|
|
Income test
This income test for Family Tax Benefit Part A is a guide only and is effective from 1 July 2011.
The income test does not apply if you, or your partner get, an income support payment such as a pension, benefit or allowance, or a Department of Veterans’ Affairs service pension.
Income test
For Family Tax Benefit Part A, if your family’s adjusted taxable income for this financial year is $46,355 or less, your payment will not be affected by the income test.
If your adjusted taxable income is more than $46,355 for this financial year, your payment will reduce by 20 cents for each dollar above $46,355 until your payment reaches the base rate of Family Tax Benefit Part A.
Your Family Tax Benefit Part A will stay at that rate until your adjusted taxable income reaches $94,316 a year (plus $3,796 for each Family Tax Benefit child after the first). Family Tax Benefit Part A will reduce by 30 cents for every dollar over that amount until your payment reaches nil.
If you get more than the base rate of Family Tax Benefit A, a Maintenance Income Test may also apply.
Adjusted taxable income limit beyond which only base rate is paid ($pa)
| No. of children
0-12 years |
No. of children 13-15 years |
| Nil |
1 |
2 |
3 |
| Nil |
|
$67,398 |
$88,440 |
$109,482 |
| 1 |
$60,955 |
$81,998 |
$103,040 |
$124,082 |
| 2 |
$75,555 |
$96,598 |
$117,640 |
$135,682 |
| 3 |
$90,155 |
$111,198 |
$132,240 |
$153,282 |
Note: Income limit will be higher if you are eligible for Rent Assistance.
Adjusted taxable income limit at which Family Tax Benefit stops ($pa). These figures do not include the supplement.
| No. of children
0-17 years |
No. of children 18-24 years |
| Nil |
1 |
2 |
3 |
| Nil |
|
$100,448 |
$110,376 |
$121,290 |
| 1 |
$98,891 |
$108,819 |
$119,733 |
$130,646 |
| 2 |
$107,262 |
$118,175 |
$129,089 |
$140,002 |
| 3 |
$116,618 |
$127,531* |
$138,445* |
$149,358* |
Adjusted taxable income limit at which Family Tax Benefit stops ($pa). These figures include the supplement.
No. of children
0-17 years |
No. of children 18-24 years |
| Nil |
1 |
2 |
3 |
| Nil |
|
$102,870 |
$115,219 |
$128,553 |
| 1 |
$101,312 |
$113,661 |
$126,996 |
$140,331 |
| 2 |
$112,104 |
$125,439 |
$138,773 |
$152,108 |
| 3 |
$123,881 |
$137,216* |
$150,551* |
$163,885* |
Note:
* Income limit is higher than stated for 3 children aged 13-15.
Income limit is higher if you are eligible for Multiple Birth Allowance.
Payment per year figures include the effect of the $726.35 Family Tax Benefit Part A Supplement which is available only after the end of the income (financial) year when annual family income can be assessed. Families with income approaching these amounts may only be paid the Family Tax Benefit at the end of the income year and not as fortnightly payments.
You may receive some Family Tax Benefit as long as you have at least 35% care of a child. If you share care of a child for at least 14% of the time (2 or more nights per fortnight), you may be able to receive Rent Assistance, a Health Care Card, Remote Area Allowance, Child Care Benefit and access to the lower threshold of the Medicare Safety Net.
Penalties for not lodging on time range from $110 to $550 depending on how long the document is over due, and can increase to $2750 depending on the size of the entity.
Just recently the ATO has started to enforce the late lodgment penalties as described above, these penalties have been about for some years, but have not been enacted upon by the Australian Taxation Office.
In the last 4 – 6 weeks I have been receiving notices from the ATO in respect to clients late lodgment of tax returns. The penalties are $110 for every 28 days that they are late, up to a maximum of $550.
The due date for lodgment for the year ending 30th June 2010 was the 15th May 2011 if lodging though a Registered Tax Agent. The 15th of May has been the due date for several years, and is quite likely going to be the due date for future years, but please check with the ATO or your tax agent.
If you are lodging your own tax return via the Taxpack or the ATO’s E-tax, then the 31st October is the last date of lodgment.
If your net medical expenses exceed $2,000 for financial year ending 30th June 2011, then you may be eligible for a 20% tax offset for all amounts over the $2,000 threshhold.
Your net medical expenses is the balance that you have paid out of your pocket after health insurance and Medicare have contributed to the cost of the medical expense.
The Medical expenses used to claim the offset may be for yourself, your spouse (only 1 person per couple should make the claim otherwise 2 by $2,000 thresholds apply), children under 21 (including your adopted children, stepchildren, ex-nuptial children or children of your spouse) . Please note that other children may qualify, either contact your accountant or the Australian Taxation Office.
Medical expense that can be included as part of the tax offset need to be paid to legally qualified doctors, nurses or chemists and public or private hospitals.
