NTEU Tax Guide 2013 by NTEU

NTEU TAX GUIDE 2013

www.nteu.org.au/tax

Contents Budget 2013..........................................1

Income................................................. 5

Australian Schooling DisabilityCare Australia Nation Building Health Services Retirement Income System

Salary and Wage Income Investment Income Government Income Other Income

1 1 1 1 1

ATO Focus 2013....................................1 Incorrect or Fraudulent Refunds Work-related Expenses Tax Avoidance Schemes Omitted Income (dividends, interest, capital gains, foreign) Income Tax Rates (Residents)

1 1 1 1 2

Changes for 2013 ............................... 2 Dependant Tax Offsets 2 Entrepreneurs Tax Offset 2 HELP Debt Statements 2 Medicare Levy Low Income Thresholds 2 Private Health Insurance Rebate & Medicare Levy Surcharge 2 Net Medical Expenses Tax Offset 2 Superannuation 3 Super Guarantee (SG) 3

Changes for 2014 and Beyond........... 3 Higher Education Loan Program (HELP) debt repayment discounts 3 Medicare Levy Increase 3 Self-education expenses 3 Superannuation 3 Family Payments System 3 Deferral of 2015/16 personal tax cuts – Clean energy future 3

The Tax System.................................. 4 Self-Assessment 4 Who needs to lodge a return? 4 Record Keeping 4 Self-Lodgement 4 Using a Tax Agent 4

5 5 5 5

Deductions......................................... 6 Bank Fees 6 Clothing 6 Donations and Gifts (including School Building Funds) 6 Excursions, School Trips and Camps 6 Home Office 7 Insurance 7 Motor Vehicle Expenses 7 Self- Education Expenses 7 Tax Returns 7 Teaching aids 8 Travel Expenses 8 Union and Professional Association Fees 8 Rental Property Expenses 8

Rebates and Offsets...........................9 Housekeeper Tax Offset Invalid Relative Tax Offset Low Income Tax Offset Mature Age Worker Tax Offset Net Medical Expenses Tax Offset Parent or Spouse’s Parent Tax Offset Private Health Insurance Rebate Senior Australians and Pensioners Tax Offset

9 9 9 9 9 9 9 9

Do your 2013 tax NOW!................... 10 Tax return questionnaire

NTEU contact details Teacher Tax contact details

14 14

NTEU Tax Guide 2013, Published by NTEU ©2013. Written by Teacher Tax. ISBN 978-0-9806500-3-7. 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 2013 The Federal Budget was brought down on 15 May 2013. The key initiatives were as follows. Australian Schooling

A National Plan for School Improvement will allocate $9.8 billion, over six years from 2014–15. This once-in-ageneration school reform will ensure that every student in every school gets the help they need. Also, an added $1.1 billion investment in early childhood education will be made.

DisabilityCare Australia

$14.9 billion over seven years, invested in Australia’s most fundamental social policy reform since Medicare. This will be funded by raising the Medicare levy by half a per cent. Nation Building

$24 billion invested in roads, including highways and rail in cities and regions. Health Services

$226 million invested in cancer prevention, detection, treatment and research, as well as providing better patient care

and support. $691 million over five years invested in new listings under the Pharmaceutical Benefits Scheme, including medications for chronic nerve pain, hepatitis C and Parkinson’s disease. Retirement Income System

From 1 July 2013 to 1 July 2019 the Superannuation Guarantee will increase from 9 to 12 per cent. $112 million pilot to assist age pensioners to downsize their family homes, via a means test exemption of up to $200,000 for ten years.

ATO Focus 2013 The Australian Taxation Office (ATO) has revealed its targets for 2012–2013. Target areas include the following. Incorrect or Fraudulent Refunds

The ATO will check all returns for incorrect claims through data mining and other analytical tools. Work-related Expenses

As claims for deductions of work-related expenses continue to increase, the ATO will continue sending advisory letters to people in high risk occupations. Particular attention will be focused on occupations that have shown a pattern of relatively high levels of claims. These include, but are not limited to: • Defence Force – non-commissioned officers. • Information Technology Managers. • Plumbers.

