NTEU Tax Guide 2015

Tax Guide 2015 nteu.org.au/tax

Contents

The Tax System...........................2

Budget 2015....................................2 ATO Focus 2015............................ 1 Excessive deductions for holiday homes 1 Husbands and wives 1 Repairs and maintenance 1 Rebuilding 1 Refinancing 1 Getting rental property deductions right 1

Changes for 2015 ........................ 1 Temporary budget repair levy Mature age worker tax offset Net medical expenses tax offset Medicare levy Dependent (invalid and carer) tax offset Dependent spouse tax offset myGov Small business concessions Income Test Thresholds for 2014-2015 Income Tax Rates (Residents) 2014–15

1 1 1 1 1 1 1 1 1 1

Changes for 2016 & beyond...2 Tax cuts for small business Car expense deductions Zone Tax Offset Commencing a new business Release of superannuation CGT roll-over relief Primary producers Managed investment trusts Residency rules FBT exemption HELP repayments from overseas debtors Parental Leave Pay Child care Aged pension asset test thresholds

NTEU National Office PO Box 1323, South Melbourne VIC 3205 Ph: (03) 9254 1910 Fax: (03) 9254 1915 national@nteu.org.au www.nteu.org.au Branch & Divisions: www.nteu.org.au/branches

2 2 2 2 2 2 2 2 2 2 2 2 2 2

Self-Assessment 2 Who needs to lodge a return?

3 Record Keeping 3 Self-Lodgement 3 Using a Tax Agent 3

Income.............................................3 Salary and Wage Income Investment Income Government Income Other Income

3 3 3 3

Deductions....................................4 Bank Fees 4 Clothing 4 Donations and Gifts (incl School Bldg Funds) 4 Excursions, School Trips and Camps 4 Home Office 4 Insurance 4 Motor Vehicle Expenses 4 Self- Education Expenses 5 Tax Returns 5 Teaching aids 5 Travel Expenses 5 Union and Professional Association Fees 5 Rental Property Expenses 5

Rebates and Offsets..................5 Invalid Relative Tax Offset Low Income Tax Offset Parent or Spouse’s Parent Tax Offset Private Health Insurance Rebate Senior Australians and Pensioners Tax Offset Zone Tax Offset

5 5 5 5 5 5

Your NTEU Tax Statement....6 Do your 2015 tax NOW!...........6 Questionnaire..............................7

NSW & National PO Box 314, Bowral NSW 2576 Ph: (02) 8006 5020 Fax: (02) 4210 8682 (central fax system) info@teachertax.com.au www.teachertax.com.au Victoria Ph: (03) 9014 9590 WA Ph: (08) 6102 0560

NTEU Tax Guide 2015, Published by NTEU ©201. Written by Teacher Tax. Online version at www.nteu.org.au/tax This guide has been prepared for 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, Teacher Tax carries no responsibility for its application. The advice given is to be considered general. Information in italics has been directly sourced from Australian Government websites.

Budget 2015 The Federal Budget was brought down on 12 May, 2015. The key initiatives were: • The right time for business to invest – $5 billion of tax relief to create jobs and small business growth, providing the right environment for investment • Supporting Australian families – $4.4 billion will make early childhood care more affordable, accessible and flexible • Fairness in Tax and Benefits – Making the tax, foreign investment and benefit systems fair and sustainable for everyone • Protecting Australia – $1.2 billion in new funding for national security • Future Challenges – Our ageing population creates a need to build productivity and increase workforce participation • Investing in Australia’s Infrastructure – Building infrastructure to support economic growth, create jobs and link businesses to markets • Roads, rail and airports – $50 billion commitment to improve Australia’s road and rail network, improving services and easing congestion.

• Regional development – $1 billion National Stronger Regions Fund • Tasmania – $60 million in developing Tasmania’s irrigation system and $203 million for the Tasmanian Freight Equalisation Scheme to include exports • The NBN – An expected 3.1 million homes and businesses will have the NBN in place or under construction by September 2016 • Mobile black spots – $100 million Mobile Black Spots Programme • Helping Farmers in Drought – $250 million to continue the Drought Concessional Loan Scheme • Supporting communities – Farmers will be able to claim an immediate tax deduction for water facilities and fencing. A $35 million grants programme will help rebuild drought affected communities.

