taxpack 2007 - australian taxation office€¦ · n you are entitled to the private health...
TRANSCRIPT
Lodge online.
e-tax – your online alternative for preparing and lodging your tax return
Go to www.ato.gov.au
Most refunds are issued within 14 days.
You may also need the separate publication TaxPack 2007 supplement – see page 8.
Lodge your tax return by 31 October 2007.
NAT 0976–6.2007
TaxPack2007To help you complete your tax return 1 July 2006 – 30 June 2007
Instructions for taxpayers
TaxPack 2007 provides advice and information to help you complete your 2007 tax return for individuals correctly.
I do not expect you to know more than what we have put in TaxPack 2007 and its related publications. However, I do ask you to take care in completing your tax return and make sure that the information you provide to us is complete and accurate.
There have been some changes since TaxPack 2006. To see if any apply to you, check the What’s new this year? section on page 9.
If you have access to the internet, you can prepare and lodge your tax return online using e-tax. It’s fast, free and easy, and most refunds are issued within 14 days.
We also have a range of advice and information services that can assist you when completing your tax return. The inside back cover provides details about how you can access our information services and how you can contact us.
Michael D’Ascenzo Commissioner of Taxation
OUR COMMITMENT TO YOUWe are committed to providing you with advice and information you can rely on and we make every effort to ensure that our advice and information is correct.
TaxPack 2007 is a public ruling for individuals who use it reasonably and in good faith to complete their 2007 personal tax return. This means that if we state the law incorrectly and as a result you do not pay enough tax, we will not ask you to pay the extra tax.
If any other information in TaxPack 2007 is incorrect and as a result you do not pay enough tax, we may ask you to pay the extra tax. However, we will not charge you a penalty or interest.
If our advice in TaxPack 2007 is misleading and you make a mistake as a result, we must still apply the law correctly. If that means you owe us money, we must ask you to pay it. However, we will not charge you a penalty or interest if you acted reasonably and in good faith.
If you make an honest mistake when you try to follow our advice and you owe us money as a result, we will not charge you a penalty. However, we will ask you to pay the money, and we may also charge you interest.
If correcting the mistake means we owe you money, we will pay it to you. We will also pay you any interest you are entitled to.
HOW TO USE TAXPACK 2007n Have on hand all your necessary documentation and records
for the 2006–07 income year (1 July 2006 to 30 June 2007).n Read all the preliminary pages – they provide valuable
information ranging from whether you need to lodge a tax return to how you can get a faster refund.
n Read each question caption carefully and:− if it applies to you, read the question carefully so that
you provide the required details on your tax return− if it does not apply to you, go to the next question.
n The Index at the back of TaxPack 2007 can help you to find information that is relevant to your circumstances.
n Make sure you complete the Medicare levy surcharge item (question M2) – it applies to all taxpayers.
n Use the checklist on page 112 before you lodge your tax return.
TAXPACK 2007 www.ato.gov.au �
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CONTENTSThesectionheadingsandquestionnumbersarecolour-codedtomatchthoseonthetaxreturnforyoureaseofreference.
T5 Privatehealthinsurance 91
T6 30%childcaretaxrebate 93
T7 Babybonus 95
Taxoffsetsfromthesupplementarysection 97
Totaltaxoffsets 97
PRIVATE HEALTH INSURANCE POLICY DETAILS 98
MEDICARE LEVY 99
M� Medicarelevyreductionorexemption 100
M2 Medicarelevysurcharge 104
ADJUSTMENTSA� Under18 108
A2 Part-yeartax-freethreshold 109
SPOUSE DETAILS – MARRIED OR DE FACTO 110
INFORMATIONChecklist–taxreturnpages1–8 112
Lodgingyourtaxreturn 112
Ifyoumadeamistakeonyourtaxreturn 113
Payingyourtaxdebt 114
Yournoticeofassessment 115
Privacyandaccesstoinformation 116
DealingwiththeTaxOffice 118
Yourrighttocomplain 118
Howweworkoutyourtax 119
Workingoutyourtaxrefundortaxdebt 120
Finalworksheet 130
TaxOfficeshopfronts 131
Index 132
Publications/Infolines insidebackcover
Doyouhavetolodgeataxreturn? 2Non-lodgmentadvice2007 4Whatareyourchoicesfordoingyourtaxreturn? 6Ifyouneedmorehelp 7DoyoualsoneedTaxPack 2007 supplement? 8What’snewthisyear? 9Importantmessages 10Completingpage1ofyourtaxreturn 11Exemptincome–incomeyoudonotpaytaxon 13
INCOME� Salaryorwages 15
2 Allowances,earnings,tips,director’sfeesetc 16
3 Lumpsumpayments 18
4 Eligibleterminationpayments 19
5 AustralianGovernmentallowancesandpayments 23
6 AustralianGovernmentpensionsandallowances 24
7 OtherAustralianpensionsorannuities 25
8 Attributedpersonalservicesincome 26
Totaltaxwithheld 27
9 Totalreportablefringebenefitsamounts 28
�0 Grossinterest 29
�� Dividends 30
Incomefromthesupplementarysection 34
Totalincomeorloss 35
DEDUCTIONSClaimingdeductionsforexpensesthatrelatetoyourworkasanemployee 36
D� Work-relatedcarexpenses 38
D2 Work-relatedtravelexpenses 45
D3 Work-relatedclothing,laundryanddry-cleaningexpenses 47
D4 Work-relatedself-educationexpenses 49
D5 Otherwork-relatedexpenses 52
D6 Low-valuepooldeduction 54
D7 Interestanddividenddeductions 56
D8 Giftsordonations 57
D9 Deductibleamountofundeductedpurchaseprice(UPP)ofanAustralianpensionorannuity 61
D�0 Costofmanagingtaxaffairs 63
Deductionsfromthesupplementarysection 64
Totaldeductions 64
Subtotal 64
LOSSESL1 Taxlossesofearlier
incomeyears 65
TAxAbLE INCOME OR LOSS 68
INFORMATIONDependantsandseparatenetincome 69
Familytaxbenefit 71
TAx OFFSETS 76
T� Spouse(withoutdependentchildorstudent),child-housekeeperorhousekeeper 77
EligibilityfortheseniorAustralianstaxoffset 84
T2 SeniorAustralians 86
T3 Pensioner 88
T4 Superannuationannuityandpension 90
TaxPack 2007isapublicrulinginaccordancewithDivision358ofSchedule1totheTaxation Administration Act 1953.However,itisapublicrulingonlyforindividualsactingreasonablyandingoodfaithwhileusingTaxPack 2007tocompletetheir2007personaltaxreturn.
©CommonwealthofAustralia2007
Thisworkiscopyright.ApartfromanyuseaspermittedundertheCopyright Act 1968,nopartmaybereproducedbyanyprocesswithoutpriorwrittenpermissionfromtheCommonwealth.RequestsandenquiriesconcerningreproductionandrightsshouldbeaddressedtotheCommonwealthCopyrightAdministration,Attorney-General’sDepartment,RobertGarranOffices,NationalCircuit,BartonACT2600orpostedathttp://www.ag.gov.au/cca
TaxpayersmaycopypartsofTaxPack 2007andTaxPack 2007 supplementfortheirpersonalrecords.
PublishedbytheAustralianTaxationOffice,Canberra,May2007.PrintedbyPMPPrintPtyLtd.DistributioncoordinatedbyPMPDistributionandeffectedbyPMPDistribution,AustraliaPostandGordon&GotchLimited.
ThankstothestaffoftheTaxOffice,taxprofessionalsandmembersofthecommunitywhocontributedtoTaxPack 2007.
2 www.ato.gov.au TAXPACK 2007
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Information
DO YOU HAVE TO LODGE A TAX RETURN?
n Youreceivedapension,allowanceorpaymentlistedatquestion6onpage24andyourtaxableincomewasmorethanthefollowingrelevantamount:– $21,637–ifyouweresingle,widowedorseparated
atanytimeduringtheyear– $20,710–ifyouhadaspousebutoneofyoulivedin
anursinghomeoryouhadtoliveapartduetoillness– $18,330–ifyoulivedwithyourspouseforthefullyear.
REASON 4You were not eligible for the senior Australians tax offset and you did not receive an Australian Government pension, allowance or payment listed at question 5 or 6 but you received or earned income.Youneedtolodgeataxreturnifyourtaxableincomeexceededthefollowingrelevantamount:n $6,000–ifyouwereanAustralianresidentfortax
purposesforthefullyearn $1,333–ifyouwereunder18yearsofageat30June
2007andyourincomewasnotsalaryorwagesn $1–ifyouwereanon-residentandyouhadincome
taxableinAustralia–excludingincomethathadnon-residentwithholdingtaxwithheldfromit
n yourpart-yeartax-freethresholdamount–ifyoubecameorstoppedbeinganAustralianresidentfortaxpurposes,youwillhaveapart-yeartax-freethresholdwhichdetermineswhetheryouhavetolodgeataxreturn.Page120showsyouhowtoworkoutthisamount.
OTHER REASONSYouneedtolodgeataxreturnifanyofthefollowingappliedtoyou:n Youaretheliableparentunderachildsupport
assessment.n Youhaveareportablefringebenefitsamountonyour
PAYG payment summary – individual non-business.n Youareentitledtotheprivatehealthinsurancetaxoffset
–seequestionT5onpages91–2.n Youcarriedonabusiness.n Youmadealossoryoucanclaimalossyoumadein
apreviousyear.n Youwereentitledtoadistributionfromatrustor
youhadaninterestinapartnershipandthetrustorpartnershipcarriedonabusinessofprimaryproduction.
n YouwereanAustralianresidentfortaxpurposesandyouhadexemptforeignemploymentincomeand$1ormoreofotherincome.(Pagess20–5inTaxPack 2007 supplement explainwhatismeantby‘exemptforeignemploymentincome’.)
n Youareaspecialprofessionalcoveredbytheincomeaveragingprovisions.Theseprovisionsapplytoauthorsofliterary,dramatic,musicalorartisticworks;inventors;performingartists;productionassociatesandactivesportspeople.
Thereareanumberofreasonsyoumayhavetolodgeataxreturnforthe2006–07incomeyear(1July2006to30June2007).Checkeachreasonlistedbelow,inorder,fromReason1toOtherreasons.Ifyou:n findareasonthatappliestoyourcircumstances,you
havetolodgeataxreturn.Youdonothavetoreadanyfurtheronthispage–gotopage5.
n don’tfindareasonthatappliestoyou,gotothenextpagetofindoutifyouneedtocompleteaNon-lodgment advice 2007.
NOTEYoucanusetheDoIneedtolodgeataxreturn?toolonourwebsitetofindoutifyouhavetolodgeataxreturnforthe2006–07incomeyear–gotowww.ato.gov.au/individuals
REASON �You paid tax during 2006–07.YouneedtolodgeataxreturnifyouwereanAustralianresidentfortaxpurposes(seepages11–12)andyou:n hadamountsoftaxwithheldfromincomeyoureceived
orearnedn paidanamountunderthepayasyougo(PAYG)
instalmentsystemduringtheyearorn hadamountswithheldfrominterestbecauseyoudidnot
quoteyourtaxfilenumber(TFN)orAustralianbusinessnumber(ABN)totheinvestmentbody.
REASON 2You were eligible for the senior Australians tax offset. You must meet all four conditions set out on pages 84–5.Youneedtolodgeataxreturnifyourtaxableincome(notincludingyourspouse’s)wasmorethanthefollowingrelevantamount:n $24,867–ifyouweresingle,widowedorseparatedat
anytimeduringtheyearn $23,600–ifyouhadaspousebutoneofyoulivedin
anursinghomeoryouhadtoliveapartduetoillnessn $20,680–ifyoulivedwithyourspouseforthefullyear.
REASON 3You received an Australian Government pension, allowance or payment but you were not eligible for the senior Australians tax offset.Youneedtolodgeataxreturnifanyofthefollowingappliedtoyou:n Youreceivedanallowanceorpaymentlistedat
question5onpage23andyouhadothernon-exemptincome,whichtogethermadeyourtaxableincomemorethan$10,000.
TAXPACK 2007 www.ato.gov.au 3
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?n Youreceivedincomefromdividendsordistributions
exceeding$6,000(or$416ifyouwereunder18yearsofageat30June2007)andyouhadfrankingcreditsattachedoramountswithheldbecauseyoudidnotquoteyourtaxfilenumberorAustralianbusinessnumbertotheinvestmentbody.
n YoumadepersonalcontributionstoacomplyingsuperannuationfundorretirementsavingsaccountandwillbeeligibletoreceiveaSuperCo-contributioninrelationtothosecontributions.
Deceased estateIfyouarelookingaftertheestateofsomeonewhodiedduring2006–07,considerallthereasonsontheirbehalfand,ifataxreturnisnotrequired,completetheNon-lodgment advice 2007 onthenextpageandsendittous.Ifataxreturnisrequired,seepage12formoreinformation.
Franking creditsIfyouhaveafrankingcreditshownonyourdividendstatementoryourdistributionstatementfromamanagedfundfor2006–07youmaybeabletoclaimarefundofthisfrankingcreditwithoutlodgingataxreturn.
SeeRefund of franking credits instructions and application for individuals 2007(NAT4105–6.2007)formoreinformation.Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
baby bonusIfyouarenotrequiredtolodgeataxreturnfor2006–07youcanlodgeyourbabybonusclaimonitsown:n onlineusinge-taxwhichhasaseparatebabybonus
application–gotowww.ato.gov.auformoreinformation,or
n byusingthepublication Baby bonus instructions and claim 2007(NAT6580–6.2007)andlodgingyourclaimbymail.
Ifyouarelodgingbothaclaimforbabybonusandanapplicationforarefundoffrankingcredits,youmustsendthemtoustogetherinoneenvelope.Youcanalsolodgethemtogetherusinge-taxbutyouwillberequiredtocompleteafulltaxreturninthee-taxapplication.
ThepublicationBaby bonus instructions and claim 2007isavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
30% child care tax rebateIfyoudonotneedtolodgea2007taxreturnbutwanttotransferyour30%childcaretaxrebateentitlementtoyourspouse,thenyoucan:n lodgethetransferadviceonlineusingthetransferadvice
ine-tax–gotowww.ato.gov.auformoreinformation,orn usethepublication30% child care tax rebate
instructions and transfer advice for individuals 2007 (NAT14719–06.2007)–availableatwww.ato.gov.auortofindouthowtogetaprintedcopy,seetheinsidebackcover.
Youwillbeeligibleforthe30%childcaretaxrebateifintheperiod1July2005to30June2006you:n hadachildinapprovedchildcaren wereentitledtoreceivechildcarebenefit,andn passedthework/training/studytestforthepurposes
oftherebate.
If you do not need to lodge a tax returnIfyoudonotneedtolodgeataxreturn,youshouldcompletethenon-lodgmentadviceonthenextpageandsendittousunlessoneofthefollowingappliestoyou:n Youhavealreadysentusataxreturn,non-lodgment
advice,formorlettertellingusthatyoudonotneedtolodgeataxreturnforallfutureyears.
n Youarelodgingababybonusclaimand/orapplyingforarefundoffrankingcreditsfor2007.
n Youronlyincomewasfromanallowanceorpaymentlistedatquestion5onpage23oryoureceivedapension,allowanceorpaymentlistedatquestion6onpage24andyourtaxableincomewaslessthantherelevantamountinReason2(ifyouareeligiblefortheseniorAustralianstaxoffset)orReason3.(Theagenciesthatpaythesehaveprovidedinformationforustodeterminethatyoudonotneedtolodgeataxreturn.)
Tax Help – serving the communityARE YOU ON A LOW INCOME?FREE HELP WITH YOUR TAX RETURN
Ifyouwanttocompleteyourowntaxreturn,applicationforarefundoffrankingcreditsorbabybonusclaimbutthinkyoumayneedsomeassistance,thenTaxHelpmaybetheanswer.Wetrainandsupportthisnetworkofcommunityvolunteerstohelpyou.
TaxHelpisafreeandconfidentialserviceforpeopleonlowincomes.PeoplewhouseTaxHelpincludeseniors,peoplefromnon-Englishspeakingbackgrounds,peoplewithadisability,Aboriginalpeople,TorresStraitIslanderpeople,andstudents.
Volunteerscanexplainyourtaxobligationsandhelpyouprepareyourtaxreturnaccurately.Theycanhelpyouifyou
haveincomefromAustralianandoverseaspensions,salaryorwages,interest,dividendsandgovernmentallowancesandbenefits.Volunteerscannothelpwithmorecomplextaxaffairssuchasbusinessincomeandincomefromrentalproperties.
ThereareTaxHelpcentresthroughoutAustralia.Ifyouwanttovisitoneofthetrainedvolunteers,youneedtomakeanappointment.Takeallyourrelevantpaperswithyouwhenyouvisit.
FormoreinformationortofindoutwhereyournearestTaxHelpcentreis,phonethePersonalInfolineon132861.
4 www.ato.gov.au TAXPACK 2007
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Non-lodgment advice 2007� July 2006 to 30 June 2007
Print neatly in BLOCK LETTERS with a black or blue ballpoint pen only. Do not use correction fluid or tape.
Your phone number during business hours – if it is convenient
AreacodePhone
number
Your postal address
Suburbortown
Countryifnot
AustraliaState Postcode
Surnameorfamilyname
Givennames
Title–forexample,Mr,Mrs,Ms,MissYour name
Your date of birth
DAY MONTH YEAR
Your tax file number
TheTaxOfficeisauthorisedbytheTaxation Administration Act 1953 torequestyoutoquoteyourtaxfilenumber(TFN).ItisnotanoffencenottoquoteyourTFN.However,yourTFNhelpstheTaxOfficetocorrectlyidentifyyourtaxrecords.
Have you changed your postal address since your last tax return?
Printtheaddressonyourlastnoticeofassessmentortheaddressyoulasttoldusabout.
YES
NOSuburbor
townCountry
ifnotAustralia
State Postcode
Use the pre-addressed envelope provided with TaxPack to send your non-lodgment advice to the Tax Office by 3� October 2007. If you are not using the pre-addressed envelope, see pages ��2–�3 for more information and the address to use.
Date
The tax law imposes heavy penalties for giving false or misleading information.
Signature
IdeclarethattheinformationIhavegiveninthisnon-lodgmentadviceistrueandcorrect.Seetheprivacyinformationonpages116–117.
DAY MONTH YEAR
Reason for not lodging a tax return
Iwillnothavetolodgeataxreturnforfutureyearsbecause:
Iwillnothavetolodgeataxreturnfor2007becausenoneofthereasonslistedonpages2–3inTaxPack 2007apply.
TAXPACK 2007 www.ato.gov.au 5
Your alternative to TaxPack 2007
Lodge online using e-taxMost refunds in 14 daysUser-friendlystep-by-stepprocessHelpisavailableonlineoroverthephoneSafeandsecure
Gotowww.ato.gov.au
6 www.ato.gov.au TAXPACK 2007
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WHAT ARE YOUR CHOICES FOR DOING YOUR TAX RETURN?
Signing your tax returnYoumustsignanddatetheTaxpayer’s declaration onpage8ofyourtaxreturntoconfirmthattheinformationonyourtaxreturnistrueandcorrect.Ifaregisteredtaxagentpreparesyourtaxreturn,youmustalsosignadeclarationstatingthat:n youhaveauthorisedtheagenttolodgeyourtaxreturn,
andn theinformationyouprovidedtotheagentforthe
preparationofyourtaxreturnistrueandcorrect.
Someoneelsemaysignyourtaxreturnonyourbehalfiftheyhaveyourauthorityunderapowerofattorney.AcertifiedcopyofthecurrentpowerofattorneymustbeattachedtoyourtaxreturnifyouhavenotpreviouslylodgedacertifiedcopywiththeTaxOffice.
MAKING IT EASIER TO COMPLYAspartofourprogramtomaketax‘easier,cheaperandmorepersonalised’wearecurrently:n providingashorttaxreturnthatcanbelodgedover
thephoneorbymail(Wewouldhavesentittoyouifyouwereeligibletouseit.)
n expandinge-tax,ouronlinelodgmentservice,forexample,youcannowsavetimeandpre-fillyoure-taxreturnwith– paymentdetailsfromCentrelinkandtheDepartment
ofEducation,ScienceandTraining– interestorunittrustdistributiondetailsfromsome
banks,creditunionsandotherfinancialinstitutions– dividenddetailsfromsomeshareregistries– medicalexpensesdetailsfromMedicareAustralia
n providingcalculatorsanddecisiontoolstohelpyoun tailoringourwebsitetoparticularaudiences–for
example,ato.gov.au/youthforunder-25s,andn providingapersonaltaxrecordkeeperthatwillhelp
youkeepyourtaxrecordsfortheyear.
MOREINFORMATIONYouwillfindmoredetailaboutourplansinMaking it easier to comply.Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
IN THE FUTUREWhenusinge-taxyouwillbeabletopre-fillyoure-taxreturnwithevenmoreinformation,suchassalaryandwagesdetails.Thiswillsaveyoutime,andreducethechancesoferror.Yourtaxagentwillalsohaveaccesstothisinformation.
LODGE ONLINE USING E-TAx Toprepareandlodgeyourtaxreturnonline,usee-tax–gotowww.ato.gov.au
e-taxisauser-friendlystep-by-stepprocess.Itissafeandsecure,withbuilt-inchecksandcalculatorstohelpyougetitright.Helpisavailableonlineandoverthephone.Mostrefundsareissuedwithin14days.
DO IT YOURSELF USING TAXPACK 2007Justfollowtheinstructionsonthefollowingpagesandmakesureyoulodgeyourtaxreturnby31October2007.Youshouldnotlodgeyourtaxreturnifitisincomplete.Ifyouthinkyouwillstillbemissinginformationon31October,askusifyoucanlodgeatalaterdate.Pages10–11tellyouhowtodothis.
SOMEONE ELSE CAN DO IT FOR YOU
Family member or friendAfamilymemberorfriendcanhelpyoubuttheycannotchargeyouafee.
Evenifafamilymemberorfriendhelpsyoutoprepareyourtaxreturn,youmustsignityourselfandyouarestilllegallyresponsiblefortheaccuracyoftheinformationonyourtaxreturn.SeeSelf-assessment–it’syourresponsibilityonpage10.
Tax Help community volunteersTaxHelpisanetworkofcommunityvolunteerstrainedtohelppeoplepreparetheirtaxreturns,babybonusclaimsandclaimsforrefundsoffrankingcredits.Thisfreeserviceisavailabletopeopleonlowincomes–includingpeoplewhoareseniors,arefromnon-Englishspeakingbackgrounds,haveadisability,areAboriginalorTorresStraitIslanders,orarestudents.Seepage3 formoreinformation.
Registered tax agentsRegisteredtaxagentsaretheonlypeoplewhocanprepareandlodgeyourtaxreturnforafee.Youshouldensurethatyouareusingaregisteredtaxagent.Alistofregisteredtaxagentscanbefoundatwww.tabd.gov.auoryoucancheckwiththeTaxAgents’Boardon1300362829.Ifyoudidnotgotoataxagentlastyear–oryouwillbegoingtoadifferenttaxagentthisyear–makesurethatyouseethembefore31October2007.
TAXPACK 2007 www.ato.gov.au 7
IF YO
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IF YOU NEED MORE HELP
Youcanaskforareviewofyourprivaterulingifyoudisagreewithit.However,ifwehaveissuedanassessmentfortheperiodtowhichtherulingrelates,theprivaterulingcannotbereviewed.Ifwehaveissuedyourassessmentyoucanaskforyourassessmenttobereviewed.Wesendyoudetailsofthereviewprocedureswhenwesendyourrulingtoyou.
Oral rulingsYoucanapplyforanoralrulingfromtheTaxOfficeoverthephoneonasimplenon-businesstaxenquirythatrelatesspecificallytoyourowntaxaffairsorthetaxaffairsofsomeoneforwhomyouarethelegalpersonalrepresentative.AnoralrulingisbindingontheTaxOfficeinmuchthesamewayasaprivateruling.
Tobeeligibleforanoralrulingyoumustmeetcertainconditions.Yourenquirymustbeaboutasimplenon-businessrelatedincometaxmatterandyoumustbeabletoconfirmyouridentity.YourTFNandmostrecentnoticeofassessmentwillusuallybesufficientproofofidentity.
Wewillconfirmyoureligibilityforanoralrulingbyaskingyouaseriesofquestions.Ifyoureceiveanoralrulingwewillprovideyouwithareceiptnumberforyourruling.
TogetfurtherinformationortoapplyforanoralrulingphonethePersonalInfoline(seetheinsidebackcover).
Product rulingsTofindoutifthereisaproductrulingforamanagedinvestmentschemeyouhaveinvestedin,visitourwebsiteatwww.ato.gov.au/atpwhichhasmoreinformationaboutproductrulingsandlistsofcurrentproductrulings.
Aproductrulingprovidescertaintyforinvestorsinthearrangementitrelatestobyconfirmingthatthetaxbenefitssetoutintheproductrulingareavailable,providedthatthearrangementiscarriedoutinaccordancewiththedetailsprovidedbytheapplicantanddescribedintheproductruling.
PUbLICATIONS
TaxPack 2007 referred publicationsBecausewecan’tcovereverythinginTaxPack 2007 and TaxPack 2007 supplement,wewillsometimesreferyoutootherpublicationsthatwillhelpyoutocompleteyourtaxreturn.Somepublicationsareessentialtocompletesomeitems.Thesepublicationsareavailableonourwebsiteortofindouthowtogetprintedcopies,seetheinsidebackcover.
Tax returnsAdditionalcopiesoftaxreturnsareavailablefromourPublicationsDistributionServiceandshopfronts.
TaxPack 2007 and TaxPack 2007 supplementFrom1Julyto31October2007youcangetadditionalcopiesofTaxPack 2007 and TaxPack 2007 supplementfrommostnewsagents.CopiesarealsoavailableallyearfromourPublicationsDistributionService(seetheinsidebackcover)andshopfronts.
YOU CAN VISIT OUR WEbSITEYoucanvisitourwebsiteatwww.ato.gov.auforinformationonanythingthatyoureadinTaxPack 2007.
Youcanusethetoolsandcalculatorsonthewebsitetohelpyoucompleteyourtaxreturn.
YOU CAN PHONE US Youcanphoneuson132861ifyouneedassistancewithaquestioninTaxPack 2007orTaxPack 2007 supplement.Ifyoudecidetophoneus,haveyourTaxPack 2007 orTaxPack 2007 supplementhandy.Seetheinsidebackcoverforthecorrectphonenumbertouse.
Wecanofferamorepersonalisedserviceifyouprovideyourtaxfilenumber(TFN)andhaveyourlastnoticeofassessmentwithyouwhenyouphoneus.
IfyourequireaccesstoyourTaxOfficerecordsyouwillbeaskedtoproveyouridentitybyprovidingyourTFNandeitherdetailsfromyourlastnoticeofassessmentorsomepersonaldetails.
Ifyouwouldliketovisitusandspeaktousinperson,phonethePersonalInfolineon132861foranappointment.
Hearing or speech impairmentIfyouaredeaforhaveahearingorspeechimpairment,youcanphoneusthroughtheNationalRelayService:n IfyouareaTTYormodemuser,phone133677
andaskforthenumberyouwant.For1800freecallnumbers,phone1800555677andaskforthenumberyouwant.
n Ifyouareavoice-only(speakandlisten)user,phone1300555727andaskforthenumberyouwant.For1800freecallnumbers,phone1800555727andaskforthenumberyouwant.
YOU CAN ASK FOR A RULING
Private rulingsIfyouhaveacomplexqueryaboutyourtaxaffairs,youcanaskusforaprivaterulingthatwillrelatetoyourparticularcircumstances.Todothis,eithercontactusorcompleteaPrivate ruling application form (non-tax professionals) (NAT13742)whichisavailableonourwebsite.
Lodgeyourtaxreturnbytheduedate,evenifyouarewaitingforthereplytoyourprivateruling.Youmayneedtorequestanamendmenttoyourtaxreturnonceyouhavereceivedtheprivateruling.
Wepublishallprivaterulingsonourwebsite.(Beforewepublishthem,weeditthetexttomakesurewedonotpublishinformationthatidentifiesyou.)Formoreinformation,seeHow to apply for a private ruling(NAT9188)whichisavailableonourwebsite.
8 www.ato.gov.au TAXPACK 2007
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DO YOU ALSO NEED TAXPACK 2007 SUPPLEMENT?
NOTEIfyouhavenotreceivedTaxPack 2007 supplement andneedit,youcangetacopyfrommostnewsagentsfrom1Julyto31October2007.CopiesarealsoavailableallyearfromourPublicationsDistributionService(seetheinsidebackcover)andshopfronts.
RENTAL PROPERTY INVESTORSDoyouknow:n thatrentisincomefortaxpurposesn whatdeductionsyoucanclaimforyourrentalpropertyn howtodividetherentalincomeandexpensesbetween
yourselfandotherowners?
Ifyouhavearentalproperty,readquestion20Rentonpagess26–7ofTaxPack 2007 supplement.Tocompleteitem20youmayneedtoreadRental properties 2007(NAT1729–6.2007).Thispublicationexplainshowtotreatrentalincomeandexpenses,includinghowtotreatmorethan230residentialrentalpropertyitems.
DOES THE CAPITAL GAINS TAx QUESTION APPLY TO YOU?Youmaynotbeawarethatquestion17Capitalgainsappliestoyourcircumstances.Thefollowinginformationisprovidedasageneralguidelinetohelpyouworkoutifyouneedtocompleteitem17onthetaxreturn(supplementarysection).
Capital gains or capital lossesYougenerallymakeacapitalgainorcapitallossifacapitalgainstax(CGT)eventhappens.Youcanalsomakeacapitalgainifyouhaveaninvestmentinamanagedfundorothertrustandyouareentitledtoashareofacapitalgainmadebythetrust.
ThemostcommonCGTeventhappensifyoudisposedofanassettosomeoneelse–forexample,yousolditorgaveitaway.CGTassetsincluderealestate,sharesinacompanyandunitsinaunittrust.
HereareexamplesofothercommonCGTevents.n Anassetyouownedwaslostordestroyed.n Anasset(suchassharesyouowned)wascancelled,
surrenderedorredeemed.n Aliquidatororadministratordeclaredthatsharesyou
ownareworthless.n Youreceivedanamountinrespectofashareortrust
interestthatwasnotincomeandwasnotforthedisposaloftheshareortrustinterest(knownasa‘returnofcapital’or‘non-assessablepayment’).
n YouceasedtobeanAustralianresident.
Remember,e-taxcanhelpyouworkoutifyouhaveacapitalgainorcapitalloss.Italsohasacalculatorthatmayhelpyouworkouttheamountofanycapitalgainorcapitallossyouhavemade.Downloade-taxatwww.ato.gov.au
TaxPack 2007 supplement andtheTax return for individuals (supplementary section) 2007containquestionswhicharenotincludedinTaxPack 2007 andtheTax return for individuals 2007.
ThelistbelowshowsyouthequestionsinTaxPack 2007 supplement.ChecktoseeifyouneedtouseTaxPack 2007 supplementtocompleteyourtaxreturn.
Questionsmarked*havearelatedpublicationwhichyoumustreadbeforeyoucancompletetheitemonyourtaxreturn.Thedetailsareexplainedattherelevantquestion.
TAXPACK 2007 SUPPLEMENT
INCOME�2 Partnershipsandtrusts�3 Personalservicesincome(PSI)*�4 Netincomeorlossfrombusiness*�5 Deferrednon-commercialbusinesslosses*�6 Netfarmmanagementdepositsorwithdrawals�7 Capitalgains*�8 Foreignentities�9 Foreignsourceincomeandforeignassetsorproperty
–includingforeignsourcepensionorannuity20 Rent2� Bonusesfromlifeinsurancecompaniesand
friendlysocieties22 Otherincome–notlistedelsewhere
DEDUCTIONSD�� Australianfilmindustryincentives*D�2 Deductibleamountofundeductedpurchaseprice
ofaforeignpensionorannuityD�3 Personalsuperannuationcontributions–generally
fortheself-employedD�4 DeductionforprojectpoolD�5 Otherdeductions
TAx OFFSETST8 SuperannuationcontributionsonbehalfofyourspouseT9 ZoneoroverseasforcesT�0 20%taxoffsetonnetmedicalexpensesoverthe
thresholdamount–thethresholdfor2007is$1,500T�� Parent,spouse’sparentorinvalidrelativeT�2 LandcareandwaterfacilityT�3 Netincomefromworking–supplementarysectionT�4 EntrepreneurstaxoffsetT�5 Othertaxoffsets
ADJUSTMENTSA3 Amountonwhichfamilytrustdistributiontaxhas
beenpaid
CREDIT FOR INTEREST ON TAx PAIDC� Creditforinterestonearlypayments–
amountofinterest
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MEDICARE LEVY SURCHARGE LUMP SUM TAx OFFSET (QUESTION M2)YoumaybeentitledtoclaimataxoffsetifyouhavetopaytheMedicarelevysurchargeasaresultofyouoryourspousereceivingalumpsumpaymentinarrears.ReadquestionM2onpages104–7formoreinformation.
PRIMARY PRODUCTION AND NON-PRIMARY PRODUCTION DEFERRED NON-COMMERCIAL bUSINESS LOSSES (QUESTION �5 TAXPACK 2007 SUPPLEMENT)Thetotalamountofdeferrednon-commercialbusinesslosseshasbeendividedintotwoseparatetotalsforprimaryproductiondeferrednon-commercialbusinesslossesandnon-primaryproductiondeferrednon-commercialbusinesslosses.Readquestion15onpages12–13inTaxPack 2007 supplementformoreinformation.
EMPLOYEE SHARE SCHEMES AND STAPLED SECURITIES (QUESTIONS �7 AND 22 TAXPACK 2007 SUPPLEMENT)From12April2007stapledsecuritiesandrightstoacquirethemcanbeacquiredunderemployeeshareschemes.Readquestion17onpagess16–18andquestion22onpagess29–32inTaxPack 2007 supplementformoreinformation.
NON-COMMERCIAL LOANS AND PRIVATE COMPANIESInDecember2006theGovernmentannouncedamendmentstotheintegrityruleswhichapplytodistributionsbyprivatecompanies.TheCommissionerofTaxationwillhavethediscretiontonottreatamountsasdividendswhereataxpayerhasattemptedtocomplywithDivision7Abutmadeanhonestmistake.Thisdiscretionisexpectedtobebackdatedto1July2002.Otheramendmentswillprovidemoreflexibilityfortaxpayers.Theseamendmentsareexpectedtoapplyfrom1July2006inmostcases.Atthetimeofprinting,theseamendmentshadnotbecomelaw.Theinformationonourwebsitewww.ato.gov.auwillbeupdatedoncethenewlawisenacted.
ELECTRONIC FUNDS TRANSFER OF REFUNDSIfyouwantyourtaxrefund,familytaxbenefitoranybabybonusdepositeddirectlyintoanAustralianbank,creditunionorbuildingsocietyaccountofyourchoice,youmustprovideyouraccountdetailsonpage1ofyourtaxreturn.ReadElectronicfundstransfer(EFT)onpage12formoreinformation.
DO NOT ATTACH YOUR PAYMENT SUMMARIES UNLESS YOU HAVE AN ELIGIbLE TERMINATION PAYMENTYounolongerneedtoattachyourpaymentsummaries(orstatutorydeclarationsinrespectofmissingpaymentsummaries)toyourtaxreturn,otherthanthoseforeligibleterminationpayments.Generally,youmustkeepyourpaymentsummariesandstatutorydeclarationswithyourtaxrecordsforfiveyears.
FULL-YEAR TAx-FREE THRESHOLD WHEN CEASING FULL-TIME EDUCATIONFrom1July2006thepart-yeartax-freethresholdthatappliedwhenyouceasedfull-timeeducationforthefirsttimehasbeenabolished.Ifyouceasedfull-timeeducationforthefirsttimeatanytimeduringtheincomeyearyouwillreceivethefull-yeartax-freethresholdof$6,000withnopro-rating.Apart-yeartax-freethresholdstillappliesifyoubecame,orceasedtobe,anAustralianresident.
SUPERANNUATION CHANGESIfyouareaged60yearsandoverandyouronlysourceofincomeisfromsuperannuationbenefits(bothlumpsumandincomestreams)thathavealreadybeensubjecttotaxinthesuperannuationfundyoumaynothavetolodgeataxreturninthefuture.ReadWillyouneedtolodgeanAustralianincometaxreturninthefuture?onpage12formoreinformation.
FOREIGN INCOME ExEMPTION FOR TEMPORARY RESIDENTSFrom1July2006ifyoumeetthetemporaryresidentrequirementsyouwillnotpaytaxonmostofyourforeignincomeandcandisregardsomecapitalgains.Forfurtherinformation,readExemptincomeonpages13–14orseetheelectronicpublicationForeign income exemption for temporary residents.Itisavailableonourwebsite.
GIFTS TO POLITICAL PARTIES AND INDEPENDENTS (QUESTION D8)Therulesondeductibilityforcontributionsandgiftsmadeonorafter22June2006toregisteredpoliticalpartiesandtoindependentmembersof(orcandidatesfor)anAustralianparliamentorlegislativeassemblyhavechanged.ReadquestionD8onpages57–60formoreinformation.
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n youreceivedatrustdistributionandthetrustwasnotanSTStaxpayerforthatyear
n anypersonenteredintoorcarriedoutaschemewiththedominantpurposeofobtainingforyouabenefitinrelationtoincometax.
KEEP YOUR RECORDSYouneedtokeeprecords:n toprovidewrittenevidenceofyourincomeandexpensesn tohelpyouoryourtaxagentprepareyourtaxreturnn toensurethatyouareabletoclaimallyourentitlements,andn incaseweaskyoutoprovetheinformationyou
providedonyourtaxreturn.
Youmustkeepmostofyourwrittenevidenceforfiveyearsfromthedateyoulodgeyourtaxreturn.Ifyouhaveclaimedadeductionfordeclineinvalue,haveacquiredordisposedofanasset,appliedalossoranetcapitalloss,orareindisputewiththeTaxOffice,youmustkeeptherecordslonger,asfollows:declineinvaluedeductions: fiveyearsfromthedateofyourlastclaimfordeclineinvalueassets: fiveyearsafterthecapitalgainstaxeventhappenedforwhichthoserecordswillbeneededtoworkoutacapitalgainorcapitallosslosses: generallyfouryearsfromtheyearofincomewhenthetaxlossisfullydeductedoranetcapitallossisfullyapplieddisputewiththeTaxOffice: fiveyearsfromthedateyoulodgedyourtaxreturn,orwhenthedisputeissettled,whicheverislater.SeeTaxation Determination TD 2007/2 – Income tax: should a taxpayer who has incurred a tax loss or made a net capital loss for an income year retain records relevant to the ascertainment of that loss only for the record retention period prescribed under income tax law?.
Youonlyneedtokeepyourpaymentsummaryandyourfamilyagreement(seequestionM1)fortwoyearsifyouareanAustralianresidentandhavesimpletaxaffairs.Tocheckwhetheryouqualifyforthisshorterrecord-keepingperiod,refertoourwebsite.
LODGE YOUR TAx RETURN bY 3� OCTObER 2007Youhavefrom1Julyto31October2007tolodgeyourtaxreturn,unlessitispreparedbyaregisteredtaxagent.
