Contents Budget 2011................................................... 1
Deductions...................................................... 5
$425 million to reward top performing teachers Phasing out the Dependent Spouse Tax Offset Discount reduction of 'up front' HEC's payers and 'voluntary repayments' to the ATO Targets for 2011 Holiday Travel as a Work Expense Investment Schemes Data Matching
Home Office Insurance Bank Fees Travel Expenses Motor Vehicle expenses What is itinerant? Self Education Expenses Gifts and Donations (including School Building Funds) Clothing Managing your tax affairs Other Deductions Rental property expenses
1 1 1 1 1 1 1
The Tax System................................................ 2 Changes for 2011 and Beyond Anstis Decision Donations to Charities Self Assessment How extensive is this? Who needs to lodge a return? Record Keeping The lodgment process – Self Lodgment The lodgment process – Using a Tax Agent
2 2 2 2 2 3 3 3 3
Income............................................................ 4 Salaries and Wages Allowances Sickness and Insurance Payments Lump Sums Rent Dividends Interest Pensions Other Government Allowances Payments, supplements and benefits Capital Gains Tax Business Income Exempt Income
4 4 4 4 4 4 4 4 4 4 5 5 5
5 5 5 5 5 6 6 6 7 7 7 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 Private health insurance rebate Senior Australians tax offset Mature age worker tax offset Net medical expenses tax offset Franking tax offset Termination Payments
7 7 7 8 8 8 8 8 8 8 8
Do your 2011 tax NOW!................................... 9 NTEU contact details Teacher Tax contact details
14 14
This guide has been prepared for NTEU members for their information only. Australian Tax Legislation is a complex body of law and members should seek qualified tax advice for their personal situation. While every effort has been made to ensure that the information in this guide is accurate, NTEU or Teacher Tax carries no responsibility for its application. The advice given is to be considered general. We encourage members to contact Teacher Tax on (02) 8006 5020 to discuss their personal situation. NTEU members will be offered a discount rate. NTEU Tax Guide 2011, Published by NTEU ©2011. Written by Teacher Tax. ISBN 978-0-9806500-3-7. Online version at www.nteu.org.au/tax
Budget 2011 The Federal Buidget was brought down on 10/5/2011. The budget at a glance included: • A deficit of $22.6 billion. • $3.5 billion surplus predicted for 2012/13. • $558 million to deliver training places through the National Workforce Development Fund. • A proposed reform of the vocational education and training system with $1.75 billion on offer to partner with the States and Territories. • $200 million to support school students with a disability. • $425 million to reward top performing teachers. • Changing the law so low income earners can receive more of the low income tax offset in their pay packets rather than at the end of the year. • Extending Family Tax Benefit Part A to include older teens • Discount reduction of ‘up front’ HEC’s payers and ‘voluntary repayments’ to the ATO. • Postponing Federal ‘Paternity Leave’ from 1 July to Jan 2012. • Phasing out the Dependent Spouse Tax Offset. • Changing the formula for calculating fringe benefits concessions on company vehicles. • Education Tax Refund extended to cover uniforms. • A ‘freeze’ on $150,000 as the ‘upper limit’ for Family Tax benefit. • The facility to access up to $1000 of Family Tax Benefit ‘in advance’ under certain circumstances.
to the HEC’s system. This will be reduced to 10%. Additionally, taxpayers who made voluntary lump sum payments to the ATO towards their HEC’s debt were entitled to a 10% discount. This has now been reduced to 5%.
The major aspects of the budget that may be of interest to NTEU members include the following.
Investment Schemes
$425 million to reward top performing teachers
Payments of bonuses are planned to the top 25,000 teachers in Australia (around one in ten) starting 2014. The bonus will be up to 10% of the teacher’s current wage.
Targets for 2011
People employed as earthmovers, flight attendants, carpenters and joiners, and real estate employees will be targeted this year. However, the following areas are still on the ATO’s radar and may be important to NTEU members. Holiday Travel as a Work Expense
The ATO is noticing a rise in claims for travel expenses as either work related, investment or self education. Whilst these can be legitimate claims, the ATO have warned taxpayers to adopt a cautious approach. The Commissioner stated on 3 May: Under these types of arrangements taxpayers purchase a self-paced study package and take it with them to a holiday destination of their choice, or participate in seminars whilst travelling overseas or on cruise ships. The taxpayers then claim a deduction for the cost incurred including travel, food and accommodation. ... there is ... the question whether the purpose of the travel is education rather than private. Legitimate arrangements have a clear relevant connection with income earning or self education activities. The ATO have warned (again) about entering into any scheme designed to minimise tax. Whilst some may be legitimate, the ATO’s message is: Doing your research and seeking independent financial advice from someone not involved with the arrangement before investing is your best protection against promoters of tax avoidance schemes.
