Parent Tax Offset
If you maintained your parent, your spouse’s parent you may be entitled to a tax offset. The maximum tax offset is $1726 for each dependent parent or spouse’s parent. Dependent Spouse Offset
This year, eligibility for the dependent spouse tax offset will be confined to taxpayers with a dependent spouse born before 1 July 1971. This will change to 1 July 1952 in future years. The maximum spouse offset you can claim is $2,355. NOTE: The Federal Budget has announced that the housekeeper, invalid relative, parent and spouse and dependent spouse offsets will be streamlined next year. Senior Australians Tax Offset
Males aged over 65 and females aged over 64 and 6 months old are usually entitled to a tax offset (this is lower for veterans). 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. As part of the 2012 Federal Budget, the Government announced that from 1 8
NTEU TAX GUIDE 2012
July 2012, eligibility for the mature age worker tax offset will be confined to taxpayers born before 1 July 1957. This means taxpayers must have turned 55 prior to 1 July 2012 to receive this offset. The offset remains unchanged in all other respects. 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. The maximum rebate is: Age
Rebate (of premium)
< 65 yr
65 - 69 yr
70 yr +
NOTE: This will change for some higher income earners from 1 July 2012. Net Medical Expenses Tax Offset
If net medical expenses for your family were over $2,060 in the 2012 financial year, you can claim a rebate for 20 cents in every dollar greater this. 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 will be means tested in future years. The threshold will increase to $5000 from 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.
Entrepreneur’s Tax Offset
From 2012-13, the entrepreneur’s tax offset can no longer be claimed. The entrepreneur’s tax offset may still be applied to assessments for applicable income years up to and including 2011-12. 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. Pensioner and Senior Australians Tax Offsets
From 1 July 2012, the pensioner tax offset (PTO) will no longer be available. Individuals previously eligible for the PTO will be eligible for the senior Australians tax offset (SATO). To reflect this merger, SATO will be known under the new name of senior and pensioner tax offset (SAPTO)
Do your 2012 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 firstname.lastname@example.org 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
By Post. Use this form and questionnaire and post to: Teacher Tax, PO BOX 314, Bowral NSW 2576 The fee is $99 for NTEU members for a standard individual tax return. AUTHORITY TO ACT AS YOUR AGENT 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
Signed Client _______________________________________________ Date _____________________ Proceed to questionnaire overpage... NTEU TAX GUIDE 2012
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.
Give the details of your car (incl number plate, make/model and engine capacity)
Did you have any other travel expenses? (You cannot claim costs met by the school or costs that are reimbursed)
YES / NO
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 2012
Have you incurred a self education expense? (There MUST be a direct connection between your selfeducation expense and your work as a teacher)
YES / Please give brief description of course. NO
If YES, place the cost next to the appropriate box.
NOTE - You cannot claim costs met by the school or costs that are reimbursed
Student union fees
Decline in value of equipment
Have you made any donations to registered charities?
YES / NO
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
Computers and computer software YES / This is usually a pro rata expense - apportioned for NO private and work use.
Answering machines, telephones, facsimile machines, mobile phones, pagers and other telecommunications equipment
YES / NO
Excursions, school trips and camps
YES / NO
First aid courses
YES / NO
YES / NO
Technical or professional publications
YES / NO
Seminars, conferences and training courses
YES / NO
YES / NO
# Expense must be able to be proved if audited NTEU TAX GUIDE 2012
Work-related telephone calls.
YES / NO
Union and professional association fees (usually listed on your group certificate â€“ in which case, disregard)
YES / NO
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
If you have school children, did you have any eligible education expenses?
YES / NO
Do you have a HECS or tax debt? If so, how much?
YES / NO
Do you receive any Government pensions or allowances incl FTB?
YES / NO
Centrelink Statement of Benefits including Pensions, Job Start, etc
Do you have Private Health OR Income Protection Insurance (please specify)?
YES / NO
Private Health Insurance Statement
Has you family had net medical expenses of greater than $2060?
YES / NO
Details of expense and Medicare number.
Have you sold an investment property this year?
YES / NO
Purchase details and settlement details
Do you own shares?
YES / NO
Have you sold any shares this year? YES / NO
Do you have another source of income (e.g. second job/business)?
YES / NO
PAYG Payment Summary
Have you been charged any deductible interest? (e.g. investment loan, tax debt)
YES / NO
# Expense must be able to be proved if audited 12
NTEU TAX GUIDE 2012
Have you made any personal superannuation contributions on behalf of yourself or a spouse?
YES / NO
Is there any other information that you feel will assist with the preparation of your return?
YES / NO
Do you have dependant children? (please provide dates of birth and names)
YES / 1 NO
PROOF REQUIRED Superannuation Statement
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.
Liability Limited by a scheme approved under professional standards legislation. NTEU TAX GUIDE 2012
Teacher Tax contact details
NSW & National PO Box 314, Bowral NSW 2576 Phone: (02) 8006 5020 NTEU contact details
Fax: (02) 4210 8682 (central fax system)
Phone: (03) 9254 1910
(03) 9254 1915
Address: PO Box 1323, South Melbourne VIC 3205
Phone: (03) 9014 9590
www.nteu.org.au Western Australia
All Branch & Division contact details at www.nteu.org.au/branches
Phone: (08) 6102 0560
Published on Jun 13, 2012