Don’tdelaysendingyourtaxreturn,evenifyouthinkyouwillowetax.Theearliestduedateforpaymentofany2006–07personalincometaxliabilityis21November2007.Ifyoulodgeyourowntaxreturnby31October2007,yourtaxispayablebythedatespecifiedonyournoticeofassessment.
Ifyoulodgeyourincometaxreturnlate,ornotatall,anytaxwillbepayableon21November2007andageneralinterestchargewillbecalculatedfromthatdateuntilfullpaymentisreceived.Inadditionapenaltyforfailuretolodgeontimemaybeapplied(seetheinformationonthenextpage).
TaxPack 2007willhelpyoucompleteyourTax return for individuals 2007fortheincomeyear1July2006to30June2007.TherearetwocopiesofthetaxreturnandanenvelopeforlodgmentineachTaxPack 2007package.Ifyouneedmorecopiesofthetaxreturn,seepage7.
Tocheckifyouhavetolodgeataxreturnthisyear,readDoyouhavetolodgeataxreturn?onpage2.
SELF-ASSESSMENT – IT’S YOUR RESPONSIbILITYUnderoursystemofself-assessmentweprepareTaxPack 2007,TaxPack 2007 supplementandothertax-timepublicationsannuallytoprovideyouwiththeinformationandguidanceyouneedtocompleteyourtaxreturn.Itisyourresponsibilitytolodgeataxreturnthatissigned,completeandcorrect.Wethenusetheinformationonyourtaxreturntoissueyournoticeofassessment.
Whenyoureceiveyournoticeofassessment,youmayfindthatwehavemadesomeadjustments–forexample,youmayhavemadeanerroraddingupyourfigures.However,wedonotcheckeverythingonyourtaxreturnbeforeissuingyournoticeofassessment.
Wemaynotinitiallyadjustanyclaimsyoumakeonyourtaxreturn.Wedonottakeresponsibilityforcheckingthatdetailsonyourtaxreturnarecorrect–thatisyourresponsibility.
Atalaterdatewemaychecksomeofthedetailsonyourtaxreturnmorethoroughly.Underthelaw,wearegenerallyallowedtwoyears(dependingonyourcircumstances–seeAmendmentperiodbelow)toreviewyourtaxreturnandifnecessaryincreaseordecreasetheamountoftaxpayable.
Remember,evenifsomeonehelpsyoutocompleteyourtaxreturn,youmustsigntheTaxpayer’s declarationandyouareresponsiblefortheinformationprovidedonyourtaxreturn.Anotherpersonmaysignyourtaxreturnonyourbehalfiftheyhaveauthoritytodosounderapowerofattorney.Acertifiedcopyofthecurrentpowerofattorneymustbeattachedtoyourtaxreturnifyouhavenotpreviouslylodgedtheauthoritywithus.
If,afterlodgingyourtaxreturn,youbelieveyouhavemadeamistake,seepage113tofindoutwhattodo.
AMENDMENT PERIOD Ifyouareamongthemajorityoftaxpayers,yourincometaxaffairsforaparticularincomeyearwillbeconsideredfinalisedtwoyearsaftertheCommissionerissuesyournoticeofassessment(formoreinformation,gotowww.ato.gov.au/notices).However,sometaxpayerswillhaveafour-yearamendmentperiod.
Generally,youwillhaveafour-yearamendmentperiodif:n youcarriedonabusinessandyouarenotasimplified
taxsystem(STS)taxpayerforthatyearn youwereapartnerinapartnershipthatwascarryingon
abusinessandthepartnershipwasnotanSTStaxpayerforthatyear
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Ifyoucannotlodgeby31October2007duetocircumstancesbeyondyourcontrol,contactusassoonaspossible–andcertainlybefore31October2007–tofindoutifyoucanlodgeatalaterdate.PhonethePersonalInfoline(seetheinsidebackcover)orsendawrittenrequesttotheaddressthatappearedonyournoticeofassessmentfortheyearending30June2006,ifyouhaveone,ortoyournearesttaxoffice(seepage131).Explainwhyyouneedtolodgelateandsuggestanotherdate.Wewillconsideryourrequestandcontactyou.
Wewillnotnormallyacceptthefollowingexplanationsasreasonsforallowingalatelodgment:n adelayinreceivingyourpaymentsummaryn losingyourpaymentsummary,orn beingabsentfromAustralia.
FAILURE TO LODGE ON TIME PENALTYWemayimposeafailuretolodgeontimepenaltyifyoulodgeyourtaxreturnlate.
Ifyourtaxreturnisincomplete–forexample,ifitisnotsignedordoesnotincludearequiredattachment–wemaysenditbacktoyouaskingyoutocompleteitandreturnittous.Weconsiderthatyourtaxreturnhasnotbeenlodgeduntilitisreturnedtouscomplete.
Generally,weapplyapenaltyof$110forevery28days(orpartthereof)yourtaxreturnisoverdue,toamaximumof$550.Wemayapplythepenaltyevenwherethereisnotaxpayable.However,ourpolicyisnottoapplyapenaltywhere:n youlodgeyourtaxreturnvoluntarily,andn notaxispayable.
Wearelikelytoapplythepenaltyif:n youhavemorethanonetaxreturnoutstanding
n youhaveapoorlodgmenthistoryorn youhavenotcompliedwitharequesttolodgeyour
taxreturn.
Thepenaltyisinadditiontoanygeneralinterestchargethatmayapplyifyouhaveanytaxamountoutstandingaftertheduedate.
FAMILY TAx bENEFITIfyouareafamilytaxbenefit(FTB)claimant:n youmustlodgeyour2007FTBtaxclaimby30June
2009andn youmustlodgeyour2007taxreturnandn yourspouse(ifyouhaveone)mustalsolodgetheir
2007taxreturn,iftheyarerequiredtodoso.
Ifyourspouseoryouarenotrequiredtolodgeataxreturnfor2007,youmustinformtheFamilyAssistanceOffice(FAO)on136150by30June2008.
ForFTBpurposes,youhaveuntil30June2009tolodgeyour2007FTBclaim.Ifyouhavenotalreadydoneso,youhaveuntil30June2008tolodgeany2006FTBtaxclaimorinformtheFAOyouarenotrequiredtolodge.
Ifyouand/oryourspouse(ifyouhadone)receivedFTB,youneedtolodgeyour2007taxreturnsby30June2008–ifyoudonot,thefullFTBamountyoureceivedinthe2006–07incomeyearmaybetreatedasadebt.Ifyoulodgethesetaxreturnsafter30June2009,youwillnotbeentitledtoanytop-uporsupplementsthatmayotherwisehavebeenduetoyou.Rememberthatwemayimposeapenaltyifyoulodgeyourtaxreturnaftertheduedatefortaxreturns–seeLodgeyourtaxreturnby31October2007onthepreviouspage.
Formoreinformation,seepages71–5.
IfyoudonothaveaTFNandyouarenotapermanentmigrantortemporaryvisitortoAustraliawithavisathatallowsworkrights,youwillneedtocompletetheformTax file number application or enquiry for an individual(NAT1432–12.2005).Thisformisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
Youwillneedtoprovideoriginal,unaltereddocumentsthatproveyouridentitywithyourapplication.Youwillfindalistofacceptableproofofidentitydocumentsontheapplication.
From1July2007,ithasbecomemoreimportanttoquoteyourTFNfortaxationandsuperannuationpurposes.Togetthefullbenefitofthenewsuperannuationrules,makesureallyoursuperannuationfundshaveyourTFN.
ARE YOU AN AUSTRALIAN RESIDENT?ThetaxratesthatapplytoyourtaxableincomedependonwhetherornotyouareanAustralianresident.Ahigherrateoftaxisappliedtoanon-resident’staxableincomeandnon-residentsarenotentitledtoatax-freethreshold.Seepages120–2formoreinformation.
Werequiretheinformationyouprovideonpage1ofyourtaxreturnbeforewecanstartprocessingit.Itisimportantthatyoucompletethispageaccuratelytoavoiddelays.Manyoftheitemsonpage1ofyourtaxreturnrelatetoyourpersonaldetailsandneednoexplanation.Forthetax-relateditems,wehaveprovidedsomeadditionalinformationtohelpyoucompletethem.Ifyouneedfurtherhelp,phonethePersonalInfoline(seetheinsidebackcover).
YOUR TAx FILE NUMbERIfyoualreadyhaveataxfilenumber(TFN),itwillbeshownonyourlastnoticeofassessmentorthepaymentsummaryyoureceivedfromyouremployerorotherpayer.IfyoucannotfindyourTFN,phonethePersonalInfoline.Youwillneedtoprovidepersonalinformationtoconfirmyouridentity.
IfyoudonothaveaTFNandyouareapermanentmigrantortemporaryvisitortoAustraliaandhaveavisathatallowsworkrights,avisathatallowspermanentmigration,avalidoverseasstudentvisaoravalidvisatostayinAustraliaindefinitely,youmayapplyforaTFNonlinebyvisitingourwebsiteatwww.ato.gov.auandselecting‘Forindividuals’–‘Applyforataxfilenumber’–‘Onlineindividualtaxfilenumber(TFN)registration(NAT4157)’.
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ThestandardstheTaxOfficeusestodetermineyourresidencystatusarenotthesameasthoseusedbytheDepartmentofImmigrationandCitizenshiporCentrelink.Generally,weconsideryoutobeanAustralianresidentfortaxpurposesif:n youhavealwayslivedinAustraliaoryouhavecometo
Australiaandliveherepermanentlyn youhavebeeninAustraliacontinuouslyforsixmonths
ormoreandformostofthattimeyouworkedintheonejobandlivedatthesameplace,or
n youhavebeeninAustraliaformorethanhalfoftheincomeyear2006–07–unlessyourusualhomeisoverseasandyoudonotintendtoliveinAustralia.
Ifyougooverseastemporarilyandyoudonotsetupapermanenthomeinanothercountry,wemaycontinuetotreatyouasanAustralianresidentfortaxpurposes.OverseasstudentswhocometoAustraliatostudyandareenrolledinacoursethatismorethansixmonthslongaregenerallytreatedasAustralianresidentsfortaxpurposes.IfyouneedhelpindecidingwhetherornotyouareanAustralianresidentfortaxpurposes,youcangototheAreyouaresident?toolonourwebsiteorphonethePersonalInfoline.
HASYOURRESIDENCY STATUSCHANGED?Ifyourresidencystatusfortaxpurposeschangedduring2006–07,youwillneedtoanswerquestionA2onpage109.Weneedthisinformationtoworkoutyourtax-freethreshold.
WILL YOU NEED TO LODGE AN AUSTRALIAN TAx RETURN IN THE FUTURE?Thismaybeyourlasttaxreturnif:n yourannualtaxableincomeinthefuturewillbebelow
thetax-freethreshold($6,000for2007–08)n youronlysourceofincomeinthefuturewillbean
AustralianGovernmentpensionn youwillbecomeeligiblefortheseniorAustralianstax
offsetintheincomeyear2007–08,andyourtaxableincomeisbelowthethresholdforlodgingataxreturnthisyear(forthresholdlevelsandeligibilityfor2006–07,seepages84–5)
n youaremovingoverseaspermanently,orn youareaged60yearsandoverandyouronlysourceof
incomeisfromsuperannuationbenefits(bothlumpsumandincomestreams)thathavealreadybeensubjecttotaxinthefund.Thiscoversthegreatmajorityofsuperannuationmembers.Youmayberequiredtolodgeataxreturninthefuturewhereyoursuperannuationbenefitcontainsanamount(otherthanthetax-freecomponent)thathasnotbeensubjecttotaxinthefund(anuntaxedelement).Thisamountissubjecttotaxbutatconcessionalrates.ThisgenerallyappliestomembersofsuperannuationfundsestablishedbytheAustralianGovernmentorastategovernment.
DECEASED ESTATE – ARE YOU LODGING A TAx RETURN FOR SOMEONE WHO DIED DURING THE YEAR?Page3willtellyouifyouneedtocompleteataxreturn.Ifyouneedtocompleteataxreturn,prepareitfortheincomeyearuptothedateofdeath.
PrintDECEASEDESTATEonthetopofpage1ofthetaxreturnandatthequestionWillyouneedtolodgeanAustraliantaxreturninthefuture?printXintheNObox.Theexecutororadministratoroftheestatemustsignthetaxreturnonbehalfofthedeceasedpersonandsendittous.
Certaintypesofincomereceivedafterthedateofdeathmayneedtobeshownonatrusttaxreturn.Ifyouhaveanyquestions,phonethePersonalInfoline.
ELECTRONIC FUNDS TRANSFERDirect refundUsingelectronicfundstransfer(EFT),wecandeposityourtaxrefund,familytaxbenefitand/oranybabybonusdirectlyintoanAustralianbank,creditunionorbuildingsocietyaccountofyourchoice.AnEFTdepositwillgiveyouquickeraccesstoyourmoney.Directdepositofyourrefundisnotavailableonthefullrangeofaccounts.Ifyouareindoubt,checkwithyourfinancialinstitution.
IfyouwouldliketouseEFT,printXintheYESboxatthequestionDoyouwanttouseelectronicfundstransfer(EFT)thisyearforyourtaxrefundorfamilytaxbenefitpaymentwhereapplicable?onpage1ofyourtaxreturn.
Completethefollowingstepsonpage1ofyourtaxreturn.
IMPORTANTMakesureyouraccountdetailsarecorrect–ifyougiveanotherperson’saccountdetails,yourrefundwillbesenttothataccount.
Ifyouusedataxagentlastyearbutarepreparingyourowntaxreturnthisyear,remembertoprovidetheaccountdetailsofyourchosenaccount.
Completethefollowingsteps.
STEP1 WritetheBSB(bankstatebranch)number.Donotincludespaces,dashesorhyphens.TheBSBnumberisthesix-digitnumberthatidentifiesafinancialinstitution.Itcanbefoundonanaccountstatementorachequeform.IfyoudonotknowtheBSBnumberortheoneyouhavehasfewerthansixdigitsorisforacreditunionaccount,checkwiththefinancialinstitution.
STEP2 Writetheaccountnumberasshownontheaccountrecords.Donotincludespaces.Anaccountstatement,chequebookorotherdocumentfromthefinancialinstitutionwillshowthisinformation.Youcannotuseanaccountnumberthathasmorethanninecharacters(numbersorletters).
STEP3 Printtheaccountname(alsocalledtheaccounttitle)asshownontheaccountrecords.Includeaspacebetweeneachwordandbetweenanyinitialsintheaccountname.Donotprinttheaccounttype–savings,cheque,mortgageoffsetetc.
MOREINFORMATIONIfyouneedmoreinformationonusingEFTforyourrefund,phonetheEFTInfoline(seetheinsidebackcover).
Direct debitIfyouhaveataxdebt,yournoticeofassessmentwillshowaduedateforpayment.IfyouwanttopayusingEFTdirectdebitfromyouraccount,phonetheEFTInfoline.
IfyouhaveprovideduswithaDirect debit requestbutyournoticeofassessmentdoesnotstatethatthepaymentwillbedebitedfromyouraccount,phonetheEFTInfoline.
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Education paymentsn Supplementaryallowancesforstudentspaidunderthe
AssistanceforIsolatedChildrenSchemen Allowancesforstudentsunder16yearsofageincluding
thosepaidunderABSTUDY,austudypayment,youthallowance,AssistanceforIsolatedChildrenScheme,CommonwealthsecondaryeducationassistanceandtheVeterans’ChildrenEducationScheme
n Australian–AmericanEducationalFoundationgrantn Commonwealthscholarshipsorbursariesprovidedto
foreignstudentsn Commonwealthsecondaryassistanceotherthan
thatalreadyreferredton CommonwealthTradeLearningScholarshipn Pensionereducationsupplementandfaresallowance
paidbyCentrelinkn Somescholarshipsandbursariesreceivedbyfull-time
studentsn Language,literacyandnumeracysupplementn PaymentsundertheMilitaryRehabilitationand
CompensationActEducationandTrainingScheme2004foreligibleyoungpersonswhoseeligibilitywasdeterminedunder:– paragraph258(1)(a)oftheMilitary Rehabilitation
and Compensation Act 2004andtheeligibleyoungpersonwasunder16yearsofage,or
– paragraph258(1)(b)oftheMilitary Rehabilitation and Compensation Act 2004
Other paymentsn AustralianGovernmentdisasterrecoverypaymentsn CarerallowancepaidundertheSocial Security Act 1991n Childcarebenefitn The2006one-offpaymenttoolderAustralians
undertheSocial Security Act 1991ortheVeterans’ Entitlements Act 1986
n The2006one-offpaymenttocarers(carerpaymentrelated,wifepensionrelated,partnerservicepensionrelated,carerservicepensionrelatedandcarerallowancerelated)undertheSocial Security Act 1991
n DFISAbonusn Disasterreliefpaymentn Employmententrypaymentn Familytaxbenefitn Farmhouseholdsupportpaymentsthathavebeen
convertedtoagrantn F-111deseal/resealex-gratialumpsumpaymentsn SuperCo-contributionsn LumpsumpensionbonuspaidundertheSocial Security
Act 1991ortheVeterans’ Entitlements Act 1986
Youmayhavereceivedincomethatisexemptfromtaxandyoudonotneedtoincludeitonyourtaxreturnasincome.However,somequestionsinTaxPack 2007 andTaxPack 2007 supplement askyoutoshowyouroryourspouse’sexemptincome.Themostcommontypesofexemptincomeyoumayhavereceivedarelistedhere.
ExEMPT AUSTRALIAN GOVERNMENT PENSIONS, ALLOWANCES AND PAYMENTS
Pensionsn Carerpaymentwhere:
– boththecarerandeitherthecarereceiverorallofthecarereceiversareunderage-pensionage,or
– thecarerisunderage-pensionageandanyofthecarereceivershasdied
n DefenceForceincomesupportallowance(DFISA)wherethepension,paymentorallowancetowhichitrelatesisexempt
n DisabilitysupportpensionpaidbyCentrelinktoapersonwhoisunderage-pensionage
n Doubleorphanpensionn Invalidityservicepensionwheretheveteranis
underage-pensionagen Partnerservicepensionwhereeither:
– thepartner(excludingthenon-illnessseparatedspouseofaveteran)andtheveteranareunderage-pensionageandtheveteranreceivesaninvalidityservicepension,or
– thepartnerisunderage-pensionageandtheveteranhasdiedandwasreceivinganinvalidityservicepensionatthetimeofdeath
n Veterans’Affairsdisabilitypensionandallowances,warwidowsandwarwidowerspension
n Wifepensionwhereboththerecipientandpartnerareunderage-pensionageortherecipientisunderage-pensionageandthepartnerhasdied
NOTELumpsumbereavementpaymentsreceivedaspartofanyoftheabovepaymentsareexemptonlyuptothetax-freeamount.PhoneourPersonalInfoline(seetheinsidebackcover)tofindouthowmuchofyourpaymentisexempt.Superannuation Act 1976andDefence Forces Retirement Benefits Act 1948pensionsandpaymentsaretaxable.Showthematitem7onyourtaxreturn.
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En Maternityimmunisationallowancen Maternitypaymentn MobilityallowancepaidundertheSocial Security
Act 1991n Openemploymentincentivebonusunderthe
Handicapped Persons Assistance Act 1974n PaymentsfromtheAustralianGovernmentunder
theincentivespaymentsschemerelatingtocertainprivatehealthinsurancepolicies
n Theone-offpaymentstofamiliesandcarersundertheFamilyAssistance(One-offPaymenttoFamiliesandCarers)Scheme2004
n PaymentstoolderAustraliansundertheschemedeterminedunderSchedule2totheSocial Security and Veterans’ Entitlements Legislation Amendment (One-off Payments to Increase Assistance for Older Australians and Carers and Other Measures) Act 2006
n PaymentstocarersundertheschemedeterminedunderSchedule4totheSocial Security and Veterans’ Entitlements Legislation Amendment (One-off Payments to Increase Assistance for Older Australians and Carers and Other Measures) Act 2006
n PharmaceuticalallowancespaidundertheSocial Security Act 1991ortheVeterans’ Entitlements Act 1986
n Remoteareaallowancen Rentassistancen Seniorsconcessionallowancepaidunderthe
Social Security Act 1991ortheVeterans’ Entitlements Act 1986
n Sugarindustryexitgrantwhereyoucompliedwithaconditionofthegrantnottoownoroperateanyagriculturalbusinesswithinfiveyearsafterreceivingthegrant
n TelephoneallowancepaidundertheSocial Security Act 1991ortheVeterans’ Entitlements Act 1986
n UtilitiesallowancepaidundertheSocial Security Act 1991ortheVeterans’ Entitlements Act 1986
n LossofearningsallowancepaidundertheVeterans’ Entitlements Act 1986
EXEMPT DEFENCE FORCE AND UNITED NATIONS PAYMENTSn CertainpayandallowancesforDefenceForcepersonnel
–youremployerwilladviseyouifanamountisexemptn Compensationpaymentsforimpairmentorincapacity
resultingfromservicewithaUnitedNationsarmedforcen CompensationpaymentsmadeundertheMilitary
Rehabilitation and Compensation Act 2004,exceptthosethatareincome-relatedpayments
n Payandallowancesforpart-timeserviceintheAustralianNaval,ArmyorAirForceReserve
n SomeallowancespaidtoDefenceForcepersonnelwhoservedinprescribedoverseasareas–youremployerwilladviseyouifanallowanceisexempt
NON-ASSESSABLE NON-EXEMPT INCOME FOR TEMPORARY RESIDENTSIfyouareatemporaryresident:n yourforeignincomeisnon-assessablenon-exempt
income,exceptincomeyouearnfromyouremploymentoverseasforshortperiodswhileyouareatemporaryresident
n capitalgainsandcapitallossesyoumadefromthedisposalofassetsfrom1July2006until11December2006thatdonothavethenecessaryconnectionwithAustraliaaredisregarded,exceptcertaingainsonsharesandrightsacquiredunderemployeeshareschemes
n capitalgainsandcapitallossesyoumadefromthedisposalofassetsotherthan‘taxableAustralianproperty’onorafter12December2006aredisregarded,exceptcertaingainsonsharesandrightsacquiredunderemployeeshareschemes.
Anyincomethatisnon-assessablenon-exemptbecauseyouareatemporaryresidentshouldnotbeshownonyourincometaxreturn.
Forfurtherinformation,seetheelectronicpublicationForeign income exemption for temporary residents.Itisavailableonourwebsite.
WHO IS A TEMPORARY RESIDENT?Youareatemporaryresidentif:n youholdatemporaryvisagrantedundertheMigration
Act 1958n youarenotanAustralianresidentwithinthemeaning
oftheSocial Security Act 1991,andn yourspouse(ifapplicable)isnotanAustralianresident
withinthemeaningoftheSocial Security Act 1991.
IfyouareanAustralianresidentfortaxpurposesbutnotatemporaryresidentonorafter6April2006,youwillnotbeentitledtothetemporaryresidentexemptionsfromthattime,evenifyoulaterholdatemporaryvisa.
Forfurtherinformation,seetheelectronicpublicationForeign income exemption for temporary residents.Itisavailableonourwebsite.
OTHER EXEMPT PAYMENTSn Amountsonwhichfamilytrustdistributiontaxhas
beenpaid(seequestionA3onpages61in TaxPack 2007 supplement)
n JapaneseinternmentcompensationpaymentsmadeundertheCompensation (Japanese Internment) Act 2001ortheVeterans’ Entitlements Act 1986
n CertainpaymentsrelatingtopersecutionduringtheSecondWorldWar
n CompensationpaymentsreceivedundertheGermanForcedLabourCompensationProgramme(GFLCP)
n Certainannuitiesandlumpsumswhicharepaidtoaninjuredpersonunderastructuredsettlement
n Mostchildsupportorspousemaintenancepaymentsn MortgageandRentReliefSchemepayments
NOTEForinformationonthetypeofpaymentyoureceived,contactthepersonoragencythatpaidyou.
Ifyouareunsureifapaymentisexemptincome,phonethePersonalInfoline(seetheinsidebackcover).
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YOU NEED TO KNOWLate, lost or wrong payment summaries, letters or signed statements from your payerIfyoudonothaveallofyourdocuments,oranydocumentiswrong,contactyourpayer.Askyourpayertogiveyouasignedcopyofyourpaymentsummary,oraletterorsignedstatementshowingthecorrectdetails.
Ifyouareunabletogetthesedocumentsfromyourpayer,youwillneedtocompleteaStatutory declaration(NAT4135),availablefromtheTaxOffice,andkeepitwithyourtaxrecords.Youwillneedaseparatestatutorydeclarationforeachpayerforwhomyouhavenodocuments.
Thisstatutorydeclarationidentifiesthecategoriesofinformationyouneedtoshowonyourtaxreturn,suchastheperiodorperiodscoveredbyyourmissingdocumentsduringwhichpaymentsweremade,thenamesofyourpayers,theamountsoftaxwithheldandtheamountofgrosspaymentsyouearned.
Tofindouthowtogetthisstatutorydeclaration,seetheinsidebackcover.
NOTEYounolongerneedtoattachpaymentsummaries(orstatutorydeclarationsformissingpaymentsummaries)toyourtaxreturn,otherthanthoseforeligibleterminationpayments.Generally,youmustkeepyourpaymentsummariesandstatutorydeclarationsforfiveyears(seeKeepyourrecordsonpage10).
COMPLETING THIS ITEM
STEP1 PrinttheoccupationfromwhichyouearnedmostofyoursalaryorwagesincludedatthisitemintheYourmainsalaryandwageoccupationboxatitem1onyourtaxreturn.
STEP2 Printthepayer’sABNorWPNshownoneachpaymentsummary,signedcopy,letterorstatementfromyourpayer–orstatutorydeclarationyouhavecompleted–inaPayer’sAustralianbusinessnumberboxatitem1onyourtaxreturn.
STEP3 Writetheamountoftaxwithheldasshownoneachpaymentsummary,signedcopy,letterorstatementfromyourpayer–orstatutorydeclarationyouhavecompleted–attheleftofC toG item1onyourtaxreturn.Donotshowcents.
STEP4 Writetheamountofgrosspaymentsshownoneachpaymentsummary,signedcopy,letterorstatementfromyourpayer–orstatutorydeclarationyouhavecompleted–atC toG item1onyourtaxreturn.Donotshowcents.Ifthegrosspaymentisexemptfrom
Did you receive payments of salary, wages, commissions, bonuses etc, including income earned from part-time and casual jobs, from which tax was withheld?
Includeamountsforlostsalaryorwagespaidunderanaccidentorinsurancepolicyorworker’scompensationschemeiftaxwaswithheldfromthepayment.
NO Gotoquestion2.
YES Readbelow.
STOPDonotshowthefollowingpaymentsatthisitemoryoumaybetaxedincorrectly:n amountsshownonanypaymentsummaryotherthan
thePAYG payment summary – individual non-businessn AustralianGovernmentpensions,allowances
andpaymentsn amountspaidfromaCommunityDevelopment
EmploymentProject(CDEP)n amountsinthe‘Allowances’and‘Lumpsum
payments’boxesonyourpaymentsummaryn amountsinthe‘Otherincome’boxonyourpayment
summary–ifthisisexemptincomeyouwillnotneedtoshowtheamountonyourtaxreturn;ifthisisforeignemploymentincomerefertotheIndex
n foreignemploymentincome(includingincomeearnedfromworkingoverseas)
n reportablefringebenefitsamountsn incomefromanAustralianannuityorsuperannuation
pensionn incomepaidtoyouasapartnerinapartnership.
Otherquestionsdealwiththesematters.RefertotherelevanttopicsintheIndex.
NOTEn Employersarepayers.n Employeesarepayees.
WHAT YOU NEEDTocompletethisitemyouneedyourPAYG payment summary – individual non-businesswhichshows:n yourgrossincome(inthe‘Grosspayments’box)n totaltaxwithheld,andn yourpayer’sAustralianbusinessnumber(ABN)or
withholdingpayernumber(WPN).
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taxorisforeignemploymentincome(includingincomeearnedfromworkingoverseas)whichyoushowatitem19onyourtaxreturn(supplementarysection),show0asthegrosspayment.
Did you have more than five payers?Thetaxreturnonlyhasspacesforinformationfromfivepaymentsummaries,signedcopies,lettersorstatementsfromyourpayers,orstatutorydeclarations.Ifyouhavemorethanfive,completesteps2to4atthisitemforyourfirstfourdocumentsonly.Foryourremainingdocuments,addupthetaxwithheldshownonthesedocumentsandwritethetotalattheleftofG item1onyourtaxreturn.Donotshowcents.LeavethePayer’sAustralianbusinessnumberboxattheleftofG blank.
AlsoadduptheamountsofgrosspaymentsshownonthesedocumentsandwritethetotalatG item1onyourtaxreturn.Donotshowcents.
CHECK THAT YOU HAVE . . . printedonyourtaxreturnyouroccupation printedonyourtaxreturntheAustralianbusinessnumbersorwithholdingpayernumbersofyourpayers
writtenonyourtaxreturntheamountsoftaxwithheld writtenonyourtaxreturntheamountsofgrosspayments
keptallyourpaymentsummaries,signedcopies,lettersorstatementsfromyourpayers,orthestatutorydeclarationsyouhavecompleted.Donotattachthemtoyourtaxreturn.
KEEPYOURRECORDSYouneedtokeeptheserecordsforfiveyearsfromthedateyoulodgeyourtaxreturn,oriftheCommissionerhasdeterminedthatyouaresubjecttoashorterperiodofreview,forthatperiod.
QUESTION 2ALLOWANCES, EARNINGS, TIPS, DIRECTOR’S FEES ETC
STOPDonotshowthefollowingpaymentsatthisitemoryoumaybetaxedincorrectly:n salaryorwagesshownatitem1n amountsshownonanypaymentsummaryotherthan
thePAYG payment summary – individual non-businessn AustralianGovernmentpensions,allowancesand
paymentsn lumpsumpaymentsinarrearsshownat‘E’inthe
‘Lumpsumpayments’boxonyourpaymentsummaryn reportablefringebenefitsamountsn amountsinthe‘Otherincome’boxonyourpayment
summary–ifthisisexemptincomeyouwillnotneedtoshowthatamountonyourtaxreturn;ifthisisforeignemploymentincome,refertotheIndex
n incomefromsicknessandaccidentinsurancepoliciesnotshownonapaymentsummary
n foreignemploymentincome(includingincomeearnedfromworkingoverseas)
n incomepaidtoyouasapartnerinapartnershipn incomeyouearnedbecauseyouwereself-employed,
includingcommissionincomen incomeyouearnedasanon-employeetaxidriver(for
example,adriveroperatingunderastandardbailmentagreementwithanowner/operator)–fortaxreturnpurposes,thisisincomeearnedasasoletrader.
Otherquestionsdealwiththesematters.RefertotherelevanttopicsintheIndex.
Did you receive any income from working (whether or not it is shown on a PAYG payment summary – individual non-business)?Thisincomemightinclude:n allowancesn paymentsofsalary,wages,commissions,bonusesetc,
includingincomeearnedfrompart-timeandcasualjobs,fromwhichtaxwasnotwithheld
n tips,gratuitiesandpaymentsforyourservicesn consultationfeesandhonoraria–paymentsforvoluntary
servicesn juryattendancefees–exceptwhereyouhavetopaythe
feestoyouremployerbecauseyoureceivedyournormalemploymentincomewhileyouwereonjuryduty.
Showatthisitemincomefromsicknessandaccidentinsurancepoliciesshownonapaymentsummarywherenotaxhasbeenwithheld.
NO Gotoquestion3.
YES Readon.
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NOTEn Employersarepayers.n Employeesarepayees.
WHAT YOU NEEDn YourPAYG payment summary – individual non-businessn Otherdetailsofyourincome
Ifyoudonothaveallofyourdocuments,contactthepersonwhopaidyou.
YOU NEED TO KNOWAllowancesandearningsfromyourpayermayinclude:n car,travelortransportallowancesn awardtransportpayments–theseareallowances
coveringeithertransportorcarexpenseswhicharepaidunderanindustriallaworawardthatwasinforceon29October1986
n allowancesfortools,clothingorlaundryn dirt,height,site,risk,mealorentertainmentallowancesn allowancesforqualifications–forexample,afirstaid
certificaten anyreimbursementofcarexpenses–calculatedby
referencetothedistancetravelledbythecar–whichisanexemptcarexpensepaymentbenefitforfringebenefitstaxpurposes.
Juryfeescanincludeattendancefeesandtravelandmealallowances.Onlytheattendancefeesshownonyourpaymentsummaryareassessablefortax.
Reasonable travel allowances and overtime meal allowances not shown on a payment summaryPayersdonothavetoshowbonafidetravelallowancespaidfortravelawayfromyourhomeinthecourseofyourdutiesasanemployeeorbonafideovertimemealallowancespaidunderanindustriallaw,awardoragreementonpaymentsummariesunlesstheallowancesexceedtheCommissioner’sreasonableallowanceamounts.Thereasonableovertimemealallowanceforthe2006–07yearis$21.90.Ifyouhavereceivedsuchanallowanceanditisnotshownonyourpaymentsummary,youdonothavetoincludeitasincomeatthisitemprovidingyouhavespentalltheallowanceondeductibleexpensesandyouarenotmakingaclaimforexpensesrelatingtotheallowanceonyourtaxreturn(seequestionD2fortravelexpensesandquestionD5forovertimemealexpenses).
DeductionsYoucannotautomaticallyclaimadeductionjustbecauseyoureceivedanallowance.CarefullyreadtheDeductionssectionthatstartsonpage36.
COMPLETING THIS ITEM
STEP1 Addupalltheamountsoftaxwithheldfromyourallowances,earningsandothersalaryandwageincome.WritethetotalamountoftaxwithheldattheleftofK item2onpage2ofyourtaxreturn.Donotshowcents.
Donotincludeanyamountsoftaxwithheldalreadyshownonyourtaxreturn.
STEP2 Addupallyourallowances,earningsandothersalaryandwageincome.DonotincludeamountslistedintheStopboxonthepreviouspage.
Includeallallowancesandearningsyoureceived,whetherornottheyareshownonapaymentsummary,signedcopy,letterorstatementfromyourpayer.
Makesureyouincludeanyreimbursementsofcarexpensesyoureceivedthatwereworkedoutbyreferencetothedistancetravelledbythecar.
STEP3 Writethetotalat K item2onyourtaxreturn.Donotshowcents.
CHECK THAT YOU HAVE . . . writtenonyourtaxreturnthetotalamountoftaxwithheldfromallowances,earningsandothersalaryandwageincome
writtenonyourtaxreturnthetotalamountofallowances,earningsandothersalaryandwageincomerequiredtobeshown
keptallyourpaymentsummaries;signedcopies,lettersorstatementsfromyourpayers;orthestatutorydeclarationsyouhavecompleted.Donotattachthemtoyourtaxreturn.
Youneedtokeepyourrecordsasevidence(seeKeepyourrecordsonpage10).
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QUESTION 3LUMP SUM PAYMENTS
COMPLETING THIS ITEM
What to do with amounts shown at ‘A’ on your payment summary, signed copy, letter or statementSTEP1 Adduptheamountsoftaxwithheldasshownoneachpaymentsummary,signedcopy,letterorstatementfromyourpayer.Donotincludeanyamountsalreadyincludedatitem1or2.Writethetotalattheleftof R item3onyourtaxreturn.Donotshowcents.
STEP2 Adduptheamountsshownat‘A’oneachpaymentsummary,signedcopy,letterorstatementfromyourpayer.Writethetotalat R item3onyourtaxreturn.Donotshowcents.
STEP3 Ifyouleftyourjobbecauseofbonafideredundancy,invalidityorunderanapprovedearlyretirementscheme,printtheletterRintheTYPEbox attherightof R item3onyourtaxreturn.Otherwise,printtheletterTintheTYPEbox .Checkwithyourpayerifyouarenotsure.
What to do with amounts shown at ‘b’ on your payment summary, signed copy, letter or statementSTEP1 Adduptheamountsoftaxwithheldasshownoneachpaymentsummary,signedcopy,letterorstatementfromyourpayer.Donotincludeanyamountsalreadyincludedatitem1or2oratstep1above.WritethetotalattheleftofH item3onyourtaxreturn.Donotshowcents.
STEP2 Adduptheamountsasshownat‘B’oneachpaymentsummary,signedcopy,letterorstatementfromyourpayer.Thendivideby20toworkout5%oftheamount.
STEP3 Writetheanswerfromstep2atH item3onyourtaxreturn.Donotshowcents.
CHECK THAT YOU HAVE . . . writtenonyourtaxreturntheamountsoftaxwithheld writtenonyourtaxreturntheamountsofincome keptcopiesofallyourpaymentsummaries,signedcopies,lettersorstatementsfromyourpayers.Donotattachthemtoyourtaxreturn.
Did you receive any lump sum payments for unused annual leave or unused long service leave?
NO Gotoquestion4.
YES Readbelow.
STOPDonotshowatthisitem:n approvedearlyretirementschemepayments
andbonafideredundancypaymentsshownas‘LumpsumD’onyourpaymentsummary.Theseamountsareoftenpaidatthesametimeasaneligibleterminationpayment(ETP).LumpsumDamountsarenottaxedandarenotshownasincomeatanyitemonyourtaxreturn.IfyoureceivedanETP,completeitem4Eligibleterminationpayments.
n lumpsumpaymentsinarrearsshownas‘LumpsumE’onyourpaymentsummary.Theseamountsaredealtwithatquestion22OtherincomeinTaxPack 2007 supplement.
WHAT YOU NEEDn YourPAYG payment summary – individual non-business
showinganamountat‘A’or‘B’inthelumpsumpaymentsbox
orn Asignedcopy,letterorstatementfromyourpayer
What are the amounts at ‘A’ and ‘b’ in the lump sum payments box on your payment summary, signed copy, letter or statement?Theamountat‘A’waspaidtoyou:n forunusedlongserviceleavethataccruedafter
15August1978ifyouleftyourjobbecauseofbonafideredundancy,invalidityorunderanapprovedearlyretirementscheme
n forunusedannualleaveifyouleftyourjobbecauseofbonafideredundancy,invalidityorunderanapprovedearlyretirementscheme
n forunusedlongserviceleavethataccruedafter15August1978andbefore18August1993ifyoudidnotleaveyourjobbecauseofbonafideredundancy,invalidityorunderanapprovedearlyretirementscheme,or
n forunusedannualleavethataccruedbefore18August1993ifyoudidnotleaveyourjobbecauseofbonafideredundancy,invalidityorunderanapprovedearlyretirementscheme.
Theamountat‘B’waspaidtoyouforunusedlongserviceleavewhichyouaccumulatedbefore16August1978.
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QUESTION 4ELIGIBLE TERMINATION PAYMENTS
IfyouhavereceivedanETP,thenyoushouldhavereceivedanETPpaymentsummaryfromyourpayer,employerorsuperannuationfund.InformationonyourETPpaymentsummaryincludestheassessableamountoftheETPandtheamountoftaxthathasbeenwithheld.IfyoudidnotreceiveanETPpaymentsummary,contactthepersonwhopaidyourETPtoobtainone.