Phasing out the Dependent Spouse Tax Offset
Data Matching
The dependant spouse offset provides tax relief when a couple without children only have one income earner. This change will only impact couples under 40 with no children where one of the couple does not work.
Last year, the ATO used 500 million transactions records as part of their data matching program. These include interest income, employment income, health records and share details. This program has reportedly been enhanced by the implementation of a new computer system at the ATO.
Discount reduction of 'up front' HEC's payers and 'voluntary repayments' to the ATO
Students who pay their university fees have been entitled to a 20% discount compared with those who defer their liability
It is important to note that the information the ATO supplies (either via e-tax or ‘pre fill’ reports to tax agents) may not be complete – and that the onus is legally on the individual to declare all relevant income. NTEU TAX GUIDE 2011
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The Tax System Changes for 2011 and Beyond Anstis Decision
The biggest change this year is the Anstis Decision which occurred in the High Court. The main issue was the deductibility of study expenses against Austudy. The decision effectively means that students can now claim their self education expenses against the Youth Allowance /Austudy/ABSTUDY. The ATO also initiated a program where they automatically amended the returns of taxpayers who they deemed eligible for this deduction dating back to 2007. This was done via a standard $550 deduction and subsequent refunds were issued. It is important to note that this deduction figure may have been actually higher for some students and they can submit an amended tax return for that year. The other consequence is that those job seekers in receipt of Newstart / Youth Allowance may be able to claim the costs of finding employment against this type of income. Amendments for this change can also be submitted for prior years – the ATO will not be automatically amending prior returns. If you think you have a claim, speak to your Tax Agent. Donations to Charities
The ATO have stated: People who donated to relief funds for disasters such as the floods in Queensland, New South Wales and Victoria, bushfires in Western Australia, Cyclone Yasi in Queensland, and the earthquakes in Christchurch and north-eastern Japan can claim donations between $2 and $10 without a receipt.
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NTEU TAX GUIDE 2011
Self Assessment
Australia has a self assessment taxation system. This means that your return is accepted initially by the Australian Taxation Office as truthful. This does not mean, however, that the ATO will not, from time to time, check the validity of your claims. This can occur, for example, by data matching and auditing. How extensive is this?
In a report published by the ATO, the following facts were revealed in relation to the 2010 financial year: • We amended over 298,600 individuals’ assessments while individual taxpayers self-amended over 200,000. • We reviewed 20,300 tax returns in relation to high risk refunds, resulting in revenue adjustments of approximately $55 million. • We reviewed 21,700 tax returns identified as potentially over claimed refunds or fraudulent claims, resulting in revenue adjustments of approximately $72 million. • We raised approximately $102 million in revenue adjustments from 910 reviews and audits of executives and directors. • We sent educational letters to over 400,000 individuals about claiming deductions for work-related expenses. • We reviewed or audited the records of over 1,000 people affected by capital gains tax, resulting in revenue adjustments of approximately $6 million. • We compared third-party information against tax returns, resulting in 314,000 income and benefits discrepancies requiring revenue
adjustments of approximately $232 million. • We undertook 335 compliance focused visits to tax agents. • We acquired and processed an additional 35 million share transactions in 2009-10, bringing the total share transactions we use in data matching to approximately 200 million. • We received an additional 1.4 million property records, bringing the total number of processed real property transactions used in our matching activities to approximately $16 million.We wrote to 760,600 individuals following up their lodgment, phoning 39,300 to further ensure they met their obligations, raising liabilities of approximately $67 million. In line with this, the ATO outlines the following responsibilities of taxpayers: 1. Be truthful in your dealings with us 2. Keep records in accordance with the law 3. Take reasonable care in preparing your tax returns and other documents and in keeping records 4. Lodge tax returns and other required documents or information by the due date 5. Pay your taxes and other amounts by the due date 6. Be cooperative in your dealings with us. In return, the ATO promise to work within the following service charter 1. Treat you fairly and reasonably 2. Treat you as being honest in your tax affairs unless you act otherwise 3. Offer you professional service and assistance to help you understand and meet your tax obligations 4. Accept you can be represented by
a person of your choice and get advice about your tax affairs 5. Respect your privacy 6. Keep the information we hold about you confidential in accordance with the law 7. Give you access to information we hold about you in accordance with the law 8. Give you advice and information you can rely on 9. Explain to you the decisions we make about your tax affairs 10. Respect your right to a review 11. Respect your right to make a complaint 12. Administering the tax system in a way that minimises your costs of complying 13. Be accountable for what we do. Who needs to lodge a return?