• A healthier system – a taskforce will review Medicare Benefits Schedule items to ensure patients receive high quality and cost effective medical services. $1.6 billion for the Pharmaceutical Benefits Scheme. $485 million to improve the electronic health record system • Medical research – $10 million for the Medical Research Future Fund

ATO Focus 2015 This year the ATO will have an increased focus on rental property deductions. Some red flag areas include the following (source: ATO): Excessive deductions claimed for holiday homes

A taxpayer rented the home to family and friends during the year at less than market rate. There were no realistic efforts to let the property. The nightly rent advertised was much higher than that of surrounding properties. The ATO ruled that the property was mainly used for the taxpayer’s personal use, and deductions were limited to the amount earned from family and friends.

Husbands and wives

The ATO has seen instances where a husband and wife jointly own a property but split the income and deductions unequally to get a tax advantage for the highest income earner. Some people have even included the income in the low income earner’s returns and the deductions in the high income earner’s returns.

Repairs and maintenance

A taxpayer recently claimed repairs and maintenance for a newly acquired rental property which was significantly improved upon purchase.

However, the scope of the refurbishment included completely stripping the property and replacing old fixtures and fittings with new. The large repairs and maintenance claim was disallowed because initial repairs and improvements to a property are not deductible.

Rebuilding

A husband and wife demolished their existing rental property and built a new dwelling. In their income tax return they claimed an immediate deduction for their share of the entire cost of the building as repairs and maintenance. While the cost of constructing the new dwelling for rental purposes is permitted, the correct treatment is to spread the cost over 40 years, claiming 2.5 per cent of eligible construction costs as a capital works deduction. The repairs and maintenance claim was disallowed.

Refinancing

The ATO recently addressed a situation where a property was refinanced by a taxpayer to pay for their daughters’ wedding and an overseas holiday.

The taxpayer claimed the whole interest amount, but should have only claimed the portion of interest that relates to the rental property.

Getting rental property deductions right

• Keep accurate records.

• Only claim deductions for the periods the property is rented out or is genuinely available for rent. If a property is rented at below market rates, to family or friends, deduction claims must be limited to the income earned while rented.

• Costs to repair damage, defects or deterioration existing on purchase, or renovation costs, can’t be claimed as an immediate deduction. These costs are deductible over a number of years.

Changes for 2015 Temporary budget repair levy

From 1 July 2014, individual taxpayers with a taxable income of more than $180,000 per year have had additional tax of 2c for each dollar over $180,000 withheld by their employer to cover the levy.

Mature age worker tax offset

The mature age worker tax offset has been abolished and cannot be claimed from 2015 onwards.

Net medical expenses tax offset

The net medical expense tax offset is being phased out. Eligibility for this offset in 2015 requires that you claimed it in your 2013 and 2014 tax returns.

2015 is the final year this offset will be allowed unless your medical expenses relate to disability aids, attendant care and aged care. Those expenses can be still claimed until 30 June 2019.

Medicare levy

From 1 July 2014, the Medicare levy rate increases from 1.5% to 2% of taxable income for the 2015 income year onwards to help fund DisabilityCare Australia.

Dependent (invalid and carer) tax offset

To reduce confusion over the word ‘dependent’, the name has been changed to the invalid and invalid carer tax offset. This should help prevent claims being made for dependent children and relatives who were not genuine invalids or carers of invalids.

Dependent spouse tax offset

From 1 July 2014 the dependent spouse tax offset was abolished and cannot be claimed in 2015 onwards. If you are eligible for the

Income Tax Rates (Residents) 2014–15

Tax Rate $0 - $18,200 0 $18,201 19c for each $1 over $18,200 $37,000 $37,001 $3,572 plus 32.5c for each $1 $80,000 over $37,000 $80,001 $17,547 plus 37c for each $1 $180,000 over $80,000 $180,001+ $54,547 plus 47c for each $1 over $180,000 Taxable income

zone, overseas civilian or overseas forces tax offset you will only be entitled to claim for a dependent (including a spouse) who is an invalid or cares for an invalid. myGov

If you have created a myGov account and linked the ATO you will receive your notice of assessment, tax receipt and other mail direct to your myGov Inbox. This means that if you have a tax agent they will no longer receive your mail on your behalf.