STOPDonotshowatthisitemalumpsumpaymentyoureceived:n onterminationofforeignemployment–showthisat
item19onyourtaxreturn(supplementarysection)n fromanon-residentsuperannuationfund–showthis
atitem19onyourtaxreturn(supplementarysection),or
n asthetrusteeofadeceasedestate–thisETPmustbeshownonthetrusttaxreturn,notonyourpersonaltaxreturn.
DonotshowatthisitemtheamountofyourrolledoverETP.FormoreinformationonwhatarolledoverETPis,refertothedefinitionssectiononpage22.
IfyouenteredAustraliaonatemporaryresident’svisaandhavepermanentlydepartedAustralia,youmayhavereceivedadepartingAustraliasuperannuationpaymentfromyoursuperannuationfund.ThispaymentisnotanETPanddoesnotformpartofyourassessableincome.Donotshowitanywhereonyourtaxreturn.
NO Gotoquestion5.
YES Readbelow.
WHAT YOU NEEDYourETPpaymentsummary.Ifyouhavelostit,youwillneedasignedcopyofthesummary,aletterorstatementfromthepayerthatshowsallthedetailsofyourETP.IfyouthinkthedetailsonyourETPpaymentsummaryarewrong,contactthepersonwhopreparedit.YouneedthedetailsonyourETPpaymentsummarytocompleteyourtaxreturnunlessyouhavereceivedareasonablebenefitlimit(RBL)determinationnotice.
YourRBLdeterminationnotice.WewouldhavesentyouanRBLdeterminationnoticeifyourETPexceededyourRBL.IfyouhavereceivedanRBLdeterminationnotice,youwillalsoneedthistocompleteyourtaxreturn.
YourRBListhemaximumamountofretirementandterminationofemploymentbenefitsyoucanreceiveoveryourlifetimeatconcessional(reduced)taxrates.Inmostcases,youremployerorsuperannuationfundwillhavereportedthepaymenttous.UsingthispaymentinformationweworkoutwhetheryourETPwaswithinyourRBL.
Did you receive an eligible termination payment (ETP)?
AnETPcanbeanyofthefollowing:n alumpsumpaymentfromyouremployerwhenyou
retiredorceasedemploymentn alumpsumpaymentfromasuperannuationfund,
approveddepositfund,retirementsavingsaccountorlifeinsurancecompany
n asimilarpaymenttothoseabove,paidtoyouasthebeneficiaryofapersonwhohasdied.Wecallthisa‘deathbenefitETP’.However,ifthepaymentsweremadetoyouasthetrusteeofadeceasedestatetheymustbeshownonthetrusttaxreturn,notonyourpersonaltaxreturn
n apaymentfromtheTaxOfficeofamountscollectedfromanemployereitherbywayofSuperannuationGuaranteeChargepaymentsorpaymentstotheSuperannuationHoldingAccountsSpecialAccount.
Examplesofalumpsumpaidtoyoubyyouremployerwhenyouretiredorceasedemploymentare:n apaymentinlieuofnoticeora‘goldenhandshake’n apaymentforunusedsickleaveorunusedrostered
daysoffn compensationforlossofajoborwrongfuldismissaln abonafideredundancypaymentoranapprovedearly
retirementschemepaymentthatexceededthetax-freethresholdforsuchpayments–currently$6,783plus$3,392foreachcompleteyearofservice
n apaymentreceivedbecauseofinvalidity.
Examplesofalumpsumpaymentfromasuperannuationfund,approveddepositfund,retirementsavingsaccountorlifeinsurancecompanyare:n paymentsyoureceivedwhenyouchangedyour
superannuationpensionorannuityintoalumpsumn paymentsyoureceivedwhenyoumadeawithdrawal
fromanapproveddepositfundn otherpaymentsyoureceivedfromasuperannuation
fund,excludingapensionorannuityoradepartingAustraliasuperannuationpayment.
IfyouarestillunsurewhetherthepaymentyoureceivedisanETP,visitourwebsiteatwww.ato.gov.au/superorphonetheSuperannuationInfoline(seetheinsidebackcover).
MOREINFORMATIONn Eligible termination payments: an employee’s guide to
lump sum payments from your employer (NAT2700)n Eligible termination payments: an individual’s guide to
lump sum superannuation payments (NAT2701)Thesepublicationsareavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
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– how these may affect you(NAT5256).Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
Weworkoutthetaxpayablebasedonthecomponentsofyoureligibleterminationpayment(ETP).ItisimportantyouattachyourETPpaymentsummaryandyourreasonablebenefitlimit(RBL)determinationnoticeifyouhavereceivedone,topage3ofyourtaxreturn.
NOTEIfyoulodgeyourtaxreturnwithETPincomeatitem4butdonotattachanETPpaymentsummary,asignedcopyofit,oraletterorstatementfromyourpayer,wewillsendyourtaxreturnbackaskingyoutolodgeitagainwiththenecessarydocument.
AnswerthequestionsinpartsAandBbelow,thenfollowthestepsunderCompletingthisiteminthenextcolumnfortheamountstoincludeatitem4onyourtaxreturn.
IfyoureceivedmorethanoneETP,checkpartsAandBforeachETPyouhavereceived.Youmayneedtoaddthetotalsbeforetransferringthemtoyourtaxreturn.
PART A
Did you receive an RbL determination notice for your ETP?
NO GotopartB.
YES Readbelow.
WewouldhavesentyouanRBLdeterminationnoticeifyourETPexceededyourRBL.YourRBLdeterminationnoticeprovidestheadjustedETPcomponentsthatyouusetorecalculatetheassessableamountatstep1andtheexcessivecomponentamountatstep3underCompletingthisitem.
PART b
Did you receive a death benefit ETP – that is, a lump sum you received because of the death of another person?
NO GotoCompletingthisiteminthenextcolumn.
YES Readbelow.
YOU NEED TO KNOWYouwillfindthenecessaryETPcomponentsat‘Section3–ETPcashpaymentdetails’onyourETPpaymentsummaryoronyourRBLdeterminationnoticeifyourETPexceededyourRBL.
Ifyoureceivedapaymentastrusteeofadeceasedestate,thefollowinginstructionsdonotapplytoyou.Thetrusteemustlodgeatrusttaxreturnforthedeceasedestateandfollowtheinstructionsforthattaxreturn.Theobligationtopaytax,ifany,iswiththetrustee.
Ifyoureceivedapaymentandyouwereadependant(seethedefinitionssection)ofthedeceased,thedeathbenefitETPisnottaxable.DonotshowitanywhereonyourtaxreturnunlessyouhavereceivedanRBLdetermination
noticeforthisETP.IfyouhavereceivedanRBLdeterminationnotice,youonlypaytaxontheexcessivecomponentofthedeathbenefitETP.Gotostep3underCompletingthisitemonthenextpage.
Ifyoureceivedapaymentandyouwerenotadependantofthedeceased,youmustshowalloftheassessableamountofthispaymentonyourtaxreturn.IfyouhavereceivedanRBLdeterminationnoticeshowinganexcessivecomponent,youmustshowtheexcessivecomponentamountfromyourRBLdeterminationnoticeandrecalculateanewassessableamounttocompleteyourtaxreturn.Gotostep1underCompletingthisitem.
COMPLETING THIS ITEM
STEP1 Totalalltheassessableamounts(otherthantheexcessivecomponent).AddtheassessableamountsshownonyourETPpaymentsummaries.
IfanRBLdeterminationnoticehasbeenissuedforanyofyourETPs,donotusetheassessableamountshownonthatETPpaymentsummary.Instead,youmustrecalculatetheassessableamountbyapplyingthefollowingpercentagesinthetablebelowtotheadjustedETPcomponentsshownonyourRBLdeterminationnotice.
THE PERCENTAGE OF EACH ETP COMPONENT TO bE INCLUDED IN YOUR ASSESSAbLE AMOUNT
ETPcomponent Assessableamountofcomponent
Pre1July1983 5%
Post-June1983taxed 100%
Post-June1983untaxed 100%
Undeductedcontributions Nil
Post-June1994invaliditycomponent
Nil
CGT-exemptcomponent Nil
Concessionalcomponent 5%
IfyouhaveanETPpaymentsummaryorRBLdeterminationnoticeshowinganon-qualifyingcomponent(seethedefinitionssection),subtracttheamountofthiscomponentfromyourETPassessableamount.Thenon-qualifyingcomponentamountisassessableincome.Showthisamountatitem22ofyourtaxreturn(supplementarysection).
RepeatthisstepforeachETPyouhavereceived.Addallassessableamountsandwritethetotalassessableamount(otherthanexcessivecomponent)at I item4onpage2ofyourtaxreturn.Donotshowcents.
STEP2 TotaltaxwithheldamountsWritethetotalamountoftaxwithheldfromallofyourETPsinthetaxwithheldcolumnatitem4onyourtaxreturn.Donotshowcents.ThisamountcanbefoundonyourETPpaymentsummary.
YoumustincludeonyourtaxreturnthetaxwithheldamountshownonyourETPpaymentsummaryevenifanRBLdeterminationnoticewasissuedfortheETP.
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ESTEP3 Totalexcessivecomponents–ifapplicableIfyouhavereceivedareasonablebenefitlimit(RBL)determinationnoticewhichshowsanexcessivecomponent,writetheamountoftheexcessivecomponentatN item4onyourtaxreturn.ThisincludesanRBLdeterminationnoticeinrespectofadeathbenefiteligibleterminationpayment(ETP).Donotshowcents.
STEP4 Attachthe‘Payee’sTaxReturnCopy’ofyourETPpaymentsummaryandacopyofyourRBLdeterminationnoticeifyouhavereceivedonetopage3ofyourtaxreturn.
CHECK THAT YOU HAVE . . . writtenonyourtaxreturntheamountofalltaxwithheld writtenonyourtaxreturnthetotalassessableamount(otherthanexcessivecomponents)ofyourETPs
writtenonyourtaxreturnthetotaloftheexcessivecomponentsfortheETPsforwhichyoureceivedanRBLdeterminationnotice
attachedtopage3ofyourtaxreturnthe‘Payee’sTaxReturnCopy’ofyourETPpaymentsummaries,signedcopiesofthesedocuments,orlettersorstatementsfromyouremployer,andacopyofanyRBLdeterminationnoticeyouhavereceivedfromtheTaxOffice
keptcopiesofyourETPpaymentsummaries,signedcopies,orlettersorstatementsfromyouremployer.Youneedtokeeptheserecordsasevidence(seeKeepyourrecordsonpage10).
HOW YOUR TAx IS WORKED OUTTheamountoftaxpayableonyourETPdependsonthefollowing:n thepercentageofeachETPcomponenttobeincluded
inyourassessableamountandthetaxratesthatapplyforeachofthosecomponents
n whetheryouwereaged55yearsorolderwhenyoureceivedtheETPandtheamountofthelowratethresholdavailabletoyou
n whetheryouhaveexceededyourRBL,andn whetheryourETPisadeathbenefitETP.
Taxation of ETP componentsWewillworkoutyourtaxbasedontheindividualcomponentsofyourETP.ThetaxratesthatapplyforeachoftheETPcomponentsareexplainedbelow.
Concessionalcomponentandpre-July1983component–5%ofeachofthesecomponentsisincludedinyourassessableincomeandtaxedatyourusualrate.
Undeductedcontributions,post-June1994invaliditycomponentsandCGT-exemptcomponentsareexemptfromtaxandarenotincludedinyourassessableamount.
Non-qualifyingcomponent–100%ofthisamountisincludedinyourassessableincomeandtaxedatyourusualrate.Showthisamountatitem22onyourtaxreturn(supplementarysection).
Post-June1983component–thismaybeeithera‘taxedelement’oran‘untaxedelement’.Somepaymentswillhavebothelementspresent.‘Taxedelement’meansthatthepayer–usuallyasuperannuationfund–has
alreadypaidacontributionstaxonthiselement.‘Untaxedelement’meansthatthepaymenthasnotbeensubjecttocontributionstax.Forthisreason,theelementsaretaxeddifferently,asshowninthetablebelow.
TAx RATES ON POST-JUNE �983 ELEMENTS
TheseratesandthresholdsdonotapplytodeathbenefitETPs.
Agewhenreceived Taxedelement
Untaxedelement
Under55years 20% 30%
55yearsorover– upto$135,590– excessover$135,590
0%15%
15%30%
AnyMedicarelevyisaddedtotheserates.AMedicarelevywillnotapplytoataxedelementwherethetaxrateiszero.
Yourpost-June1983componentisincludedinfullinyourassessableincomeonyourtaxreturnevenwhereitissubjecttoaniltaxrate.Whereapplicablewegiveyouataxoffsettoensurethatthecorrecttaxratesareapplied.
Theinclusionofthepost-June1983componentinfullinyourassessableincomemayaffectyourentitlementtoothertaxoffsets,forexample,theseniorAustralians,beneficiaryandlowincometaxoffsets.
TheassessableamountsoftheotherETPcomponentsmaysimilarlyaffectthesetaxoffsets.
Excessivecomponent–thiscomponentistaxedatahigherratethantheotherETPcomponents.Thetaxrateis45%plusMedicarelevyiftheETPwaspaidbyanemployer;andeither38%or45%plusMedicarelevyiftheETPwaspaidbyasuperannuationfund.Wewillcalculatethetaxontheexcessivecomponentforyou.
Taxation of an ETP when you are aged 55 years or olderIfyouwereaged55yearsorolderwhenyoureceivedyourETPandhaveapost-June1983componentshownonyourETPpaymentsummary,someorallofthisportionoftheETPmaybetaxedatalowerrate.Thereisalimittotheamountofthepost-June1983componentsthataretaxedatthelowerrate.Thisiscalledthe‘lowratethreshold’(seethetableonthenextpage).Thelimitisindexedeachyear.
Thelowratethresholdappliestothetotalofallthepost-June1983components(taxedanduntaxed)youhavereceivedsince1July1988,providedyouwere55yearsorolderatthetimeyoureceivedtheETP.Wekeeparecordofthepost-June1983componentsofETPspaidtoyouandcalculatewhetherthecurrentETPisbelowthislimit.
Oncethelimithasbeenreached,youcannotuseitinfutureyears,thoughyoumayuseanyamountsaddedforannualindexation.Ifyouexceedthislimityouwillpaytaxontheamountinexcessofthethresholdattheratessetoutinthetableonthenextpage.
Ifyouturnedage55yearsonorafter1July1988andyoudidnotreceivethebenefitofthelowratethresholdincreasedbyindexation,writetous.Intheletter,stateyourageatthetimeyoureceivedtheETP,theamountof
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LOW RATE THRESHOLDS
2006–07 $135,590 1996–97 $86,917
2005–06 $129,751 1995–96 $83,574
2004–05 $123,808 1994–95 $79,975
2003–04 $117,576 1993–94 $77,796
2002–03 $112,405 1992–93 $76,949
2001–02 $105,843 1991–92 $73,776
2000–01 $101,188 1990–91 $68,628
1999–2000 $97,109 1989–90 $64,500
1998–99 $94,189 1988–89 $60,000
1997–98 $90,916
Taxation of an ETP that exceeded your reasonable benefit limit (RbL)RefertotheExcessivecomponentinformationinTaxationofETPcomponentsonthepreviouspage.
Taxation of death benefit ETPsDeathbenefitETPsaretaxeddifferentlydependingonwhothepaymenthasbeenmadeto.
ApaymenttoadependantofthedeceasedthathasnotexceededtheRBLisnottaxable.IfyoureceivedanRBLdeterminationnotice,theexcessivecomponentmustbeshownonyourtaxreturn.ThetaxationoftheexcessivecomponentisexplainedinTaxationofETPcomponents.
ApaymenttoapersonwhowasnotadependantistaxedthesameasotherETPswiththeexceptionofthetaxratesapplicabletothepost-June1983component.RefertotheinformationinTaxationofETPcomponents.
Apaymenttothetrusteeofthedeceasedestatemustbedeclaredonthedeceasedestate’strusttaxreturn.
DEFINITIONS
DependantYouwereadependantofthedeceasedif,atthetimeofdeathorthetimethepaymentwasmade,youwere:n thesurvivingspouse(includingadefacto)n aformerspousen achildofthedeceasedwhowasunder18yearsoldn financiallydependentonthedeceased,orn inaninterdependencyrelationshipwiththedeceased.Seethedefinitionofspouseonpage110.
Excessive componentAnexcessivecomponentistheamountbywhichyourETPexceedsyourRBL.
Interdependency relationshipAninterdependencyrelationshipexistsifthereisaclosepersonalrelationshipbetweentwopeoplewholivetogetherandoneorbothprovideforthefinancial,domesticandpersonalsupportoftheother.
Aninterdependencyrelationshipcanalsoexistifthereisaclosepersonalrelationshipbuttheotherconditionsarenotsatisfiedbecauseofthephysical,intellectualorpsychiatricdisabilityofoneofthepeople.
Non-qualifying componentThiscomponentisveryrare.Itrelatestotheearningsonannuitiesthatwerepurchasedwithnon-superannuationmoneyanddoesnotqualifyforconcessionaltaxrates.
Reasonable benefit limitsIn2006–07,thelumpsumRBLis$678,149andthepensionRBLis$1,356,291.YoumaybeentitledtothepensionRBLifyoutakemorethanhalfofthevalue(forRBLpurposes)ofyourbenefits,orusemorethanhalfofyourpensionRBLasapensionorannuitywhichmeetsthepensionorannuitystandards.
DeathbenefitETPsarealwaysmeasuredagainstthepensionRBLofthedeceasedperson.
Rolled over ETPYouhaverolledoveryourETPifyoutransferredapartorallofittoacomplyingsuperannuationfund,retirementsavingsaccountoranapproveddepositfund;orusedapartorallofittobuyanannuity.IfyourolledsomeorallofyourETP,youshouldhavereceivedanETProll-overstatementfromthepayer.YoudonotneedtodeclaretherolledovercomponentofyourETPonyourtaxreturnatthisstage.Thetaxpayableontherolledovercomponentisdeferreduntilyoureceivethebenefit.
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QUESTION 5AUSTRALIAN GOVERNMENT ALLOWANCES AND PAYMENTS
Donotshowatthisitemthepaymentslistedinthefollowingbox.
STOPDonotshowanyofthesepaymentsatthisitem:n exemptpayments–thesearelistedonpages13–14n OverseasStudentHigherEducationLoanProgramme
amountsfromyourhighereducationprovider–thesepaymentsshouldnotbeincludedanywhereonyourtaxreturn
n emergencyandgeneralassistancepayments–thesepaymentsareshownatitem22Otherincomeonyourtaxreturn(supplementarysection).
WHAT YOU NEEDn YourPAYG payment summary – individual non-business
orn Aletterfromtheagencythatpaidyourallowanceor
paymentstatingtheamountthatyoureceived
Ifyouhavenotreceivedthisinformationoryouhavelostit,contacttheagencythatpaidyou.
COMPLETING THIS ITEM
STEP1 Addupalltheamountsoftaxwithheldasshownoneachpaymentsummaryorletter.Writethetotalamountoftaxwithheldattheleftof A item5onyourtaxreturn.Donotshowcents.
STEP2 Addupallthetaxableamountsyoureceived.Writethetotalamountat A item5.Donotshowcents.
Donotattachtheletterorpaymentsummaryaboutthesepaymentstoyourtaxreturn.
NOTEYoumaybeentitledtoataxoffsetonthisincome.Taxoffsetsreducetheamountoftaxyouhavetopay.Ifyoureceivedoneormoreofthepaymentslistedatthisquestion,youmaybeentitledtoabeneficiarytaxoffset.Youdonothavetoworkoutyourtaxoffset.WeworkitoutforyoufromtheincomeyoushowatA item5.Ifyouwanttoworkitoutbeforeyoureceiveyournoticeofassessment,youcanusethebeneficiarytaxoffsetcalculatoronourwebsite,orworksheet4.1onpage123.
Did you receive any of the following Australian Government payments?n Parentingpayment(partnered)n Newstartallowancen Youthallowancen Matureageallowancen Partnerallowancen Sicknessallowancen Specialbenefitn Widowallowancen Austudypaymentn Exceptionalcircumstancesreliefpayment
orfarmhelpincomesupportn Interimincomesupportpaymentn CycloneLarryorCycloneMonicaincome
supportpaymentn Educationpaymentofanyofthefollowingand
youwereaged16yearsorolder– ABSTUDYlivingallowance– paymentundertheVeterans’Children
EducationScheme– paymentundertheMilitaryRehabilitation
andCompensationActEducationandTrainingScheme2004–shownas‘MRCAEducationAllowance’onyourPAYG payment summary – individual non-business
n TrainingforEmploymentProgramallowance;NewEnterpriseIncentiveSchemeallowance;textile,clothingandfootwearspecialallowance;GreenCorpstrainingallowance;orothertaxableCommonwealtheducationortrainingpayments
n IncomesupportcomponentfromaCommunityDevelopmentEmploymentProject(CDEP)–shownas‘CDEPSalaryorWages’onyourPAYG payment summary – individual non-business
n CDEPschemeparticipantsupplement
NO Gotoquestion6.
YES Readbelow.
Showyourincomefromthesepaymentsatthisitem.
NOTEInterimincomesupportpaymentsandCycloneLarryorCycloneMonicaincomesupportpaymentsarenotreportedasseparateamountsonCentrelinkPAYGpaymentsummaries,butareincludedinthetotalamountreportedforemergencyandgeneralassistancepayments.IfyoureceivedthesepaymentsyouwillneedaletterfromCentrelinknotifyingyouoftheamountyouhavereceived.Showtheseamountsatthisiteminordertogetthecorrecttaxoffset.ShowthebalanceoftheamountforemergencyandgeneralassistancepaymentsshownonyourCentrelinkPAYGpaymentsummaryatitem22Otherincomeonyourtaxreturn(supplementarysection).
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QUESTION 6AUSTRALIAN GOVERNMENT PENSIONS AND ALLOWANCES
WHAT YOU NEEDn YourPAYG payment summary – individual non-business
orn Aletterfromtheagencythatpaidyourpension,
allowanceorpaymentstatingtheamountthatyoureceived
Ifyouhavenotreceivedthisinformation,oryouhavelostit,contacttheagencythatpaidyou.
COMPLETING THIS ITEM
STEP1 Addupalltheamountsoftaxwithheldasshownonyourpaymentsummariesorletters.Writethetotalamountoftaxwithheldattheleftof b item6onpage2ofyourtaxreturn.Donotshowcents.
STEP2 Addupalltheincomeyoureceived.Writethetotalamountat b item6.Donotshowcents.
Donotattachtheletterorpaymentsummaryaboutthesepaymentstoyourtaxreturn.
IMPORTANTYoumaybeentitledtoataxoffsetonthisincome.Taxoffsetsreducetheamountoftaxyouhavetopay.
WorkthroughquestionsT2SeniorAustraliansandT3Pensionertoseeifyouareentitledtoataxoffset.Fillintherelevantitemonyourtaxreturn.Weworkoutyourtaxoffsetentitlementbasedonthetaxoffsetcodeandveterancode(ifapplicable)thatyouprintonyourtaxreturn.
Makesureyouprintthecorrectcodeletters;otherwise,youmaynotreceiveyourcorrectentitlement.
Did you receive any of the following payments from Centrelink or the Department of Veterans’ Affairs?n Agepensionn Bereavementallowancen Carerpaymentn Disabilitysupportpensionandyouhave
reachedage-pensionagen Educationentrypaymentn Parentingpayment(single)n WidowBpensionn Wifepensionandeitheryouoryourpartner
wasofage-pensionagen Ageservicepensionn Incomesupportsupplementn DefenceForceincomesupportallowance(DFISA)
wherethepension,paymentorallowancetowhichitrelatesistaxable
n DFISA-likepaymentfromtheDepartmentofVeterans’Affairs(DVA)
n Invalidityservicepensionandyouhavereachedage-pensionage
n Partnerservicepension
NO Gotoquestion7.
YES Readbelow.
Showyourincomefromthesepaymentsatthisitem.Donotshowatthisitemthepaymentslistedintheboxbelow.
STOPDonotshowthefollowingpaymentsatthisitemoryoumaybetaxedincorrectly:n exemptpayments–thesearelistedonpages13–14n SuperannuationActandDefenceForcesRetirement
BenefitsActpensionsandpaymentsn eligibleterminationpaymentsn foreignpensions.
Otherquestionsdealwiththesematters.RefertotherelevanttopicsintheIndex.
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QUESTION 7OTHER AUSTRALIAN PENSIONS OR ANNUITIES
WHAT YOU NEEDn YourPAYG payment summary – individual non-business
orn AstatementfromyourAustralianannuity,
superannuation,otherpensionfundorRSAprovider
Ifyouhavenotreceivedyourpaymentsummaryorstatement,oryouhavelostit,contactyourpayertoobtainacopy.
COMPLETING THIS ITEM
STEP1 Printthetypeofannuityorpension–forexample,‘superannuationpension’–intheTYPEbox atitem7onpage2ofyourtaxreturn.Ifyoureceivedmorethanonetype,printthetypethatgaveyouthelargestamountofincome.
STEP2 Addupallthetaxwithheldamountsasshownonyourpaymentsummariesandstatementsandwritethetotalamountattheleftof J item7.Donotshowcents.Donotincludeamountsalreadyshownatitems1,3and4.
STEP3 Addupallthegrossamountsshownonyourpaymentsummariesandstatementsandwritethetotalamountat J item7.Donotshowcents.
Donotattachthepaymentsummariesandstatementsaboutthesepaymentstoyourtaxreturn.
DEDUCTIONSANDTAXOFFSETSUndeducted purchase priceIfyourannuityorpensionhadanundeductedpurchaseprice,youcanclaimthedeductibleamount.ReadquestionD9onpages61–2.
Senior Australians tax offsetYoumaybeentitledtotheseniorAustralianstaxoffset.ReadquestionT2onpages86–7tofindoutmoreaboutthistaxoffset.
Superannuation annuity and pension tax offsetYoumaybeentitledtoataxoffsetforyourannuityorpension.ReadquestionT4onpage90tofindoutmoreaboutthistaxoffset.
Did you receive an Australian:n annuityn superannuation pension n pension not shown at question 6?
STOPDonotshowforeignpensionsorforeignannuitiesatthisitem.Incomefromaforeignsourceisdealtwithatquestion19ForeignsourceincomeandforeignassetsorpropertyinTaxPack 2007 supplement.
NO Gotoquestion8.
YES Readbelow.
YOU NEED TO KNOWAustralianannuitiesandpensionsinclude:n superannuationandsimilarpensionsandannuities
paidtoyoubyanAustraliansuperannuationfund,lifeassurancecompanyorretirementsavingsaccount(RSA)provider,and
n pensionspaidbyafundestablishedforthebenefitofCommonwealth,stateorterritoryemployeesandtheirdependants–forexample,fundsmanagedbyComSuperandVicSuper.
AlsoshowatthisitemAustralianannuitiesandpensionspaidtoyouwhileyouwerestillworking.
NOTES1 Ifyouhavenotgivenyourtaxfilenumber(TFN)toyour
fundorRSAprovider,theymaywithholdagreaterrateoftaxfromyourbenefitthanifyouhadprovidedit.YoucanphoneorwritetoyourfundorRSAproviderandquoteyourTFN.
2 SuperannuationfundsandRSAprovidersalsouseTFNstokeeptrackofsuperannuationbenefits.
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QUESTION 8ATTRIBUTED PERSONAL SERVICES INCOME
Wherethepaymenthasbeenmadetoapersonalservicesentity,theincome(lessanydeductionsallowabletothepersonalservicesentityingainingorproducingthepersonalservicesincome)willbeattributedtoyouunless:n thepersonalservicesentitygainedtheincomeinthe
courseofconductingapersonalservicesbusiness,orn theincomehasbeenpromptlypaidtoyoubytheentity
assalary.
YoucanfindanexplanationoftherulesrelatingtotheattributionofpersonalservicesincomeinTaxation Ruling TR 2003/6: Income tax – attribution of personal services income.Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
Wherethepersonalservicesentityhasanetpersonalservicesincomelossrelatingtoyourpersonalservicesincomethereisnoamountattributedtoyou.YouareentitledtoadeductionforthelossandyoumustanswerquestionD15inTaxPack 2007 supplement.
IfyouneedhelpinrelationtotheserulesvisitourwebsiteorphonetheBusinessInfoline(seetheinsidebackcover).
COMPLETING THIS ITEM
STEP1 WritethetotalamountoftaxpaidorwithheldfrompersonalservicesincomeattributedtoyouattheleftofO item8onyourtaxreturn.Donotshowcents.Donotshowanytaxwithheldamountthatyouhaveincludedelsewhereonyourtaxreturn.
STEP2 WritethetotalamountofpersonalservicesincomeattributedtoyouatO item8onyourtaxreturn.Donotshowcents.
CHECK THAT YOU HAVE . . . writtenonyourtaxreturntheamountsoftaxpaidorwithheld
writtenonyourtaxreturntheamountsofpersonalservicesincomeattributedtoyou
keptcopiesofallyourpaymentsummaries.Donotattachthemtoyourtaxreturn.
Did you have personal services income attributed to you from a company, partnership or trust?IfyouhavereceivedaPAYG payment summary – personal services attributed income,youranswertothisquestionisYESandyoumustcompleteitem8onyourtaxreturn.
Whereyouhaveprovidedpersonalservicesforrewardandthepaymentforyourserviceswasmadetoyouasasoletrader,youranswertothisquestionisNO.Inthatcaseyoumustanswerquestion13inTaxPack 2007 supplementandcompleteitemP1intheBusiness and professional items schedule for individuals 2007(NAT2816–6.2007).Thesepublicationsareavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
STOPDonotshowatthisitemamountsshownonaPAYG payment summary – individual non-business.
Youshouldhavealreadyshowntheseamountsatitem1Salaryorwagesoritem2Allowances,earnings,tips,director’sfeesetc.
NO GotoTotaltaxwithheldonthenextpage.
YES Readbelow.
WHAT YOU NEEDn YourPAYG payment summary – personal services
attributed incomeshowingtheamountofpersonalservicesincomeattributedtoyouandthetotalamountoftaxpaidorwithheld
n Detailsofanyotherpersonalservicesincomeattributedtoyou
Ifyoudonothaveallofyourdocuments,contactthepersonwhopaidyou.
YOU NEED TO KNOWTherearespecialrulesfortheincometaxtreatmentofcertainpersonalservicesincome.
Personalservicesincomeisincomethatismainlyarewardforyourpersonaleffortsorskillsandisgenerallypaideithertoyouortoapersonalservicesentity(acompany,partnershiportrust).
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PAY AS YOU GO (PAYG) INSTALMENTS YoudonotneedtoshowinstalmentsmadeunderthePAYGinstalmentssystemanywhereonyourtaxreturn.Theamountsarecreditedautomaticallyinyourassessment.
Toensureyouarecreditedwiththecorrectamount,makesureyoulodgeallyouractivitystatementsbeforeyoulodgeyourtaxreturn.Youshouldlodgeanyoutstandingactivitystatementsevenifyouhavepaidyourinstalmentsorhavenothingtopay.
Addupalltheamountsinthetaxwithheldboxesatitems1to8onpage2ofyourtaxreturn.
Writethetotalamountat $ TOTALTAXWITHHELDonyourtaxreturn.Gotoquestion9.
Tax offsets and your tax withheldIfyourtaxoffsetorfamilytaxbenefitentitlementshavechangedsinceyoulastfilledinaWithholding declaration(NAT3093–7.2007)authorisingyourpayertovarytheamountoftaxwithheld,youmayneedtofillinanewdeclaration.Ifyourfamilytaxbenefitentitlementshavechanged,youwillalsoneedtocompletetheWithholding declaration family tax benefit worksheet(NAT7089–7.2007).Contactyourpayerformoreinformation.Failuretofillinanewdeclarationmayresultinataxdebt.Pages76–97tellyouabouttaxoffsets.Formoreinformationaboutfamilytaxbenefit,seepages71–5.
Additional tax withheld for the Higher Education Loan Programme and the Student Financial Supplement SchemeIfyouhad:n anaccumulatedHigherEducationLoanProgramme
debt,orn anaccumulatedStudentFinancialSupplement
Schemedebttheadditionaltaxwithheldfromyourpayformspartofyournormaltaxwithheld–shownonyourpaymentsummary–andisthereforealreadyincludedinthetotalamountyoushowat $ TOTALTAXWITHHELDonyourtaxreturn.Pages120–130showyouhowweworkoutyourtax.
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QUESTION 9TOTAL REPORTABLE FRINGE BENEFITS AMOUNTS
ThehighestmarginalrateofincometaxplusMedicarelevyisusedtogrossupyourfringebenefits,soafringebenefithavingataxablevalueof$1,000.01becomesareportablefringebenefitsamountof$1,869.
Ifyourpaymentsummaryshowsareportablefringebenefitsamountoflessthan$1,869youwillneedtocheckwithyouremployerabouttheamountorthemethodofcalculatingtheamount.
ThetotalamountofreportablefringebenefitsthatyoushowonyourtaxreturnisnotincludedinyourtotalincomeorlossamountandyoudonotpayincometaxorMedicarelevyonit.
However,itwillbeusedindeterminingyourentitlementtoorliabilityfor:n Medicarelevysurchargen deductionsforsuperannuationcontributionsn superannuationcontributionstaxoffsetn SuperCo-contributionsn matureageworkertaxoffsetn HigherEducationLoanProgrammerepaymentsn StudentFinancialSupplementSchemerepaymentsn childsupportobligationsn certaingovernmentbenefits.
COMPLETING THIS ITEM
STEP1 Addupthereportablefringebenefitsamountsshownonyourpaymentsummaries.
STEP2 WritethetotalatW item9onyourtaxreturn.Donotshowcents.DonotshowanamountatW thatislessthan$1,869.
Do you have a reportable fringe benefits amount shown on a PAYG payment summary – individual non-business?
NO Gotoquestion10.
YES Readbelow.
WHAT YOU NEEDn YourPAYG payment summary – individual non-business
MOREINFORMATIONYoucanfindmoreinformationinReportable fringe benefits – facts for employees (NAT2836).Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
YOU NEED TO KNOWYouneedtocompletethisitemifyouand/oranassociatereceivedcertainfringebenefitsandanypaymentsummariesprovidedbyyouremployershowedareportablefringebenefitsamount.
Youremployerhastokeeprecordsofthevalueofanyfringebenefitsgiventoyouand/oryourassociate,butonlyneedstoshowthefringebenefitsonyourpaymentsummaryiftheirtaxablevalueexceeds$1,000inthefringebenefitstaxyear1April2006to31March2007.
Additionally,fortaxreturnpurposesyouremployerhastogrossupthetaxablevalueofthefringebenefitstoensuretheirvalueiscomparablewithotherformsofincomeonyourpaymentsummary.Asyoudonotpayincometaxonfringebenefits,thegrossed-uptaxablevalueofabenefitreflectsthegrosssalaryyouwouldhavetoearntopurchasethebenefitfromafter-taxdollars.
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QUESTION �0GROSS INTEREST
n writetheamountsofinterestyoureceivedduringanyperiod(s)youwereanon-resident,fromwhichwithholdingtaxwasnotdeducted
n signyourscheduleandattachittopage3ofyourtaxreturn.
PrintXintheYESboxatTaxpayer’s declaration question2aonpage8ofyourtaxreturn.Wewillworkouttheamountofnon-residentwithholdingtaxyouhavetopayonthisinterestandadviseyouoftheamount.
WHAT YOU NEEDn Yourstatement,passbookorotherdocumentation
fromyourfinancialinstitutionorothersourcethatshows2006–07interestincome
n AnyTaxOfficenoticeofassessmentoramendedassessmentyoureceivedduring2006–07thatshowsinterestonearlypaymentsorinterestonoverpayments
COMPLETING THIS ITEM
STEP1 Usingyourrecords,addupalltheamountsofgrossinterestyoureceivedorthatwerecreditedtoyou.Youdonothavetoshowanamountifthetotalgrossinterestyouearnedfromallaccountsduringtheyearwaslessthan$1.Donotshowamountsthatwereorshouldhavebeensubjecttonon-residentwithholdingtax.
Ifyouwerenotthesoleholderofanaccount,showonlyyourshareofinterest.Foranyaccountwheretheaccountholdersdonotshareequallyintheinterest,keeparecordtoshowhowyouworkedoutyourshare.
Thegrossinterestamountyoushowatthisitemmustincludeanytaxfilenumber(TFN)amounts.TheseareamountsoftaxwithheldbythefinancialinstitutionbecauseyoudidnotquoteyourTFNorAustralianbusinessnumber(ABN)totheinstitution.TheywillbeshownonyourstatementorotherdocumentasCommonwealthtaxorTFNwithholdingtax.
NOTEDonotdeductaccount-keepingfeesandchargesfromyourgrossinterestamount.YoumaybeabletoclaimtheseatitemD7Interestanddividenddeductions.
STEP2 Writeyourgrossinterestat L item10onpage2ofyourtaxreturn.Donotshowcents.
STEP3 AddupalltheTFNamountsshownonyourstatementandtakeawayanyTFNamountsalreadyrefundedtoyou.Thesewillalsobeshownonyourstatementorotherdocument.
STEP4 Writetheanswerfromstep3atM item10.Showcents.Thisamountwillbecreditedtoyouonyournoticeofassessment.
Did you receive, or were you credited with, interest from any source within Australia?
STOPDonotshowatthisitem:n distributionsofinterestyoureceived,orwereentitled
toreceive,fromapartnershiportrust–includingacashmanagementtrust,moneymarkettrust,mortgagetrust,propertytrust,unittrustorothersimilartrustinvestmentproduct
n interestfromaforeignsourcen interestfromthelandtransportfacilitiestaxoffset
schemeorinfrastructureborrowingsscheme.
Otherquestionsdealwiththesematters.RefertotherelevanttopicsintheIndex.
Includeinterestearnedfromfinancialinstitutionaccountsandtermdepositsunlessyouwereanon-residentandhavepaid,orshouldhavepaid,non-residentwithholdingtaxonthatinterest(seeNon-residentsbelow).
IncludeanyinteresttheTaxOfficegaveyouorcreditedyouwith.Ifyouwereanon-residentandwegaveyouorcreditedyouwithinterest,seeNon-residentsbelow.
NO Gotoquestion11.
YES Readbelow.
Children’s accountsIfyouopenedoroperatedanaccountforachildandthefundsinthataccountbelongedtoyou,oryouspentorusedthefundsintheaccountasiftheybelongedtoyou,youmustincludeanyinterestfromtheaccountatthisitem.
Taxation Ruling IT 2486 – Income tax: children’s savings accounts hasmoredetail.Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
Non-residentsIfyouwereanon-residentfortaxpurposesforallorpartoftheyear(seepages11–12)andyoureceivedorwerecreditedwithinterestduringtheperiod,donotincludethatinterestatthisitem.
Ifwithholdingtaxwasdeductedfromyourinterestyoudonothavetowriteitanywhereonyourtaxreturnbecausewithholdingtaxpaidbynon-residentsisafinaltax.
However,ifwithholdingtaxwasnotdeductedfromthatinterest,youmustattachascheduleshowingthedetails.
Onaseparatepieceofpaper:n print:SCHEDULEOFADDITIONALINFORMATION
–ITEM10
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QUESTION ��DIVIDENDS
Dividendsinclude:n distributionsmadebyacorporatelimitedpartnership
(apartnershiptaxedinaccordancewithDivision5AofPartIIIoftheIncome Tax Assessment Act 1936)
n dividendspaidtoyoubyalistedinvestmentcompany.