In general, if you have earned income over $6,000 in the financial year, you must lodge a return. Also, you will need to lodge a return if you have paid any tax at all. Even if you haven’t been employed, you may have been credited bank interest and paid withholding tax. Special rules apply to Senior Australians (a male aged 65 years or more or a male veteran or war widower aged 60 years or more who met the veteran pension age test. A female aged 63 years or more or a female veteran or war widow aged
58 years or more who met the veteran pension age test.) Check with your tax agent. Even if you’re not required to lodge a return, in some cases, you need to advise the ATO by filling out the prescribed Non Lodgment Advice. Record Keeping
Because the tax system is self assessment, it is essential that taxpayers be able to substantiate their income and expenses. In general, records should be kept for a period of five years from the date you receive your notice of assessment. Records should be kept in such categories as: • Payments you have received. • Expenses related to payments. • Acquisition or disposal of an asset – such as shares or a rental property. • Tax deductible gifts or donations. • Medical expenses. If you’re not sure whether or not to keep a record, the best advice is to err on the side of caution. It is better to have too many records than not enough. The lodgment process – Self Lodgment
Tax returns are submitted either by individuals or their tax agent to the Australian Tax Office on an annual basis. If you are doing the return yourself, it
must be lodged by 31 October. The ATO has the power to fine the taxpayer up to $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. 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 2012). To avoid penalty however, you must be registered as a client with that tax agent by 31 October 2011. 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 2011
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Income In general, income tax is calculated by subtracting allowable deductions from assessable income. Assessable income can be obtained in a variety of ways. The income we are likely most familiar with is that which is paid in return for our labour (employment income). It should be noted that payments received through the Governments various Economic Security Payments this financial year are generally not counted as assessable income. ASSESSABLE INCOME COULD INCLUDE: Salaries and Wages
Salary and wages are the main forms of payments made to an employee. Generally they are considered to be payments made: • to an individual • as remuneration for services, and • provided under a contract of service (employment contract). 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 4
NTEU TAX GUIDE 2011
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.
GOVERNMENT INCOME COULD INCLUDE: Pensions
Rent
A ge pension Widow B pension Age service pension Partner 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.
This is the amount of money you earn when you rent out your property.
Other Government Allowances
Dividends
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.
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:
May include: • dividends paid directly to you • dividends applied under a dividend reinvestment plan • dividends that were otherwise dealt with on your behalf, and • bonus shares that qualify as dividends Interest
• I nterest earned from financial institution accounts and term deposits unless you were a non-resident and have paid, or should have paid, non-resident withholding tax on that interest. • Interest the Tax Office gave you or credited you with. • If you opened or operated an account for a child and the funds in that account belonged to you, or you spent or used the funds in the account as if they belonged to you, you must include any interest from the account.
• • • • •
Payments, supplements and benefits
• • • • • •
A ustudy 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. 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, sur-
rendered 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
Business income must also be included on your tax return. This may include earnings from you operation through a Sole Trader, Partnership, Trust or Company structure. The ATO makes a distinction between what is considered a business and what is a hobby. Exempt Income
There is a wide range of income that is not assessed for tax purposes. In general, some types of Government pension’s allowances and other payments may not be deemed as assessable.
Deductions Deductions are allowable expenses or outgoings that have been incurred in earning any assessable income. An expense must be incurred, that is either paid, or definitely committed to be paid, Such as holding the Invoice. You must have written evidence to prove your claims if your total claims exceed $300. Deductions can fall into the following broad categories: Home Office
Some employees carry out work activities in the home office. There are many 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 26 cents per hour for home office expenses for heating, cooling, lighting and the decline in value of furniture instead of keeping details of actual costs.