Small business concessions

The government has allowed small businesses with an annual turnover of less than $2 million to immediately deduct assets that cost less than $20,000. This applies for assets acquired and installed ready for use between 7.30pm (AEST) 12 May 2015 and 30 June 2017. From 1 July 2017, the thresholds for the immediate depreciation of assets will revert back to existing arrangements (‘less than $1,000’ threshold).

Income Test Thresholds for 2014-2015

Singles Families

Base Tier $90,000 or less $180,000 or less

Tier 1 $90,001$105,000 $180,001$210,000

Tier 2 $105,001$140,000 $210,001$280,000

Tier 3 $140,001 or more $280,001 or more

Private Health Insurance Rebate premiums paid to 31 March 2015

Under 65yr 29.04% 65-69yr 33.88% 70yr + 38.72%

19.36% 24.20% 29.04%

9.68% 14.52% 19.36%

0% 0% 0%

Private Health Insurance Rebate premiums paid after 1 April 2015

Under 65yr 27.820% 18.547% 65-69yr 32.457% 23.184% 70yr + 37.094% 27.820%

9.273% 13.910% 18.547%

0% 0% 0%

1.25%

1.5%

Medicare levy surcharge

Rates

0.0%

1.0%

From 1 July 2015, the income thresholds used to calculate Medicare levy surcharge (MLS) and Private health insurance (PHI) rebate will not be adjusted for 3 years. The thresholds will remain at the 2014–15 levels for 2015–16, 2016–17 and 2017–18.

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Changes for 2016 & beyond Tax cuts for small business

From 1 July 2015 the company tax rate will be reduced to 28.5% (from 30%) for companies with an annual turnover of $2 million or less.

Individual taxpayer’s with business income from an unincorporated business that has an annual turnover of less than $2 million will be eligible for a small business tax offset. The discount will be 5% of the income tax payable on the business income capped at $1,000 per individual for each income year.

Car expense deductions

From the 2016 income year both the ‘12 per cent of original value method’ and the ‘one-third of actual expenses method’ will be removed. The ‘cents per kilometre method’ will be modernised by replacing the three current (cents per kilometre) rates based on engine size, with one rate set at 66 cents per kilometre for all cars.

Zone Tax Offset

From 1 July 2015, the government will exclude fly-in-fly-out/drive-in-drive-out workers from the zone tax offset if their normal residence is not in that zone. For those workers whose normal residence is in one zone, but who work in a different zone, they can claim for the zone of their normal place of residence.

Commencing a new business

From 1 July 2015, the government will allow businesses to claim an immediate write-off for a range of professional expenses associated with starting a new business, such as professional, legal and accounting advice.

Release of superannuation

From 1 July 2015, the government will extend access to superannuation for people with a terminal medical condition by extending the certification period (from one year to two years). This will give terminally ill patients earlier access to their superannuation entitlements.

CGT roll-over relief

From 1 July 2016, the government will allow small businesses with an annual turnover of less than $2 million to change legal structure without attracting a capital gains tax liability at that point.

This will aid new small businesses that choose an initial legal structure but later find that it does not suit the business.

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NTEU TAX GUIDE 2015

Primary producers

Aged pension asset test thresholds

From 1 July 2016 primary producers can immediately deduct capital expenditure on fencing and water facilities and depreciate all capital expenditure on fodder storage assets over three years.

From 1 January 2017, the government will increase the asset test thresholds from $202,000 to $250,000 for a single home owner and from $286,500 to $375,000 for a home owner couple.

Non-home owner pensioners will increase their threshold to $200,000 more than home owner pensioners.

Managed investment trusts

From 1 July 2016 the government will proceed with the implementation of a new tax system for managed investment trusts with a twelve month transition period.