Adividendisassessableincomeintheyearitwaspaidorcreditedtoyou.Yourdividendstatementshouldhavetherelevantdate(oftenreferredtoasthepaymentdateordatepaid).
ExAMPLE
Sallyreceivedadividendstatementnotifyingherofafinaldividendfortheyearended30June2006.Thepaymentdateshownonthedividendstatementwas30July2006.Sallymustincludetheamountofthedividend,aswellasanyfrankingcredits,inherassessableincomeonher2007taxreturn.
Demerger dividendsDividendspaidunderademergeraregenerallynotassessabledividends.Donotshowdemergerdividendsatthisitemunlessyouareadvisedbythecompanythattheyareassessable.
FindoutmoreaboutdemergersinYou and your shares 2007(NAT2632–6.2007).Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
DON’TLEAVEITTOOLATE!Didyou:n purchaseorinheritanysharesn receiveanysharesaspartofadivorcesettlement
orasagiftordonationn receiveownershipinterestsunderademerger,orn participateinadividendreinvestmentplan?
Ifyoudid,startkeepingorupdatingyourrecordsnow.Incompleterecordscouldmeanpayingmoretaxthanyouneedtowhenyoudisposeofyourshares.Forfurtherinformationaboutsharesandotherassetsthatattractcapitalgainstax,includingwhatrecordsyouneedtokeep,seethepublicationGuide to capital gains tax 2007(NAT4151–6.2007).Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
Payments, loans and forgiven debts that are treated as dividends Ifyouwereashareholder(oranassociateofashareholder)ofaprivatecompanyandreceivedpaymentsorloansfromthecompanyorhaddebtsforgivenbythecompany,thevalueofthosepayments,loansorforgivendebtsaretreatedasdividends(unlessspecificallyexcludedbylaw).
Did an Australian company (including a listed investment company), corporate unit trust, public trading trust or corporate limited partnership pay or credit you with any dividends or distributions?
STOPDonotshowatthisitem:n dividenddistributionsfromotherpartnershipsortrusts
–includingacashmanagementtrust,moneymarkettrust,mortgagetrust,unittrustormanagedfundsuchasapropertytrust,sharetrust,equitytrust,growthtrust,imputationtrust,balancedtrustorsimilartrustinvestmentproduct(seequestion12)
n dividendsfromforeigncompanies(seequestion19)n thatpartofadividendordistributiononwhichfamily
trustdistributiontaxhasbeenpaid(seequestionA3).
QuestionsrelatingtotheseamountsareinTaxPack 2007 supplement.
Donotclaimdividendexpenseshere.ClaimthematitemD7.
Ifyoucarriedonthebusinessoftradinginshares,includeanydividendincomeandfrankingcreditatthisitem;ifyouhaveaprofitorlossonthesaleofshares,readquestion14inTaxPack 2007 supplement.
Ifyousoldsharesduringtheyearandyoudidnotcarryonabusinessoftradinginshares,youmustreadquestion17inTaxPack 2007 supplementtoseeifyouneedtoshowacapitalgainorcapitalloss.
IfaNewZealandcompanyhaspaidyouadividendwithAustralianfrankingcreditsattached,youmaybeeligibletoclaimthefrankingcredits.YoushowthedividendsandclaimtheAustralianfrankingcreditsatitem19Foreignsourceincomeandforeignassetsorproperty.Readquestion19inTaxPack 2007 supplement.
NO GotoIncomefromthesupplementarysectiononpage34.
YES Readbelow.
YOU NEED TO KNOWYouneedtoshowatthisitemallyourassessabledividendsincluding:n thosepaiddirectlytoyoun dividendsappliedunderadividendreinvestmentplann dividendsthatwereotherwisedealtwithonyourbehalf,
andn bonussharesthatqualifyasdividends.
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shareholder)ofaprivatecompanythathad(orwasgoingtohavebyacertaintime)anunpaidpresententitlementfromatrustestateand
n thetrusteeofthetrustestatemadeapaymentorloan,orforgaveadebt,inyourfavour.
Combinetheamountsthatweretreatedasdividendswithanyunfrankeddividendsyoureceivedandincludethetotalamountinyourassessableincomeat S item11onyourtaxreturn.
Formoreinformation,readYou and your shares 2007.
Returns on non-share equity interestsDividendsalsoincludedividendspaidonanon-shareequityinterest.Tofindoutmoreaboutthis,readYou and your shares 2007.
Non-residentsWithholdingtaxpaidbynon-residentsisafinaltax.
IfyouwerenotanAustralianresidentfortaxpurposesforallorpartoftheyear(seepages11–12),includedividendincomepaidorcreditedtoyouduringthatperiodatthisitemunless:n thedividendwasfullyfranked,orn thedividendwasnotfullyfranked,buteither:
– withholdingtaxwas(orshouldhavebeen)withheldfromtheunfrankedamount,or
– theunfrankedamountwasdeclaredtobeconduitforeignincomeinthedividendstatement.
Onaseparatepieceofpaper,printSCHEDULEOFADDITIONALINFORMATION–ITEM11.Providedetailsofanydividendyoureceivedduringanyperiodyouwereanon-residentthatwasnotfullyfranked,andwasnotdeclaredtobeconduitforeignincome,oronwhichyouhavenotpaidwithholdingtax.
Signyourscheduleandattachittopage3ofyourtaxreturn.PrintXintheYESboxatTaxpayer’s declarationquestion2aonpage8ofyourtaxreturn.Wewillworkouttheamountofwithholdingtaxyouhavetopayonthedividends,andadviseyouoftheamount.
IMPUTATION SYSTEMDividendsthatAustralianresidentcompaniespaytheirshareholdersaretaxedunderasystemknownas‘imputation’.Itiscalledanimputationsystembecausethetaxthecompanypaysisimputedorattributedtotheshareholders.Thetaxpaidbythecompanyisallocatedtoshareholdersbywayoffrankingcreditsattachedtothedividendstheyreceive.
Youincludeanamountequaltothefrankingcreditattachedtoyourdividendinyourassessableincome.Youarealsoentitledtoafrankingtaxoffsetequaltotheamountincludedinyourincome(therearesomeexceptionstothisrule,seeFrankingcredittrading–qualifiedpersons,inthenextcolumn).
Thefrankingtaxoffsetwillbeusedtocover,orpartlycover,thetaxpayableonthedividends.Ifthetaxoffsetismorethanthetaxpayableonthedividends,theexcesstaxoffset
willbeusedtocover,orpartlycover,anytaxpayableonothertaxableincomereceived.
Ifthereisanytaxoffsetamountleftoverafterthat,werefundthatamounttoyou.
NOTEIfyouhaveafrankingcreditbutdonothavetolodgeataxreturn,seeFrankingcreditsonthenextpage.YoucanclaimyourrefundonashorterformincludedinthepublicationRefund of franking credits instructions and application for individuals 2007.
Somesituationsarenotcoveredbytheimputationsystemandthetaxpaidbythecompanyisnotallocatedtoshareholdersbywayoffrankingcredits.Frankingcreditsdonotattachtothefollowingdividends:n thepartofthedividendonwhichfamilytrustdistribution
taxhasbeenpaid.Thesedividendsareexemptincomeandyoucannotclaimthefrankingcredit.(Thecompanyorcorporatelimitedpartnershipthatpaidthedividendshouldtellyouiffamilytrustdistributiontaxhasbeenpaidonit.)
n adividendthatisincludedinatrustdistributiononwhichultimatebeneficiarynon-disclosuretaxhasbeenpaid.(Thetrusteewillletyouknowifadistributionfitsthiscategory.)
n dividendswhereyouengagedinfrankingcredittradingandfailedtosatisfythe‘holdingperiod’ruleorthe‘relatedpayments’rule(seebelow)
n dividendstotheextentthatafrankingtaxoffsetisdeniedbecauseyouhaveexceededthesmallshareholderfrankingtaxoffsetlimitcontainedinthefrankingcredittradingrules
n dividendsfromanon-equitysharewhich,althoughashareinlegalform,isnottreatedasanequityinterest,sothedividendsarenotfrankable.(You and your shares 2007hasmoreinformationonnon-equityshares.)
n demergerdividends.
Franking credit trading – qualified personsMeasuresdesignedtocurbtheunintendeduseoffrankingcreditsapplytopeoplewhodonoteffectivelyownthesharesorwhoonlybrieflyowntheshares.Underthesemeasures,knownasthe‘holdingperiodrule’andthe‘relatedpaymentsrule’,youmustsatisfycertaincriteriabeforeyouqualifyforfrankingtaxoffsets.Inotherwords,onlyqualifiedpeopleareabletohavethebenefitofthefrankingcreditattachedtotheirdividends.Thesemeasuresaddresstheissueoffrankingcredittrading.
Theholdingperiodruleappliestosharesboughtonorafter1July1997.Itwillapplytoyouifyousellshareswithin45daysofbuyingthem.Italsoappliesifyouenterintoariskdiminutionarrangement,suchasaderivativetransaction,withinthattime.Theholdingperiodis90daysforcertainpreferenceshares.
Therelatedpaymentsruleappliestoarrangementsenteredintoafter7.30pm(AustralianEasternStandardTime)on13May1997.Itappliestoyouifyouwereunderanobligationtomakearelatedpaymentforadividendandyoudidnotholdyourshares‘atrisk’duringaspecifiedqualifyingperiod.
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EIfyoufailedtosatisfytheholdingperiodrule,andtherelatedpaymentsruledoesnotapplytoyou,youmaystillbeentitledtoafrankingtaxoffsetifyouqualifyforthesmallshareholderexemption.Thesmallshareholderexemptionappliesprovidedthatyoudonotexceedthefrankingtaxoffsetlimitof$5,000onallofyourfrankingtaxoffsetentitlementsinagivenyear,whetherreceiveddirectlyorindirectly(suchasthroughatrustorpartnership).
Ifanyofthesemeasuresarelikelytoaffectyou,readYou and your shares 2007.
Unfranked dividends UnfrankeddividendsarepaidbyanAustralianresidentcompanythathasnotalreadypaidAustraliancompanytax.Ifyourdividendwasunfranked,youarenotentitledtoafrankingtaxoffset.Youmustincludetheunfrankeddividendinyourassessableincomeat S item11onyourtaxreturn.
NOTEIfyourdividendstatementshowsthatyourunfrankeddividendwaspaidoutofconduitforeignincome,youmuststillincludethisamountasunfrankeddividendincome.
Ifyoudidnotquoteyourtaxfilenumber(TFN)toyourinvestmentbodyforthesharesorunitsyouheld,taxmayhavebeenwithheldfromanyunfrankeddividendsatthehighestmarginalrateplustheMedicarelevy,atotalof46.5%.
TFNamountswithheldfromyourunfrankeddividendswillbeshownonyourdividendstatement.YoucanclaimacreditforanyTFNamountswithheldat V item11onyourtaxreturn.IfyouhavereceivedarefundofsomeoralloftheTFNamountswithheld,youcannotclaimacreditfortheseamounts.
Franked dividendsYoumustincludetheamountofanyfrankeddividendsyoureceivedfromaresidentcompanyinyourassessableincomeat T item11.
Franking creditsYoumustalsoincludeanyfrankingcreditinyourassessableincomeatU item11onyourtaxreturn,sowecancalculatethecorrectamountoftaxandMedicarelevy.However,donotincludeanyfrankingcreditifyoudonotqualifyforafrankingtaxoffsetbecauseoftheapplicationoftheholdingperiodruleortherelatedpaymentsruleorbecauseyouexceededthesmallshareholderexemptionlimit(seethefrankingcredittradingmeasuresdescribedonthepreviouspage).
Thefrankingcreditsattachedtodividendsarefromdividendsfrankedatthecompanytaxrateof30centsinthedollar(thatis,thecompanypaidtaxonitstaxableincomeattherateof30%).
Anamountequaltothefrankingcreditwillbeautomaticallyallowedasataxoffsettoreduceanytaxpayableonyourdividendsandanyothertaxableincomereceived.
Formoreinformation,readYou and your shares2007.
WHAT YOU NEEDYouneedyourstatementsfromthecompany,corporateunittrust,publictradingtrustorcorporatelimitedpartnershipthatpaidyouthedividendsormadethedistributions.
Thesestatementsshouldshow:n theamountsofunfrankedandfrankeddividends
youreceivedn theamountsoffrankingcreditsyoureceived(the
companyworksthisoutandallocatesittothedividendordistribution),and
n theTFNamountswithheldfromunfrankeddividends.
Ifyouhavenotreceivedyourdividendordistributionstatements,contactthecompany,corporateunittrust,publictradingtrustorcorporatelimitedpartnershipthatpaidorcreditedyouwiththedividendsordistributions.
NOTEShowonlyyourshareofanydividendsthatwerepaidorcreditedtoyou(forexample,ifyouandanotherpersonownedthesharesinyourjointnames,showonlyyourportionofthedividendincomeonyourtaxreturn).
COMPLETING THIS ITEM
Thereisanexampleonthenextpageonhowtoshowunfrankedandfrankeddividends.Itmayhelpyoucompletethefollowingsteps.
STEP1 Addupalltheunfrankeddividendamountsonyourstatements–includinganyTFNamountswithheld–plusanyamountstreatedasdividends.Writethetotalamountat S item11onpage2ofyourtaxreturn.Donotshowcents.
STEP2 Addupallthefrankeddividendamountsonyourstatementsandanyotherfrankeddividendspaidorcreditedtoyou.Writethetotalamountat T item11.Donotshowcents.
NOTEIfyourstatementdoesnotshowthefrankedandunfrankedportionsofthedividend,includethetotaldividendamountat T item11.
STEP3 Addupalltheallowablefrankingcreditamountsonyourstatements.WritethetotalamountatU item11.Donotshowcents.
STEP4 AddupanyTFNamountswithheldthathavenotbeenrefundedtoyou.Writethetotalamountat V item11.Showcents.Thisamountwillappearasacreditonyournoticeofassessment.
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ECHECK THAT YOU HAVE . . . writtenonyourtaxreturnthetotalunfrankedamount writtenonyourtaxreturnthetotalfrankedamount writtenonyourtaxreturnthetotalallowablefrankingcreditamount
writtenonyourtaxreturnthetotaltaxfilenumber(TFN)amountwithheldfromdividends,and
keptyourdividendstatementswithyourotherrecords.
ExAMPLE
Howtoshowunfrankedandfrankeddividends
RanjinihassharesinCoalsTyreLtd,TelsbraLtd,JTCorporateUnitTrustandSYFPtyLtd.ShehasnotgivenherTFNtoTelsbraorSYF.
Forthe2006–07year,Ranjini’sdividendstatementsfromthecompaniesshehassharesinshowed:a)CoalsTyreLtd–fullyfrankeddividendsof$70and
a$30frankingcreditb)Telsbra–anunfrankeddividendof$100.ATFN
amountof$46.50waswithheldfromherpayment,soshereceived$53.50.TheunfrankeddividendamountRanjinimustshowonhertaxreturnis$100($53.50plus$46.50)
c) JTCorporateUnitTrust–unfrankeddividendsof$50,frankeddividendsof$70anda$30frankingcredit
d)SYFPtyLtd–adividendof$240,madeupofanunfrankeddividendof$100andafrankeddividendof$140.ATFNwithheldamountof$46.50waswithheldfromtheunfrankeddividendamount,soRanjinireceived$53.50.Theunfrankeddividendamountshemustshowonhertaxreturnis$100($53.50plus$46.50).Forthefrankeddividendof$140,shehadafrankingcreditof$60.NoTFNamountiswithheldfromfrankeddividends.
Companyortrust
Unfrankedamount*
Frankedamount
Frankingcredit
TFNamountswithheldfromdividends
a)CoalsTyreLtd $0.00 $70.00 $30.00 $0.00
b)TelsbraLtd $100.00 $0.00 $0.00 $46.50
c)JTCUTrust $50.00 $70.00 $30.00 $0.00
d)SYFPtyLtd $100.00 $140.00 $60.00 $46.50
Total S $250.00 T $280.00 U $120.00 V $93.00
*UnfrankedamountincludesboththeamountreceivedorcreditedandtheTFNamountwithheld.
Formoreexamples,refertoYou and your shares 2007.
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INCOME FROM THE SUPPLEMENTARY SECTION
‘Otherincome’includes:– anon-qualifyingcomponentofaneligibletermination
payment– discountsonshares,stapledsecuritiesorrightsto
acquirethemunderanemployeesharescheme– lumpsumpaymentsinarrears– foreignexchangegains– royalties– bonusamountsdistributedfromfriendlysociety
incomebonds– taxablescholarships,bursaries,grantsorother
educationalawards– benefitsorprizesfrominvestment-relatedlotteries
andsomegame-showwinnings– incomefromyouractivitiesasaspecialprofessional,
suchasauthorofaliterary,dramatic,musicalorartisticwork;aninventor;aperformingartist;aproductionassociateoranactivesportsperson
– reimbursementsoftax-relatedexpensesorelectionexpenseswhichyouhaveclaimedasadeduction
– anassessablebalancingadjustmentfromthedisposal,lossordestructionofanydepreciatingasset,includingyourcar,forwhichyouhaveclaimedadeductionfordeclineinvalue
– paymentsfromsicknessandaccidentinsurancepoliciesotherthanthoseshownonyourpaymentsummary
– interestfromthelandtransportfacilitiestaxoffsetschemeorinfrastructureborrowings
– gainsfromthedisposalorredemptionoftraditionalsecurities
– allowancesorpaymentsyoureceivedasamemberofalocalgovernmentcouncilthatyouhavenotalreadyshownatitem1or2
– othertaxableallowancesorpaymentsyoureceivedfromCentrelinkthatarenotshownatitem5or6.
Loss typesn Abusinessloss(includingifyouareself-employed)n Adeferrednon-commercialbusinesslossn Acapitalloss,forexample,ondisposalofaCGTassetn Non-capitallossfromthedisposalorredemptionof
traditionalsecurities
NO GotoTotalincomeorlossonthenextpage.
YES YoumustcompletetheTax return for individuals (supplementary section) 2007.Readbelow.
Ifyouhadpersonalservicesincome,netincomeorlossfrombusiness,ordeferrednon-commercialbusinesslossesyouwillneedtoreadthepublicationBusiness and professional items 2007 (NAT2543–6.2007)thencompletetheBusiness and professional items schedule for individuals 2007andattachittopage3ofyourtaxreturn.
CAUTIONReadthisquestioncarefully–consultTaxPack 2007 supplementifyouarenotfamiliarwiththetermsused.
Did you derive any of the following types of income or incur any of the following types of losses?
Income typesn Partnershipandtrustdistributionsn Personalservicesincome(otherthansalaryorwages)*n Incomefromabusiness(includingifyouare
self-employed)n Incomeunderapayasyougo(PAYG)voluntary
agreementn Incomefromwhichanamountwaswithheldbecause
youdidnotquoteyourAustralianbusinessnumbern Incomereceivedasanindependentcontractorunder
alabourhirearrangementn Incomeyouearnedasanon-employeetaxidriver,for
example,adriveroperatingunderastandardbailmentagreementwithanowner/operator
n Incomefromwhichanamountwaswithheldduetotheoperationofforeignresidentwithholding
n Incomeyoudepositedintoafarmmanagementaccountn Incomeyouwithdrewfromafarmmanagementaccountn Acapitalgain,forexample,ondisposalofacapital
gainstax(CGT)assetn Adistributionfromaforeignentityn Incomeattributedtoyoufromacontrolledforeign
company,foreigninvestmentfund,foreignlifepolicyoratransferortrust(foreignincome)
n Incomereceivedfromaforeignsource,includingforeignpensionsandforeignemploymentincome,andforeigndividends,forexample,NewZealanddividendswithAustralianfrankingcredits**
n Rentn Bonusesfromlifeinsurancecompaniesandfriendly
societiesn Otherincomenotshownatitems1to11
* Personalservicesincomeincludesthefollowingpaymentsspecifiedbyregulation(‘specifiedpayments’):– incomeasaperformingartistinapromotionalactivity– paymentfortutorialservicesprovidedfortheIndigenous
TutorialAssistanceSchemeoftheDepartmentofEducation,ScienceandTraining
– paymentfortranslationandinterpretationservicesfortheTranslatingandInterpretingServiceoftheDepartmentofImmigrationandCitizenship.
**Youmustalsocompletethesupplementarysectionif:– youownforeignassets(includinganinterestinaforeignlife
policyorforeigncompanyortrust,orshares)– youhaveeverdirectlyorindirectlycausedthetransferof
property(includingmoney)orservicestoanon-residenttrustestate.
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YoucanfindtheTax return for individuals (supplementary section) 2007atthebackofTaxPack 2007 supplement.Ifyoudon’thaveacopyofthissupplement,youcangetonefrommostnewsagentsduringthelodgmentperiod(1Julyto31October2007).CopiesarealsoavailableallyearfromourPublicationsDistributionService(seetheinsidebackcover)andshopfronts.
COMPLETING THIS ITEM
STEP1 Completethedetailsatthetopofpage9onyourtaxreturn(supplementarysection).UseTaxPack 2007 supplement tohelpyoucompletetheIncomesection.
STEP2 TransfertheamountyouwroteatTOTALSUPPLEMENTINCOMEORLOSSonpage11to I onpage2ofyourtaxreturn.Ifitisalossamount,printLintheLOSSbox besideit.
TOTAL INCOME OR LOSS
Ifyouhavenotbeenabletocompleteanyoftheincomeitemsbecauseyoudonothaveallthedocumentsyouneedtoworkouttherightamount–forexample,youaremissingapaymentsummary–donotcompletethissectionyet.
Rememberthatyouhaveuntil31October2007tolodgeyourtaxreturn.Youshouldnotlodgeyourtaxreturnifitisincomplete.Ifyouthinkyouwillstillbemissinginformationon31October,asktheTaxOfficeifyoucanlodgeatalaterdate.Seepages10–11forinformationonhowtodothis.
COMPLETING THIS ITEM
STEP1 Addupalltheamountsintheright-handcolumnofitems1to11and I –donotinclude I ifitisaloss–onyourtaxreturn.
STEP2 Takeanylossamountat I awayfromtheamountyouworkedoutatstep1.Youranswerisyourtotalincomeorloss.
STEP3 Writeyouranswerfromstep2atTOTALINCOMEORLOSSonpage2ofyourtaxreturn.Donotshowcents.
Ifyoumadeanoverallloss,printLintheLOSSbox attherightofTOTALINCOMEORLOSS.
You have now reached the end of the Income section.Beforeaddingupyourincomeamountsfromitems1to11andanyamountat I onpage2ofyourtaxreturn,pleasenotethefollowing:n Themorecommontypesofexemptincomearelisted
onpages13–14.Generallyyourexemptincomeisnotincludedonyourtaxreturn.
n Youmusthaveshownallofyourincomefortaxpurposes.TheTaxpayer’s declaration onpage8ofyourtaxreturnwillrequireyoutosignthatthisistrue.Theprecedingpages15–35giveyoutheinformationyouneedtoshowtherightamounts.Ifyoustillhaveincomethatyouhavenotputatanyitemanditisnotexemptincome,youwillneedtogobackthroughtheIncomesectionandincludeit.
Ifyouareinanydoubt,phonethePersonalInfoline(seetheinsidebackcover).
Ourauditactivitiesincludecheckingtheincomedetailsyouprovideonyourtaxreturnwithothersources–forexample,youremployer,yourbankortheAustralianGovernmentagencythatpaysyourpension,allowanceorpayment.
NOTEIfyouwere55yearsorolderon30June2007,youmaybeentitledtothematureageworkertaxoffset.Certainincomefromthesupplementarysectionwillbeusedtocalculateyournetincomefromworking.SeequestionT13Netincomefromworking–supplementarysectionforfurtherinformation.
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SDeductionsCLAIMING DEDUCTIONS FOR ExPENSES THAT RELATE TO YOUR WORK AS AN EMPLOYEE
expenditureinapriorincomeyearandapportioneditundertheadvanceexpenditurerulesandtheprepaidserviceextendedintothe2006–07incomeyear,youmayclaimtherelevantportionoftheexpenditureonyour2007taxreturn.
Ifyouneedtoknowmore,refertoDeductions for prepaid expenses(NAT4170–6.2007).Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
AllowancesReceivinganallowancefromyouremployerdoesnotautomaticallyentitleyoutoadeduction.Youmuststillmeetthebasicruleslistedinthepreviouscolumntomakeaclaim.Youcanclaimonlythetotalamountyouincurredeveniftheallowanceismore.Forexample,ifyoureceivedatoolsallowanceof$500andyourtoolexpenseswere$400,youmustincludethewholeamountoftheallowanceatitem2onyourtaxreturnandthedeductionyoucanclaimatitemD5is$400.
Written evidence rule – records you need to keep for claims of more than $300Youmusthavewrittenevidencetoproveyourclaimsifyourtotalclaimsexceed$300.Therecordsyoukeepmustprovethetotalamount,notjusttheamountover$300.
The$300limitdoesnotapplytoclaimsforcar,mealallowance,awardtransportpaymentsallowanceandtravelallowanceexpenses.Therearespecialwrittenevidencerulesfortheseclaimswhichareexplainedattherelevantquestions.
NOTEDonotsendinyourreceiptsorotherrecordswithyourtaxreturnunlesswerequestyoutodosoinwriting.
What is written evidence?Writtenevidencecanbe:n adocumentfromthesupplierofthegoodsorservices,
showing:– thenameofthesupplier– theamountoftheexpense– thenatureofthegoodsorservices–ifnotshown,
youmaywritethisonthedocumentbeforeyoulodgeyourtaxreturn
– thedatetheexpensewasincurred– thedateofthedocument
n anotherdocumentorcombinationofdocumentscontainingtheinformationlistedabove.
Ifyouuseacombinationofdocuments,thedatesofthedocumentsarenotrequiredbuttheyneedtocontainthedateyouincurredtheexpense.
Thesedocumentscanbeinwrittenorelectronicform.Theyinclude:– bankandotherfinancialinstitutionstatements– creditcardstatements
Youcanclaimdeductionsforwork-relatedexpensesyouincurredwhileperformingyourjob.Youincurawork-relatedexpensewhen:n youreceiveabillorinvoiceforanexpensethatyouare
liableforandmustpayn youdonotreceiveabillorinvoicebutyouarecharged
andyoupayforit. RefertoTaxation Ruling TR 97/7 – Income tax:
subsection 51(1) – meaning of ‘incurred’ – timing of deductionsformoreinformation.Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.Ifyourwork-relatedexpenseincludesanamountofgoodsandservicestax(GST),theGSTispartofthetotalexpenseandisthereforepartofanyallowablededuction.
basic rulesn Youmusthaveincurredtheexpensein2006–07.n Youcannotclaimanexpensethatyouremployer(or
anyotherperson)hasorwillreimburseyoufor.n Youmusthaveincurredtheexpenseinthecourseof
earningyourassessableincomeanditmustnotbeprivate,domesticorcapitalinnature.Forexample,thecostsofnormaltraveltoandfromworkorbuyingluncheachdayareprivate.Ifyouincurredanexpensethatwasbothworkrelatedandprivateordomestic,youcanonlyclaimadeductionforthework-relatedportionoftheexpense.
n Ifyouincurredanexpenseforservicespaidinadvance,readAdvanceexpenditurebelowtodecidewhatpartoftheexpenseisallowablein2006–07.
n Youmustbeabletosubstantiateyourclaimswithwrittenevidenceifthetotalamountyouareclaimingforexpenses,notincludingclaimsforcar,mealallowance,awardtransportpaymentsallowanceandtravelallowanceexpenses,isgreaterthan$300(seeWrittenevidencerule–recordsyouneedtokeepforclaimsofmorethan$300inthenextcolumn).
n Ifthetotalamountyouareclaimingis$300orless,youneedtobeabletoshowhowyouworkedoutyourclaimsbutyoudonotneedwrittenevidence.
BUSINESSEXPENSESIfyourincomecomesfromcarryingonabusinessyouclaimyourbusinessexpensesusingtheBusiness and professional items schedule for individuals 2007.Seequestions13and14inTaxPack 2007supplement.
Advance expenditureYoumustfollowtheapportionmentrulesforadvanceexpenditureifyouprepayforaservicecosting$1,000ormoreandtheserviceextendsforaperiodofmorethan12monthsorbeyond30June2008.Undertheserulesyoumaybeentitledtoclaimonlypartoftheexpenditurethisyearandtheremainderinfutureyears.Ifyouincurred
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S– BPAYreferencenumbers,oftenalsocalledreceipt
ortransactionnumbers– emailreceipts– yourPAYG payment summary – individual
non-business;thismayshow,forexample,yourtotalunionfees
– paperorelectroniccopiesofdocuments–thesemustbeatrueandclearreproductionoftheoriginal
n evidenceyouhaverecordedyourself:– forexpensesof$10eachorless,providingthetotal
oftheseexpensesisnotmorethan$200– ifyouhavebeenunabletoobtainwrittenevidence–
forexample,fortollorparkingfeeswhereyoucannotgetareceipt.
Yourrecordsmustshowthesamedetailsasadocumentfromasupplierasdescribedabove.
YourdocumentationmustbeinEnglishunlessyouincurredtheexpenseoutsideAustralia.
Formoreinformation,seeLaw Administration Practice StatementPS LA 2005/7 – Substantiation of deductions claimed by individual taxpayers for work and car expenses incurred in the course of earning non-business and non-investment income.Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
Electronic recordsWerecommendthatifyoustoreyourrecordselectronicallyyoumakeaback-upcopytoensuretheevidenceiseasilyaccessibleiftheoriginalbecomesinaccessibleorunreadable(forexample,whereacompactdisk,floppydiskorharddriveiscorrupted).
Claims of $300 or lessWemayaskyoutotellushowyouworkedoutyourclaimandexplainwhyyourclaimisreasonable,basedontherequirementsofyouroccupation.Youdonotneedwrittenevidence;youcanmakereasonableestimates.
DON’TLEAVEITTOOLATE!Willyourtotalclaimsforwork-relatedexpensesexceed$300nextyear?Ifyouareunsure,youmaywanttokeepwrittenevidenceofyourexpensesduringtheyear.Youwillneedthisevidenceifyouwanttoclaimmorethan$300.
How long you need to keep your recordsYoumustkeepyourwrittenevidenceforfiveyearsfromthedateyoulodgeyourtaxreturn.IfattheendofthisperiodyouareinadisputewiththeTaxOfficethatrelatestoaworkexpense,youmustkeeptherelevantrecordsuntilthedisputeisresolved.
Fordepreciatingassets,youmustkeeprecordsfortheentireperiodoverwhichyouclaimdeductionsforthedeclineinvalueofthoseassets.Youmustkeepyourrecordsforafurtherfiveyearsfromthedateofyourlastclaim.Forexample,ifthiswasyourlastclaimyear,thefiveyearsstartfromthedateyoulodgeyour2007taxreturn.Thisperiodisextendedif,whenthefiveyearsend,youareinadisputewithusthatrelatestoadepreciatingasset.
DEFINITIONAdepreciating assetisanassetthathasalimitedeffectivelifeandcanreasonablybeexpectedtodeclineinvalueoverthetimeitisused.
EXAMPLE
Keeping recordsLindabuysacomputerfor$4,000inJuly2003.Lindauseshercomputerforwork60%ofthetime.Sheclaims60%ofthedeclineinvalueonthecostofhercomputeroverfouryears.Linda’slastclaimforadeductionfordeclineinvalueisonher2007taxreturnwhichshelodgeson14October2007.
Lindamustkeepherrecordsuntil31October2012.IfatthistimesheisinadisputewiththeTaxOfficethatrelatestothisclaim,shemustkeepherrecordsuntilthedisputeisresolved.
Ifyouhavelostyourrecordsortheyhavebeendestroyed,phonethePersonalInfoline(seetheinsidebackcover)tofindoutwhatyoucando.
Why you need to keep your recordsWewillworkoutyourrefundortaxdebtusingtheinformationyouprovideonyourtaxreturn.Wemayaskformoreinformationorauditthisinformationatalaterdate.Youneedtokeepyourrecordstoproveyourdeductionclaimsincaseweaudityou.
Questions D1 to D6 on the following pages show you how to claim deductions for expenses that relate to your work as an employee.
Extra information for some occupationsWeprovidesummariesoftaxrulingsfor16occupations:n Airline employees(NAT2331–6.2007)n Australian Defence Force members(NAT2321–6.2007)n Building workers(NAT2324–6.2007)n Cleaners(NAT2328–6.2007)n Factory workers(NAT2329–6.2007)n Hairdressers(NAT2320–6.2007)n Hospitality industry employees(NAT2326–6.2007)n Journalists(NAT2782–6.2007)n Lawyers(NAT2327–6.2007)n Nurses(NAT2319–6.2007)n Performing artists(NAT2325–6.2007)n Police officers(NAT2316–6.2007)n Real estate employees(NAT2323–6.2007)n Shop assistants(NAT2322–6.2007)n Teachers(NAT2317–6.2007)n Truck drivers(NAT2318–6.2007)
Youremployer,tradeunionorprofessionalassociationshouldhavecopiesofthesepublications.Theyarealsoavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
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QUESTION D�WORK-RELATED CAR EXPENSES
n youhadtotravelbetweenhomeandworkmorethanonceaday
n youwereoncall–forexample,youwereonstandbydutyandyouremployercontactedyouathometocomeintowork
n therewasnopublictransportnearwhereyouworkn youworkedoutsidenormalbusinesshours–for
example,shiftworkorovertime,orn yourhomewasaplaceofbusinessandyoutravelled
directlytoaplaceofemployment.
WHAT YOU MAY NEEDn Writtenevidenceofyourcarexpenses–receipts,
invoicesordiaryentriesn Carlogbookandodometerrecordsn Guide to depreciating assets 2007(NAT1996–6.2007)n Law Administration Practice Statement PS LA 1999/2
– Calculating car expense deductions where the car is jointly owned, jointly leased or jointly hired under a hire purchase agreement (but is not owned, leased or hired by a partnership)
n Law Administration Practice Statement PS LA 2005/7 – Substantiation of deductions claimed by individual taxpayers for work and car expenses incurred in the course of earning non-business and non-investment income
Thesepublicationsareavailableonourwebsiteortofindouthowtogetprintedcopies,seetheinsidebackcover.
Youcanclaimthecostoftripsbetweenhomeandworkif:n youusedyourcarbecauseyouhadtocarrybulkytools
orequipmentthatyouusedforworkandcouldnotleaveatwork–forexample,anextensionladderorcello
n yourhomewasabaseofemployment–youstartedyourworkathomeandtravelledtoaworkplacetocontinuethework,or
n youhadshiftingplacesofemployment – youregularlyworkedatmorethanonesiteeachdaybeforereturninghome.
Taxation Ruling TR 95/34 – Income tax: employees carrying out itinerant work hasmoreinformationontravelexpensesforemployeeswhohaveshiftingplacesofemployment.Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
Youcanclaimthecostofusingyourcartotraveldirectlybetweentwoseparateplacesofemployment–forexample,whenyouhaveasecondjob.
Did you have any car expenses relating to your work as an employee?Donotincludeexpensesforvehiclesotherthancars–forexample,utilitytrucksorpanelvanswithacarryingcapacityofonetonneormore,vehicleswithacarryingcapacityofnineormorepassengers,ormotorcycles.ShowexpensesforthesevehiclesatitemD2.
Donotincludetravelexpensesincludingshort-termcarhire,publictransportfares,bridgeandroadtolls,parkingfees,taxifares,orthework-relatedrunningcostsofacarownedorleasedbysomebodyelse–aborrowedcar.YoumaybeabletoclaimtheseatitemD2.
NO GotoquestionD2.
YES Readbelow.
CAUTIONIfyoureceivedanallowanceforcarexpensesorareimbursementthatwasworkedoutbyreferencetothedistancethecartravelled,youmustshowtheamountofthereimbursementorallowanceasincomeatitem2onyourtaxreturn.
Youcanclaimatthisitemyourwork-relatedexpensesforusingacarthatyouowned,leasedorhired(underahirepurchaseagreement).
Youcannotclaimatthisitemanyexpensesrelatingtoacarownedorleasedbysomeoneelse,includingyouremployeroranothermemberofyourfamily.However,weconsideryoutobetheownerorlesseeofacarandeligibletoclaimexpenseswhereafamilyorprivatearrangementmadeyoutheownerorlesseeeventhoughyouwerenottheregisteredowner.Forexample,wewouldallowyoutoclaimforafamilycarthatwasgiventoyouasabirthdaypresentandwhich,althoughitwasnotregisteredinyourname,youusedasyourownandforwhichyoupaidallexpenses.
Ifyouownedorleasedacarorhiredoneunderahirepurchaseagreement,youcanuseoneofthefourmethodsexplainedinthisquestiontoclaimyourwork-relatedcarexpenses.
Dependingonthemethodyouchoose,youwillneedtoknoworestimateyourbusinesskilometres.Businesskilometresarethekilometresyoutravelledinthecarinthecourseofusingitforwork-relatedpurposes.
YOU NEED TO KNOW
Using your car for workYoucannotclaimthecostofnormaltripsbetweenhomeandworkasthattravelisprivate.Youcannotclaimitevenif:n youdidminortasks–forexample,pickingupthemail
onthewaytoworkorhome
D1
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ExAMPLE
Willisaclerkatalargedepartmentstore.During2006–07heusedhisowncartotravelfromhisnormalplaceofemploymenttohissecondjobasawaiter.Afterfinishingworkasawaiter,hewentdirectlyhome.Will’stravelcostfromhisnormalplaceofemploymenttohissecondjobisanallowablededuction.However,hecannotclaimthecostoftravellinghomefromhissecondjob.
Youcanclaimthecostofusingyourcartotravel:n fromyournormalworkplacetoanalternativeworkplace
–forexample,aclient’spremises–whilestillondutyandbacktoyournormalworkplaceordirectlyhome
n fromyourhometoanalternativeworkplaceforworkpurposesandthentoyournormalworkplaceordirectlyhome.
ExAMPLE
Becisaclerkatalargedepartmentstoreinthecity.In2006–07shewasrequiredtoattendmeetingsatheremployer’sotherstoreinthesuburbs.Sheusedherowncartotraveltothemeetings.Asthemeetingsfinishedlate,Becwentdirectlyhomeafterthemeetings.
Beccanclaimthecostofeachjourney.
Calculating your deductionYoucanuseoneofthefourmethodssummarisedbelowtoworkoutyourcarexpenses.Choosethemethodthatgivesyouthelargestdeductionandensureyouhavethenecessaryevidence.
METHOD � – Cents per kilometre n Yourclaimisbasedonasetrateforeach
businesskilometre.n Youcanclaimamaximumof5,000businesskilometres.n Youdonotneedwrittenevidence.
METHOD 2 – �2% of original value n Yourclaimisbasedon12%oftheoriginalvalueof
yourcar.n Thevalueissubjecttoluxurycarlimits.n Yourcarmusthave(orwouldhave)travelledmorethan
5,000businesskilometresintheincomeyear.n Youdonotneedwrittenevidence.