Tax Avoidance Schemes

High income earners seem more likely to be involved in tax avoidance schemes. This year the ATO will focus on investments by medical practitioners and other higher income individuals – particularly focusing on widely-marketed financial products that promise substantial tax benefits. Omitted Income (dividends, interest, capital gains, foreign)

Third party information supplied by employers, banks, insurance funds and other Government departments allows the ATO to detect income that may not have been declared.

who fail to lodge may be subject to penalties, in addition to having to pay interest on outstanding tax. Increasingly, where individuals fail to lodge despite our requests, we either issue a default tax assessment based on an estimate of income or refer the case for prosecution.” The Budget also outlined Additional ATO funding for compliance activities including $77.8 million over four years to improve compliance by expanding data matching with third party information.

“The comprehensive scope and timeliness of information now available to us means that we can readily identify people with outstanding returns and activity statements. Taxpayers

NTEU TAX GUIDE 2013

Changes for 2013 Dependant Tax Offsets

If your spouse was born on or after 1 July 1952, you can no longer claim a dependent spouse tax offset. However, you can claim the housekeeper and child housekeeper tax offsets if you were eligible for a zone or overseas forces tax offset. If you are not eligible for a zone or overseas forces tax offset, you may be entitled to claim the new dependant (invalid and carer) tax offset for a spouse born on or after 1 July 1952, parent, parent-in-law or invalid relative. To be eligible for the new offset their dependant must receive a government payment as an invalid or carer or be caring for someone who receives a government payment as an invalid. Entrepreneurs Tax Offset

The Entrepreneurs Tax Offset (ETO) has been abolished and cannot be claimed from 2012–13. HELP Debt Statements

The ATO will no longer issue an annual HELP statement. This will make it harder to keep track of your outstanding debts as well as estimating your expected compulsory repayment amount on your tax return. Your tax agent can get a current balance of your HELP account from the ATO. Medicare Levy Low Income Thresholds

For 2013, the Medicare Levy low income threshold for individuals will increase from $19,404 to $20,542 and for families from $32,743 to $33,693. For each dependent child the additional amount will also be increased to $3,094. The Medicare levy threshold for single pensioners eligible to claim the new Seniors and Pensioners Tax Offset has been increased to $32,279 2

NTEU TAX GUIDE 2013

Income Tax Rates (Residents) 2012–2013

Taxable income

Tax Rate

$0 - $18,200

$18,201 - $37,000

19c for each $1 over $18,200

$37,001 - $80,000

$3,572 plus 32.5c for each $1 over $37,000

$80,001 - $180,000

$17,547 plus 37c for each $1 over $80,000

$180,001+

$54,547 plus 45c for each $1 over $180,000

Private Health Insurance Rebate and Medicare Levy Surcharge

The private health insurance rebate and Medicare levy surcharge are income tested against the income thresholds in the table below. Net Medical Expenses Tax Offset

This tax offset is being phased out. If your adjusted taxable income (ATI) is below Threshold 1 in the table above then you can continue to claim an offset

of 20% of your net medical expenses over $2,120. If however, your ATI is above this threshold you can only claim an offset of 10% of your net medical expenses over $5,000. From 1 July 2013, taxpayers who received the offset in their 2012–13 income tax assessment will continue to be eligible for the offset in 2013–14 if they have eligible out-of-pocket medical expenses above the relevant claim threshold. Similarly, those who receive the tax offset in their 2013–14 income tax assessment will continue to be

Private Health Insurance: Income Test Thresholds for 2012-13

Unchanged

Threshold 1

Threshold 2

Threshold 3

Singles

$84,000 or less $84,001$97,000

$97,001$130,000

$130,001 or more

Families

$168,000 or less

$194,001$260,000

$260,001 or more

$168,001$194,000

Private Health Insurance Rebate

Under 65

30%

20%

10%

65-69

35%

25%

15%

70 or over 40%

30%

20%

1.0%

1.25%

1.5%

Medicare levy surcharge

Rates

0.0%

Family income threshold is increased by $1,500 for each dependent after the 1st child. You may be eligible for a private health insurance rebate if you were covered by private health insurance regardless of who paid for the policy. This does not apply if you were covered as a dependent child on a policy, but you will not have to pay the Medicare levy surcharge.