Residency rules

From 1 July 2016 the government intends to treat most people who are temporarily in Australia for a working holiday as non-residents for tax purposes, regardless of how long they are here. This means they will not be eligible for the tax-free threshold.

FBT exemption

From 1 April 2016, the government will allow an FBT exemption for small businesses with an annual turnover of $2 million or less, that provide employees with more than one qualifying workrelated portable electronic device, even where the items have similar functions (such as a tablet and a laptop).

HELP repayments from overseas debtors

From 1 January 2016 the Higher Education Loan Programme (HELP) repayment framework will apply to debtors residing overseas for six months or more. From this date, debtors going overseas for more than six months will be required to register with the ATO, while those already overseas will have until 1 July 2017 to register. Repayment obligations will apply to new and existing debts from 1 July 2017.

Parental Leave Pay

From 1 July 2016, the government will prevent individuals from accessing both employer and government parental leave pay arrangements. All primary carers will have access to parental leave payments that are at least equal to the minimum PLP benefit (18 weeks minimum wage).

Child care

From 1 July 2017 a new single Child Care Subsidy will be introduced. Families meeting the activity test with annual incomes up to $60,000 will be eligible for a subsidy of 85% of the actual fee paid, up to an hourly fee cap. The subsidy will taper to 50% for eligible families with annual incomes of $165,000. For families with annual incomes of over $180,000 the CCS will be capped at $10,000 per child per year. This subsidy will replace the Child Care Benefit, Child Care Rebate and the Jobs, Education and Training Child Care Fee Assistance payments which will end on 30 June 2017.

The Tax System Self-Assessment

Australia has a self-assessment taxation system.

This means that your return is accepted initially by the Australian Taxation Office as truthful.

However, the ATO will check the validity of your claims by data matching and auditing. 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.

The responsibilities of taxpayers include: • Be truthful and cooperative in your dealings with us.

• Take reasonable care in preparing your tax returns and in keeping your records.

• Lodge your documents and pay any amounts payable by the due date.

The responsibilities of the ATO • Treat you fairly and reasonably.

• Treat you as being honest in your tax affairs unless you act otherwise.

• Offer you professional assistance to help you understand and meet your tax obligations.

• Accept you can be represented by a person of your choice and get advice about your tax affairs.

• Respect your privacy.

• Keep your information confidential in accordance with the law.

• Give you access to information we hold about you in accordance with the law.

• Give you advice and information you can rely on.

• Explain to you the decisions we make about your tax affairs.

• Respect your right to a review.

• Respect your right to make a complaint.

• Administering the tax system in a way that minimises your costs of complying.

• Be accountable for what we do.

Who needs to lodge a return?

If you have earned income over $18,200 in the 2015 financial year, you must lodge a return. If you earned less than this amount but had tax withheld from your salary you will also need to lodge a tax return. Even if you haven’t been employed, you may have been credited bank interest and paid withholding tax. 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 Lodgement Advice.

Record Keeping

As 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-Lodgement

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.

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 of the following year). To avoid penalty however, you must be registered as a client with a tax agent by 31 October.

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.

credited tax account with. It also includes money received from financial institution accounts and term deposits. NB If you 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

Income In general, income tax is calculated by subtracting allowable deductions from assessable income.

Assessable income can be obtained in a variety of ways: Salary and Wage Income

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). Other payments include: • Allowances can be for car, travel or transport, tools, clothing or laundry, dirt, site, risk, meal or entertainment or for qualifications held e.g. a first aid certificate.

• Any payment received under sickness or insurance policy for loss of income is usually considered assessable.

• Certain lump sum 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 labelled A B C D or E on your payment summary.

• Eligible Termination Payment (ETP) is a lump sum payment paid by an employer or a superannuation fund. Some of these payments receive concession tax treatment up to certain limits called caps. Areas include resignation, age retirement, redundancy, dismissal, death of an employee.

Investment Income

• Rental income when you rent out your property.

The rental income must go on the tax return of the taxpayer whose name appears on the title deed of the property. This is most often a 50% spilt between two taxpayers.

• Dividend income including dividends paid directly to you, dividends applied under a dividend reinvestment plan, dividends that were dealt with on your behalf and bonus shares that qualify as dividends.