METHOD 3 – One-third of actual expenses n Youclaimone-thirdofyourcar’sexpenses.n Yourcarmusthave(orwouldhave)travelledmorethan
5,000businesskilometresintheincomeyear.n Youneedwrittenevidenceorodometerrecordsforfuel
andoilcosts.n Youneedwrittenevidenceforalltheotherexpenses
forthecar.
METHOD 4 – Logbook n Yourclaimisbasedonthebusinessusepercentage
ofeachcarexpense.n Youneedalogbooksoyoucanworkoutthe
percentage.n Youneedodometerreadingsforthestartandendof
theperiodyouownedorleasedthecar.n Youcanclaimfuelandoilcostsbasedonodometer
records.n Youneedwrittenevidenceforalltheotherexpenses
forthecar.
Jointly owned carsTherearespecialrulesforjointlyownedcars.Forexample,iftwopeoplehaveequalsharesinacar,underthe‘12%oforiginalvalue’method,theywouldeachclaim6%ofthevalueastheirdeduction.LawAdministrationPracticeStatementPSLA1999/2 tellsyoumoreabouttheserules.
Deductions for decline in valueIfyouareclaimingadeductionforthedeclineinvalueofacar,youshouldrefertothepublicationGuide to depreciating assets 2007.Itcontainsdetailsofhowtoworkoutdeductionsfordeclineinvalueandbalancingadjustmentsforcars.(Youmayneedtomakeabalancingadjustmentifyoudisposedofyourcar.Seethenextpage.)
Youcanonlyclaimadeductionfordeclineinvalueif:n youownedthecarorhireditunderahirepurchase
agreement,andn youusedeitherthe‘one-thirdofactualexpenses’or
‘logbook’methodtocalculateyourcarexpenses.
Ifyouleasedacaryoucannotclaimadeductionforitsdeclineinvalue(becauseyouwerenottheownerofthecar),unlessitwasaluxurycar.Specialrulesapplytoleasedluxurycars(seebelow).
Someimportantthingstoremember:n Thedeclineinvalueisworkedoutfromthedayyou
firstusethecarforanypurpose.n Youcanonlyclaimadeductionfordeclineinvaluein
ayearyouusethecarforwork-relatedpurposes.n Youwillneedtoapportionyourdeductionfordecline
invalueifyouusedthe‘logbookmethod’andownedthecarforonlypartoftheyear.
n Whencalculatingadeductionforthedeclineinvalue,thecostofthecarisrestrictedtotheluxurycarlimit(seepage41).
Leased luxury carsIfyouleasedaluxurycaryoucanclaimadeductionforitsdeclineinvalue.Specialrulesapplyifyouwanttoclaimadeductionforthedeclineinthevalueofaluxurycar:n youmustusethe‘one-thirdofactualexpenses’or
‘logbook’methodtocalculateyourcarexpenses,andn thevalueofthecarisrestrictedtotheluxurycarlimit
(seepage41).
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SAcarisconsideredtobealuxurycarifthecostofthecar–whetherneworsecond-hand–atthetimetheleasebeginsismorethantheluxurycarlimitapplyingforthatyear.PhonethePersonalInfoline(seetheinsidebackcover)tofindoutmoreaboutthespecialrules.
Decline in value and low-value pools Ifyouincludedacaryouusedforworkinyourlow-valuepool,donotincludeanamountforthedeclineinvalueofthatcarinyourcarexpensesatitemD1.Youclaimthedeductionfordeclineinvalueofthelow-valuepoolatitemD6.SeeGuide to depreciating assets 2007 forinformationonthelow-valuepoolmethodandhowtocalculatethedeclineinvalueofyourlow-costandlow-valuedepreciatingassets.
Decline in value using the simplified tax systemIfyouwereinthesimplifiedtaxsystem(STS)for2006–07,donotclaimanamountforthedeclineinvalueofyourcaratitemD1.Youmustcalculateyourwork-relateddeductionfordepreciatingassets,includingyourcar,usingtheSTSrules.YouclaimyourSTSdepreciatingassetsdeductionsatitemP8ontheBusiness and professional items schedule for individuals 2007.
NOTETousetheSTSrulesyoumustbeinbusinessandhaveelectedtoenterorcontinueintheSTSatitemS1ontheBusiness and professional items schedule for individuals 2007.
Ifyoudidnotcarryonanybusinessduring2006–07buthaveSTSpooldeductionsbecauseyouhaveallocateddepreciatingassets(suchasacar)toanSTSpoolinaprioryear,makeyourclaimforSTSpooldeductionsatitemD15onyourtaxreturn(supplementarysection).
Formoreinformation,refertoThe simplified tax system – a guide for tax agents and small businesses (NAT6459).Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
Was your car disposed of, lost or destroyed?Youmayneedtomakeabalancingadjustmentifyouhavedisposedofyourcarandyouhaveclaimedadeductionforitsdeclineinvalue.Thebalancingadjustmentisnecessaryifyou:n usedonlythe‘one-thirdofactualexpenses’or
‘logbook’methodn switchedbetweenthe‘one-thirdofactualexpenses’
methodandthe‘logbook’method,orn switchedbetweenthe‘one-thirdofactualexpenses’
or‘logbook’methodandthe‘centsperkilometre’or‘12%oforiginalvalue’method.
ThepublicationGuide to depreciating assets 2007 explainshowtomakethesecalculations.
Ifyouhadalossaftermakingtheadjustment,claimthelossamountatthisitem.Ifyouhadaprofit,includetheamountascategory1incomeatitem22onyourtaxreturn(supplementarysection).RefertotheIndexformoreinformation.
IMPORTANTAbalancingadjustmentisnotrequiredifyouhaveusedonlythe‘centsperkilometre’or‘12%oforiginalvalue’methodforcalculatingexpensesforthecar.
Award transport paymentsAwardtransportpaymentsareallowancescoveringeithertransportexpensesorcarexpensereimbursementsthatarepaidunderanindustriallaworawardthatwasinforceon29October1986.Thecarexpensereimbursementiscalculatedinrespectofacertainnumberofkilometres.
Changesmadetotheindustriallaworawardafterthatdatearetreatedasiftheyhadbeenmadeonthatday.Yourunionoremployercantellyouthe‘29October1986’amount.
Awardtransportpaymentsareassessableincomeandyoumustincludeanypaymentsasincomeonyourtaxreturn.Ifyouhaveincurredtransportorcarexpensescoveredbythesepayments,youmaybeabletoclaimadeduction:n fortransportexpenses–atitemD2n forcarexpenses–ateitherthisitemoritemD2.
Ifyourclaimforwork-relatedtransportorcarexpensesisnomorethantheawardamount,maketheclaimatitemD2.Youdonotneedwrittenevidence.
Ifyoualsohaveaclaimforanyadditionalkilometresnotcoveredbytheawardtransportpayment,youcanmaketheclaimatthisitembutyoucanonlyusethe‘logbook’method(youwillneedwrittenevidence)orthe‘centsperkilometre’method.
Remember,kilometresthatarecoveredbytheawardtransportpaymentandclaimedatitemD2arenotcountedasbusinesskilometresundereitherthe‘centsperkilometre’or‘logbook’methodbuttheyarecountedaspartofthetotalkilometrestravelledforthe‘logbook’method.Ifyoudonotknowhowmanybusinesskilometresrelatetoyourawardtransportpayment,youcanmakeareasonableestimate.
Alternatively,youmaychoosenottolimitanypartofyourclaimforwork-relatedcarexpensestotheawardamount.Ifthisisthecase,makeyourclaimatthisitem(anddonotclaimcarexpensescoveredbyyourawardtransportpaymentatitemD2).Whenmakingyourclaimatthisitemyoucanuseanyofthefourmethodstocalculateyourcarexpenses.Treatanywork-relatedkilometrescoveredbytheawardtransportpaymentasbusinesskilometres.Youwillneedtoprovidethewrittenevidencerequiredbytheparticularmethodyouselect.
Theexampleonthenextpageexplainsthedifferentwaysyoucanclaimwhenyoureceiveanawardtransportpayment.
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ExAMPLE
Emmatravelled22,000kilometresintotalduring2006–07.Halfofthesewereworkrelated.Shereceivedanawardtransportpaymentof$2,000which,underheraward,coveredtravelof5,000work-relatedkilometres.Thisleftherwith6,000businesskilometresnotcoveredbythepayment.The‘29October1986’awardtransportpaymentwas$1,400.
Emmahastoshowthe$2,000atitem2.Shecanclaimhercarexpensesinoneofthefollowingways:n Shecanclaim$1,400atitemD2.n Shecanclaim$1,400atitemD2andthenuse5,000
ofheradditional6,000businesskilometrestowardsaclaimfortotalcarexpensesatitemD1usingthe‘centsperkilometre’method(seebelow).
n Ifshehaswrittenevidenceofherexpenses,shecanclaim$1,400atitemD2andthenusealltheoutstanding6,000businesskilometrestowardsaclaimfortotalcarexpensesusingthe‘logbook’method(seepages43–4).Shedividesher6,000businesskilometresbyher22,000totalkilometrestoworkoutherbusinessusepercentage:
6,0005 100 = 27%
22,000n Ifshehaswrittenevidenceofherexpenses,she
canignoreitemD2andtreatthekilometrescoveredbytheawardtransportpaymentasbusinesskilometres,andclaimthematthisitem.Thisgivesheratotalof11,000businesskilometrestowardsaclaimfortotalcarexpensesusingthe‘logbook’method(seepages43–4).Shedividesher11,000businesskilometresbyher22,000totalkilometrestoworkoutherbusinessusepercentage:
11,0005 100 = 50%
22,000
METHOD � – Cents per kilometreYoucanusethismethodtoclaimuptoamaximumof5,000businesskilometrespercarevenifyouhavetravelledmorethan5,000businesskilometres.Forexample,ifyoutravelled5,085businesskilometres,youcanonlyclaimthecostoftravelling5,000kilometreswiththismethod.Youcannotclaimfortheextra85kilometres.
Youdonotneedwrittenevidencebutyoumayneedtobeabletoshowhowyouworkedoutyourbusinesskilometres.
STEP1 Multiplythetotalbusinesskilometrestravelled(amaximumof5,000foreachcar)bythenumberofcentsallowedforyourcar’senginecapacity(fromtheRatesperbusinesskilometretableinthenextcolumn).Divideyouranswerby100toworkouttheamountindollarsthatyoucanclaim.
RATES PER bUSINESS KILOMETRE
Ordinarycar–enginecapacity
Rotaryenginecar–enginecapacity
Centsperkilometre
1600cc(1.6litre)orless
800cc(0.8litre)orless 58cents
1601–2600cc(1.601–2.6litre)
801–1300cc(0.801–1.3litre) 69cents
2601cc(2.601litre)andover
1301cc(1.301litre)andover 70cents
Workouttheamountyoucanclaimforeachcarandaddupalltheamounts.
STEP2 Writethetotalamountat A itemD1onpage3ofyourtaxreturn.Donotshowcents.PrintthecodeletterSintheCLAIMTYPEbox besidetheamount.
METHOD 2 – �2% of original value Youcanusethismethodifyouusedyourcartotravelmorethan5,000businesskilometresin2006–07.Thismethodisalsoavailableifyouwouldhaveusedyourcartotravelmorethan5,000businesskilometreshadyouuseditforthewholeof2006–07.
Youdonotneedwrittenevidencetousethismethodbutyoumayneedtobeabletoshowhowyouworkedoutyourbusinesskilometres.
Ifyouboughtthecar,youcanclaim12%ofthecost.Ifyouleasedthecar,youcanclaim12%ofitsmarketvalueatthetimethatyoufirstleasedit.Themaximumdeductionyoucanclaimis12%oftheluxurycarlimitintheyearinwhichyoufirstusedorleasedthecar.Theluxurycarlimitsforthepast10yearsareshowninthetablebelow.
LUxURY CAR LIMITS FOR THE PAST �0 YEARS
2006–07 $57,009 2001–02 $55,134
2005–06 $57,009 2000–01 $55,134
2004–05 $57,009 1999–2000 $55,134
2003–04 $57,009 1998–99 $55,134
2002–03 $57,009 1997–98 $55,134
STEP1 Multiplythecostofthecarortheluxurycarlimit,whicheverisless,by12anddividetheresultby100.Thisistheamountyoucanclaimifyouownedorleasedyourcarforthewholeof2006–07anduseditforworkduringthatyear.
Ifyouareusingthismethodtoclaimadeductionformorethanonecar,workouttheamountyoucanclaimforeachcar.
Ifyouownedorleasedallthecarsforthewholeof2006–07,gotostep3.Otherwise,gotostep2.
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SSTEP2 Ifyoudidnotownorleasethecarforallof2006–07,youneedtoworkoutwhetheryoucanusethismethod.
Firstworkoutthenumberofdaysyouownedorleasedthecarin2006–07.
Ifyoutravelled5,000businesskilometresorless,multiplythenumberofbusinesskilometresyoutravelledby365.Dividetheresultbythenumberofdaysyouownedorleasedthecarduring2006–07.Weconsidertheanswertobethenumberofkilometresyouwouldhavetravelledifyouhadusedthecarforthewholeyear.
Ifyouranswerismorethan5,000,youcanusethismethodtoclaimyourexpenses.GotoWorkingouttheamountyoucanclaimbelow.
Ifyouransweris5,000orless,youcannotusethismethod;usethe‘centsperkilometre’or‘logbook’method.
Working out the amount you can claimMultiplytheamountyouworkedoutatstep1bythenumberofdaysyouownedorleasedthecar.Dividetheresultby365.
ExAMPLE
Aaronboughtacaron1March2007for$40,000andhetravelled3,600kilometresforworkbetween1March2007and30June2007(122days).
Becausehedidnotownthecarforthefullyear,Aaronneedstoworkoutifhecanusethe‘12%oforiginalvalue’method.
Ashetravelledlessthan5,000businesskilometres,Aaronmultipliesthebusinesskilometreshetravelledby365anddividestheresultbythenumberofdaysheownedthecar:
3,6005365= 10,770kilometres
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Becausethisismorethan5,000businesskilometres,heisabletousethismethod.
Aaronfollowstheinstructionsinstep1toget12%ofthecostofthecar:
$40,000512= $4,800
100
Hemultipliesthisamountbythenumberofdaysheownedthecaranddividestheresultby365:
$4,8005122= $1,605
365
ThisistheamountAaroncanclaimforcarexpenses.
STEP3 Writeyourclaimat A itemD1onpage3ofyourtaxreturn.Donotshowcents.PrintthecodeletterTintheCLAIMTYPEbox besidetheamount.
METHOD 3 – One-third of actual expenses Thismethodallowsyoutoclaimone-thirdofyourexpensesforeachcar.Carexpensesdonotincludecapitalcostssuchastheinitialcostofyourcarorimprovementstoit.
Youcanusethismethodifyouusedyourcartotravelmorethan5,000businesskilometresin2006–07.Thismethodisalsoavailableifyouwouldhaveusedyourcartotravelmorethan5,000businesskilometreshadyouuseditforthewholeof2006–07.
Youmusthavewrittenevidenceforallyourcarexpensesexceptfuelandoilcosts.
Therearetwowaystoworkoutyourfuelandoilcosts:n useyourfuelandoilreceipts,ifyouhavethemn keepodometerrecordsandmakeareasonable
estimatebasedonthoserecords.
Odometerrecordsneedtoshowtheodometerreadingsofthecaratthestartandendoftheperiodthatyouownedorleasedthecarduring2006–07.Theyshouldalsoshowthecar’senginecapacity,make,modelandregistrationnumber.Youmayalsoneedtobeabletoshowhowyouworkedoutyourbusinesskilometresandanyreasonableestimateyoumade.
ExAMPLE
Simhasmadeareasonableestimatethatshetravelled7,000businesskilometresduring2006–07.Sheisabletousethismethod.
Herodometerrecordsshowsheusedthecartotravelatotalof25,000kilometresduring2006–07.
Shealsoestimatedthatthecarused10litresoffuelper100kilometrestravelled,basedonthemanufacturer’sguidelines,andtheaveragefuelpricefortheperiodinherareawas$1.30perlitre.
Simwouldworkoutherfuelclaimlikethis:
25,000510= 2,500litres
100
2,5005$1.30=$3,250
ThisistheamountSimwouldincludeforfuelinstep1.
Completethefollowingstepstoworkouthowmuchyoucanclaimusingthe‘one-thirdofactualexpenses’method.
STEP1 Addupyourtotalexpensesforfuelandoil,registration,insurance,interest,repairsandmaintenance,thedeclineinvalueorleasepaymentsandanyothercostsofrunningyourcar.Seepages39–40toworkouttheamounttoshowherefordeclineinvalue.
STEP2 Divideyourtotalcarexpensesby3.Theansweristheamountyoucanclaim.
STEP3 Writetheamountfromstep2at A itemD1onpage3ofyourtaxreturn.Donotshowcents.PrintthecodeletterOintheCLAIMTYPEbox besidetheamount.
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SMETHOD 4 – Logbook Usingthe‘logbook’method,youworkoutthebusinessusepercentageofyourcar.Youcanthenclaimthispercentageofeachcarexpense.Carexpensesdonotincludecapitalcostssuchasthepurchasepriceofyourcarorimprovementstoit.
Youmustkeep:n alogbookn odometerrecords,andn writtenevidenceforallyourcarexpensesexceptfuel
andoilcosts.
business use percentageYoucanclaimthebusinessusepercentageofallyourcarexpenses.Toworkoutyourbusinessusepercentage,usethedetailsfromyourlogbookandodometerrecords.
Fromyourrecords,workoutthetotalkilometresyoutravelled.
Workouthowmanywerebusinesskilometres.Dividethisnumberbythetotalnumberofkilometrestravelled.Multiplytheanswerby100.
ExAMPLE
Attheendofthelogbookperiod,Tim’slogbookshowsthathetravelledatotalof11,000kilometresofwhich6,600werebusinesskilometres.
Timwouldworkouthisbusinessusepercentagelikethis:
6,6005 100 = 60%
11,000
ThisisthebusinessusepercentageTimwouldusetoworkouthiscarexpensesclaim.
Itisinyourinteresttowriteinthelogbookalljourneysyoumakeinyourcarforworkactivities.Ifawork-relatedjourneyisnotrecorded,thelogbookwillindicatealowerbusinessusepercentagethanitcould.
Did the pattern of use of your car change during 2006–07?Ifthepatternofuseofyourcarchanged,makeareasonableestimateofwhatyourbusinessusepercentagewouldhavebeenforthewholeof2006–07,takingintoaccountyourlogbook,odometerandotherrecords,anyvariationsinthepatternofuseofyourcarandanychangesinthenumberofcarsyouusedinthecourseofearningyourincome.
Your logbookYourlogbookisvalidforfiveyears.Ifthisisthefirstyearyouareusingthismethod,youmusthavekeptalogbookduring2006–07.Thelogbookmustcoveratleast12continuousweeks.Ifyoustartedtouseyourcarforbusinesspurposeslessthan12weeksbeforetheendof2006–07,youareabletocontinuetokeepalogbookinto2007–08sothatyourlogbookcoverstherequired12weeks.Ifyouwanttousethelogbookmethodfortwoormorecars,thelogbookforeachcarmustcoverthesameperiod.
Ifyouhavenotkeptalogbooksince2001–02,youmusthavekeptanewlogbookfor2006–07.Ifyoudidnotkeepanewlogbookfor2006–07,youcannotusethe‘logbook’method.Youmustuseanothermethod.
Whereyouhavekeptalogbookfor2006–07itmustcontainthefollowinginformation:n whenthelogbookperiodbeginsandendsn thecar’sodometerreadingsatthestartandendof
thelogbookperiodn thetotalnumberofkilometresthatthecartravelled
duringthelogbookperiodn thenumberofkilometrestravelledforworkactivities
basedonjourneysrecordedinthelogbook.Ifyoumadetwoormorejourneysinarowonthesameday,youcanrecordthemasasinglejourney
n thebusinessusepercentageforthelogbookperiod.
Ifyouestablishedyourbusinessusepercentageusingalogbookfromanearlieryearyouneedtokeepthatlogbookandmaintainodometerrecords.
Youalsoneedalogbookifwetoldyouinwritingtokeepone.Wedonotsupplylogbooks.Pre-printedlogbooksareavailablefromstationerysuppliersoryoucandrawupyourown.
Logbook entries Yourlogbookmustshowdetailsofeachbusinesstrip.Youmustwritedown:n thedatethejourneybeganandthedateitendedn thecar’sodometerreadingsatthestartandendof
thejourneyn howmanykilometresthecartravelledonthejourney,
andn thereasonforthejourney.
Thelogbookentriesmustbemadeattheendofthejourney,orassoonaspossibleafterwards,andtheymustbeinEnglish.
Odometer recordsYoumustkeepwrittenodometerrecordsfortheperiodyouownedorleasedthecarduring2006–07.Youneedtorecord:n thecar’sodometerreadingsatthestartandendofthe
period,andn themake,model,enginecapacityandregistration
numberofthecar.
Odometerrecordscanbekeptaspartofyourlogbookifyoukeptonefor2006–07.Ifyoudidnotkeepalogbookin2006–07,youneedtohaveaseparaterecordoftheodometerreadingsandotherdetails.
Working out your claimOnceyouhaveworkedoutyourbusinessusepercentage,youcanapplyittoyourcarexpenses.
Youneedtokeepwrittenevidenceofallyourcarexpensesexceptfuelandoilcosts,forexample,forregistration,repairs,interestandinsurance.
Therearetwowaystoworkoutyourfuelandoilcosts:n useyourfuelandoilreceipts,ifyouhavethemn makeareasonableestimatebasedonyourodometer
records.
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ExAMPLE
Bayden’sodometerrecordsshowheusedhiscartotravelatotalof7,000kilometresduring2006–07.
Basedonthemanufacturer’sguidelines,heestimatedthatthecarused10litresoffuelper100kilometrestravelledandtheaveragefuelpricefortheperiodinhisareawas$1.20perlitre.
Baydenwouldworkouthisfuelclaimlikethis:
7,000510= 700litres
100
7005$1.20=$840
ThisistheamountBaydenwouldincludeforfuelinstep1.
Completethefollowingstepstoworkouthowmuchyoucanclaimusingthe‘logbook’method.
STEP1 Addupyourtotalexpensesforfuelandoil,registration,insurance,interest,repairsandmaintenance,thedeclineinvalueorleasepaymentsandanyothercostsofrunningyourcar.Seepages39–40toworkouttheamounttoshowherefordeclineinvalue.
STEP2 Multiplytheamountyouworkedoutatstep1byyourbusinessusepercentage.Theansweristheamountyoucanclaim.
STEP3 Writetheamountfromstep2at A itemD1onpage3ofyourtaxreturn.Donotshowcents.PrintthecodeletterBintheCLAIMTYPEbox besidetheamount.
Claiming under more than one methodIfyouhadmorethanonecarandyouareclaimingexpensesunderdifferentmethods,addtheamountsyouworkedoutundereachmethodandwritethetotalatitemD1onyourtaxreturn.Donotshowcents.PrintthecodeletterforthemethodthatgaveyouthelargestamountintheCLAIMTYPEbox besidetheamount.
CHECK THAT YOU HAVE . . . writtenonyourtaxreturntheamountofyourclaimforcarexpenses
printedthecorrectcodeletterintheCLAIMTYPEbox besidetheamount:S–ifyouusedthe‘centsperkilometre’methodT–ifyouusedthe‘12%oforiginalvalue’methodO–ifyouusedthe‘one-thirdofactualexpenses’methodB–ifyouusedthe‘logbook’method
writtenevidenceofyourcarexpenses,whererequired.Keepthisevidenceforfiveyearsfromthedateyoulodgeyourtaxreturn.Ifattheendofthisperiodyouareinadisputewithusthatrelatestothisworkexpense,youmustkeepyourrecordsuntilthedisputeisresolved.
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n yourhomewasabaseofemployment–youstartedyourworkathomeandtravelledtoaworkplacetocontinuethework,or
n youhadshiftingplacesofemployment–youregularlyworkedatmorethanonesiteeachdaybeforereturninghome.
Taxation Ruling TR 95/34 – Income tax: employees carrying out itinerant workhasmoreinformationontravelexpensesforemployeeswhohaveshiftingplacesofemployment.Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
Youcanclaimthecostoftravellingdirectlybetweentwoseparateplacesofemployment–forexample,whenyouhaveasecondjob.
ExAMPLE
Sueisaclerkatalargedepartmentstore.During2006–07shetravelledbybusfromhernormalworkplacetohersecondjobasawaitress.Afterfinishingworkasawaitress,shewentdirectlyhome.
Sue’stravelcostsfromhernormalworkplacetohersecondjobareanallowablededuction.However,shecannotclaimthecostoftravellinghomefromhersecondjob.
Youcanclaimthecostoftravelling:n fromyournormalworkplacetoanalternativeworkplace
–forexample,aclient’spremises–whilestillondutyandbacktoyournormalworkplaceordirectlyhome
n fromyourhometoanalternativeworkplaceforworkpurposesandthentoyournormalworkplaceordirectlyhome.
ExAMPLE
Janetisaclerkatalargedepartmentstoreinthecity.In2006–07shewasrequiredtoattendmeetingsatheremployer’sotherstoreinthesuburbs.Shetravelledbybustothesuburbanstore.Asthemeetingsfinishedlate,shewentstraighthomebytrain.
Janetcanclaimthecostofeachjourney.
Records you needThetableonthenextpageexplainswhatrecordsyouneedifyouareclaimingdomesticoroverseastravelexpensesforaccommodation,food,drinkorincidentals.
Ifyouareclaimingtravelexpensesandyoureceivedatravelallowancefromyouremployer,youmustshowtheallowanceatitem2onyourtaxreturn.
Wesetthereasonableallowanceamountforyourcircumstancesinanannualtaxationdeterminationwhichexplainswhenyoudonotneedevidenceofyourexpensesandthewayinwhichyoucanclaimthem.
Did you have any travel expenses relating to your work as an employee?Atthisitemyouclaimtravelexpenses,includingforvehiclesotherthancars–forexample,utilitytrucksorpanelvanswithacarryingcapacityofonetonneormore,vehicleswithacarryingcapacityofnineormorepassengers,andmotorcycles.Youcanalsoclaimwork-relatedrunningcostsyouincurredforacarownedorleasedbysomebodyelse–aborrowedcar.
NO GotoquestionD3.
YES Readbelow.
YOU NEED TO KNOWYoucanclaimtravelexpensesdirectlyconnectedwithyourwork.Ifyourtravelwaspartlyprivateandpartlyforwork,youcanclaimonlythepartthatrelatedtowork.Travelexpensesyoumaybeabletoclaimincludemeals,accommodationandincidentalexpensesyouincurredwhileawayovernightforwork–forexample,goingtoaninterstateworkconference.Generally,ifyourtraveldidnotinvolveanovernightstay,youcannotclaimformealsevenifyoureceivedatravelallowance.Othertravelexpensesyoumaybeabletoclaimincludeair,bus,train,tramandtaxifares,bridgeandroadtolls,andparkingandcarhirefees.Youcannotclaimadeductionforexpensesyouincurredforthedirectoperationofacarthatyouremployerprovided,ifatanytimeyouoryourrelativesuseditforprivatepurposes,eveniftheexpenseswereworkrelated.Examplesofdirectoperationexpensesarepetrol,oilandrepairs.Suchexpensesformpartofthevaluationofthecarforfringebenefitstaxpurposes.However,youmaybeabletoclaimexpenseslinkedtothecarthatarenotrelatedtoitsdirectoperation,suchasparkingfeesandbridgetolls.Youcannotclaimthecostofnormaltripsbetweenyourhomeandyourworkplaceasthattravelisprivate.Youcannotclaimitevenif:n youdidminortasks–forexample,pickingupthemail
onthewaytoworkorhomen youhadtotravelbetweenyourhomeandyour
workplacemorethanonceadayn youwereoncall–forexample,youwereonstandbydutyand
youremployercontactedyouathometocomeintoworkn therewasnopublictransportnearwhereyouworkn youworkedoutsidenormalbusinesshours–for
example,shiftworkorovertime,orn yourhomewasaplaceofbusinessandyoutravelled
directlytoaplaceofemployment.Youcanclaimforthecostoftripsundertakenbetweenyourhomeandyourworkplaceif:n youusedyourvehicleorhadothertravelexpenses
becauseyouhadtocarrybulkytoolsorequipmentthatyouusedforyourworkandcouldnotleaveatyourworkplace–forexample,anextensionladderorcello
QUESTION D2WORK-RELATED TRAVEL EXPENSES D2
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For2006–07refertoTaxation Determination TD 2006/43 – Income tax: what are the reasonable travel and meal allowance expense amounts for 2006–07?. ThisdeterminationshouldbereadtogetherwithTaxation Ruling TR 2004/6 – Income tax: substantiation exception for reasonable travel and overtime meal allowance expenses.Thesepublicationsareavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.Youremployermayalsobeabletotellyouwhattheamountis.
Ifyourtravelallowancewasnotshownonyourpaymentsummaryandwasnotmorethanthereasonableallowanceamountforyourcircumstances,youdonothavetoincludetheallowanceatitem2providedthatyouhavefullyexpendedtheallowanceondeductibletravelexpensesandyoudonotclaimadeductionfortheseexpenses.
TRAVEL ExPENSE RECORDS
DOMESTICTRAVEL
OVERSEASTRAVEL
Writtenevidence
Traveldiary1
Writtenevidence
Traveldiary1
Ifyoudidnotreceiveatravelallowance:
n travellessthan6nightsinarow
Yes No Yes No
n travel6ormorenightsinarow
Yes Yes Yes Yes
Ifyoureceivedatravelallowanceandyourclaimdoesnotexceedthereasonableallowanceamount:
n travellessthan6nightsinarow
No No No2 No
n travel6ormorenightsinarow
No No No2 Yes3
Ifyoureceivedatravelallowanceandyourclaimexceedsthereasonableallowanceamount:
n travellessthan6nightsinarow
Yes No Yes No
n travel6ormorenightsinarow
Yes Yes Yes Yes3
1Atraveldiaryisadocumentinwhichyourecordthedates,places,timesanddurationofyouractivitiesandtravel.
2Writtenevidenceisrequiredforoverseasaccommodationexpensesregardlessofthelengthofthetrip.
3Membersofinternationalaircrewsdonothavetokeepatraveldiaryiftheylimittheirclaimtotheamountoftheallowancereceived.
Written evidenceYoumusthavewrittenevidenceforthewholeofyourclaim,notjusttheexcessoverthereasonableamount.Writtenevidenceisexplainedonpages36–7.
Utility trucks, panel vans, large passenger- carrying vehicles and motorcyclesIfyouowned,leasedorhired(underahirepurchaseagreement)oneormoreofthefollowingvehiclesand
usedthemforworkpurposes,youcanclaimthecostsyouincurredrelatingtothisworkuse(forexample,thecostofpetrolandoil):n autilitytruckorpanelvanwithacarryingcapacity
ofonetonneormoren avehiclewithacarryingcapacityofnineormore
passengersn amotorcycle.Youcanclaimthecostsyouactuallyincurred.Asthesetypesofvehiclesarenotconsideredtobecarsyoucannotusethe‘centsperkilometre’methodoranyothermethoddescribedatquestionD1tocalculateyourclaim.
Car owned or leased by somebody else – a borrowed carYoucanclaimthecostsyouactuallyincurredwhenusingacarownedorleasedbysomebodyelseforwork-relatedpurposes–forexample,thecostsofpetrolandoil.Youcannotusethe‘centsperkilometre’methodoranyothermethoddescribedatquestionD1tocalculateyourclaim.
Award transport paymentsAwardtransportpaymentsareallowancescoveringeithertransportexpensesorcarexpensereimbursementsthatarepaidunderanindustriallaworawardthatwasinforceon29October1986.Somechangesmadetotheindustriallaworawardafterthatdatearetreatedasiftheyhadbeenmadeonthatday.Yourunionoremployercantellyouthe‘29October1986’amount.Awardtransportpaymentsareassessableincomeandyoumustincludeanypaymentsasincomeonyourtaxreturn.Ifyouhaveincurredwork-relatedtransportexpensesorcarexpensescoveredbythesepayments,youmaybeabletoclaimadeductionfortheseexpenses.Ifyouchoosetoclaimnomorethanthe‘29October1986’amount,claimtheseexpensesatthisitem.Youdonotneedwrittenevidence.Ifyouchoosetoclaimmorethanthe‘29October1986’amountfor:n transportexpenses,maketheclaimatthisitem.Youwill
needwrittenevidenceforthewholeoftheclaimn carexpenses,maketheclaimatitemD1.
YoucanalsoclaimadditionalcarexpensesnotcoveredbytheawardtransportpaymentatitemD1.
COMPLETING THIS ITEM
STEP1 Addupallyourallowabletravelexpenses.
STEP2 Writethetotalamountat b itemD2onpage3ofyourtaxreturn.Donotshowcents.
CHECK THAT YOU HAVE . . . writtenonyourtaxreturntheamountofyourclaimfortravelexpenses
writtenevidenceofyourtravelexpenses,whererequired.Youneedtokeeptheserecordsforfiveyearsfromthedateyoulodgeyourtaxreturn.Ifattheendofthisperiodyouareinadisputewithusthatrelatestothisworkexpense,youmustkeepyourrecordsuntilthedisputeisresolved.
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DEFINITIONClothingisuniqueifithasbeendesignedandmadeonlyfortheemployer.
Clothingisdistinctiveifithastheemployer’slogopermanentlyattachedandtheclothingisnotavailabletothepublic.
Compulsory work uniformThisisasetofclothingthatidentifiesyouasanemployeeofanorganisationwhichhasastrictlyenforcedpolicythatmakesitcompulsoryforyoutoweartheuniformwhileyouareatwork.
Youmaybeabletoclaimadeductionforshoes,socksandstockingswheretheyareanessentialpartofadistinctivecompulsoryuniform,thecharacteristicsofwhich(colour,style,andtype)arespecifiedinyouremployer’suniformpolicy.
Formoreinformation,readTaxation Determination TD 1999/62 – Income tax: what are the criteria to be considered in deciding whether clothing items constitute a compulsory corporate uniform/wardrobe?. Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
Youmaybeabletoclaimforasingleitemofdistinctiveclothing,suchasajumper,ifitiscompulsoryforyoutowearitatwork.
Non-compulsory work uniformYoucannotclaimexpensesincurredfornon-compulsoryworkuniformsunlessyouremployerhasregisteredthedesignwithAusIndustry–checkwithyouremployer(whowillbeabletofindtheinformationatwww.ausindustry.gov.au).
Shoes,socksandstockingscanneverformpartofanon-compulsoryworkuniform,andneithercanasingleitemsuchasajumper.
Occupation-specific clothingThisisclothingthatisspecifictoyouroccupation,isnoteverydayinnatureandwouldallowthepublictoeasilyrecogniseyouroccupation,forexample,thecheckedpantsachefwears.
Protective clothingThisisclothingandfootwearthatyouweartoprotectyourselffromtheriskofillnessorinjuryposedbyyourincome-earningactivitiesortheenvironmentinwhichyouarerequiredtocarrythemout.Tobeconsideredprotective,theitemsmustprovideasufficientdegreeofprotectionagainstthatrisk.Examplesofprotectiveclothingincludefire-resistantandsun-protectionclothing,safety-colouredvests,non-slipnurse’sshoes,rubber
Did you have expenses for any of the following items that relate to your work as an employee:n protective clothingn uniformn occupation-specific clothing, orn laundry or dry-cleaning?
NO GotoquestionD4.
YES Readbelow.
Ifyoureceivedanallowancefromyouremployerforclothing,uniforms,laundryordry-cleaning,makesurethatyouhaveshowntheamountatitem2.
Youcanclaimthecostofbuying,renting,repairingandcleaningoccupation-specificclothing,protectiveclothingandcertainworkuniforms.
Youcannotclaimthecostofpurchasingorcleaningaplainuniformorclothesyouboughttowearforworkthatarenotprotectiveorspecifictoyouroccupationevenifyouremployertellsyoutowearthem,forexample,abartender’sblacktrousersandwhiteshirtoramanager’ssuitorstockings.
Formoreinformation,read:n Taxation Ruling TR 98/5 – Income tax: calculating and
claiming a deduction for laundry expensesn Taxation Ruling TR 97/12 – Income tax: deductibility of
expenses on clothing, uniform and footwearn Taxation Ruling TR 2003/16 – Income tax: deductibility
of protective itemsn Taxation Ruling TR 94/22 – Income tax: deductibility of
expenditure on conventional clothing.
Thesepublicationsareavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
WHAT YOU MAY NEEDn Writtenevidencefromyourgoodsorservicessuppliern Diaryrecordsofyourlaundrycosts,ifyouneedwritten
evidence
YOU NEED TO KNOWYoucannotautomaticallyclaimadeductionsimplybecauseyoureceivedauniform,clothing,laundryordry-cleaningallowancefromyouremployer.CarefullyreadthesectionClaimingdeductionsforexpensesthatrelatetoyourworkasanemployeeonpages36–7beforeclaimingadeduction.
Work uniformThisisauniform,eithercompulsoryornon-compulsory,thatisuniqueanddistinctivetotheorganisationthatyouworkfor.
QUESTION D3WORK-RELATED CLOTHING, LAUNDRY AND DRY-CLEANING EXPENSES D3
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Sbootsforconcreters,steel-cappedboots,hardhats,gloves,overalls,andheavydutyshirtsandtrousers.Wealsoconsiderthatoveralls,smocksandapronsyouweartoavoiddamageorsoilingtoyourordinaryclothesduringthecourseofyourincome-earningactivitiesareprotectiveclothing.Ordinaryclothes,suchasjeans,drillshirtsandshorts,trousersandsocksthatlackprotectivequalitiesdesignedfortherisksofyourworkarenotprotectiveclothing.
Laundry expensesYoucanclaimthecostsofwashing,dryingandironingeligibleworkclothes.Thesecostscanincludelaundromatexpenses.
Youmusthavewrittenevidence,forexample,diaryentriesandreceipts,foryourlaundryexpensesif:n theamountofyourclaimisgreaterthan$150,andn yourtotalclaimforworkexpensesexceeds$300
–notincludingcar,mealallowance,awardtransportpaymentsallowanceandtravelallowanceexpenses.
Ifyoudonotneedtoprovidewrittenevidenceforyourlaundryexpenses,youmayuseareasonablebasistoworkoutyourclaim.
Forwashing,dryingandironingyoudidyourself,weconsiderthatareasonablebasisforworkingoutyourlaundryclaimwouldbe$1perload–thisincludeswashing,dryingandironing–iftheloadismadeuponlyoftheclothesdescribedinthisquestion,and50centsperloadifotherlaundryitemsareincluded.Ifyouchooseadifferentbasistoworkoutyourclaim,wemayaskyoutoexplainthatbasis.
Dry-cleaning expensesYoucanclaimthecostofdry-cleaningeligibleworkclothes.Youmusthavewrittenevidencetosubstantiateyourclaimifyourtotalclaimforworkexpensesexceeds$300–notincludingcar,mealallowance,awardtransportpaymentsallowanceandtravelallowanceexpenses.
COMPLETING THIS ITEM
Toworkoutyourclaimyoucanusethework-relateduniformexpensescalculatoronourwebsiteandthengotostep3.Otherwise,gotostep1.