To be eligible for the Medical Expense tax offset, payments need to be paid to the following medical professionals:-
- to dentists, orthodontists or registered dental mechanics
- to opticians or optometrists, including for the cost of prescription spectacles or contact lenses
- to a carer who looks after a person who is blind or permanently confined to a bed or wheelchair
- for therapeutic treatment under the direction of a doctor
- for medical aids prescribed by a doctor
- for artificial limbs or eyes and hearing aids
- for maintaining a properly trained dog for guiding or assisting people with a disability (but not for social therapy)
- for laser eye surgery, and
- for treatment under an in-vitro fertilisation program.
To be able to claim this tax offset you must be a resident of Australia for taxation purposes. Medical expenses while travelling overseas on holiday qualify as long as they are paid to a legally qualified professional in the above group.
Expenses which do not qualify as medical expenses include payments made for:-
- cosmetic operations for which a Medicare benefit is not payable
- dental services or treatments that are solely cosmetic
- therapeutic treatment where the patient is not formally referred by a doctor – a mere suggestion or recommendation by a doctor to the patient is not enough for the treatment to qualify; the patient must be referred to a particular person for specific treatment
- chemist-type items, such as tablets for pain relief, purchased in retail outlets or health food stores
- inoculations for overseas travel
- non-prescribed vitamins or health foods
- travel or accommodation expenses associated with medical treatment
- contributions to a private health insurer
- purchases from a chemist that are not related to an illness or operation
- life insurance medical examinations
- ambulance charges and subscriptions, and
- funeral expenses.
As I am writing this blog, the kids are just starting back to school for the first time in 2011. I thought it would be an opportune time to suggest keeping your receipts for your recent purchases that may be claimed on the 2011 tax return for the Education Tax Refund (ETR).
If you are receiving Family Tax Benefits Part A and have children in either Secondary or Primary School you may be eligible to claim the following as part of the Education Tax Refund:
- Eligible expenses include the cost of buying, establishing, repairing and maintaining any of the following items:
- laptop computers and home computers
- computer-related equipment such as printers, USB flash drives, as well as disability aids to assist in the use of computer equipment for students with special needs
- computer repairs
- home internet connections
- computer software for educational use
- school textbooks and other printed learning material, including prescribed textbooks, associated learning materials, study guides and stationery, and
- prescribed trade tools for secondary school trade courses.
The maximum that can be claimed for the Education Tax Refund for 2011 for Secondary School is 50% of $1,558 in eligible expenses and for Primary School it is 50% of $780 in eligible expenses.
Any amounts greater than the $1,558 and $780 amounts that is spent on the eligible education expenses can be carried forward and claimed in future years.
For computer purchases and internet connections used by the children there is no need to apportion the costs based on their usage.
I recently Googled to see what was out there on the subject, and was shocked at what I found. There seemed to be a lot of information, but many of the facts are so often lost in the stories told.
Lets dispell a myth first: there is no dollar threshold that constitutes being in business as an artist.
(e.g at $5,999 its a hobby and at $6,000 you are conducting a business)
So how do you determine that you are conducting a business?
The following indicators must be considered when determining whether you are carrying on a business;
- Whether the activity has a significant commercial purpose or character; this indicator comprises many aspects of the other indicators;
An amatuer will undertake their activities for personal pleasure, a professional on the other hand will use their abilities towards a commercail end.
- Whether the artist has more than just an intention to engage in business;
If it is your intention to carry on a business, do the following apply?
Regular activity, systematic, organised, business like approach to the activity, attempts to bring the art work or services to the public, actual sales of art work or services to the public and so on.
- Whether the artist has a purpose of profit as well as a prospect of profit from the activity;
Is your motive to make a profit? Are you marketing your art, creating industry contacts, offering and selling your work to the public, doing commissions and consulting, publically exhibiting your art, entering competitions and building your reputation?
Even if you are doing all of these and no profit is made, that doesn’t exclude your motives.
- Whether there is repetition and regularity of the activity;
As the artist are you producing regular work and participating in regular activities to promote and enhance your standing as an artist?
- Whether the activity is of the same kind and carried on in a similar manner to that of the ordinary trade in that line of business;
Are you carrying on your business like a recognised industry peer, do you have qualifications, recieve public recognition, becoming eligible for Government Grants, been offered positions on a board or as a teacher?
- Whether the activity is planned, organised and carried on in a business like manner such that it is directed at making a profit;
As an artist, do you keep good records of income and expenses, use contracts to record agreements, use business professionals, have a business plan, rent exibition space?
- The size, scale and permanency of the activity.
The activity must be beyond your personal needs and the volume of output must be sufficient enough to provide your work to the relevant markets.
So if you are in the business of being an artist you would be attempting to build public recognition, and awareness of your work, find suitable markets to sell your work so you can gain a profit from your abilities.
On the other hand if you are creating art for your pleasure and the sales that are made are to family and friends. The costs involved far outweight any income received and there is no intent to make a profit, then your creative work is considered a hobby.
I have attached a link to taxation ruling TR 2005/1, it contains about 45 pages of reading, with examples and cases.
If you took out a Student Financial Supplement Loan between 1993 and 2003, you will have an amount to repay if your repayment income is greater than the thresholds in the table below.