• Interest income can include interest the ATO

Assessable government payments include; • Age pension • Newstart allowance • Youth Allowance • Austudy payment • Parenting payment (partnered) • Partner Allowance • Sickness Allowance • Special benefit • Widow Allowance • Exceptional circumstances relief payment • Interim income support payment • The following payments if you are 16 or older • Abstudy living allowance • Payments under the Veterans’ Children Education Scheme • Payments under the Military Rehabilitation And Compensation Act Education and Training Scheme 2004 (MRCA education allowance) • Other taxable Australian Government education or training payments • Community Development Employment Project (CDEP) payments Other Income

Business income may include earnings from your 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. There are certain tests that must be satisfied in order to gain treatment as a business (e.g. the ’business’ must make a consistent profit).

Capital Gains income could include any capital gain or capital loss on the disposal of certain assets. Reasons leading to a possible event can include: • An asset you own is lost or destroyed (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.

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• 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.

• You stop being an Australian resident.

This is a complex area of tax law and we recommend you consult a tax professional.

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 include: Bank Fees

Fees incurred due to having your salary paid directly into a bank account are a claimable expense.

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 identifies you as an employee.

• A single item of distinctive clothing, such as a jumper or tie, if it is compulsory for you to wear it at work. Generally having a 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 sun protection such as sunscreen, sunglasses and sunhats. n.b. Expenditure on sports clothes such as tracksuits, t-shirts, aerobics clothing, swimming costumes and running shoes is considered conventional clothing and is not an allowable deduction.

Donations and Gifts (including School Building Funds)

Donations must meet certain conditions. 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 • Property purchased during the 12 months before making the gift • Listed shares valued at $5,000 or less • Trading stock disposed of outside the ordinary course of business 4

NTEU TAX GUIDE 2015

• Cultural gifts Program Engine capacity Engine capacity Rate (cents • Heritage gifts (ordinary car) (rotary engine car) per km) Examples of payments that are 1,600cc / 1.6 litre or less 800cc / 0.8 litre or less 63 not gifts include: 1,601–2,600cc / 1.6–2.6 801–1,300cc / 0.801–1.3 74 • Purchases of raffle or art litre litre union tickets 1,301cc / 1.301 litre or 75 • Purchases of chocolates, pens 2,601cc / 2.601 litre or more more etc.

• The cost of attending lar course at the school. Even though the trip fundraising dinners, even if the cost exceeds the may provide social and cultural benefits to the value of the dinner students, the expenses incurred by the teacher • Membership fees are not deductible. However, if the trip is not • Payments to school building funds as an altercurriculum-related but forms an integral part of native to an increase in school fees the extra-curricular activities and the teacher • Payments where the person has an understand- accompanies students as a representative of the ing with the recipient that the payments will be school (e.g. school sporting events or school band used to provide a benefit for the donor competitions) the expenses would be allowable.

Contributions to school building funds can also be The deductibility of expenses incurred to inspect deductions. The ATO states that a school building a possible excursion venue prior to taking the fund has the following characteristics: students depends on the purpose and reasons for • The fund is a public fund. undertaking such an inspection; e.g. expenses associated with prior visit of a venue to ensure that it • The public fund is established and maintained meets safety requirements are allowable. Howevsolely for providing money for the acquisition, er, if a teacher visits a venue privately then decides construction or maintenance of a building.

• The building is used, or is to be used, as a school that it would make a good excursion venue, the private visit expenses are not claimable. or college, by a government or a public authority, or a non-profit society or association.

Home Office n.b. A deduction is not allowable for purchasing When you carry out work activities your home gifts for other teachers or students.: office, you can claim the heating, cooling, lighting “Teachers may outlay their own money to supply items to and cleaning as well as the decline in value of and students for their own individual needs (e.g. books and repairs to your home office furniture and fittings. uniforms); purchase gifts for students (e.g. Christmas gifts); The ATO has set a fixed rate of 34 cents per hour for purchase food and drinks for special occasions (e.g. student birthdays) and replace money lost by students (e.g. money these office expenses instead of keeping details of for bus fares and lunch). While employee teachers may actual costs. feel a moral, personal or social obligation to outlay these Also, the following may be applicable (apporexpenses, there is no connection between the expenditure incurred by the employee teacher and producing assessable tioned for private and work use): income.”