STEP1 Workoutthetotalcostoflaunderingyouroccupation-specificclothing,protectiveclothingorworkuniforms.(Forinformationaboutusingareasonablebasistoworkoutlaundryexpenses,seeLaundryexpensesinthepreviouscolumn.)
STEP2 Addupallyourallowableuniform,clothing,laundryanddry-cleaningexpenses.
STEP3 WritethetotalamountatC itemD3onpage3ofyourtaxreturn.Donotshowcents.
STEP4 Selectthecodeletterthatdescribesthemajorityoftheclothingforwhichyouareclaiming:C compulsoryworkuniformN non-compulsoryworkuniformSoccupation-specificclothingPprotectiveclothing
PrintthecodeletterintheCLAIMTYPEbox attherightofC itemD3onyourtaxreturn.
CHECK THAT YOU HAVE . . .
writtenonyourtaxreturnthetotalamountofyouruniform,occupation-specificclothing,protectiveclothing,laundryanddry-cleaningexpenses
printedyourcodeletterintheCLAIMTYPEbox writtenevidencetoproveyourclaims,whererequired.Youneedtokeeptheserecordsforfiveyearsfromthedateyoulodgeyourtaxreturn.Ifattheendofthisperiodyouareinadisputewithusthatrelatestothisworkexpense,youmustkeepyourrecordsuntilthedisputeisresolved.
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QUESTION D4WORK-RELATED SELF-EDUCATION EXPENSES
YOU NEED TO KNOWYoucanonlyclaimself-educationexpensesthatrelatedtoyourworkasanemployeeatthetimeyouwerestudying.Ifyourself-educationwastohelpyougetanewjoborcommenceanewincome-earningactivity,youcannotclaimyourexpenses.
Self-educationexpensesareexpensesrelatedtoacourseofeducationprovidedbyaschool,college,universityorotherplaceofeducation.Youmusthaveundertakenthecoursetogainaformalqualificationforuseincarryingonaprofession,businessortrade,orinthecourseofemployment.
What you cannot claimYoucannotclaimdeductionsforthefollowingexpenses:n self-educationexpensesthatyouincurrediftheonly
incomeyoureceivedwasfromyouthallowance,austudy,ABSTUDYorsimilarschemesprovidingpaymentsinthenatureoffinancialassistance
n self-educationexpensesforacontributionamountpaidtoaneducationproviderbyyouorbytheAustralianGovernmentunderHECS-HELP
n therepaymentsyoumade,whethercompulsoryorvoluntary,ondebtsyouhaveunderthefollowingstudentloanschemes:– StudentFinancialSupplementScheme(SFSS)– HigherEducationLoanProgramme(HELP)
TheHigherEducationLoanProgramme(HELP)isthestudentloanschemethatwasintroducedon1January2005.
HELPhasthreetypesofloans:n HECS-HELPforeligiblestudentsenrolledin
aCommonwealthsupportedplacen FEE-HELPforeligiblefee-payingstudentsenrolled
ataneligiblehighereducationproviderorOpenUniversitiesAustralia
n OS-HELPwhichhelpsstudentswhowishtoundertakesomeoftheirstudyoverseas.
FormoreinformationonHELP,seetheDepartmentofEducation,ScienceandTrainingwebsiteatwww.goingtouni.gov.au
n thecostofmealsgenerally;forwhenyoucanclaimthecostofmeals,seeWhatyoucanclaimonthenextpage.
Did you have any self-education expenses relating to your work as an employee?
STOPDonotshowatthisitem:n thecostofformaleducationcoursesprovidedby
professionalassociations.ShowtheseatitemD5Otherwork-relatedexpenses
n thecostofattendingseminars,educationworkshopsorconferencesthatwereconnectedtoyourworkactivitiesbutdidnotrelatetoyourcourseofeducation.ShowtheseatitemD5Otherwork-relatedexpenses
n amountsfordeclineinvalueofitemsincludedinalow-valuepool.ShowtheseatitemD6Low-valuepooldeduction
n deductionsfordepreciatingassetsifyouwereinbusinessandhavechosentoenterorcontinueinthesimplifiedtaxsystem(STS).ShowtheseatitemP8ontheBusiness and professional items schedule for individuals 2007
n STSpooldeductionsfordepreciatingassetsifyouwerenotcarryingonanybusinessduring2006–07.ShowtheseatitemD15onyourtaxreturn(supplementarysection).
NO GotoquestionD5.
YES Readbelow.
WHAT YOU MAY NEEDn Writtenevidence.Readpages36–7foranexplanation
ofthewrittenevidencerule.n Taxation Ruling TR 98/9 – Income tax: deductibility of
self-education expensesn Guide to depreciating assets 2007.Thispublication
containsinformationaboutdeductionsfordeclineinvalue,balancingadjustmentsandimmediatedeductionsforcertaindepreciatingassets.Italsoexplainstheoptiontopoollow-valuedepreciatingassetsforwhichyoucannotclaimanimmediatededuction.Ifyouchoosethisoption,seequestionD6Low-valuepooldeduction.
Thesepublicationsareavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
DEFINITIONAdepreciatingassetisanassetthathasalimitedeffectivelifeandcanreasonablybeexpectedtodeclineinvalueoverthetimeitisused.
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SWhat you can claimYoucanclaimdeductionsforthefollowingexpenses:n yourtuitionfeespayableunderFEE-HELPprovided
therewasadirectconnectionbetweenthecourseandyourworkactivitiesatthetimeyouincurredthedebt–eveniftheAustralianGovernmentpaidyourfeesforyouunderFEE–HELP
n self-educationexpensespaidwithyourOS-HELPloanprovidedtherewasadirectconnectionbetweenthecourseandyourworkactivitiesatthetimeyouincurredtheexpenses
n thecostofmealsduringanabsencefromhomeif:– youwereparticipatinginself-educationdirectly
connectedtoyourcurrentwork,and– thatself-educationrequiredyoutobetemporarily
awayfromyourhomeforoneormorenightsn otherexpensessuchastextbooks,stationery,student
unionfeesandthedeclineinvalueofyourcomputer.Ifyoudidnotuseyourcomputersolelyforself-educationpurposes,youwillneedtoapportionyourdeduction.Thismeansyoudividetheamountbetweenprivateuseandwork-relateduse.Forexample,ifyouusedyourcomputer40%ofthetimefordeductibleself-educationpurposesand60%ofthetimeforprivatepurposes,thenyoucanonlyclaim40%ofthedeclineinvalue.
n expensesfortravelbetween:– yourhomeandyourplaceofeducation– yourplaceofeducationandyourhome– yourworkplaceandyourplaceofeducation,and– yourplaceofeducationandyourworkplace.However,onlythefirstlegofeachtripisdeductiblewhereyoutravelled:– fromyourhometoyourplaceofeducationandthen
toyourworkplace,or– fromyourworkplacetoyourplaceofeducationand
thentoyourhome.Toworkouttheamountsofallowablecarorothertravelexpenses,youwillneedtoreadquestionD1(carexpenses)orD2(travelexpenses).However,youmustgenerallyclaimtheseamountshereatitemD4.
$250 reductionIncertaincircumstancesyoumayhavetoreduceyourallowableself-educationexpensesby$250.However,youmayhaveothertypesofexpenses–someofwhicharenotallowableasadeduction(seecategoryEinHowtoworkoutyourclaim)–thatcanbeoffsetagainstthe$250beforeyouhavetoreducetheamountyoucanclaimforallowableexpenses.
HOW TO WORK OUT YOUR CLAIMYoucanusetheself-educationexpensescalculatoronourwebsitetoworkoutyourclaimamountandthengotoCompletingthisitem.Alternatively,followtheinstructionsbelow.
First,listyourexpensesunderthefollowingcategories.
Category ACategoryAexpensesaregeneralexpensesthatareallowableasadeduction.Includeinthiscategorythecostoftextbooks,stationery,studentunionfees,coursefees,publictransportfaresandcarexpenses(excludingamountsfordeclineinvalue)workedoutunderthe‘logbook’or‘one-thirdofactualexpenses’method.
InsomecasesyoumayneedtoreduceyourcategoryAexpensesby$250–seeexample1onthenextpage.
Category b*CategoryBexpensesaredeductionsforthedeclineinvalueofdepreciatingassetsusedforself-educationpurposes,includingacarforwhichyouareclaimingdeductionsunderthe‘logbook’or‘one-thirdofactualexpenses’method.
Category C*CategoryCexpensesareexpensesforrepairstoitemsofequipmentusedforself-educationpurposes.
Category D*CategoryDexpensesarecarexpensesrelatedtoyourself-educationactivitieswhichareclaimedusingthe‘centsperkilometre’or‘12%oforiginalvalue’method.Seepages41–2forinformationonthesemethods.
YoucannotclaimcarexpensesunderthiscategoryifyouhaveincludeddeductionsfordeclineinvalueorrepairstoyourcarundercategoryBorC.
*YoudonothavetoreducecategoryB,CandDexpensesby$250.
Category ECategoryEexpensesareself-educationexpensesyouhaveincurredthatarenotallowableasadeduction.Forexample:n travelexpensesinrespectofthelastlegofeachtrip:
– fromyourhometoyourplaceofeducationandthentoyourworkplace,or
– fromyourworkplacetoyourplaceofeducationandthentoyourhome
n childcarecostsrelatedtoattendanceatlecturesorotherself-educationactivities,or
n capitalcostofitemsacquiredin2006–07andusedforself-educationpurposes–forexample,acomputerordesk.
COMPLETING THIS ITEM
STEP1 IfyouusedthecalculatortoworkoutyourclaimamountwritethisamountatD itemD4onpage3ofyourtaxreturnthengotostep7.Otherwise,readon.
STEP2 IfyouhadanycategoryAexpenses,gotostep3.Otherwise,readon.
IfyoudonothaveanycategoryAexpenses,youdonothavetoreduceyourclaim.AddanycategoryB,CandDamountstogetherandwritethetotalatD itemD4onpage3ofyourtaxreturn.Donotshowcents.Gotostep7.
STEP3 IfthetotalofyourcategoryC,DandEamountsislessthan$250,gotostep4.Otherwise,readon.
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SIfthetotalofyourcategoryC,DandEamountsis$250ormoreyoudonothavetoreduceyourclaim.AddanycategoryA,B,CandDamountstogetherandwritethetotalatD itemD4onpage3ofyourtaxreturn.Donotshowcents.Gotostep7.
STEP4 TakeawaythetotalofanycategoryC,DandEamountsfrom$250.
STEP5 Takeyouranswerfromstep4awayfromyourtotalcategoryAamount.Ifthisleavesyouwithzeroorless,yourcategoryAamountisreducedtozero.
STEP6 Addyourstep5amount,ifany,tothetotalofyourcategoryB,CandDamounts.WriteyouransweratD itemD4onyourtaxreturn.Donotshowcents.
STEP7 Selectfromthelistbelowthecodeletterthatbestdescribesyourself-education.K Atthetimeyouincurredtheexpense,therewasadirect
connectionbetweenyourself-educationandyourworkactivitiesasanemployee,becausethestudymaintainedorimprovedaskillorspecificknowledgerequiredforthoseworkactivities.
I Atthetimeyouincurredtheexpense,therewasadirectconnectionbetweenyourself-educationandyourworkactivitiesasanemployee,becauseyoucanshowthatthestudywasleadingto,orwaslikelytoleadto,increasedincomefromthoseworkactivities.
O Atthetimeyouincurredtheexpense,othercircumstancesexistedwhichestablishedadirectconnectionbetweenyourself-educationandyourworkactivitiesasanemployee.
STEP8 Printyourcodeletter(K,IorO)fromstep7intheCLAIMTYPEboxattherightofD itemD4onyourtaxreturn.
Examples of how to work out a claim
ExAMPLE �
MaureenstudiedhairdressingataTAFEcollegeandthecoursewasdirectlyrelatedtohercurrentemploymentasanapprenticehairdresser.
Herexpenses Category
Coursefees $180 A
Textbooks $70 A
Studentunionfees $40 A
Totalexpenses $290
Takeaway $250
Maureencanclaim $40
ExAMPLE 2
IanwasunemployedandgotaNewstartallowance.Hewenttoacoursetogainasecondqualificationtohelphisjobprospects.
Iancannotclaimanyself-educationexpensesastherewasnodirectconnectionbetweentheexpenseandhisincomesource.
ExAMPLE 3
Lachlanwasaclerkinthepublicservicewhowasstudyinggourmetcookingparttimeinordertobecomeachef.Lachlancannotclaimanyself-educationexpensesastherewasnodirectconnectionbetweentheexpenseandhisincomesource.
ExAMPLE 4
Katelinstudiedfulltimeatauniversityandreceivedanaustudypaymentasheronlysourceofincome.
Katelincannotclaimanyself-educationexpensesastherewasnotasufficientconnectionbetweentheexpenseandheraustudypayment.
ExAMPLE 5
Angusstudiedparttimeatauniversityandthecoursewasdirectlyrelatedtohiscurrentemployment.Hetravelledbybusfromhisworktouniversity.
Hisexpenses Category
Stationery $10 A
Textbooks $240 A
Coursefees $200 A
Busfares $150 A
Studentunionfees $150 A
Repairtohomeprinter $70 C
Totalallowableexpenses $820
Self-educationexpensesnotallowableasadeduction:
Childcarecosts $520 E
Thegeneralexpensesforstationery,textbooks,coursefees,busfaresandstudentunionfeesarecategoryAamounts.TherepairexpenseisacategoryCamount.
AngusdoesnothavetoreducehiscategoryAexpensesasthetotalofhiscategoryC(repairs$70)andcategoryEamounts(childcarecosts$520)ismorethan$250.
Anguscanclaim$820–hiscategoryAandcategoryCamounts.
However,ifAngushadnochildcarecoststhenhisclaimwouldbeworkedoutusingthestepsfromthepreviouspages,asfollows:
STEP3 $250less$70(thecategoryCamount)=$180
STEP4 $750(categoryAamount)less$180(step3amount)=$570
STEP5 $570(step4amount)plus$70(categoryCamount)=$640
Anguscouldclaim$640.
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n Guide to depreciating assets 2007.Thispublicationcontainsinformationaboutdeductionsfordeclineinvalueandbalancingadjustments,andimmediatedeductionsforcertaindepreciatingassetswhosecost(whenaddedtothecostofothersubstantiallyidenticalassetsorassetsthatmakeupaset)doesnotexceed$300.Italsoexplainstheoptiontopoollow-valuedepreciatingassetsforwhichyoucannotclaimanimmediatededuction.(Ifyouchoosethisoption,seequestionD6Low-valuepooldeduction.)
Thesepublicationsareavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
DEFINITIONAdepreciatingassetisanassetthathasalimitedeffectivelifeandcanreasonablybeexpectedtodeclineinvalueoverthetimeitisused.
Simplified tax systemIfyouareinthesimplifiedtaxsystem(STS)youwillneedtocalculateyourwork-relateddeductionfordepreciatingassetsusingtheSTSrules.YouclaimyourSTSdepreciatingassetsdeductionsatitemP8ontheBusiness and professional items schedule for individuals 2007.
NOTETousetheSTSrulesyoumustbeinbusinessandhavechosentoenterorcontinueintheSTSatitemS1ontheBusiness and professional items schedule for individuals 2007.
Ifyoudidnotcarryonanybusinessduring2006–07buthaveSTSpooldeductionsbecauseyouhaveallocateddepreciatingassetstoanSTSpoolinaprioryear,makeyourclaimforSTSpooldeductionsatitemD15onyourtaxreturn(supplementarysection).
Formoreinformation,refertoThe simplified tax system – a guide for tax agents and small businesses.Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
YOU NEED TO KNOWReceivinganallowancefromyouremployerdoesnotautomaticallyentitleyoutoadeduction.Toclaimadeduction,youmusthaveincludedthewholeoftheallowanceatitem2onyourtaxreturnandincurredtheexpense,anditmustberelatedtoyourworkasanemployee.
Ifyourtotalclaimforallworkexpensesasanemployeeexceeds$300,youmayneedwrittenevidencetoproveyourclaim.Readaboutthewrittenevidenceruleonpages36–7.
Did you have any other expenses relating to your work as an employee?Otherexpensesincludeunionfees;overtimemeals;attendingformaleducationcoursesprovidedbyprofessionalassociations;seminars,conferencesoreducationworkshops;books,journalsandtrademagazines;toolsandequipment;protectiveitemssuchassunscreensandsunglasses;computersandsoftware;telephoneandhomeofficeexpenses.PhonethePersonalInfoline(seetheinsidebackcover)ifyouarenotsureifyoucanclaimanexpense.
Youcannotclaimthecostofentertainment,finesorpenalties.Youcannotclaimprivateexpensessuchaschildcareexpensesorfeespaidtosocialclubs.
STOPDonotshowatthisitemclaimsfor:n expensesnotrelatedtoyourworkn protectiveclothingitems(showtheseatitemD3Work-relatedclothing,laundryanddry-cleaningexpenses)
n declineinvalueofitemsincludedinalow-valuepool(showtheseatitemD6Low-valuepooldeduction)
n taxcosts–suchastaxagentfees(showtheseatitemD10Costofmanagingtaxaffairs)
n thecostofsicknessandaccidentinsurancepremiums(showtheseatitemD15Otherdeductions)
n expensesfromcarryingonabusiness(showtheseontheBusiness and professional items schedule for individuals 2007).
NO GotoquestionD6.
YES Readbelow.
WHAT YOU MAY NEEDn Statementsfromyourbank,buildingsocietyor
creditunionn Writtenevidencefromyoursupplierorassociationn Otherwrittenevidence(seepages36–7)n YourPAYG payment summary – individual non-businessn Taxation Ruling TR 93/30 – Income tax: deductions for
home office expensesn Law Administration Practice Statement PS LA 2001/6
– Home office expensesn Law Administration Practice Statement PS LA 2005/7
– Substantiation of deductions claimed by individual taxpayers for work and car expenses incurred in the course of earning non-business and non-investment income
QUESTION D5OTHER WORK-RELATED EXPENSES D5
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SUnion fees and subscriptions to associationsYoucanclaimadeductionforunionfeesandsubscriptionstotrade,businessorprofessionalassociations.Youcanonlyclaimpaymentsofleviestoastrikefundwherethefundisusedsolelytomaintainorimprovethecontributors’pay.Yourpaymentsummarymayshowfeesorsubscriptionspaidbyyou.
Overtime mealsYoucanclaimadeductionforovertimemealexpensesyouincurredifyouworkedovertimeandyoureceivedabonafideovertimemealallowancefromyouremployerwhichwaspaidunderanindustriallaw,awardoragreement.Youcanclaimonlytheamountofexpenditureyouincurred.Ifyourclaimismorethan$21.90permeal,youwillneedwrittenevidence.Anamountforovertimemealsthathasbeen‘foldedin’(forexample,underaworkplaceagreement)aspartofyournormalsalaryorwagesincomeisnotconsideredtobeanovertimemealallowance.
Amountsreceivedasovertimemealallowancesmustbeincludedasincomeatitem2onyourtaxreturn,subjecttothenotebelow.
NOTEIfyourawardovertimemealallowancewasnotshownonyourpaymentsummaryandwasnotmorethan$21.90foreachmeal,youdonothavetoincludetheamountatitem2providedthatyouhavefullyexpendedtheallowanceanddonotclaimadeductionforovertimemealexpenses.
Seminars, conferences or education workshopsYoucanclaimthecostofattendingseminars,conferencesoreducationworkshopsthataresufficientlyconnectedtoyourworkactivities.
books, journals and professional librariesYoucanclaimthecostoftrademagazines,technicaljournalsandreferencebooksthatyouneedtodoyourwork.
Youcanclaimadeductionforthedeclineinvalueofaprofessionallibrarythatincludesbooks,tapes,compactdiscs,records,DVDsandvideosthatyouneedtodoyourwork.
Protective equipment and other itemsThisisequipmentorotheritems,otherthanclothingitems,thatyouusedtoprotectyourselffromtheriskofillnessorinjuryposedbyyourincome-earningactivitiesortheenvironmentinwhichyouwererequiredtocarrythemout,forexample,safetyequipment,sunscreensandsunglasses.MakeyourclaimforthecostofprotectiveclothingandfootwearatitemD3.
Computers and softwareYoucanclaimadeductionforthework-relatedproportionofthedeclineinvalueofcomputers.Ifyouusedyourcomputerforprivatepurposesyoumustdivideyourdeclineinvalueamountbetweenyourwork-relatedandprivateuse.Forexample,ifyouusedacomputer30%ofthetimeforworkand70%ofthetimefornon-workpurposes,youcanclaim30%ofthedeclineinvalue.
Youcanalsoclaimadeductionforthework-relatedproportionofthecostofrepairstoyourcomputerandinterestonmoneyborrowedtofinancethecostofyourcomputer.
Youmayneedtomakeabalancingadjustmentifyouceasedtoholdortouseacomputerwhereyouhavepreviouslyclaimedadeductionforitsdeclineinvalue.SeetheGuide to depreciating assets 2007 forinformationonhowtoworkoutyourclaim.
Telephone expensesYoucanclaimadeductionforthecostofwork-relatedphonecalls.Youcanclaimadeductionforyourtelephonerentalifyoucanshowyouwereoncallorwereregularlyrequiredtophoneyouremployerorclientswhileyouwereawayfromyourworkplace.Ifyoualsousedyourtelephoneforprivatepurposesyoumustapportionthecostoftelephonerentalbetweenwork-relatedandprivateuse.
Home office expensesYoucanclaimtheadditionalrunningexpensesofahomeoffice–forexample,thedeclineinvalueofandrepairstoyourhomeofficefurnitureandfittings,heating,cooling,lightingandcleaning.Youcankeepadiarytoworkouthowmuchofyourrunningexpensesrelatetodoingworkinyourhomeoffice.Alternatively,youcanuseafixedrateof26centsperhourforhomeofficeexpensesforheating,cooling,lightingandthedeclineinvalueoffurnitureinsteadofkeepingdetailsofactualcosts.
Whenyouuseyourhomeofficeforworkasanemployee,notethattimeinyourdiary.Diaryrecordsareacceptableevidenceofaconnectionbetweentheuseofahomeofficeandyourwork.Keepdiaryrecordsforarepresentativefour-weekperiod.
Thereisahomeofficeexpensescalculatoronourwebsiteyoucanusetoworkoutyourclaimamount.
Forfurtherinformation,refertoLaw Administration Practice Statement PS LA 2001/6 – Income tax: home office expenses.Foracompleteexplanationofthelimitedcircumstancesinwhichyoumayclaimforoccupancyexpensesofyourhome,suchasrates,rent,mortgageinterestandinsurance,refertoTaxationRulingTR93/30.
Low-value poolingIfyouchoosethelow-valuepoolmethodtocalculatethedeclineinvalueoflow-costandlow-valuedepreciatingassets,makeyourclaimatitemD6.
Other expensesYoucanclaimadeductionhereforanyotherexpensesyouincurredinearningyoursalaryorwagesthatyouhavenotalreadyclaimed.
COMPLETING THIS ITEM
STEP1 Addupalltheexpensesthatyoucanclaimatthisitem.
STEP2 Writethetotalamountat E itemD5onpage3ofyourtaxreturn.Donotshowcents.
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QUESTION D6LOW-VALUE POOL DEDUCTION
n atthisiteminallothercases–theseincludewhereyourlow-valuepoolcontainedassetsusedinrelationtoyourworkasanemployee(questionsD1toD5)ortogainrentalincome(question20inTaxPack 2007 supplement).
Working out your deductionYouworkoutyourdeductionforthedeclineinvalueofdepreciatingassetsinalow-valuepoolusingadiminishingvaluerateof37.5%.
Fortheincomeyearinwhichyoufirstallocateoneormorelow-costassetstoalow-valuepool,youworkoutyourdeductionatarateof18.75%,orhalfthenormalpoolrate.Halvingtheraterecognisesthatassetsmaybeallocatedtothepoolthroughouttheincomeyearandeliminatestheneedforseparatecalculationsforeachassetbasedonthedateitisallocatedtothepool.
YoumayneedthepublicationGuide to depreciating assets 2007.Thispublicationisavailableonourwebsiteortogetaprintedcopy,seetheinsidebackcover.
Taxable use percentageWhenyouallocateanassettoalow-valuepool,youmustmakeareasonableestimateofthepercentageofyouruseoftheassetthatwillbeforataxablepurposeoveritseffectivelife(foralow-costasset)orremainingeffectivelife(foralow-valueasset).Thisestimateisthetaxableusepercentage.Onlythetaxableusepercentageofthecost(ofalow-costasset)orthetaxableusepercentageoftheopeningadjustablevalue(ofalow-valueasset)isallocatedtothepoolandusedtocalculatethedeductionfordeclineinvalue.
How to calculate your low-value pool deductionWorksheet1onthenextpageshowsyouhowtoworkoutyourlow-valuepooldeduction,usingtheexamplebelow.Thereisalsospaceforyourowncalculations.
ExAMPLE
Edwardboughtaprinterfor$600in2006–07andallocatedittoalow-valuepool.Heestimatedthattheprinterwouldbeused40%ofthetimefortaxablepurposesoveritseffectivelife.ThisisthefirstyearofEdward’slow-valuepool.
In2006–07Edwardalsodecidedtoallocateanexistinglaptopcomputertothelow-valuepool.Hehaspreviouslyclaimeddeductionsforthelaptopworkedoutunderthediminishingvaluemethod.Thelaptop’sopeningadjustablevalueat1July2006was$900andEdwardwilluseitonlyfortaxablepurposesoveritsremainingeffectivelife.
Youcanclaimadeductionatthisitemforthedeclineinvalueoflow-costassetsandcertainotherdepreciatingassetswhichyouhaveallocatedtoalow-valuepool.
Did you allocate assets used for a taxable purpose to a low-value pool in 2006–07, or have you done so in a previous year?
ReadYouneedtoknowbelowfortherulesaboutlow-valuepools.
NO GotoquestionD7.
YES Readbelow.
DEFINITIONSAdepreciatingassetisanassetthathasalimitedeffectivelifeandcanreasonablybeexpectedtodeclineinvalueoverthetimeitisused.Ataxablepurposeisthepurposeofproducingassessableincome,thepurposeofexplorationorprospecting,thepurposeofminingsiterehabilitationorenvironmentalprotectionactivities.
YOU NEED TO KNOWYoucanonlyhaveonelow-valuepool.Onceyouchoosetoallocatealow-costassettoalow-valuepool,alllow-costassetsyoustarttoholdinthatandanysubsequentincomeyearmustalsobeallocatedtothepool.Youcanallocatethefollowingtypesofdepreciatingassetstoalow-valuepoolfor2006–07:n low-costassets–assetscostinglessthan$1,000,andn low-valueassets–assetsthatarenotlow-costassets
butwhichhave,underthediminishingvaluemethod,beenwrittenofftolessthan$1,000asat1July2006.
Youcannotallocatethefollowingdepreciatingassetstoalow-valuepool:n assetsforwhichyouhavepreviouslyclaimeddeductions
workedoutusingtheprimecostmethodn assetsthatcost$300orlessforwhichyoucanclaim
animmediatedeductionn assetsforwhichyoudeductamountsunderthe
simplifiedtaxsystem(STS),andn horticulturalplants.
Claiming your low-value pool deductionYoumustclaimyourdeduction:n atitemP8ontheBusiness and professional items
schedule for individuals 2007 ifyourlow-valuepoolcontainedonlyassetsusedinbusinessandnotforanyotherincome-producingpurpose
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WORKSHEET �: Low-value pool deduction
Edward You
Theclosingbalanceofthepoolfor2005–06.Ifyoudidnothavealow-valuepoolin2005–06,write0at(a). (a) $0 (a) $
Foreachlow-valueassetallocatedtothepoolin2006–07,multiplytheopeningadjustablevalue(at1July2006)bythetaxableusepercentage.Adduptheamountsandwritethetotalat(b). (b) $900 (b) $
Add(a)and(b). (c) $900 (c) $
Multiply(c)by37.5%. (d) $337 (d) $
Foreachlow-costassetallocatedtothepoolin2006–07,multiplythecost(includingadditionalcapitalcostsincurredin2006–07,suchascostsofimprovements)bythetaxableusepercentage.Adduptheamountsandwritethetotalat(e).
(eg$600x40%)
(e) $240 (e) $
Foreachn assetallocatedtothe
poolinaprioryear,and
n low-valueassetaddedthisyear
forwhichyouincurredadditionalcapitalcosts(suchascostsofimprovements)in2006–07,multiplythecostsbythetaxableusepercentage.Adduptheamountsandwritethetotalat(f). (f) $0 (f) $
Add(e)and(f). (g) $240 (g) $
Multiply(g)by18.75%. (h) $45 (h) $
Add(d)and(h). (i) $382 (i) $
Theamountat(i)isthetotallow-valuepooldeduction.Edwardwillshow$382at K itemD6onhistaxreturn.
COMPLETING THIS ITEM
Writetheamountofyourtotallow-valuepooldeductionat K itemD6onpage3ofyourtaxreturn.
Closing pool balanceYouwillneedtheclosingpoolbalancefor2006–07tocalculateyourlow-valuepooldeductionfornextyear.Useworksheet2belowtoworkouttheamount.
Disposal of depreciating assets in a low-value poolIfa‘balancingadjustmentevent’happenedtoanassetinalow-valuepoolin2006–07(suchasthesale,lossordestructionoftheasset),youneedtoreducetheclosingpoolbalancefor2006–07bythetaxableusepercentageoftheasset’sterminationvalue.(Theasset’sterminationvalueisusuallytheproceedsfromtheasset’ssaleortheinsurancepayoutforitslossordestruction.)Ifthetaxableusepercentageoftheasset’sterminationvalueismorethantheclosingpoolbalance,youreducetheclosingpoolbalancetonilandincludetheexcessinyourassessableincomeatitem22.
WORKSHEET 2: Closing pool balance for 2006–07
Edward You
Closingpoolbalancefor2005–06[from(a)onworksheet1] $0 $
plusAmountsallocatedtothepoolin2006–07for:n low-valueassets[from(b)
onworksheet1] $900 $
n low-costassets[from(e)onworksheet1] $240 $
n additionalcapitalcostsrelatingtopooledassets[from(f)onworksheet1] $0 $
lessTotallow-valuepooldeductionfordeclineinvalue[from(i)onworksheet1] $382 $
SUBTOTAL $758 $
lessTaxableusepercentageofterminationvalueofeachassetsubjecttoabalancingadjustmenteventin2006–07(seeDisposalofdepreciatingassetsinalow-valuepoolabove) $0 $
CLOSINGPOOLBALANCEFOR2006–07 $758 $
Keeparecordofyour2006–07closingpoolbalancefornextyear’staxreturn.
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QUESTION D7INTEREST AND DIVIDEND DEDUCTIONS
income-producingpurposes,thenyoumustapportiontheinterestbetweeneachpurpose.Onlyinterestincurredforanincome-producingpurposeisdeductible.UndertheTax Laws Amendment (2006 Measures No. 7) Act 2007someinterestonborrowingsforshares,unitsinunittrusts,andstapledsecurities,whichisattributabletocapitalprotectionunderacapitalprotectedborrowingisnotdeductible,andistreatedasapaymentforaputoption.Formoreinformation,visitourwebsiteatwww.ato.gov.auYoucanclaimforongoingmanagementfees,retainersandamountspaidforadvicerelatingtochangesinthemixofinvestment.However,youcannotclaimafeechargedfordrawingupaninvestmentplanunlessyouwerecarryingonaninvestmentbusiness.Youcannotclaimafeepaidtoaninvestmentadviserfordrawingupaninitialinvestmentplanwhichincludespre-existinginvestments.Youmayalsobeabletoclaimaportionofothercostsiftheywereincurredinmanagingyourinvestments.Suchcostswouldincludetravelexpenses,thecostofspecialistinvestmentjournalsorsubscriptions,borrowingcosts,thecostofinternetaccessandacapitalallowanceforthedeclineinvalueofyourcomputer.
Formoreinformation,readthepublicationYou and your shares 2007.Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
Deduction for 50% of a listed investment company (LIC) capital gain amountIfyouwereanAustralianresidentwhenaLICpaidyouadividend,andthedividendincludedaLICcapitalgainamount,youcanclaimadeductionof50%oftheLICcapitalgainamount.TheLICcapitalgainamountwillbeshownseparatelyonyourdividendstatement.ShowdividendsreceivedfromaLICatitem11Dividends.
Thin capitalisationIfyouhavedebtdeductions,suchasinterest,yourclaimsmaybeaffectedbythethincapitalisationrules.TheserulesmayapplyifyouareanAustralianresidentfortaxpurposesandyou(oranyassociateentities)havecertainoverseasinterests,oryouareaforeignresidentwithoperationsorinvestmentsinAustralia,andyourdebtdeductions(combinedwiththoseofyourassociateentities)for2006–07weremorethan$250,000.IfyouareaforeignresidentthethresholdappliesinrespectofdebtdeductionsagainstAustralianassessableincome.Moreinformationisavailableonourwebsite.
WHAT YOU NEED n Yourbankorfinancialinstitutionstatementsorpassbooksn YourdividendstatementsshowinganyLICcapital
gainamount
COMPLETING THIS ITEMSTEP1 Addupallyourinterestanddividenddeductionsand50%ofanyLICcapitalgainamount.STEP2 Writethetotalamountat I itemD7onpage3ofyourtaxreturn.Donotshowcents.
Did you have any of the following:n expenses that you can claim as deductions
against assessable interest and dividend income
n a ‘listed investment company (LIC) capital gain amount’ included in a dividend received from a LIC?
Yourexpensesmightinclude:n account-keepingfeesormanagementfeesn interestchargedonmoneyborrowedtopurchaseshares.Youcanclaimadeductionifyouareabletoshowthattheexpenseswereincurredinearninginterestanddividendincome.Youcannotclaimadeductionforexpensesincurredinderivinganexemptdividendorotherexemptincome.
NO GotoquestionD8.
YES Readbelow.
STOPDonotshowatthisitem:n anamountforfees,chargesortaxesrelatingtoan
accountkeptasanessentialpartofabusiness.ShowthisamountatP8onyour Business and professional items schedule for individuals 2007
n expensesincurredinearningforeignsourceinterestordividends.Taketheseexpensesintoaccountinworkingouttheamountyoushowatitem19orinthecaseofdebtdeductions,claimatitemD15onyourtaxreturn(supplementarysection)
n expensesincurredinrelationtoapartnershiportrustdistribution,rentalincome,businessincome,taxcostsandthelandtransportfacilitiestaxoffsetschemeorinfrastructureborrowingsscheme.RefertotherelevanttopicsintheIndexformoreinformationonthesematters.
YOU NEED TO KNOW
Account-keeping feesSomefinancialinstitutionschargeaccount-keepingfees.Youcanclaimthesefeeswheretheaccountwasheldforinvestmentpurposes,forexample,acashmanagementaccount.Youwillfindthesefeeslistedonyourstatementsorinyourpassbooks.Ifyouwerenotthesoleholderofanaccountyoucanonlyclaimyourshareoffees,chargesortaxesontheaccount.Forexample,ifyouheldanequalshareinanaccountwithyourspouse,youcanonlyclaimhalfofanyallowableaccount-keepingfeespaidonthataccount.
Other deductionsYoucanclaimforinterestincurredonmoneyborrowedtopurchasesharesandotherrelatedinvestmentsfromwhichyouderivedassessableinterestordividendincome.Ifyouusedthemoneyyouborrowedforbothprivateand
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QUESTION D8GIFTS OR DONATIONS
n AcertificateofapprovalfromtheMinisterforCommunications,InformationTechnologyandtheArtsforaculturalbequest
n YourPAYG payment summary – individual non-businessorotherformofadvicefromyouremployershowingtheamountyouhavedonatedthroughaworkplace-givingprogram
n YourvaluationcertificatefromtheAVOinrelationtoaconservationcovenantyouhaveenteredinto
n WrittenapprovalfromtheMinisterfortheEnvironmentandWaterResourcesforaconservationcovenantyouhaveenteredinto
YOU NEED TO KNOW Generally,youcannotclaimadeductionforadonationifyoureceivedsomethinginreturn–forexample,apen,raffleticket,dinnerorareductioninyourchild’sschoolfees(seeDeductionsforcontributionsrelatingtofund-raisingeventsonthenextpagefortheexceptiontothisrule).
Ifyoumadeadonationtoaschoolbuildingfundandyourreceiptincludesotherpayments,youcanclaimonlythepartthatisthevoluntarydonation.
Youcanclaimdeductionsfordonationsmadetoprescribedprivatefunds.
Gifts of money Youcanclaimadeductionfortheamountofmoneyyoudonatedtoaneligibleorganisation.Youcanelecttospreadyourdeductionforthisdonationoverfiveincomeyearsorless.Youneedtomaketheelectioninwritingbeforelodgingyourtaxreturn,settingoutthepercentageofthedeductionyouwillclaimineachyear.Youmaymaketheelectionusingtheformonpage60.
Workplace-giving programIfyoumadedonationsduringtheyeartoaneligibleorganisationthroughyouremployer’spayrollsystem(knownas‘workplace-giving’)youstillneedtorecordthetotalamountofyourdonationsatthisitem.
Yourpaymentsummaryorotherformofadvicefromyouremployer,showingthedonatedamount,issufficientevidencetosupportyourclaimforthededuction.Youdonotneedtohaveareceiptfromtheeligibleorganisation.
Donations and gifts to political parties and independent candidates and membersYoucanclaimadeductionforcontributionsorgiftstoregisteredpoliticalparties,independentmembersofparliament(stateorCommonwealth)orindependentcandidatesinanelectionforparliament.Contributionsmustbe$2ormore.Thecontributionorgiftmustbemoney,orpropertythatyoupurchasedduringthe12monthsbeforemakingthecontributionorgift.
Did you make:n a gift or donation of $2 or more to an eligible
organisation (an organisation that is eligible to receive tax-deductible gifts, see below)
n a contribution to an eligible organisation of more than $250 in respect of a fund-raising event before � January 2007
n a contribution to an eligible organisation of more than $�50 in respect of a fund-raising event on or after � January 2007
n a contribution of $2 or more to – a registered political party – an independent candidate in an election
for parliament, or– an independent member of parliament
OR did you:n make an approved cultural bequestn enter into a conservation covenant?
Aneligibleorganisationisanorganisationthatislistedinthetaxlaw,orhasbeenendorsedbytheTaxOffice,asadeductiblegiftrecipient,suchas:n certainorganisationsorcharitieswhichprovidehelp
inAustralian anapprovedoverseasaidfundn aschoolbuildingfundn anapprovedenvironmentalorculturalorganisation.
NO GotoquestionD9.
YES Readbelow.
NOTEIfyoudonotknowwhetheryoucanclaimadeduction,seeiftheinformationisonthereceiptforyourdonation.Ifnot,contacttheorganisationforconfirmation.Ifyoustilldonotknow,youcancheckonwww.abn.business.gov.auorphonethePersonalInfoline(seetheinsidebackcover).