eligible for the offset in 2014–15. The offset will continue to be available for taxpayers with out-of-pocket medical expenses relating to disability aids, attendant care or aged care expenses until 1 July 2019 when DisabilityCare is fully operational. Superannuation

For 2013 there is a maximum contribution cap of $25,000 for all ages with a super balance less than $500,000. From

2014 this is proposed to rise to $35,000 for some age groups. The government previously announced that from 1 July 2012, individuals with ‘income’ greater than $300,000 will have their concessional contributions taxed at 30% and not at 15%. The ATO will now use a similar definition of ‘income’ for the measure to that used for calculating whether an individual is liable to pay the Medicare levy surcharge (i.e., ‘income for surcharge purposes’, which broadly

includes a taxpayer’s taxable income, reportable fringe benefits total, reportable superannuation contributions) Super Guarantee (SG)

The SG rate increases from 9% to 12% between 1 July 2013 and 1 July 2019. In addition the SG age limit of 70 will be removed from 1 July 2013, and employers will be required to contribute to complying super funds of eligible mature age employees aged 70 and older.

Changes for 2014 and Beyond Higher Education Loan Program (HELP) debt repayment discounts

Currently, there is a 10% discount for students who elect to pay their student contribution up-front and a 5% bonus on voluntary payments of $500 or more. However, from 1 January 2014, these discounts will be removed.

the money held the government has increased the threshold for which amounts are required to be transferred to the ATO. From 31 December 2015 the threshold will be increased from $2,000 to $2,500, and then to $3,000 from 31 December 2016. Individuals can reclaim their lost superannuation accounts transferred to the ATO at any time.

Medicare Levy Increase

Family Payments System

From 1 July 2014, the Medicare levy will increase by 0.5% (from 1.5% to 2%) to provide funding for DisabilityCare Australia. Low-income earners will continue to receive relief from the Medicare levy.

Abolition of the Baby Bonus

Self-education expenses

From 1 July 2014, self-education expense deductions will be limited to $2,000 annually. Superannuation

From 1 July 2014, the government will limit the tax exemption for earnings on Superannuation assets supporting retirement income streams to $100,000 p/a. Earnings above the $100,000 threshold will be taxed at the same concessional rate of 15%. Inactive Superannuation accounts can be transferred to the ATO for distribution. In order to reunite more members with their lost super and protect the real value of

From 1 March 2014, the Baby Bonus will no longer be available. Families eligible for FTB Part A will receive an additional loading when they have a baby ($2,000 for the first child (and all multiple births) and $1,000 for subsequent children). Continuing indexation pauses

Indexation pauses on higher income limits will continue for a further three years until 1 July 2017. Broadly, this means that the income limit for FTB Part B, the dependency tax offsets, the Paid Parental Leave and Dad and Partner Pay schemes will remain at $150,000. FTB Part A eligibility age

From 1 January 2014, FTB Part A will only be paid to families up to the end of the calendar year that their child, 16 or over, completes school. Youth Allowance will continue to be available for eligible

young people who need financial support for postsecondary study or while they are looking for work. FTB lump sum claims

Families that choose to wait until the end of the financial year to claim their FTB entitlement or Child Care Benefit will now have a grace period of one year instead of two years. This change will start for the 2012/13 entitlement year, meaning families will have 12 months from the end of the year (e.g. until 30 June 2014 in respect of the 2012/13 entitlement year) to claim their payments. Receiving payments overseas

From 1 July 2014, the length of time that families can be temporarily overseas and continue to receive family payments will reduce from three years to one year. Deferral of 2015/16 personal tax cuts – Clean energy future

The government will defer the personal income tax cuts that were to commence from 1 July 2015, which were part of the household assistance package to compensate for the expected impact of the carbon price. These tax cuts were to raise the tax-free threshold to $19,400 but with a lower carbon price forecast resulting in no anticipated increase in costs to households in 2016 these tax cuts have been deferred. NTEU TAX GUIDE 2013

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 4

NTEU TAX GUIDE 2013

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 2013 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.

