The Levy of is imposed on taxable incomes greater than $50,000. The taxable income is your gross income less allowable deductions, (i.e your gross income may [...]]]> For the year ending 30th June 2012 an addition levy has been imposed by the Australian Government to help with the reconstruction costs of  the floods in January 2011.

The Levy of is imposed on taxable incomes greater than $50,000. The taxable income is your gross income less allowable deductions, (i.e your gross income may be $51,000 and you may have $2,000 in allowable deductions, in this case as your taxable income is less that $50k no flood levy will be added).

Below are the rates for the flood levy.

From the 1st July 2011 your employer has been taking out extra tax to cover the levy,  so it should not make a huge difference to your end of year tax return.

To be exempt from paying the levy you must fall into one of the following classes;

• Class 1 – Australian Government Disaster Recovery Payment recipient;
• You were eligible for an Australian Government Disaster Recovery Payment for a natural disaster that occurred during the 2010-11 financial year and you received the payment by 30th June 2012.
• Class 2 – Natural Disaster Relief and Recovery Arrangements;
• You were affected by an event that occurred during 2010-11 declared as a natural disaster under the Natural Disaster Relief and Recovery Arrangements, and you satisfy all four of the following requirements:
1. You were not eligible for an Australian Government Disaster Recovery Payment as a result of the disaster.
2. You were at least 16 years old at the time of the disaster or were receiving a social security payment from Centrelink at that time.
3. You were an Australian resident for social security purposes at the time of the disaster.
4. At least one of the following conditions applies:
• As a direct result of the disaster, at least one of the following conditions applies
• you were seriously injured
• your spouse, child, parent, legal guardian or brother or sister, who was an Australian citizen, was killed
• your principal place of residence was destroyed
• your principal place of residence sustained major damage
• you were unable to gain access to your principal place of residence for at least 24 hours
• you were stranded in your principal place of residence for at least 24 hours; or
• As a result of the disaster your principal place of residence was without electricity, or water, or gas, or sewerage service, or another essential service for at least 48 hours; or
• You are the principal carer of a dependent child under 16 years old who experienced any of the events listed above (under item 4).
• Class 3 – New Zealand citizens holding a special category visa who are not eligible for the Australian Government Disaster Recovery Payment;
• You are a New Zealand citizen who received an ex-gratia payment from Centrelink by 30th June 2012 for a natural disaster that occurred in the period 1 July 2010 to 30th June 2011.

The following rates for 2011-12 apply 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 [...]]]> 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)

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.

Adjusted taxable income limit at which Family Tax Benefit stops ($pa). These figures include the supplement.

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.

Just recently the ATO has started to enforce the late lodgment penalties as described above, these penalties have been about for some years, [...]]]>

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.

Your net medical expenses is the balance that you have paid out of your pocket after health insurance and Medicare have contributed to the [...]]]> 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.

If you are [...]]]> 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.

The repayment income is your taxable income plus any net rental losses, total reportable fringe benefits amounts, reportable superannuation contributions and exempt foreign [...]]]>

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 [...]]]>