WHAT YOU MAY NEED n Yourreceiptsfordonationsorcontributionsn Thepurchasepriceandpurchasedateofanyproperty
donatedn Yourvaluationsbytwoormoreapprovedvaluersforany
donationsofpropertyundertheCulturalGiftsProgramortoabodyoftheNationalTrust
n YourvaluationcertificatefromtheAustralianValuationOffice(AVO),ifrequired,foryourdonationofpropertyvaluedatmorethan$5,000
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SThemaximumamountyoucandeductintotalforallyourcontributionsorgiftstopoliticalpartiesduringtheyearis$1,500.Aseparatelimitof$1,500appliesinrespectofthetotaldeductionforallyourcontributionsorgiftstoindependentcandidatesorindependentmembersofparliamentfortheyear.
ThecontributiontoapoliticalpartymustbetoaregisteredpoliticalpartyunderCommonwealth,stateorterritoryelectorallaws.Acontributiontoapoliticalpartycanincludemembershipfees.
Thecontributiontoanindependentcandidateorindependentmembermustbetoacandidateforelectionto,ormemberof,theCommonwealthParliamentorastateparliament,ortheLegislativeAssemblyoftheNorthernTerritoryortheAustralianCapitalTerritory.
Anindependentcandidateisanindividualwhosecandidatureinanelectionforparliamentisnotendorsedbyaregisteredpoliticalparty.Anindependentmemberisamemberofparliamentwhoisnotamemberofaregisteredpoliticalparty.
NOTEOn22June2006themaximumamountyoucanclaimforacontributionorgifttopoliticalparties,andtoindependentmembersandcandidatesincreasedfrom$100to$1,500.Ifyoucontributedmorethan$100between22and30June2006anddidnotclaimthefullamount,youmaybeentitledtoanamendmentofyour2006assessment.Formoreinformationonhowtorequestanamendment,seeIfyoumadeamistakeonyourtaxreturnonpage113.
Deductions for contributions relating to fund-raising events Youcanclaimadeductionforcontributionstoeligibleorganisationsthatrelatetocertainfund-raisingeventswhereyoureceiveaminorbenefitforyourcontribution,providedthat:n thecontributionmeetscertainconditions,andn thebenefityoureceiveddoesnotexceeda
specifiedlimit.
Afund-raisingeventincludesafete,ball,galashow,dinner,performanceorsimilarevent.
Subjecttotheconditionslistedbelow,youcanclaimadeductionifyoumade:n acontributionofmoneyorpropertytoattendor
participate(orfortherighttoattendorparticipate)inafund-raisingevent
n acontributionofmoneytopurchasegoodsorservicesatacharitableauctionatthefund-raisingevent(orthecharitableauctionwasitselfthefund-raisingevent).
Ifyourcontributionwasmadebefore1January2007,itmustmeetthefollowingconditions:n itmusthavebeenmadetoaneligibleorganisationn itmusthavebeenworthmorethan$250n ifitwasproperty,youmusthaveeither:
– purchaseditwithin12monthsofmakingthecontribution,or
– owneditformorethan12monthsandtheAustralianValuationOffice(AVO)valueditatmorethan$5,000(seethefirstboxonthenextpage)
n thefund-raisingeventwasheldinAustralia,andn themarketvalueoftheminorbenefityoureceivedfor
yourcontributionwasworthnomorethan$100or10%ofthevalueofthecontribution(whicheverisless).Thereceiptfromtheeligibleorganisationwillshowthemarketvalueoftheminorbenefityoureceived.
NOTEThecontributionisthegoodsandservicestax(GST)-inclusiveamount.
Ifyourcontributionwasmadeonorafter1January2007,itmustmeetthefollowingconditions:n itmusthavebeenmadetoaneligibleorganisationn itmusthavebeenworthmorethan$150n ifitwasproperty,youmusthaveeither:
– purchaseditwithin12monthsofmakingthecontribution,or
– owneditformorethan12monthsandtheAustralianValuationOffice(AVO)valueditatmorethan$5,000(seethefirstboxonthenextpage)
n thefund-raisingeventwasheldinAustralia,andn themarketvalueoftheminorbenefityoureceived
foryourcontributionwasworthnomorethan$150or20%ofthevalueofthecontribution(whicheverisless).Thereceiptfromtheeligibleorganisationwillshowthemarketvalueoftheminorbenefityoureceived.
Yourdeductionislimitedtothepartofthecontributioninexcessofthemarketvalueoftheminorbenefityoureceived.
Youcanclaimadeductionforuptotwocontributionsthatyoumaketoattendorparticipateinthesamefund-raisingevent.
Eachsuccessfulbidatafund-raisingeventisasinglecontribution.Providedtheconditionsaremetthereisnolimittothenumberofdeductionsyoucanclaimforthepurchaseofgoodsorservicesbywayofsuccessfulbids.
ExAMPLE
Steveandhispartnerattendedafund-raisingeventinAugust2006.Hecontributed$600fortheopportunitytoattendthedinnerandauction($300each).Theminorbenefit(thedinner)heandhispartnerreceivedwasvaluedbytheeligibleorganisationat$30perhead($60intotal).
Intheauction,Stevemadefoursuccessfulbidsat$70each($280intotal).Stevecannotclaimadeductionfortheseitemsbecauseeachcontributionwasnotmorethan$250.
Stevealsomadetwosuccessfulbidsat$290each($580intotal).Bothitemswerevaluedat$5each($10intotal).
Stevecanclaimdeductionsfor: $540($600lesstheminorbenefit[thedinner]of$60) $570($580forthetwosuccessfulbidsat$290each
lesstheminorbenefitof$10)
Steve’stotalclaimis$1,110.
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SIftheeligibleorganisationissuesareceipt,itshouldstate:n thenameandAustralianbusinessnumber(ABN)
oftheorganisationn thatyourcontributionwasmadetoattendthe
fund-raisingeventorforyourpurchasesasasuccessfulbidderatthecharitableauction
n theamountofthecontribution(ifmoney),andn theGST-inclusivemarketvalueoftheminorbenefit.
Gifts of property Underthegeneralgiftprovisionsyoucanclaimadeductionforadonationofpropertytoaneligibleorganisationif:n thepropertywaspurchasedwithin12monthsof
donatingit,orn thepropertywaspurchasedmorethan12months
beforeyoudonateditandtheAustralianValuationOffice(AVO)hasvalueditatmorethan$5,000.
Theamountdeductibleisthelesserofthemarketvalueofthepropertyatthetimeofthedonationandtheamountyoupaidfortheproperty.
Youcannotclaimadeductionforadonationofpropertyifyoudidnotpurchaseit(forexample,youinheritedorwontheproperty)unlesstheAVOhasvalueditatmorethan$5,000.
YoucanelecttospreadthedeductionforadonationofpropertywhichisvaluedbytheAVOatmorethan$5,000,overfiveincomeyearsorless.Youneedtomaketheelectioninwritingbeforelodgingyourtaxreturnfortheincomeyearinwhichyoumadethedonation,settingoutthepercentageofthedeductionyouwillclaimineachyear.Youmaymaketheelectionusingtheformonthenextpage.
AUSTRALIANVALUATIONOFFICEFormoreinformationaboutpropertyvaluations,phonetheAVOon(08)81981900,fax(08)82963398orvisittheAVO’swebsiteatwww.avo.gov.au
Cultural and environmental property giftsYoucanelecttospreadthedeductionfordonationsmadeundertheCulturalGiftsProgramandforenvironmentalandheritagegiftsvaluedbytheAVO,overfiveincomeyearsorless.Youmustlodgeyourelectionwiththerelevantdepartmentbeforeyoulodgeyourtaxreturn.
Formoreinformationabout:n theCulturalGiftsProgramandtheelectionprocess,
phonetheDepartmentofCommunications,InformationTechnologyandtheArtson(02)62711643,[email protected]’swebsiteatwww.dcita.gov.au/cgp
n makingdonationstoenvironmentalandheritageorganisationsandtheelectionprocess,phonetheDepartmentoftheEnvironmentandWaterResourceson(02)62742436,[email protected]’swebsiteathttp://www.environment.gov.au/tax/reo/index.html
If,onorafter1July2002,youenteredintoaconservationcovenantoverlandyouownedyoumaybeentitledtoclaimadeductionifcertainconditionsweremet.Youcanelecttospreadthedeductionoverfiveyearsorless.ThecovenantneedstoeitherbeapprovedinwritingbytheMinisterfortheEnvironmentandWaterResourcesorenteredintounderaprogramapprovedinwritingbytheMinister.
Formoreinformation,phonetheDepartmentoftheEnvironmentandWaterResourceson(02)62741111andasktospeaktotherelevantofficerintheNaturalResourceManagementPolicyBranch,[email protected]’swebsiteatwww.environment.gov.au/tax/reo/index.html
Ifyouareanexecutororadministratorofanestate,youcanclaimadeductiononthedonor’sfinalindividualtaxreturnforaculturalbequestmadeundertheCulturalBequestsProgram.Ifthevalueofthebequestreducesthedonor’staxableincometonil,anyexcessvaluecanbeclaimedonthefirsttaxreturnoftheestate.YouneedacertificateofapprovalissuedtothedonorbytheMinisterforCommunications,InformationTechnologyandtheArtsduringthe1998,1999or2000incomeyears.
COMPLETING THIS ITEM
STEP1 Addupalltheamountsofyoureligiblegifts,donationsandcontributions.
NOTEIfyouhavebeengivenmorethanonereceiptorformofadvice(forexample,thecharityyoudonatedtoandyouremployerhavebothprovidedwrittenconfirmationofyourdonations),makesureyouclaimthedeductionforyourdonationsonlyonce.
STEP2 Writethetotalat J itemD8onpage3ofyourtaxreturn.Donotshowcents.
Spreading a deduction over five years
NOTEThissectiondoesnotapplytocultural,environmentorheritagegifts.
Youcanonlyelecttospreadyourdeductionoverfiveyearsifitwasagiftofpropertyvaluedatmorethan$5,000bytheAVO,oragiftofcash.Theelectionisnotavailablefordonationsandgiftstopoliticalpartiesandindependentcandidatesandmembers.
Youdonotneedtofillintheelectionifyouwishtoclaimthefulldeductionintheyearofdonation.
Whereyouelecttospreadyourdeductionyougiveuptherighttoclaimthefulldeductionamountintheyearthedonationwasmade.
Ifyoumadeadonationinconjunctionwithotherdonorsandyouelecttospreadyourshareofthededuction,youmustcompleteyourownseparateelectionformandadviseusofyourpercentageshareinthedonation.
Youcanvaryyourelectionatanytimebutonlyforyearsthatyouhavenotlodgedataxreturn.
Yourelectionmust:n bemadeinwriting,signedanddatedn bemadebeforeyoulodgeyourtaxreturnfortheincome
yearinwhichthedonationwasmaden statethepercentageofthedeductionyouwillclaimin
theincomeyearthedonationwasmadeandforeachyearuptofiveyears,thetotalofwhichcannotexceed100%oftheoriginaldeduction.
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ELECTION TO SPREAD DEDUCTION FOR A GIFT(Doesnotcovercultural,environmentalorheritagegifts)
Nameofdonor:
Nameofrecipientfund,authorityorinstitution:
Referencenumberfromcertificateofvaluation(ifproperty):
Percentageownershipshare(ifgiveninconjunctionwithotherindividuals):
Dateofdonation:
Apportionmentelectionorvariation
Year1 Year2 Year3 Year4 Year5
% % % % %
(Note:Ensurethatyourapportionmentstotal100%.)
Thisismyfirstelectionforthisgift(ordonation).
Thisisavariationtoapreviouselection.
Ticktheappropriatebox.
Signature: Date:
//
Youmustkeepyourelectionforfiveyearsfromthedateyoulodgeyourtaxreturnwiththeclaimforyourlastapportionment.Donotattachittoyourtaxreturnorsendittous.
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QUESTION D9DEDUCTIBLE AMOUNT OF UPP OF AN AUSTRALIAN PENSION OR ANNUITY
COMPLETING THIS ITEM
Ifyoualreadyknowyourdeductibleamount(oryouhavemorethanoneandyouknowthemall),gotostep1.
Ifyoudonotknowyourdeductibleamount:n yourpayermaybeabletotellyoun thecalculatoronourwebsitecanhelpyoutowork
itoutifyourpensionorannuitycommencedafter1July2004,or
n gotostep2.
Ifyouhavemorethanonedeductibleamountandyoudonotknowsomeofthem,youwillneedtocompletesteps1and2.
STEP1 WritethedeductibleamountofyourUPPat L itemD9onpage3ofyourtaxreturn.Donotshowcents.IfyouhavemorethanoneAustralianpensionorannuity,writethetotalofthedeductibleamountsat L itemD9.Ifyouhavedeductibleamountsyoudonotknow,gotostep2.
NOTEThedeductibleamountofyourUPPcannotbemorethanthepensionorannuitytowhichitrelates–theamountshownatitem7.
Youhavefinishedthisquestion.GotoCheckthatyouhave...onthenextpage.
STEP2 YouwillneedtocompletetheRequest for a determination of the deductible amount of UPP of an Australian pension or annuity(NAT16544).
Thisformisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
Wewilladdressyourrequestintheformofaprivatebindingruling(PBR)whichislegallybindingontheCommissioner.
YouwillneedtoanswerallthequestionsontheRequest for a determination of the deductible amount of UPP of an Australian pension or annuityandprovidetheadditionaldocumentationrequired.WewillprocessyourtaxreturnoncethePBRisfinalised.
IfyoudonotknowanyofyourdeductibleamountsleaveL itemD9blank.
PrintXintheYESboxatTaxpayer’s declarationquestion2aonpage8ofyourtaxreturn.SigntheRequest for a determination of the deductible amount of UPP of an Australian pension or annuityandattachittopage3ofyourtaxreturn.
Youhavenowfinishedthisquestion.
Did you receive an Australian pension or annuity that has a deductible amount of undeducted purchase price (UPP)?IfyoushowedincomefromanAustralianpensionorannuityatitem7onyourtaxreturn,youmaybeabletoclaimadeductionagainstthetaxableamountofyourpensionorannuityincome.
TheUPPistheamountyoucontributedtowardsthepurchasepriceofthepensionorannuityforwhichyoudidnotclaim,andwerenoteligibletoclaim,ataxdeduction.
NO GotoquestionD10.
YES Readbelow.
STOPIfyouareentitledtoaUPPdeductibleamountforaforeignpensionorannuitythenclaimthisatitemD12onyourtaxreturn(supplementarysection).AustralianGovernmentpensionsincludingpensionsfromCentrelinkandtheDepartmentofVeterans’Affairs(DVA)listedatquestion6donothaveadeductibleamount.
YOU NEED TO KNOW
UPP of a pension or annuityYourpensionorannuitymayhaveaUPPif:n youreceivedasuperannuationpensionandyou
werenotentitledtoclaimataxdeductionforsomeorallofthepersonalcontributionsyoumadetoyoursuperannuationfundorretirementsavingsaccount
n youreceivedapensionorannuitythatrevertedtoyouonthedeathofanotherperson,or
n youreceivedapensionorannuitythatyouboughtwithyourowncapital.
Eachyear,youdeductthepartofyourpensionorannuitythatrepresentsareturntoyouofyourpersonalcontributionswhichwerenotclaimedasataxdeductionfromyourtaxablepensionorannuityincome.Thistax-freepartiscalledthedeductibleamountoftheUPP,anditisusuallycalculatedbydividingtheUPPofyourpensionorannuitybyalifeexpectancyfactordeterminedaccordingtolifeexpectancystatistics.
NOTEIfyouhavetakenanypartofyourpensionorannuityasalumpsumoriftherearechangestoyourpensionorannuitydueto,forexample,commutation,divorceorre-marriagethenthedeductibleamountofyourUPPmayneedtoberecalculated.
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SCHECK THAT YOU HAVE . . . writtenonyourtaxreturnthetotaldeductibleamountoftheundeductedpurchasepriceofallyourAustralianpensionsandannuities,ifyouknowit
attachedtopage3ofyourtaxreturnyoursignedRequest for a determination of the deductible amount of UPP of an Australian pension or annuityifyoudonotknowyourdeductibleamount.
Ifyouneedinformationorassistancewiththisquestion,phoneourSuperannuationInfoline(seetheinsidebackcover).
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QUESTION D�0COST OF MANAGING TAX AFFAIRS
Youcannotclaimforthecostoftaxadvicegivenbyapersonwhoisnotarecognisedtaxadviser.
Taxshortfallandotherpenaltiesforfailingtomeetyourobligationsarenotdeductible.
Expenses relating to an FTb tax claimYoucanclaimthecostofadvicefromarecognisedtaxadviserinrelationtoanFTBtaxclaimlodgedwiththeTaxOfficeatthisitem.
Expenses incurred as an interest chargeTheTaxOfficeimposesaninterestchargeon:n latepaymentsoftaxesandpenaltiesn theamountofanyincreaseinyourtaxliabilityas
aresultofanamendmenttoyourassessment,andn theamountofanyincreaseinothertaxliabilities,such
asGSTorPAYGamounts.
Youcanclaimanyinterestchargeweimposeiftheinterestchargewasincurredin2006–07.Interestchargesimposedwhenanincometaxassessmentisamendedareincurredwhenyouarechargedtheinterest.Interestchargesintheothersituationslistedaregenerallyincurredintheyearinwhichtheinterestaccrues.
Expenses incurred for underestimating a varied GST or PAYG instalment IfwehavechargedyouanamountforunderestimatingavariedinstalmentforGSTorPAYGin2006–07,youcanclaimthatexpenseatthisitem.
Expenses for complying with your legal obligations relating to another person’s tax affairsThiscategoryincludesexpensesrelatingto:n complyingwiththePAYGwithholdingobligations–
forexample,whereyouwithheldtaxfromapaymenttoasupplierbecausethesupplierdidnotquoteanAustralianbusinessnumber,and
n providinginformationrequestedbytheTaxOfficeaboutanothertaxpayer.
COMPLETING THIS ITEM
STEP1 Adduptheamountsofyourexpensesformanagingyourowntaxaffairs,expensesrelatingtoanFTBclaimlodgedthroughthetaxsystem,anyinterestchargeoranyamountchargedforGSTorPAYGunderestimationandanyexpensesforcomplyingwithyourlegalobligationsrelatingtoanotherperson’staxaffairs.
STEP2 WritethetotalamountatM itemD10onpage3ofyourtaxreturn.Donotshowcents.
Did you have expenses:n relating to managing your own tax affairsn for advice relating to a claim for family tax
benefit (FTb) lodged through the tax systemn imposed by the Tax Office as an interest
chargen imposed by the Tax Office for underestimating
a varied goods and services tax (GST) or pay as you go (PAYG) instalment
n for complying with your legal obligations relating to another person’s tax affairs?
NO GotoDeductionsfromthesupplementarysectiononthenextpage.
YES Readbelow.
YOU NEED TO KNOWExpenses for managing your own tax affairs Theseincludeexpensesrelatingto:n preparingandlodgingyourtaxreturnandactivity
statementsn travel,totheextentthatitisassociatedwithobtaining
taxadvice–forexample,thetravelcostsofattendingameetingwitharecognisedtaxadviser
n appealingtotheAdministrativeAppealsTribunalorcourts,and
n obtainingavaluationneededforadeductiblegiftordonationofpropertyorforadeductionforenteringintoaconservationcovenant.
Expensesrelatingtopreparingandlodgingyourtaxreturnandactivitystatementsincludecostsassociatedwith:n buyingtaxreferencematerialn lodgingyourtaxreturnthrougharegisteredtaxagentn obtainingtaxadvicefromarecognisedtaxadviser,andn dealingwiththeTaxOfficeaboutyourtaxaffairs.
Youcanclaimfeespaidtoarecognisedtaxadviserforpreparingorlodgingyourtaxreturnifthosefeeswereincurredin2006–07.Generally,youincurthefeestheyearyoupaythem.Arecognisedtaxadviserisaregisteredtaxagent,barristerorsolicitor.Seepage6forinformationonhowtocheckwhetheryourtaxagentisregistered.
ExAMPLE
Louiseengagedaregisteredtaxagenttoprepareandlodgeher2007taxreturn.ThetaxagentlodgedhertaxreturninSeptember2007andchargedLouise$100,whichshepaidimmediately.Louisecanclaimadeductionforthetaxagent’sfeeonher2008taxreturn.
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DEDUCTIONS FROM THE SUPPLEMENTARY SECTION
n Simplifiedtaxsystem(STS)pooldeductionsthatyoucanclaimundertheSTSrulesandyounolongercarryonanybusiness
n Adeductionforthenetpersonalservicesincomelossofapersonalservicesentitythatrelatedtoyourpersonalservicesincome
n UnitedMedicalProtectionLimited(UMP)supportpayments
NO GotoTotaldeductionsbelow.
YES YoumustcompletetheTax return for individuals (supplementary section) 2007.Readthenotebelow.
NOTEYoucanfindtheTax return for individuals (supplementary section) 2007atthebackofTaxPack 2007 supplement.Ifyoudon’talreadyhaveacopyofthissupplementyoucangetacopyfrommostnewsagentsduringthelodgmentperiod(1Julyto31October2007).CopiesarealsoavailableallyearfromourPublicationsDistributionService(seetheinsidebackcover)andshopfronts.
COMPLETING THIS ITEM
STEP1 Completethedetailsatthetopofpage9onyourtaxreturn(supplementarysection)ifyouhaven’talreadydoneso.UseTaxPack 2007 supplementtocompletetheDEDUCTIONSsectiononpage11ofyourtaxreturn(supplementarysection).
STEP2 TransfertheamountyouwroteatTOTALSUPPLEMENTDEDUCTIONSonpage11to D onpage3ofyourtaxreturn.
CAUTIONReadthisquestioncarefully–consultTaxPack 2007 supplementifyouarenotfamiliarwiththetermsused.
Can you claim any of the following types of deductions?n Australianfilmindustryincentivesn Thedeductibleamountoftheundeductedpurchase
priceofaforeignpensionorannuityn Personalsuperannuationcontributionsn Certaincapitalexpendituredirectlyconnectedwith
aprojectn Electionexpensesforlocal,territory,stateorfederal
candidatesn Deductionsallowableforsubscriptionsforsharesinthe
filmlicensedinvestmentcompany(FLIC)schemen Certaindeductiblecapitalexpenditureyouhadnotclaimed
infullpriortoceasingaprimaryproductionbusinessn Non-capitallossesincurreduponthedisposalor
redemptionofatraditionalsecurityn Insurancepremiumspaidforsicknessandaccidentcovern Deductibleforeignexchangelossesn Interestyouincurredonmoneyborrowedtoinvest
underthelandtransportfacilitiestaxoffsetschemeorinfrastructureborrowingsscheme
n Debtdeductionsyouincurredinearningcertainforeignnon-assessablenon-exemptincomeorinearningassessableincomethatyouhavenotclaimedelsewhere
n Amountsdeductibleunderthefive-yearwrite-offforcertainbusiness-relatedcapitalexpenditureundersection40-880oftheIncome Tax Assessment Act 1997
D
TOTAL DEDUCTIONSSTEP1 Addupallthedeductionamountsintheright-handcolumnofitemsD1toD10and D onpage3ofyourtaxreturn.
STEP2 Writetheamountfromstep1atTOTALDEDUCTIONSonyourtaxreturn.Donotshowcents.Readbelow.
SUbTOTALIfyouhaveanamountatTOTALDEDUCTIONSonyourtaxreturn,takeitawayfromtheamountatTOTALINCOMEORLOSSonpage2ofyourtaxreturn.WritetheresultatSUBTOTAL.
IftheamountatSUBTOTALislessthanzero,printLintheLOSSbox attherightoftheamount.
NOTEIftheamountatTOTALINCOMEORLOSSisaloss,workoutSUBTOTALbyincreasingtheamountofthisloss(thatis,byaddingtheamountatTOTALDEDUCTIONStoit).MakesureyouprintLintheLOSSbox attherightofSUBTOTAL.
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YOU NEED TO KNOWYoumustshowtheamountofyourtaxlossescarriedforwardfromearlieryears,separatedintoprimaryproductionandnon-primaryproduction.Werequirethisinformationevenifyouarenotabletoclaimalossfromanearlieryearagainstyourincomethisyear.YoucanprovideyourprioryearlossamountsatitemL1Q Primaryproductionlossescarriedforwardfromearlierincomeyearsand R Non-primaryproductionlossescarriedforwardfromearlierincomeyears.
Youcancarryforwardprimaryproductionlossesincurredinanyearlierincomeyear.Yourdeductiblenon-primaryproductionlossesarelimitedtolossesincurredin1989–90oralateryear.Non-primaryproductionlossesincurredbefore1989–90cannolongerbedeductedfromincome.
Ifyouhadtaxlossesformorethanoneearlierincomeyearyoumust,generally,deductyourlossesintheorderyouincurredthem,oldestfirst.Youcanonlydeductataxlosstotheextentthatyouhavenotalreadydeductedit.
Beforeyoucandeducttaxlossesofearlierincomeyearsyoumustreducethembyyournetexemptincomeforthecurrentyearand,ifrelevant,byanyamountyouelecttousetoreduceyournetforeignsourceincome.SeeAustralianlossesandforeignsourceincomeonthenextpageformoredetails.
NOTEYourtaxlossesofearlierincomeyearscanonlyreduceyourAustraliansourceincometozero.IfyourtaxlossesofearlierincomeyearsweremorethanyourAustraliansourceincomeyouwillneedtokeeprecordsofthelossestoclaiminfutureyears.
Net exempt incomeIfyouwereanAustralianresident,yournetexemptincomeincludesallyourexemptincome,includinganyexemptforeignemploymentincome.Toworkoutyournetexemptincomeyoudeductanynon-capitalexpensesyouincurredinearningyourexemptincomeandanyforeigntaxpayableonthatincomefromyourtotalexemptincome.
Ifyouwereanon-resident,yournetexemptincomeincludesallyourexemptincomefromAustraliansourcesandfilmincomeexemptundersection26AGoftheIncome Tax Assessment Act 1936.Toworkoutyournetexemptincomeyoudeductanynon-capitalexpensesyouincurredinearningyourexemptAustralianincomeandanyforeigntaxpayableonfilmincomeexemptundersection26AGfromyourtotalexemptincome.
Did you have any undeducted tax losses of earlier income years?ThisquestiononlyappliestolossesincurredinrelationtoearningincomefromAustraliansources.
NO GotoTaxableincomeorlossonpage68.
YES Readbelow.
Ataxlossoccurswhenthetotalofyourallowabledeductionsforanincomeyear–excludingtaxlossesofearlierincomeyears–isgreaterthanthetotalofyourassessableincomeandyournetexemptincome.However,somedeductions,suchasgiftsordonations(seequestionD8)andpersonalsuperannuationcontributions(seequestionD13inTaxPack 2007 supplement)arelimitedforthispurposeandcannotbeusedeithertocreateorincreasealoss.
Youareentitledtoclaimalossofanearlieryearagainsttaxableincomeinasubsequentyearbutyoumustclaimthelossatyourfirstopportunitytodoso.Ifyouhadataxableincomelastyearanddidnotclaimanearlierlossagainstit,youcannotclaimthatlossagainstyour2006–07income.Ifyouwereabletoclaimalosslastyearbutdidnot,youcanrequestanamendment.Youmustcompletethisitemwhetherornotyouareabletoclaimthelossesagainsttaxableincomethisyear.
STOPDonotshowatthisitem:n deferrednon-commercialbusinesslossesfrom
aprioryear.Showthematthefollowingrelevantitem:– forpartnershipactivities–item12onyourtax
return(supplementarysection),or– forsoletraderactivities–itemP8onthe
Business and professional items schedule for individuals 2007
n capitallosses.Showtheseatitem17Capitalgainsonyourtaxreturn(supplementarysection)
n expensesandlossesinrelationtoearningforeignsourceincome.Taketheseintoaccountatitem19onyourtaxreturn(supplementarysection).
WHAT YOU MAY NEEDn Recordsofyourtaxlossesofearlierincomeyearsn Yourforeignsourceincomestatement
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SEffect of bankruptcyIfyouhavebeenbankrupt,yougenerallycannotclaimadeductionfortaxlossesrelatingtoincomeyearsprecedingthedateyoubecamebankruptinanincomeyearafterthatdate.ThisrulealsoappliesifyouwerereleasedfromthedebtsbytheoperationofanActrelatingtobankruptcy.Formoreinformation,phonethePersonalInfoline(seetheinsidebackcover).
Australian losses and foreign source incomeYoucanchoosetousesomeorallofyourtaxlossesofearlierincomeyearsincurredinearningAustraliansourceincometoreduceyournetforeignsourceincome,asshownintheexamplebelow.Youmaychoosenottoreduceyournetforeignsourceincomeandinsteadreturnsomeorallofthenetforeignsourceincomeasassessableincome.Areasoncouldbetheavailabilityofforeigntaxcreditsonsomeorallofthenetforeignsourceincome.
DEFINITIONNetforeignsourceincomeisassessableforeignsourceincomelessthoseallowableexpensesincurredinderivingtheforeignsourceincome.
ExAMPLE
Peterownsasmallgoodsbusinessandhasaccumulatednon-primaryproductiontaxlossesofearlierincomeyearsof$6,000.Hemadeallhislossesin1989–90andlateryears.
In2006–07Peterhadnoexemptincomebuthereceived$1,500incomefromGermany.Hehaselectedtouse$500ofhistaxlossesofearlierincomeyearstoreducethisforeignincome.
Peter’staxlossesfromearlierincomeyears (a) $6,000
Peter’snetexemptincomefor2006–07 (b) nil
Take(b)awayfrom(a).ThisistheamountoflossesavailabletoPeterfor2006–07. (c) $6,000
TheamountoftaxlossesofearlierincomeyearsPeterusedtoreducenetforeignsourceincome (d) $500
Peterwillshowthebalanceoftheforeignsourceincomeof$1,000atitem19onpage10ofhistaxreturn(supplementarysection).
Take(d)awayfrom(c).Theamountat(e)isthetotaltaxlossesofearlierincomeyearsavailabletoPetertoreducehisnetAustraliansourceincomeshownatSUBTOTALonpage3ofhistaxreturn.PeterwillshowthisamountatR itemL1onpage3ofhistaxreturn. (e) $5,500
PeterthenneedstodeterminehowmuchoftheselosseshecanactuallydeductfromhisnetAustraliansourceincome.IfPeterhasatleast$5,500ofnetAustraliansourceincomeatSUBTOTALhewillshow$5,500at Z itemL1onpage3ofhistaxreturn.
Ifyouchoosetouseyourtaxlossesofearlierincomeyearstoreduceyournetforeignsourceincome,youwillneedtoprovideadditionalinformationwithyourtaxreturn.PrintSCHEDULEOFADDITIONALINFORMATION–ITEML1onthetopofaseparatepieceofpaperandexplainyoursituation.Includeyourname,address,taxfilenumberandtheamountoftaxlossesofearlierincomeyearsyouhaveusedtoreduceyournetforeignsourceincome.PrintXintheYESboxatTaxpayer’s declarationquestion2aonpage8ofyourtaxreturn.Signyourscheduleandattachittopage3ofyourtaxreturn.
COMPLETING THIS ITEMYourtaxlossesofearlierincomeyearscanonlyreduceyourtaxableincometozero.Thisruleaffectshowyoucompletethisitem.
STEP1 IfyouramountatSUBTOTALonpage3ofyourtaxreturnisaloss,readon.Otherwise,gotostep2.WritetheamountofyourprimaryproductiontaxlossescarriedforwardfromearlierincomeyearsatQ itemL1onpage3ofyourtaxreturn.Donotshowcents.Writetheamountofyournon-primaryproductiontaxlossescarriedforwardfromearlierincomeyearsat R itemL1onpage3ofyourtaxreturn.Donotshowcents.Donotcomplete F or Z itemL1.Gotostep5.STEP2 IfyouramountatSUBTOTALonpage3ofyourtaxreturnisanincomeamount,workoutwhatcarry-forwardlossamountyouhaveavailabletoclaimagainstthisyear’snetAustraliansourceincome.Useworksheet1belowtoworkoutseparateprimaryproductionandnon-primaryproductionlossamounts.
WORKSHEET �
Primaryproductionlosses
Non-primaryproductionlosses
Taxlossesfromearlierincomeyearsatthebeginningof2006–07* (a) $ $**
Netexemptincomefor2006–07*** (b) $ $
Totallossesavailablethisyear:take(b)awayfrom(a). (c) $ $
Theamountoftaxlossesofearlierincomeyearsusedtoreducenetforeignsourceincome (d) $ $
YourtotaltaxlossestodeductfromSUBTOTALonpage3ofyourtaxreturn:take(d)awayfrom(c). (e) $ $
* Ifyourlossesincludeanyfilmlosses,specialdeductionrulesapply.Formoreinformation,phonethePersonalInfoline.
** Donotincludeat(a)anynon-primaryproductionlossesmadein1988–89andearlierincomeyears.
*** Ifyouhavebothprimaryandnon-primaryproductionlossesyoucanchoosewhereyoudeductyournetexemptincome.
Ifyouhaveshownanamountofprimaryproductionlossesat(e)inworksheet1above,gotostep3.
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STEP3 PrimaryproductionlossesAtQ itemL1onpage3ofyourtaxreturn,writetheamountyouworkedoutat(e)inthe‘Primaryproductionlosses’columnofworksheet1instep2.Donotshowcents.
IfyouramountatSUBTOTALonpage3ofyourtaxreturnis:n greaterthanyouramountatQ ,youcandeductall
yourprioryearprimaryproductionlosses.At F writetheamountyouhaveatQ
n lessthanyouramountatQ ,youcandeductsomeofyourprioryearprimaryproductionlosses.At F writetheamountyouhaveatSUBTOTAL.
Ifyoudidnotshowanamountofnon-primaryproductionlossesat(e)inworksheet1,gotostep5.Otherwise,readon.
STEP4 Non-primaryproductionlossesWorkoutthefollowingamount:
SUBTOTALminus F itemL1 (i) $
At R itemL1,writetheamountyouworkedoutat(e)inthe‘Non-primaryproductionlosses’columnofworksheet1instep2.Donotshowcents.
Ifyouramountat(i)is:n greaterthanyouramountat R ,youcandeductall
yourprioryearnon-primaryproductionlosses.At Z writetheamountyouhaveat R
n lessthanyouramountat R ,youcandeductsomeofyourprioryearnon-primaryproductionlosses.At Z writetheamountyouhaveat(i)
n zero,youcannotdeductanynon-primaryproductiontaxlossesofearlieryears.
STEP5 Carry-forwardlossesattheendof2006–07Youcancarryforwardfordeductioninfutureincomeyears:n anyundeductedtaxlossesofearlierincomeyears,andn anyundeductedlossfromthisincomeyear.
Youneedarecordofyourlossesseparatedintoprimaryandnon-primaryproductionamounts.Useworksheet2inthenextcolumntoworkoutyourtaxlossestocarryforwardfordeductioninfutureyears.
Ifyouhavenoamountsat F and Z itemL1,youmustbreakuptheamountatSUBTOTALintoprimaryandnon-primaryproductionlosses.Todothisfollow1to7inworksheet2below.
Ifyouhaveanamountat F and/or Z ,complete8and9inworksheet2below.
WORKSHEET 2
1 YouramountatSUBTOTAL (a) $(frompage3ofyourtaxreturn)
2 Your2007primaryproductionloss:theamountatb item14onpage10ofyourtaxreturn(supplementarysection)
(b) $
3 Your2007non-primaryproductionloss:take(b)awayfrom(a). (c) $
4 YouramountatQ itemL1 (d) $
5 Yourtotalcarry-forwardprimaryproductionlosses:add(b)and(d).
$
6 YouramountatR itemL1 (e) $
7 Yourtotalcarry-forwardnon-primaryproductionlosses:add(c)and(e).
$
8 Yourtotalcarry-forwardprimaryproductionlosses: $taketheamountat F awayfromtheamountatQ itemL1.
9 Yourtotalcarry-forwardnon-primaryproductionlosses:taketheamountat Z awayfromtheamountatR itemL1.
$
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TAx OFFSET FOR LOW INCOME TAxPAYERSIfyouwereanAustralianresidentfortaxpurposesandyourtaxableincomewaslessthan$40,000youmaygetataxoffset.
Themaximumtaxoffsetof$600appliesifyourtaxableincomewas$25,000orless.Thisamountisreducedby4centsforeachdollarover$25,000.
Wewillworkoutyourtaxoffsetandmakesureitcomesoffyourtax.Thetaxoffsetwillbeshownonyournoticeofassessment.Ifyouwanttoworkoutyourtaxoffset,usethelowincometaxoffsetcalculatoronourwebsiteorgotopage123.Donotincludeanythingaboutthistaxoffsetonyourtaxreturn.
CHILD SUPPORT AGENCY CLIENTSTheChildSupportAgency(CSA)mayuseyourtaxableincometomakeanassessmentofchildsupport.
TheCSAwillincludeyourtotalreportablefringebenefitsamounts,lossesfromrentalpropertiesandexemptforeignemploymentincomewhenassessingchildsupportliabilities.
Howyoucompletethisitemwilldependonwhetheryoucompleted F or Z atitemL1Taxlossesofearlierincomeyearsonpage3ofyourtaxreturn.
Have you completed F or Z at item L�?
YES GotoDeductyourlossesbelow.
NO TransfertheamountyouhaveshownatSUBTOTALonpage3ofyourtaxreturnto $ TAXABLEINCOMEORLOSS.Donotshowcents.Iftheamountat $ TAXABLEINCOMEORLOSSislessthanzero,printLintheLOSSbox .
Deduct your lossesAdduptheamountsat F and Z itemL1andtakethetotalawayfromtheamountyouhavewrittenatSUBTOTAL.Writetheanswerat $ TAXABLEINCOMEORLOSSonyourtaxreturn.Donotshowcents.
IftheamountatSUBTOTALisaloss,youhavenotaxableincomethisyearagainstwhichyoucanclaimalossofanearlieryear.PrintLintheLOSSbox .
NOTEAlthoughtheamountat $ TAXABLEINCOMEORLOSSislessthanzeroandyouhaveprintedLintheLOSSbox,thisamountmaynotbeyourtaxlossthatcanbecarriedforwardfornextyear.Adjustmentsmayhavetobemadetolimitcertaindeductions–forexample,giftsordonationsandpersonalsuperannuationcontributions–totakeintoaccountanyexemptincomeandtomakeothervariations.PhonethePersonalInfoline(seetheinsidebackcover)formoreinformation.
Yourtaxlossescarriedforwardfromearlierincomeyearsplusyourtaxlossfromthisincomeyearcanbecarriedforwardtobedeductedinfutureincomeyears.Youwillneedtokeeparecordoftheselosses.
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DEPENDANTS AND SEPARATE NET INCOME
WHAT IS SEPARATE NET INCOME?Separatenetincome(SNI)includesincomeandotherspecifiedamountsthatyourdependantearnedorreceivedin2006–07whileyoumaintainedthem.SNIalsospecificallyincludessomeamountswhicharenotincludedintherecipient’sassessableincome.TherearealsosomeamountsthatarespecificallyexcludedfromSNI.SNIearnedbyyourdependantmayaffectanyclaimyouareentitledto.