• Answering machines Excursions, School Trips and • Briefcase Camps • Calculators and electronic organisers • Computers and computer software The trips MUST be related to the curriculum or • Mobile phones , Telephones extra-curricular activities. Factors determining • Facsimile machines relevance would include the purpose of the trip, the activities undertaken, and the duties of the • Pagers teacher. For example, a teacher accompanies a class • Hiring equipment of school students on a day excursion to visit Parlia• Technical or professional publications ment House as part of the social studies curriculum.

• Teaching aids The purpose of the trip as well as the activities have Insurance a direct relevance to the curriculum therefore, all Insurance against the loss of income is usually a expenses would be deductible. legitimate expense.

Supervising students alone is not sufficient to It should be noted that this does not include make the expenses deductible. For example, a Private Health insurances and the like. teacher accompanies a group of students to visit their sister school. Half of the time is spent at the Motor Vehicle Expenses sister school engaging in social, classroom and These are claimed when you have used your vesporting activities. Half of the time is spent in hicle for work purposes. It does not include travel tourist activities. The trip is open to all students between work and home. and is not part of the curriculum of any particu-

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.

Method 1 – Cents per km.

This is the most common method, allowing a claim of up to 5000 business km for each car. 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 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

Expenses incurred 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. The first $250 of these expenses is not claimable. Such expenses may include: • Textbooks • Student union fees • Stationery • Course fees • Travel expenses • Decline in value of equipment.

NB In general, the costs associated with personal motivation seminars are not tax deductible.

Whilst they vary from course to course, the ATO’s view is that ‘the material covered is too general to be classed as relating specifically to incomeproducing activities.’

Tax Returns

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 lodgement, advice, costs of travel to and from the advisor and obtaining reference works.

Teaching aids

Items purchased must have a direct and relevant

use in carrying out your duties. Examples include: • Pens, pencils, markers/highlighters, stamps, stickers, paints, stationery, posters, maps, laminating.

• Storybooks, jigsaws, games, toys used by early childhood, primary school or special education teachers.

• Items used in cooking or sewing classes or science experiments.

• Prizes purchased to reward achievement and encourage students.

• Entrance fees for school excursions.

• Whistles and stopwatches used by physical education employee teachers.

• Calculators/calculator batteries • Maintaining classroom or school pets.

• 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 costs to inspect the property.

If only part of your property is rented out, these expenses must be apportioned.

Travel Expenses

Rebates and Offsets

If you have to travel away for work, then certain expenses may be deductible which may include: • air, bus, train, tram and taxi fares • bridge and road tolls • parking • car hire fees • meals • accommodation.

If a travel allowance is received and the amount of the claim for expenses incurred is no more than a reasonable amount, substantiation is not required. If the deduction claimed is more than the reasonable amount (rates outlined by the ATO depending on travel location) the whole claim must be substantiated, not just the excess over the reasonable amount.

If the dominant purpose in incurring the cost is the attendance at the conference or seminar then the existence of any private activity would be merely incidental and the cost would be fully deductible.

If the attendance at the conference or seminar is only incidental to a private activity (e.g. a holiday) then only the costs directly attributable to the conference or seminar is allowable deduction. The cost of accommodation, meals and travel directly relating to the private activity is not allowable.

Union and Professional Association Fees

You can claim for the cost of being a member of a Union or Association. See the boxed aside on p.6 for where to find your NTEU Tax Statement.

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

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 and private health insurance. This is a complicated area of tax. Seek professional guidance. Below is a basic outline of the major rebates.

Invalid Relative Tax Offset

If you maintained a dependent invalid relative you may be entitled to a tax offset depending on your adjusted taxable income.

Low Income Tax Offset

Low income earners can have their tax offset by a maximum of $445 if their taxable income does not exceed $37,000.

Parent or Spouse’s Parent Tax Offset

If you maintained your parent, your spouse’s parent you may be entitled to a tax offset depending on your adjusted taxable income.