The repayment income is your taxable income plus any net rental losses, total reportable fringe benefits amounts, reportable superannuation contributions and exempt foreign employment income.
Hopefully you have told your pay office that you have the debt so that they can take extra tax out on your behalf to cover your obligations. For the 2008 – 09 year your employer will start withholding SFSS if your wages exceed $863 per week.
Unfortunately with the SFSS there is no provision to make any voluntary payments.
At the end of the year when you do your tax return, based on your repayment income the ATO will calculate how much SFSS will need to be paid
The SFSS that is calculated and the extra tax that has been taken out of your wages by your pay office is in most cases enough to offset each other.
2010 – 11
| Repayment income |
Repayment rate |
| Below $44,912 |
Nil |
| $44,912–$55,143 |
2% |
| $55,144–$78,273 |
3% |
| $78,274 and above |
4% |
You have or are currently studying at a university, you are most likely to have a HELP/HECS debt.
Hopefully you have notified your pay office that you have the debt so that they can take extra tax out on your behalf to cover your obligations. For the 2009 – 10 year your employer will start withholding HELP if your wages exceed $863 per week.
At the end of the year when you do your tax return, based on your HRI income (HRI= Taxable income + any net rental losses + total reportable fringe benefits amounts + reportable super contributions + exempt foreign employment income.) the ATO will calculate how much HELP will need to be paid. The rates for the 2010 – 11 year are set out in the table below.
The HELP that is calculated and the extra tax that has been taken out of your wages by your pay office is in most cases enough to offset each other.
Voluntary repayments of $500 or more can be made at any time, this will give you a discount of 10%. So if you make a payment of $1,000 it will reduce your debt by $1,100. The ATO has a simple calculator to work out the voluntary payments here.
2010–11
| HELP repayment income (HRI*) |
Repayment rate |
| Below $44,912 |
Nil |
| $44,912–$50,028 |
4% of HRI |
| $50,029–$55,143 |
4.5% of HRI |
| $55,144–$58,041 |
5% of HRI |
| $58,042–$62,390 |
5.5% of HRI |
| $62,391–$67,570 |
6% of HRI |
| $67,571–$71,126 |
6.5% of HRI |
| $71,127–$78,273 |
7% of HRI |
| $78,274–$83,407 |
7.5% of HRI |
| $83,408 and above |
8% of HRI |
From 1 July 2010 the new fuel tax credit rate is 15.543 cents per litre.
The new rate replaces the following the fuel tax credit of 16.443 from the 1st July 2009 to the 30th June 2010.
If you took out a Student Financial Supplement Loan between 1993 and 2003, you will have an amount to repay if your repayment income is greater than the thresholds in the table below.
The repayment income is your taxable income plus any net rental losses, total reportable fringe benefits amounts, reportable superannuation contributions and exempt foreign employment income.
Hopefully you have told your pay office that you have the debt so that they can take extra tax out on your behalf to cover your obligations. For the 2008 – 09 year your employer will start withholding SFSS if your wages exceed $829 per week.
Unfortunately with the SFSS there is no provision to make any voluntary payments.
At the end of the year when you do your tax return, based on your repayment income the ATO will calculate how much SFSS will need to be paid
The SFSS that is calculated and the extra tax that has been taken out of your wages by your pay office is in most cases enough to offset each other.
2009 – 10
| Repayment income |
Repayment rate |
| Below $43,151 |
Nil |
| $43,151–$52,980 |
2% |
| $52,982–$75,203 |
3% |
| $75,204 and above |
4% |
You have or are currently studying at a university, you are most likely to have a HELP/HECS debt.
Hopefully you have notified your pay office that you have the debt so that they can take extra tax out on your behalf to cover your obligations. For the 2009 – 10 year your employer will start withholding HELP if your wages exceed $829 per week.
At the end of the year when you do your tax return, based on your HRI income (HRI= Taxable income + any net rental losses + total reportable fringe benefits amounts + reportable super contributions + exempt foreign employment income.) the ATO will calculate how much HELP will need to be paid. The rates for the 2009 – 10 year are set out in the table below.
The HELP that is calculated and the extra tax that has been taken out of your wages by your pay office is in most cases enough to offset each other.
Voluntary repayments of $500 or more can be made at any time, this will give you a discount of 10%. So if you make a payment of $1,000 it will reduce your debt by $1,100. The ATO has a simple calculator to work out the voluntary payments here.
2009–10
| HELP repayment income (HRI*) |
Repayment rate |
| Below $43,151 |
Nil |
| $43,151–$48,066 |
4% of HRI |
| $48,067–$52,980 |
4.5% of HRI |
| $52,981–$55,764 |
5% of HRI |
| $55,765–$59,953 |
5.5% of HRI |
| $59,954–$64,919 |
6% of HRI |
| $64,920–$68,336 |
6.5% of HRI |
| $68,337–$75,203 |
7% of HRI |
| $75,204–$80,136 |
7.5% of HRI |
| $80,137 and above |
8% of HRI |
|
|
Recent Comments