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 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

Can include: • Age pension • Bereavement allowance • Carer payment • Disability support pension • Education entry payment • Parenting payment(single) • Widow B pension • Wife pension and either you or your partner was of age-pension age • Age service pension • Income support supplement • Defence Force Income support allowance • Invalidity service pension if you have reached age-pension age • Partner service 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 • ABSTUDY living allowance • Payment under the Veterans’ Children Education Scheme • Payment under the Military Rehabilitation and Compensation Act • CDEP income support component. 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. • 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. NTEU TAX GUIDE 2013

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.

Donations and Gifts (including School Building Funds)

Deductions can include:

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.

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. 6

NTEU TAX GUIDE 2013

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.

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 states that 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, by a government or a public authority, or a non-profit society or association. NB A deduction is not allowable for purchasing gifts for other teachers or students.: “Teachers may outlay their own money to supply items to students for their own individual needs (e.g. books and uniforms); purchase gifts for students (e.g. Christmas gifts); purchase food and drinks for special occasions (e.g. student birthdays) and replace money lost by students (e.g. money for bus fares and lunch). While employee teachers may feel a moral, personal or social obligation to outlay these expenses, there is no connection between the expenditure incurred by the employee teacher and producing assessable income.” Excursions, School Trips and Camps

The trips MUST be related to the curriculum or extra-curricular activities. Factors determining relevance would include the purpose of the trip, the activities undertaken, and the duties of the teacher. For example, a teacher accompanies a class of school students on a day excursion to visit Parliament House as part of the social studies curriculum. The purpose of the trip as well as the activities have a direct relevance to the curriculum therefore, all expenses would be deductible.

Supervising students alone is not sufficient to make the expenses deductible. E.g. A teacher accompanies a group of students to visit their sister school. Half of the time is spent at the sister school engaging in social, classroom and sporting activities. Half of the time is spent in tourist activities. The trip is open to all students and is not part of the curriculum of any particular course at the school. Even though the trip may provide social and cultural benefits to the students, the expenses incurred by the teacher are not deductible. However, if the trip is not curriculum-related but forms an integral part of the extracurricular activities and the teacher accompanies students as a representative of the school, the expenses would be allowable, e.g. school related sporting events or school band competitions. The deductibility of expenses incurred to inspect a possible excursion venue prior to taking the students depends on the purpose and reasons for undertaking such an inspection. E.g. the expenses associated with the prior visit of a venue to ensure that it meets safety requirements are allowable. However, if a teacher visits a venue privately then decides that it would make a good excursion venue, the private visit expenses are not claimable. Home Office

When you carry out work activities your home office, you can claim the heating, cooling, lighting and cleaning as well as the decline in value of and repairs to your home office furniture and fittings. The ATO has set a fixed rate of 34 cents per hour for these office expenses instead of keeping details of actual costs. Also, the following may be applicable (apportioned for private and work use): • Answering machines • Briefcase • Calculators and electronic organisers • Computers and computer software

• • • • • •

Mobile phones , Telephones Facsimile machines Pagers Hiring equipment Technical or professional publications Teaching aids

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. 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. 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 income-producing 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.

Engine capacity (ordinary car)

Engine capacity (rotary engine car)

Rate (cents per km)

1,600cc / 1.6 litre or less

800cc / 0.8 litre or less

1,601–2,600cc / 1.6–2.6 litre

801–1,300cc / 0.801–1.3 litre

2,601cc / 2.601 litre or more

1,301cc / 1.301 litre or more

NTEU TAX GUIDE 2013

Teaching aids

The 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 • Costs of maintaining classroom or school pets. Travel Expenses

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. NB 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 8

NTEU TAX GUIDE 2013

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. Your annual NTEU tax statement is available from 1 July in the Member area on the national website. Statements will not be mailed out. To download your tax statement: • Go to www.nteu.org.au. • Click on ‘Member Login’ in the top right hand corner. • ID = Your NTEU membership number • Password = Your surname in CAPS. • Go to ‘Tax Statement’ to view or print your tax statement. Note: If you pay via Payroll Deduction, your membership dues should be recorded on your PAYG summary by your employer. Please contact your payroll department for all matters related to the PAYG summary. 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 costs to inspect the property.