Added to the expenses above, the following may be claimed on a pro 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.
Travel Expenses
If you have to travel away for work, then certain expenses may be deductible: These may include: • Air, bus, train, tram and taxi fares • Bridge and road tolls • Parking • Car hire fees • Meals • Accommodation. For a guide on the amounts that can be claimed, access www.ato.gov.au. Motor Vehicle expenses
These are claimed when you have used your vehicle for work purposes. It does not include travel between work and home. However, the following trips may be included: • Travel directly between two separate workplaces. • Travel for work-related purposes from your normal workplace to an alternative workplace and back to your normal workplace or directly home. • Travel between two workplaces or between a workplace and a place of business. • Are classed as itinerant. NTEU TAX GUIDE 2011
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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
63
1,601–2,600cc / 1.6–2.6 litre
801–1,300cc / 0.801–1.3 litre
74
2,601cc / 2.601 litre or more
1,301cc / 1.301 litre or more
75
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NTEU TAX GUIDE 2011
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, baby bonus and private health insurance. This is a complicated area of tax. Seek professional guidance. Below is a basic outline of the major rebates.
Education tax offset
Housekeeper tax offset
The thresholds are up to $794 per Primary School students and up to $1588 per Secondary School student.
A housekeeper is a person who worked full time keeping house for you and cared for: • A child of yours aged under 21 years. • Your invalid relative. • Your spouse who received a disability support pension.
Low income tax offset
Low income earners can have their tax offset by a maximum of $1500. That means that, if the taxpayer earns $16,000 or under, they effectively do not pay any tax.
This is a complicated area of tax. Seek professional guidance for your particular circumstances. NTEU TAX GUIDE 2011
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Invalid relative tax offset
In previous years, your taxable income and the separate net income of your dependant was used to assess your eligibility. From the 2009-10 income year, your and your dependant’s adjusted taxable income will be used. All other eligibility requirements apply, and remain unchanged. 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 $1,489 for each dependent parent or spouse’s parent. For the 2008-09 income year, you are not eligible for the parent or spouse’s parent tax offset if your taxable income is over $150,000. From 1 July 2009 (2009-10 income year), instead of using your taxable income to determine your eligibility to claim this offset, your adjusted taxable income will be used. Adjusted taxable income includes your taxable income plus additional income components. You will not be eligible for this offset if your adjusted taxable income is over $150,000. Private health insurance rebate
If you have private health insurance, you are entitled to a tax rebate. Most
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NTEU TAX GUIDE 2011
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. Senior Australians tax offset
Males aged over 65 and females aged over 63 are usually entitled to a tax offset. Age
Amount of rebate
< 65 yr
30% of premium paid
65– <70yr 35% of premium paid > 70 yr
40% of premium paid
Mature age worker tax offset
To encourage people to stay in the workforce, the ATO provide a maximum $500 tax offset for workers over 55 who meet certain conditions. This offset does not apply to people who earn net income greater than $63,000 pa. Net medical expenses tax offset
If net medical expenses for your family were over $2000 in the financial year, you can claim a rebate for 20c 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).
Franking tax offset
If you have been a shareholder, you usually receive dividends which have already had tax paid on them by the company. These are called franking credits. It is important to keep all share transactions record in a safe, orderly manner to allow for these calculations. Termination Payments
An Eligible Termination Payment (ETP) is a form of lump sum payment paid by an employer or a superannuation fund. These payments are taxed at a lower rate. As each ETP is very different, a registered tax agent should help you if you have received an ETP. They may include: • A payment in lieu of notice. • A payment for unused sick leave. • A payment for unused rostered days off. • A ‘golden handshake’ whether paid under contract, industrial award obligation or the employer’s desire to recognise past service. • Compensation for loss of job. • Compensation for wrongful dismissal. • Redundancy payment that exceeds the tax-free limit.* • A payment because of the employee’s permanent disability. • Payment under an approved early retirement scheme that exceeds the tax-free limit.