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.

Senior Australians and Pensioners Tax Offset

The pensioner tax offset and the senior Australians tax offset have been combined to form the seniors and pensioners tax offset (SAPTO).

Zone Tax Offset

If you live and work in a remote area you may be entitled to the zone offset.

NTEU TAX GUIDE 2015

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Do your 2015 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 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

First Name Middle Name(s) Last Name D.O.B. T.F.N. Street Address Suburb Postcode State Email Address Home Phone Mobile Fax Personal Details

Signed Client ____________________________________________________________________ Date __________________________________________ Proceed to questionnaire...

Where to find your NTEU Tax Statement If you pay your fees via direct debit, credit card or invoice

Statement can be accessed from your online Member Tools page. Login in at www.nteu.org.au/members and click on Print Tax Statements in the Payments box. Statements will not be mailed out.

If you pay your fees via payroll deduction

Membership fees will appear on the PAYG summary supplied by your employer. Contact your Payroll Department for any inquiries regarding this.

TAFE members and ex-members

Tax statements will be sent to your home address in early July.

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NTEU TAX GUIDE 2015

Questionnaire

D1

QUESTION Who is your employer? Include any business who has given you a PAYG Summary.

Were you required to use your vehicle for work purposes?

If YES, place the approx km next to the appropriate box and complete D1A

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) D3 Did you have any “work related clothing” expenses?

If YES, place the cost next to the appropriate box (write details below)

D4

Have you incurred a self education expense? (There MUST be a direct connection between your self-education expense and your work as a teacher) If YES, place the cost next to the appropriate box.

NOTE - You cannot claim costs met by the school or costs that are reimbursed

DETAILS

YES / NO

PROOF REQUIRED PAYG Payment Summary

# 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.

#

#

#

# #

YES / NO

#

YES / NO

#

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.

YES / NO Please give brief description of course.

#

#

# #

#

Textbooks

#

Student union fees

#

Stationery Course fees Travel expenses Decline in value of equipment

# # # #

# Expense must be able to be proved if audited NTEU TAX GUIDE 2015

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QUESTION

DETAILS

PROOF REQUIRED

D5

Have you made any donations to registered YES / NO charities?

D6 If you used a tax agent last year, how much YES / NO were you charged? (claimable expense).

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 / NO This is usually a pro rata expense - apportioned for private and work use.

D9 Answering machines, telephones, facsimile YES / NO machines, mobile phones, pagers and other telecommunications equipment 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 D16 Work-related telephone calls.

YES / NO D17 Union and professional association fees YES / NO (usually listed on your group certificate – in which case, disregard) D18 Dedicated stopwatches YES / NO Please answer the following questions about your tax affairs Q1 Have you earned interest from any source? YES / NO

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# # #

# # # # # # # #

#

YES / NO YES / NO YES / NO YES / NO

Bank Statements

YES / NO

Superannuation Statement

Do you receive any Government pensions or YES / NO allowances incl FTB?

Q3

Do you have Private Health OR Income Protection Insurance (please specify)?

Q4 Have you sold an investment property this year?

Q5A Do you own shares?

Q5B Have you sold any shares this year?

Q6 Do you have another source of income (e.g. second job/business)?

Q7 Have you been charged any deductible interest? (e.g. investment loan, tax debt) Q8 Have you made any personal superannuation contributions on behalf of yourself or a spouse?

Q10 Do you have dependant children? (please indicate how many)

YES / NO

Q11 Do you have (or a share in) an investment property?

YES / NO If YES, please provide details on a separate sheet. We will call you at a convenient time to discuss specific details.

NTEU TAX GUIDE 2015

Please provide the agents name and address.

Bank interest - Call your bank to obtain the exact amount or use your July bank statement Centrelink Statement of Benefits - including Pensions, Job Start, etc Private Health Insurance Statement Purchase details and settlement details Dividend Statements Sales Certificates PAYG Payment Summary

Q2

# Expense must be able to be proved if audited

#

YES / NO

YES / NO

Liability Limited by a scheme approved under professional standards legislation.