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

of-pocket medical expenses are above the relevant claim threshold). Similarly, taxpayers who receive the tax offset in 2013–14 will continue to be eligible for the offset in 2014–15. The offset will continue to be available for taxpayers with out-of-pocket medical expenses relating to disability aids, attendant care or aged care expenses until 1 July 2019 when DisabilityCare is fully operational.

Housekeeper Tax Offset

Parent or Spouse’s Parent Tax Offset

A housekeeper is a person who worked full time keeping house for you and cared for a child of yours aged under 21 years, your invalid relative or your spouse who received a disability support pension.

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

Invalid Relative Tax Offset

Private Health Insurance Rebate

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

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.

Low Income Tax Offset

Senior Australians and Pensioners Tax Offset

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

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

This Offset is being phased out. From 1 July 2012, this tax offset is only available to taxpayers born before 1 July 1957. Net Medical Expenses Tax Offset

This tax offset is being phased out. Depending on your adjusted taxable income (ATI) you can claim an offset as a percentage of expenses (20% over $2,120 or 10% over $5,000). From 1 July 2013, taxpayers who received the offset in 2012–13 will continue to be eligible for the offset in 2013–14 (if outNTEU TAX GUIDE 2013

Do your 2013 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

By Post. Use this form and questionnaire and post to: Teacher Tax, PO BOX 314, Bowral NSW 2576 The fee is $99 for NTEU members for a standard individual tax return. AUTHORITY TO ACT AS YOUR AGENT Personal Details

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

Signed Client _______________________________________________ Date _____________________ Proceed to questionnaire... 10

NTEU TAX GUIDE 2013

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)

Did you have any other travel expenses? (You cannot claim costs met by the school or costs that are reimbursed)

YES / NO

Did you have any “work related clothing” expenses?

YES / NO

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

A compulsory uniform – a set of clothing that, worn together, identifies you as an employee of an organisation having a strictly enforced policy that makes it compulsory for you to wear the uniform while at work.

A single item of distinctive clothing, such as a jumper or tie, if it is compulsory for you to wear it at work. Generally, clothing is distinctive if it has the employer’s logo permanently attached and the clothing is not available to the general public.

A non compulsory BUT registered uniform

The cost of buying, hiring, replacing or maintaining protective clothing. You can also claim a deduction for the cost of clothing that you use at work to protect your ordinary clothes from soiling or damage – for example, laboratory coats or art smocks.

# Expense must be able to be proved if audited NTEU TAX GUIDE 2013

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

Have you made any donations to registered charities?

YES / NO

If you used a tax agent last year, how much were you charged? (claimable expense).

YES / NO

Please provide the agents name and address.

If you have incurred the following expenses, provide brief details (as well as cost) D7

Calculators and electronic organisers

YES / NO

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

Answering machines, telephones, facsimile machines, mobile phones, pagers and other telecommunications equipment

YES / NO

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 12

NTEU TAX GUIDE 2013

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

If you have school children, did you have any eligible education expenses?

YES / NO

Receipts

Do you have a HECS or tax debt? If so, how much?

YES / NO

HECS Statement

Do you receive any Government pensions or allowances incl FTB?

YES / NO

Centrelink Statement of Benefits including Pensions, Job Start, etc

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

YES / NO

Private Health Insurance Statement

Has you family had net medical expenses of greater than $2060?

YES / NO

Details of expense and Medicare number.

Have you sold an investment property this year?

YES / NO

Purchase details and settlement details

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 NTEU TAX GUIDE 2013

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.

Liability Limited by a scheme approved under professional standards legislation.

Teacher Tax contact details

NSW & National PO Box 314, Bowral NSW 2576 Phone: (02) 8006 5020 NTEU contact details

Fax: (02) 4210 8682 (central fax system)

National Office

Email: info@teachertax.com.au

Phone: (03) 9254 1910

Web: www.teachertax.com.au

Fax:

(03) 9254 1915

Address: PO Box 1323, South Melbourne VIC 3205

Victoria

Email: national@nteu.org.au

Phone: (03) 9014 9590

Web:

www.nteu.org.au Western Australia

All Branch & Division contact details at www.nteu.org.au/branches

Phone: (08) 6102 0560