Do your 2011 tax NOW! At Teacher Tax, we offer competitive rates on tax returns. Our system has been designed BY Teachers FOR Teachers. There are 3 main ways of doing your tax with us: Email
Simply send your details to info@teachertax.com.au By Phone
Call us on (02) 8006 5020 or contact our nearest office and discuss your details. We can then guide you through our easy step by step process. By Post
Use this form and send us your documents. We have included a price guide below to let you know your fee.* Simply fill in the personal details and as many other details as possible and post to Teacher Tax, PO BOX 524, Macksville NSW 2447 * We guarantee the price of $110 (incl GST) per individual tax return. This is for individuals with relatively simple tax affairs. This includes all the deductions listed overleaf and if you answer questions 1 â&#x20AC;&#x201C; 7 only. If you answer questions 8 onwards, please send us your documents, but weâ&#x20AC;&#x2122;ll confirm a quote before processing. No obligation. Personal Details
First Name Middle Name(s) Last Name D.O.B. T.F.N. Street Address Suburb Postcode State Email Address Home Phone Mobile Fax Proceed to questionnaire overpage... Liability Limited by a scheme approved under professional standards legislation. NTEU TAX GUIDE 2011
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QUESTIONS
DETAILS
PROOF REQUIRED
Who is your employer? Include any business who has given you a PAYG Summary. D1
Were you required to use your vehicle for work purposes?
PAYG Payment Summary YES / NO
If YES, place the approx km next to the appropriate box and complete D1A
# Travel directly between two separate workplaces because you have two different employers – for example, you have a second job
#
Travel for work-related purposes from your normal workplace to an alternative workplace and back to your normal workplace or directly home – for example, if you need to go to a regional meeting/ excursion
#
Travel between two workplaces or between a workplace and a place of business – for example, between two schools or between your school and the Exam Marking Centre
#
Any other reasons? Please outline.
#
D1A
Give the details of your car (incl number plate, make/model and engine capacity)
D2
Did you have any other travel expenses? (You cannot claim costs met by the school or costs that are reimbursed)
YES / NO
#
D3
Did you have any “work related clothing” expenses?
YES / NO
#
If YES, place the cost next to the appropriate box (write details below)
#
A compulsory uniform – a set of clothing that, worn together, identifies you as an employee of an organisation having a strictly enforced policy that makes it compulsory for you to wear the uniform while at work.
#
A single item of distinctive clothing, such as a jumper or tie, if it is compulsory for you to wear it at work. Generally, clothing is distinctive if it has the employer’s logo permanently attached and the clothing is not available to the general public.
#
A non compulsory BUT registered uniform
#
The cost of buying, hiring, replacing or maintaining protective clothing. You can also claim a deduction for the cost of clothing that you use at work to protect your ordinary clothes from soiling or damage – for example, laboratory coats or art smocks.
#
# Expense must be able to be proved if audited 10
NTEU TAX GUIDE 2011
QUESTIONS D4
Have you incurred a self education expense? (There MUST be a direct connection between your selfeducation expense and your work as a teacher)
DETAILS
PROOF REQUIRED
YES / Please give brief description of course. NO
#
If YES, place the cost next to the appropriate box.
Textbooks
#
NOTE - You cannot claim costs met by the school or costs that are reimbursed
Student union fees
#
Stationery
#
Course fees
#
Travel expenses
#
Decline in value of equipment
#
D5
Have you made any donations to registered charities?
YES / NO
#
D6
If you used a tax agent last year, how much were you charged? (claimable expense).
YES / NO
Please provide the agents name and address.
If you have incurred the following expenses, provide brief details (as well as cost) D7
Calculators and electronic organisers
YES / NO
#
D8
Computers and computer software YES / This is usually a pro rata expense - apportioned for NO private and work use.
#
D9
Answering machines, telephones, facsimile machines, mobile phones, pagers and other telecommunications equipment
YES / NO
#
D10
Excursions, school trips and camps
YES / NO
#
D11
First aid courses
YES / NO
#
D12
Hiring equipment
YES / NO
#
D13
Technical or professional publications
YES / NO
#
D14
Seminars, conferences and training courses
YES / NO
#
D15
Teaching aids
YES / NO
#
# Expense must be able to be proved if audited NTEU TAX GUIDE 2011
11
QUESTIONS
DETAILS
PROOF REQUIRED
D16
Work-related telephone calls.
YES / NO
#
D17
Union and professional association fees (usually listed on your group certificate â&#x20AC;&#x201C; in which case, disregard)
YES / NO
#
D18
Dedicated stopwatches
YES / NO
#
Please answer the following questions about your tax affairs Q1
Have you earned interest from any source?
YES / NO
Bank interest - Call your bank to obtain the exact amount or use your July bank statement
Q2
If you have school children, did you have any eligible education expenses?
YES / NO
Receipts
Q3
Do you have a HECS or tax debt? If so, how much?
YES / NO
HECS Statement
Q5
Do you receive any Government pensions or allowances incl FTB?
YES / NO
Centrelink Statement of Benefits including Pensions, Job Start, etc
Q6
Do you have Private Health OR Income Protection Insurance (please specify)?
YES / NO
Private Health Insurance Statement
Q7
Has you family had net medical expenses of greater than $2000?
YES / NO
Details of expense and Medicare number.
Q8
Have you sold an investment property this year?
YES / NO
Purchase details and settlement details
Q9A
Do you own shares?
YES / NO
Dividend Statements
Q9B
Have you sold any shares this year? YES / NO
Sales Certificates
Q10
Do you have another source of income (e.g. second job/business)?
YES / NO
PAYG Payment Summary
Q11
Have you been charged any deductible interest? (e.g. investment loan, tax debt)
YES / NO
Bank Statements
# Expense must be able to be proved if audited 12
NTEU TAX GUIDE 2011
QUESTIONS
DETAILS
Q12
Have you made any personal superannuation contributions on behalf of yourself or a spouse?
YES / NO
Q13
Is there any other information that you feel will assist with the preparation of your return?
YES / NO
Q14
Do you have dependant children? (please provide dates of birth and names)
YES / 1 NO
PROOF REQUIRED Superannuation Statement
2 3
Q15
Do you have (or a share in) an investment property?
YES / If YES, please provide details on a separate sheet. NO We will call you at a convenient time to discuss specific details.
AGREEMENT â&#x20AC;&#x201C; Please sign and send
I, ___________________________________, of _________________________________________, Name Address hereby direct & instruct Teacher Tax to provide the following services and carry out the following work and to advise on my behalf, from time to time, as and when they fall due or as requested by me. 1. Accounting and management services. 2. Taxation planning. 3. Income tax returns. I personally undertake and guarantee to pay all professional fees and disbursements as agreed on behalf of myself or any entity previously mentioned. This does not diminish my rights.
AUTHORITY TO DEDUCT At my request and in consideration of not being required to pay in advance, I hereby direct and authorise Teacher Tax to receive, to bank and to deduct from ANY tax refund cheques or any other monies received from me (including third party cheques) or on my behalf, all fees in regards to tax returns prepared, accounting work performed, advice provided, disbursements, and any other fees incurred on my instructions, or the instructions of any person or entity listed below, such as solicitors fees, barrister fees, valuers fees, and any fees
or premiums paid on behalf of; 1. Myself. 2. Any of my relatives, including my husband/wife (defacto or otherwise), son, daughter, brother, sister, mother, father, mother-in-law, father-in-law etc. 3. Any other person or entity who may be related to me or of which I may be connected or associated with. I understand that a service fee as set by Teacher Tax at the appropriate time will be charged.
I warrant that I have authority to give the above undertakings and authorities with regard to payment of your fees. I understand that Teacher Tax will remit the balance of all monies due to me after deduction of each of the fees paid, etc as described above as soon as is practicable after the relevant bank clearance has been obtained. This authority shall remain in force in respect of future years unless revoked in writing. This does not diminish my rights. Signed Client _______________________________________________ Date ______________________ Liability Limited by a scheme approved under professional standards legislation. NTEU TAX GUIDE 2011
13
Teacher Tax contact details
NSW & National PO Box 524, Macksville NSW 2447 Phone: (02) 8006 5020 Fax: (02) 8580 5073 (central fax system) Email: info@teachertax.com.au Web: www.teachertax.com.au NTEU contact details
Victoria
National Office
PO Box 550W, Ballarat West VIC 3350
Phone: (03) 9254 1910
Phone: (03) 9014 9590
Fax:
(03) 9254 1915
Address: PO Box 1323, South Melbourne VIC 3205
Western Australia
Email: national@nteu.org.au
Phone: (08) 6102 0560
Web:
www.nteu.org.au Head Office
All Branch & Division contact details at www.nteu.org.au/branches
PO Box 831, Campbelltown NSW 2560