Income included in SNIn Salaryandwagesn Terminationpaymentsrepresentingunusedannual
leaveandlongserviceleaven Pensions,includingAustralianannuitiesand
superannuationpensionsandexemptpensionslistedonpage13
n Interestanddividendincome–butnotthefrankingcreditattachedtofrankeddividends
n Business,trustandrentalincomen Veterans’AffairspaymentsandmostCentrelink
payments,includingparentingpayment(partnered),carerpayment,remoteareaallowanceandthelanguage,literacyandnumeracysupplement
n Anynetcapitalgainfortheincomeyearn Anymaintenancepaymentsyourspousereceivedfor
theirownsupportafterdivorceorseparation–eventhoughyourspousemaynotneedtodeclaresuchincomefortaxpurposes
n ThemaintenanceoraccommodationcomponentofascholarshippaidbytheCommonwealthorastateexceptwherethatcomponentispaidforhelpingtoeducateisolatedchildrenagedunder16years
Income not included in SNIn ThefollowingCentrelinkpayments:
– childcarebenefit– familytaxbenefit(FTB)– theone-offpaymenttofamiliesandcarers
undertheFamilyAssistance(One-offPaymenttoFamiliesandCarers)Scheme2004
– the2006one-offpaymenttocarers(carerpaymentrelated,wifepensionrelated,partnerservicepensionrelated,carerservicepensionrelatedorcarerallowancerelated)paidundertheSocial Security Act1991
– paymentstocarersundertheschemedeterminedunderSchedule4totheSocial Security and Veterans’ Entitlements Legislation Amendment (One-Off Payments to Increase Assistance for Older Australians and Carers and Other Measures) Act 2006
– the2006one-offpaymenttoolderAustraliansundertheSocial Security Act 1991ortheVeterans’ Entitlements Act 1986
Thepurposeofthissectionistogiveyouimportantinformationaboutdependantsand‘separatenetincome’.VariousquestionsinTaxPack 2007 and TaxPack 2007 supplement willreferyoutothisinformationwhenyouneedit.
WHO IS A DEPENDANT?Adependantcanbe:n yourspouse–marriedordefacto(seethedefinition
ofspouseonpage110)n yourparentsorspouse’sparentsn astudentunder25yearsoldwhoisstudying
fulltimeatschool,collegeoruniversityn achild–includingyourstepchildoradoptedchild–
whoisunder21yearsoldandnotastudentn achild-housekeeper–yourchildofanyagewho
worksfulltimekeepinghouseforyoun aninvalidrelative–yourchild,brotherorsister–
whois16yearsorolderand:– receivesadisabilitysupportpensionoraspecial
needsdisabilitysupportpension,or– hasacertificatefromaCommonwealth-approved
doctorcertifyingacontinuinginabilitytowork.AdependantneedstobeanAustralianresidentfortaxpurposes(seepages11–12).Foraspouse,studentorchildonly,theywillbetreatedasaresidentiftheyhavealwayslivedinAustraliaortheycametoliveinAustraliapermanently,unlesstheyhavesetupapermanenthomeoutsideAustralia.
NOTEYoucanonlyclaimataxoffsetforadependantifyouwereanAustralianresidentfortaxpurposes.
Did you have dependants waiting to migrate to Australia?Ifyourspouseanddependentchildrenwereoverseasin2006–07,wewillconsiderthemtobeyourdependantsfortaxoffsetpurposesifyouweretakingthestepsnecessaryfortheirmigrationinatimelymanner.
WHAT IS MAINTAINING A DEPENDANT?Youmaintainedadependantifanyofthefollowingapplies:n youandyourdependantlivedinthesamehousen yougaveyourdependantfood,clothingandlodging,orn youhelpedthemtopayfortheirliving,medicaland
educationalcosts.Ifyouhadaspouseforthewholeincomeyearandyourspouseworkedatanytimeduringtheyear,westillconsideryoutohavemaintainedyourspouse–asadependant–forthewholeincomeyear.Weconsideryoutohavemaintainedadependantevenifthetwoofyouweretemporarilyseparated,forexample,duetoholidaysorbecausetheywereoverseas.Ifyoumaintainedadependantforonlypartoftheyear,youmayneedtoadjustyourclaim.
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– paymentstoolderAustraliansundertheschemedeterminedunderSchedule2totheSocial Security and Veterans’ Entitlements Legislation Amendment (One-Off Payments to Increase Assistance for Older Australians and Carers and Other Measures) Act 2006
– maternityimmunisationallowance– maternitypayment– carerallowance[butnotethatcarerpaymentsareincludedinseparatenetincome(SNI)]
n Babybonusn Frankingcreditsattachedtofrankeddividendsn Thevalueoramountofanynon-government
scholarshipreceivedinconnectionwiththeeducationofadependentchildorstudent
n ThevalueoramountofanyCommonwealthorstateassistanceprovidedforschoolfees,thepurchaseoftextbooksortravellingexpenses
n Lumpsumseveranceorretirementpaymentsofacapitalnatureoramountspaidascompensationforlosingajob
n Anymaintenancepaymentsyourspousereceivedforsupportoftheirdependentchildren
n Amountsreceivedundertheincentivepaymentsschemerelatingtocertainprivatehealthinsurancepolicies
n TheJapaneseinternmentcompensationpaymentsmadeundertheCompensation (Japanese Internment) Act 2001 ortheVeterans’ Entitlements Act 1986
n CompensationpaymentsreceivedundertheGermanForcedLabourCompensationProgramme(GFLCP)
What can reduce SNI?IncalculatingSNI,yourdependant’sincomecanbereducedby:n anyexpensestheyincurredin2006–07inearning
theirincomewhichtheycouldclaimasadeductionn anyamounttheycouldclaimin2006–07forthe
deductibleamountoftheundeductedpurchasepriceoftheirpensionorannuityatquestionD9orquestionD12inTaxPack 2007 supplement
n netchildcareexpensestheyincurredin2006–07becausetheywereworking–thatis,theamountpaidbythedependantlessanycashrebates(forexample,childcarebenefitandrebatesprovidedbyanemployerorunion)
n theirexpensesfortravelduring2006–07toandfromchildcarebecausetheywereworking
n theirexpensesfortravelduring2006–07toandfromwork
n expensestheyincurredin2006–07inconductingabusinessactivitythatresultedinadeferrednon-commercialbusinessloss,eveniftheydidnotlodgeataxreturn.
Whereanyoftheaboveexpensesincludecarexpenses,weacceptacalculationoftheexpensebasedonarateperkilometremultipliedbytheactualnumberofkilometrestravelled–seethe‘centsperkilometre’methoddescribedonpage41.Ifthismethodisused,the5,000kilometrelimitdoesnotapplyforthepurposeofcalculatingyourdependant’sSNI.
YourdependantmustbeabletodemonstratethattheyactuallyincurredtherelevantexpenseswhichreducetheirSNI.
What doesn’t reduce SNI?Yourdependant’sSNIcannotbereducedby:n amountstheypaidforgifts,donationsortaxagentfeesn taxwithheld,superannuationcontributionsorlosses
broughtforwardfrom2005–06orearlieryearsn self-educationexpensesthatwouldnotbetax-deductible
becausetheironlyincomewasfromaustudy,youthallowanceorworkthatwasnotconnectedwithself-education.
HOW MUCH SNI CAN YOUR DEPENDANT EARN?Forsomeofyourclaimsrelatingtodependants,theamountyoumaybeentitledtowillbeaffectedbytheirSNI.Forexample,sometaxoffsetsarereducedby$1forevery$4ofSNIover$282thatyourdependantsearnedin2006–07.WeexplainateachquestiontheamountofSNIyourdependantscanearnbeforeyourclaimisaffected.
TAXOFFSETSANDYOURTAXWITHHELDIfyourtaxoffsetorfamilytaxbenefitentitlementshavechangedsinceyoulastfilledinaWithholding declarationauthorisingyourpayertovarytheamountoftaxwithheld,youmayneedtofillinanewdeclaration.
Ifyourfamilytaxbenefitentitlementshavechanged,youwillalsoneedtocompletetheWithholding declaration – family tax benefit worksheet.Contactyourpayerformoreinformation.Failuretofillinanewdeclarationmayresultinataxdebt.
Pages76–97tellyouabouttaxoffsets.Formoreinformationaboutfamilytaxbenefit,seepages71–5.
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childturns18years–providedthechildisstudyingfulltimeandisnotreceivingasocialsecuritypayment,suchasyouthallowanceoraprescribededucationalschemeallowance,suchasABSTUDY.
IfyouwereeligibleforFTBforachildwhohasdied,youmaybeentitledtoabereavementpayment.Formoreinformation,visittheFAOorphone136150.
WERE YOU ELIGIbLE FOR FTb?
FTBCALCULATORTheFTBcalculatoronourwebsitecanhelpyouworkoutwhetheryouwereeligibleforFTB.Ifyouwere,itcanalsoworkouttheamountyouareentitledtoclaim.
TobeeligibletoclaimFTByoumustsatisfythefollowingthreecriteria:n Youmusthaveprovidedcaretoadependentchild
(seethedefinitionunderDidyouhaveaneligibledependentchild?onthenextpage).
n Ifyousharedthecareofthedependentchildwithanotherpersonwhoisnotyourcurrentspouse,youmusthavecaredforthechildforaminimumof10%oftheassessmentperiod.Forexample,ifyousharedthecareoverthewhole2006–07incomeyearyoumusthavecaredforthedependentchildforatleast37nightsoftheincomeyear.
n Youmusthavesatisfiedtheresidencyrequirementsforfamilyassistancepurposes(seebelow).Thesedifferfromthosefortaxpurposes.
Residency requirements for family assistance purposesTobeanAustralianresidentforfamilyassistancepurposes,youmust:n resideinAustraliaonapermanentbasis,andn satisfyoneofthefollowing:
– youareanAustraliancitizen– youholdapermanentvisa,or– youareaNewZealandcitizenwhoentered
Australiaunderaspecialcategoryvisa.
IfyouholdacertainclassoftemporaryvisabutyoudonotresideinAustraliaonapermanentbasis,youmaystillbeentitledtoFTBwhileyouareinAustralia(forfurtherinformation,contacttheFAO).
IndecidingwhetheryouresideinAustraliaonapermanentbasis,theFAOmayneedtolookat:n thenatureofyouraccommodationn thenatureandextentoffamilyrelationshipsinAustralian thenatureandextentofemployment,businessor
financialtieswithAustralian thefrequencyanddurationoftraveloutsideAustralia,
andn anyotherrelevantmatters.
Did you have care of a dependent child aged under 2� years (or under 25 years if they were studying full time) at any time between � July 2006 and 30 June 2007?
EXPLANATIONOFTERMSCareandothertermsusedinthissectionaredefinedatExplanationoftermsonpages74–5.
NO Youcannotclaimfamilytaxbenefit(FTB)anddonotneedtocontinuereadingthissection.GotoTaxoffsetsonpage76.
YES Readbelow.
Did you or your spouse receive FTb payments directly from the Family Assistance Office (FAO) for the full income year?
YES YoudonotneedtolodgeaclaimforFTB.YouonlyneedtoreadHowdoesincomeaffectyourFTBPartBonpage74tofindoutifyouareeligibletoclaimataxoffsetatitemT1.YourFTBpaymentswouldhaveincludedPartBifyousatisfythePartBeligibilitytests.
IfyouhavebeenpaidtoomuchFTB,theFAOwillrecoveranyamountyoushouldnothavereceived.Yourtaxrefund–oryourspouse’siftheygaveconsent–canbeusedtorecovertheseamountsdirectly.
FormoreinformationonreconciliationofFTB,seethepublicationFamily tax benefit (FTB) tax claim instructions 2007(NAT4108–6.2007).
GotoHowdoesincomeaffectyourFTBPartBonpage74.
NO Readbelow.
WHAT IS FAMILY TAx bENEFIT?FTBhastwoparts,PartAandPartB.PartAisdesignedtohelpwiththecostofraisingchildren.PartBisdesignedtogiveextrahelptofamilieswithonemainincome,includingsingleparentfamilies.YoumaybeeligibleforPartAorPartB,orboth.
PartAispaidforeachdependentchildyoucareforwherethedependentchildisagedunder21yearsandforthosedependentchildrenaged21yearsto24yearswhoarestudyingfulltime.
PartBisafamilypayment(thatis,itisnotpaidperchild)andcanbepaiduntiltheyoungestchildturns16yearsoruntiltheendofthecalendaryearinwhichtheyoungest
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THavingataxfilenumberdoesnotnecessarilymeanyoumeettheresidencyrequirementforfamilyassistance.
Ifyouareunsureofyourresidencystatus,phonetheFamilyAssistanceOffice(FAO)on136150orvisittheFAOwebsiteatwww.familyassist.gov.au
Did you have an eligible dependent child?Tobeeligibleforfamilytaxbenefit(FTB),yourdependentchildmust:n havebeeninyourcareandyoumusthavebeen
responsible(whetheraloneorjointlywithsomeoneelse)fortheirday-to-daycare,welfareanddevelopment
n havebeenanAustralianresidentforfamilyassistancepurposesorhavelivedwithyou
n nothavebeenyourspousen haveresidedinAustraliaforsomeoftheperiod
1July2003to30June2007.
Achildisnotadependentchildif:n they(orsomeoneontheirbehalf,forexample,aparent)
receivedanyofthepaymentslistedatquestions5and6onpages23–4
n theywere16yearsorolderandreceivedpaymentsunderanABSTUDYschoolingortertiaryscheme,theStudentFinancialSupplementScheme,theVeterans’ChildrenEducationScheme,orthePost-graduateAwardsScheme,or
n theyhadanadjustedtaxableincomeofmorethantheincomelimitinthetablebelow.
Ageofchild Incomelimits
Under5years Nolimit
5to15yearsstudyingfulltime Nolimit
5to15yearsnotstudyingfulltime $11,548
16to24years $11,548
Did you satisfy the eligibility criteria AND did at least one dependent child or full-time student that you provided care for satisfy the dependent child eligibility criteria?
NO YouarenoteligibletoclaimFTB.GotoTaxoffsetsonpage76.
YES Readbelow.
IfyouareunsureofhowyouwouldliketoclaimyourFTB,workthroughthefollowingstepstofindoutwhichwayisbestforyou.
STEP1 Did you receive an income support payment from Centrelink for the whole income year? (Incomesupportpaymentsarelistedatquestions5and6onpages23–4.)
NO Gotostep2.
YES YourFTBwouldhavebeenpaidinadditiontoyourincomesupportpayment.YoushouldnotlodgeanFTBtaxclaim.Ifyouwouldlikefurtherinformation,contacttheFAO.GotoTaxoffsetsonpage76.
STEP2 Were you entitled to a health care card and/or rent assistance from the FAO? Forfurtherinformationonhealthcarecardsandrentassistance,phonetheFAOon136150orvisittheirwebsiteatwww.familyassist.gov.au
NO YoucanchoosehowyouwouldliketoreceiveyourFTB–fromtheFAOorfromtheTaxOffice.IfyoureducedtheamountoftaxthatwaswithheldfromyourpayinanticipationofyourFTBentitlementbylodgingaWithholding declaration(NAT3093),youshouldclaimyourFTBfromtheTaxOfficeoryoumayincurataxdebt.
YES Healthcarecardsandrentassistancearenotavailablethroughthetaxsystem.ToreceiveyourhealthcarecardyoushouldclaimyourFTBdirectlyfromtheFAO.GotoTaxoffsetsonpage76.
STEP3 Did you or your spouse receive child support for all or part of the 2006–07 income year that was registered for collection by the Child Support Agency (CSA)?
NO YoucanchoosehowyouwouldliketoreceiveyourFTB–fromtheFAOorfromtheTaxOffice.IfyoureducedtheamountoftaxthatwaswithheldfromyourpayinanticipationofyourFTBentitlementbylodgingaWithholding declaration,youshouldclaimyourFTBfromtheTaxOfficeoryoumayincurataxdebt.
YES Gotostep4.
STEP4 Did you or your spouse receive arrears of child support in the 2006–07 income year?
Forthepurposesofthemaintenanceincomecredit‘arrearsofchildsupport’meansanamountinexcessofthechildsupportentitlementamountfor2006–07asworkedoutbytheCSA.
NO YoucanchoosehowyouwouldliketoreceiveyourFTB–fromtheFAOorfromtheTaxOffice.IfyoureducedtheamountoftaxthatwaswithheldfromyourpayinanticipationofyourFTBentitlementbylodgingaWithholding declaration,youshouldclaimyourFTBfromtheTaxOfficeoryoumayincurataxdebt.
YES Gotostep5.
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UsethetablebelowtohelpyoudetermineifyouareentitledtoallorsomeofPartA.Inthetable,usetheageofyourdependentchildorchildrenat30June2007.Ifyourdependentchildturned25yearsduringtheincomeyear,countthechildinthe‘Numberofdependentchildrenaged18to24years’row.
Youcanusethecalculatoronourwebsitetoworkoutyourrate.ThereisalsoarateestimatorontheonlineservicespageoftheFAOwebsiteatwww.familyassist.gov.au
Inthetablebelow:Ifallyourchildrenwereaged0to17yearsat30June2007,findtherowthatshowsthenumberofdependentchildrenyouhad.Yourincomelimitistheamountshadedblue inyourrow.Ifallyourchildrenwereaged18to24years,findthecolumnthatshowsthenumberofdependentchildrenyouhad.Yourincomelimitistheamountshadedpink inyourcolumn.Ifyouhadchildreninbothagegroups,findtherowthatshowsthenumberofdependentchildrenyouhadaged0to17yearsandthecolumnthatshowsthenumberofdependentchildrenyouhadaged18to24years.Yourincomelimitistheunshadedamountwhereyourcolumnandyourrowmeet.
IfyourfamilyATIisequaltoormorethantheincomelimitsinthetableyouarenotentitledtoPartAbutyoumaybeentitledtoPartB.Readon.
NOTEYoumayhavebecomeorceasedtobeeligibleforPartAduringtheincomeyearif:n yourmaritalstatuschangedn anyofyourdependentchildrenaged21to24years
stoppedstudyingfulltime,orn yougainedthecareof,orceasedtocarefor,
adependentchild.
NOTEThefollowingquestionrelatestopreviousincomeyears.
STEP5 During the period � July 2000 to 30 June 2006:n did you or your spouse receive child support that
was less than the maintenance income-free area (see Explanation of terms) for any of the income years, and the amount of child support received in that year was also less than the amount due for that year, and
n were you or your spouse eligible for family tax benefit (FTb) for all or part of that period?
NO YoucanchoosehowyouwouldliketoreceiveyourFTB–fromtheFamilyAssistanceOffice(FAO)orfromtheTaxOffice.IfyoureducedtheamountoftaxthatwaswithheldfromyourpayinanticipationofyourFTBentitlementbylodgingaWithholding declaration,youshouldclaimyourFTBfromtheTaxOfficeoryoumayincurataxdebt.
YES Youmayhaveamaintenanceincomecreditthatcanbeusedtooffsetthechildsupportarrearsyoureceivedinthe2006–07incomeyear.ToaccessthiscredityoushouldclaimyourFTBdirectlyfromtheFAO.
Themaintenanceincomecreditmay,insomecases,increasetheamountofFTByouwillreceivein2006–07.Forfurtherinformation,contacttheFAO.
IfyouwouldliketoclaimyourFTBfromtheFAO–eitherasalumpsumorasfortnightlypayments–contacttheFAOtogettheappropriateFAOclaimform.Otherwise,readon.
HOW DOES INCOME AFFECT YOUR FTb PART A?TheamountofPartAyoureceivedependsonyourfamilyadjustedtaxableincome(ATI).YourfamilyATIisthetotalofyourandyourspouse’sATI.
FTb PART A FAMILY ADJUSTED TAxAbLE INCOME LIMIT (INCLUDING THE PART A SUPPLEMENT)
Numberofdependentchildrenaged18to24years
Numberofdependentchildrenaged0to17years
0 1 2 3
0 $96,081 $107,043 $118,857
1 $94,718 $105,680 $117,494 $129,308
2 $104,317 $116,131 $127,945 $139,759
3 $114,769* $126,582* $138,396* $150,210*
*Incomelimitishigherthanstatedifyouhavethreechildrenaged13to15years.ContacttheFAOifyouhavefurtherqueries.
Note:Youcannotusethistableif:n youhadmorethanthreechildrenineitheragegroupn yousharedcareforanyofyourchildrenn youhadtripletsorquadruplets(orchildrenfromalargermultiplebirth)whowereundersixyearsold,orn youreceivedgovernmentrentassistancepayments.Ifanyoftheseapplytoyou,usethefamilyassistanceestimatoravailableontheFAOwebsiteatwww.familyassist.gov.auorphonetheFAOon136150.
ExAMPLES
n Ifyouhadonedependentchildaged0to17yearsandnodependentchildrenaged18to24years,yourincomelimitis$94,718.
n Ifyouhadnodependentchildrenaged0to17yearsandthreedependentchildrenaged18to24years,yourincomelimitis$118,857.
n Ifyouhavethreedependentchildrenaged0to17yearsandtwodependentchildrenaged18to24years,yourincomelimitis$138,396.
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TWere you entitled to family tax benefit (FTb) Part A?
NO YoumaystillbeentitledtoPartB.SeeHowdoesincomeaffectyourFTBPartB?below.
YES SeeHowtoclaimFTBfromtheTaxOfficeinthenextcolumn.YoumayalsobeentitledtoPartB.Readbelow.
Unsure? ContacttheFamilyAssistanceOffice(FAO).
HOW DOES INCOME AFFECT YOUR FTb PART b?IfyouwereasingleparentatanytimeduringtheclaimperiodyourincomewillnotaffectyourPartBentitlementforthattime.Ifyouwereamemberofacouple,onlythelowerearner’sadjustedtaxableincome(ATI)istakenintoaccountwhendeterminingentitlementtoPartB.UsethetablebelowtoworkoutifyouareentitledtoPartB.
Ageofdependentchild Lowerearner’sincomelimitatwhichPartBstopsbeingpaid
Under5years $21,572
5to18years* $16,790
*Ifyouryoungestchildwasaged16to18yearsatanytimeduringtheclaimperiodyoucanonlybeentitledtoPartBforthatchildiftheywerestudyingfulltime.Ifthechildwas18yearsyouwillbeentitledtoPartBuntil31Decemberoftheyeartheyturned18years.
Ifyouhadashared-carearrangementforanyofyourchildren,PartBiscalculatedforeacheligiblechildandpaymentisbasedonthechildwiththehighestrate.
Return to workIfyouwereaparentwhoreturnedtoworkforthefirsttimeafter1July2006:n afterthebirthofyourchild,orn aftercaringforachildwhohascomeintoyourcareyoumaybeentitledtothemaximumrateofFTBPartBfortheperiodthatyouwerenotatworkduringtheyear.
EligibilityforthisextraassistancewillbecalculatedaftertheendoftheincomeyearwhenFTBpaymentsarereconciled.
Startinganewjobmaybeconsideredareturntowork.
Forfurtherinformation,refertoFamily tax benefit (FTB) tax claim instructions 2007.
Were you entitled to FTb Part b?
NO GotoTaxoffsetsonpage76.
YES SeeHowtoclaimFTBfromtheTaxOfficeinthenextcolumn.
Unsure? ContacttheFAO.
NOTEIfyourentitlementtoPartBwas:n foronlypartoftheyear–youmaybeabletoclaima
spousetaxoffsetatitemT1fortherestoftheyear,orn ataratebasedonachildyouoryourspouse
sharedthecareofwithsomeoneelse,forexample,anex-spouse–youmaybeabletoclaimaspousetaxoffsetatitemT1fortheperiodswhenthechildwasnotinthecareofyouoryourspouse.
HOW TO CLAIM FTb FROM THE TAx OFFICEIfyouwouldliketoclaimyourFTBfromtheTaxOfficeyouwillneedtocompleteaseparateform,theFamily tax benefit (FTB) tax claim 2007andthenlodgeitwithorafteryourTax return for individuals 2007.
ThisformisincludedwiththeFamily tax benefit (FTB) tax claim instructions 2007.Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.AnFTBtaxclaimforthe2006–07incomeyearcanbeaccepteduntil30June2009.However,toavoidpenaltiesforlatelodgmentofyourtaxreturnyoumustlodgebytheduedate–seeLodgeyourtaxreturnby31October2007onpages10–11.
Ifyouhavea2005–06FTBtaxclaimthatyouhavenotlodgedwiththeTaxOfficeyoumustdosoby30June2008.
ExPLANATION OF TERMSBelowisanexplanationoftermsusedinthisinformationsection.Ifyouarestillunsureaboutatermafterreadingtheexplanation,contacttheFAO.
Adjusted fringe benefitsThisisthereportablefringebenefitsamount‘grosseddown’.
Anyreportablefringebenefitswillappearonyourpaymentsummary.YouneedtowritethereportablefringebenefitsamountonyourFTBtaxclaimoronyourtaxreturn.TheFAOwillautomaticallyreduceanyamountsthatappearonyourpaymentsummarytotheadjustedamount.
To‘grossdown’youradjustedfringebenefitsamountusethefollowingformula:
reportablefringebenefitsamount 53.5%
Adjusted taxable income (ATI)Thecomponentsofadjustedtaxableincomeare:n taxableincomen adjustedfringebenefitsn netrentalpropertylossesn tax-freepensionsorbenefitsn targetforeignincome,andn deductiblechildmaintenanceexpenditure.
Eachofthesecomponentsisdescribedindetail.
Assessment periodAnassessmentperiodisusedtocalculateyourshared-carepercentage.
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Anassessmentperiodbeginsonthelatestof:n thedayonwhichthecareofthedependentchildstarts
tobesharedn thedayonwhichcarearrangementsforthedependent
childchangedorn 1Julyintheincomeyearoftheclaim.
Anassessmentperiodendsontheearlierof:n 30Juneoftheincomeyearinwhichtheperiodbegann thedaybeforethedayonwhichthecarearrangements
ofthedependentchildchangedorn thedayonwhichthecareofthedependentchild
stopped.
Theassessmentperiodisnotaffectedifthereareshort-termabsencesorminorvariationstoyourshared-carearrangements–forexample,ifachildwhonormallystayswithyourex-spouseforaweekenddoesnotdosobecauseofillness.
CareCaremeansthatyouhadresponsibilityfortheday-to-daycare,welfareanddevelopmentofthechild.Generally,day-to-daycareincludesphysicalcare.
Youcanstillcareforyourdependentchildiftheywerebeingeducatedawayfromyourhome–forexample,atuniversity.
Deductible child maintenance expenditureDeductiblechildmaintenanceexpenditureistheamountofchildmaintenance(alsoknownaschildsupport)youarerequiredtopaytoanotherpersontomaintainyournaturaloradoptedchild.Toworkoutyouradjustedtaxableincome(ATI)deductthisamountfromthetotalofalltheotherATIamounts.
Full careYouhadfullcareofyourchildrenifyouand/oryourcurrentspousecaredforyourchildrenforthewholeassessmentperiodandyouareclaimingfamilytaxbenefit(FTB)onbehalfofyourfamily.
Maintenance income-free areaThemaintenanceincome-freeareaistheamountofchildsupport(maintenance)youcanreceivebeforeyourFTBPartApaymentisreduced.MaintenanceincomeabovethefreeareareducesyourFTBPartApaymentby50centsinthedollaruntilthebaserateofFTBPartAisreached.
Themaintenanceincome-freeareaismadeupofabasicamountforthefirstchildandasupplementaryamountforeachsubsequentchild.Themaintenanceincome-freeareasfor2006–07areshownbelow.
Individual’ssituation Basicamount(1child)
Foreachadditionalchild,add
Single $1,215.45 $405.15
Acouple,andbothhavemaintenanceincome
$2,430.90 $405.15
Acouplebutonlyonehasmaintenanceincome
$1,215.45 $405.15
Ifyouneedthemaintenanceincome-freeareasforpreviousincomeyears,phonetheFamilyAssistanceOffice(FAO)on136150orvisittheirwebsiteatwww.familyassist.gov.au
Net rental property lossesNetrentalpropertylossesareshownatitem20Netrentonpage11ofyourtaxreturn(supplementarysection).Onlyincludethisamountifyouhaveshownarentalloss–youwouldhaveprintedLintheLOSSbox attherightofitem20.ThevalueofanynetpropertylossiscountedasincomeforATIpurposes.
Shared careSharedcareiswhereyouand/oryourspousecaredforachildforsomeofthetimeduringtheassessmentperiodandsomeoneelse–forexample,yourex-spouse–caredforthechildfortherestofthetime,suchasweekendsorschoolholidays.Youcanworkoutyourshared-carepercentageasfollows:
Numberofnightsyouand/oryourspousecaredforthechildinanassessmentperiod 100Numberofnightsintheassessmentperiod
YouwillneedaccuraterecordstoclaimyourcorrectpercentageofFTB,particularlyifyourcarearrangementschangedduringtheyear.Thepercentagecanbedifferentfordifferentperiodsifyourpatternofcarechangedduringtheyear.Ifyouneedhelptoworkoutyourshared-carepercentagecontacttheFAO.
SpouseYourspouseisapersonoftheoppositesextowhomyouwerelegallymarried,orwithwhomyoulivedinamarriage-likerelationshipatanytimeduringtheclaimperiod,providedyouwerenotlivingseparatelyandapartonapermanentorindefinitebasis.Youmayhavehadmorethanonespouseduringtheclaimperiod–forexample,ifyouweremarriedatthebeginningoftheclaimperiod,thenseparated,thenlivedwithanewspouseattheendoftheclaimperiod.
Target foreign incomeTargetforeignincomeisincome,calculatedinAustraliandollars,fromsourcesoutsideAustralia.Donotincludeanyamountsyouhavealreadyincludedinyourtaxableincomeandanyforeignincomereceivedintheformofafringebenefit.
Ifyoureceivedamountsoftargetforeignincomethroughouttheincomeyear,usetheexchangerateapplicableon1July2007toconvertforeignamountstoAustraliandollars.YouwillfindtheapplicableexchangeratesontheFAOwebsiteunder‘Howtocalculateincome’oryoucangetthemfromtheFAO.
Taxable incomeThisistheamountthatyouhavewrittenatTAXABLEINCOMEORLOSSonyourTax return for individuals 2007.Ifyouhavealosstheamounttobeincludedinyourcalculationofadjustedtaxableincomeiszero.
IfyouarecompletingyourFTBtaxclaimseparatelyfromyourtaxreturn,taxableincomeisalsoshownonyourincometaxnoticeofassessmentissuedbytheTaxOffice.
Tax-free pensions or benefitsThesearelistedunderPensionsonpage13.ForFTBpurposesdoubleorphanpensionisnotincluded.
Tax-freepensionsorbenefitsdonotincludebereavementpayment,pharmaceuticalallowance,rentassistance,remoteareaallowance,language,literacyandnumeracysupplement.
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Generally,therearethreetypesoftaxoffsets.They:n providetaxreliefforpersonalcircumstances(for
example,taxoffsetsforseniorAustraliansandpeoplelivinginremoteareas)
n giveyouacreditforanamountoftaxthathaseffectivelyalreadybeenpaid(forexample,creditsforfrankeddividendsandforeigntax)
n provideanincentive(forexample,thetaxoffsetformatureageworkersandtheprivatehealthinsurancerebate).
Sometaxoffsetsappearonthefollowingpages;somearepartofotherquestions.
Taxoffsetsdirectlyreducetheamountoftaxyoumustpay.Theyarenotthesameasdeductions,whicharetakenoffyourincomebeforeyourtaxisworkedout.
Withataxoffset,weworkoutthetaxdueonyourtaxableincomethenreduceitbythetotalamountofyourtaxoffsets.
Taxoffsetscanonlyreducetheamountoftaxyoupaytozero,thatis,ifyourtaxoffsetsaregreaterthanyourtaxdue,youdonotgetarefundoftheexcessamount–withthreeexceptions.Thethreerefundabletaxoffsetsare:n theprivatehealthinsurancerebate(seequestionT5)n thefrankingtaxoffset(seequestion11)n thebabybonus(seequestionT7).
Taxoffsets,ingeneral,donotreduceyourMedicarelevy;however,whereyouhaveexcessrefundabletaxoffsets,youcanusethemtoreduceyourtax,includingyourMedicarelevy.
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QUESTION T�SPOUSE (WITHOUT DEPENDENT CHILD OR STUDENT), CHILD-HOUSEKEEPER OR HOUSEKEEPER
Were you or your spouse (during any period they were your spouse) entitled to FTb Part b for the whole year?
NO GotoDependentspouseeligibilitychecklistbelow.
YES Readbelow.
Were you or your spouse (during any period they were your spouse) entitled to FTb Part b for any part of the year at a rate based on sharing care of the child with someone else, such as a former spouse (shared-care rate)?
NO Youcannotclaimadependentspousetaxoffsetorachild-housekeepertaxoffset.GotopartConpage82.
YES GotoDependentspouseeligibilitychecklistbelow.
Dependent spouse eligibility checklistYouareeligibletoclaimadependentspousetaxoffsetforanyperiodin2006–07thatyouhadaspouseandyoumetalltheseconditions: youmaintainedyourspouse–seeWhatismaintainingadependant?onpage69
yourspousewasaresident–ifyouareunsure,readAreyouanAustralianresident?onpages11–12
youwerearesidentatanytimein2006–07 neitheryourspouse(iftheywereyourspouseduringthatperiod)noryouwereentitledtoFTBPartBorwereonlyentitledtoitattheshared-carerate(formoreinformationonFTB,readpages71–5).
NOTEYourspouse’sseparatenetincome(SNI)fortheperiod(s)youareclaimingaspousetaxoffsetreducesyourclaimby$1forevery$4bywhichtheirSNIexceeds$282(seesteps6–10ofworksheet1onthenextpage).Youcannotclaimaspousetaxoffsetifyouhadadependentspouseforthewholeyearandyourspouse’sSNIwasmorethan$6,901.ReadWhatisseparatenetincome?onpages69–70.
How much can you claim?Themaximumspousetaxoffsetyoumaybeabletoclaimis$1,655.Youmaybeentitledtoapartialtaxoffsetif:n youhadaspouseforonlypartoftheincomeyear,orn youmetalloftheeligibilityconditionsforonlypartofthe
incomeyear–forexample,ifyourspouseceasedtobearesidentduring2006–07,orneitheryourspousenoryouwereentitledtoFTBPartBforpartoftheyear.
Did you have any of the following for any part of the year:n a spousen a child-housekeeper, orn a housekeeper?
DEFINITIONSAspousecanbemarriedordefacto(seethedefinitionofspouseonpage110).
Achild-housekeeperisyourchild,adoptedchildorstepchildwhokepthouseforyoufulltime.
Ahousekeeperissomeonewhokepthouseforyoufulltimeandalsocaredforyoureligibledependentchild,studentorinvalidrelative,oryourdependentspousewhoreceivedadisabilitysupportpension.
NO GotoEligibilityfortheseniorAustralianstaxoffsetonpage84.
YES Readbelow.
PART A Dependent spouse – married or de factoYouhadadependentspouseifyoumaintainedthem.ReadWhatismaintainingadependant?onpage69.
Did you have a dependent spouse – married or de facto?
NO GotopartBonpage80.
YES Readbelow.
Did you have a dependent child or student for any part of the year?
NO GotoDependentspouseeligibilitychecklistinthenextcolumn.
YES Readbelow.
STOPYoucannotclaimaspousetaxoffsetforanyperiodthatyouoryourspouse(duringanyperiodtheywereyourspouse)wasentitledtofamilytaxbenefit(FTB)PartBataratebasedonhavingfullcareofachild(full-carerate).ThisruleappliesevenifneitheryounoryourspouseclaimedFTBPartBwheneligibletodoso.TofindoutifyouoryourspousewaseligibleforFTBPartB,youwillneedtoreadtheinformationonfamilytaxbenefitonpages71–5.Thenreturntothispageandworkthroughthequestionsinthenextcolumn.
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Are you eligible to claim a dependent spouse tax offset?
NO GotopartBonpage80.
YES Gotoworksheet1below.Followsteps1–5toworkoutyourmaximumavailabletaxoffsetamountfortheperiod(s)youareeligibletoclaim.Thenfollowsteps6–10toworkoutyourallowabletaxoffsetclaimafteranyreductionforyourspouse’sseparatenetincome(SNI).Thenworkthroughsteps11–14,iftheyapplytoyou,tocompletethissection.
WORKSHEET �: How to claim your dependent spouse tax offset
STEP1 Ifyouhadadependentspouseforthewholeyearandneitherofyouwereentitledtofamilytaxbenefit(FTB)PartBatANYtimeduringtheyear:
1 Write$1,655at(a). (a) $
2 Gotostep5.
STEP2 IfyouhadadependentspouseforonlypartoftheyearandneitherofyouwereentitledtoFTBPartBduringthatperiod:
1 Workoutthenumberofdaysyouhadaspouseandmultiplythisnumberby$4.53(thedailyrate).Writetheamountat(b). (b) $
2 Gotostep5.
STEP3 IfyourspouseoryouwereentitledtoFTBPartBatanytimeduringtheyear(seeexample1onthenextpage):
1 Fortheperiodyouhadadependentspouse,workoutthenumberofdaysthatneitherofyouwereentitledtoFTBPartB.
2 Multiplyby$4.53(thedailyrate)thenumberofthosedaysyouworkedoutinno.1.Writetheamountat(c). (c) $
STEP4 IfyourspouseoryouwereentitledtoFTBPartBattheshared-carerateatanytimeduringtheyear(seeexample2onthenextpage):
1 Fortheperiodyouhadadependentspouse,workoutthenumberofdaysthatyourspouseoryouwereentitledtoFTBPartBattheshared-carerate.
2 Multiplythenumberofthedaysworkedoutinno.1by$4.53(youransweris$1,655ifyouhadadependentspouseforthewholeyear).
3 Workoutyourshared-carepercentage–seeexplanationonpage75andexample2onthenextpage.
4 Deductyourshared-carepercentagefrom100%.
5 Multiplytheamountyouworkedoutinno.2bythepercentageyouworkedoutinno.4.Writetheamountat(d). (d) $
STEP5 Addupanyamountsat(a),(b),(c)and(d)andwritethetotalat(e). (e) $
Thisisyourmaximumavailabletaxoffset.Itcannotbemorethan$1,655.
STEP6 Ifyourspouse’sSNIfortheyear(orfortheperiodyouareclaimingaspousetaxoffsetifthisisnotforthewholeyear)waslessthan$286,writetheamountfrom(e)at(j)instep10,thengotostep12.Otherwise,gotostep7.
STEP7 Ifyourspouse’sSNIwas$286ormore,writeat(f)theirSNIfortheyear(orfortheperiodyouareclaimingaspousetaxoffsetifthisisnotforthewholeyear). (f) $
STEP8 SNIatwhichthetaxoffsetbeginstoreduce (g) $282
Take(g)awayfrom(f)andwritetheamountat(h). (h) $
STEP9 Divide(h)by4andwritetheamountat(i). (i) $
STEP10 Take(i)awayfrom(e)andwritetheamountat(j). (j) $
NOTEIfyouhadadependentspouseforpartoftheyearandadifferentdependentspouseforanotherpartoftheyear,youwillneedtogothroughthestepstwice–onceforeachspouse–andthenaddtheresults.
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SSTEP11 Iftheamountat(j)is$0orless,youcannotclaimadependentspousetaxoffset.
GotopartBonthenextpage.Iftheamountat(j)ismorethan$0,thisisyourallowabletaxoffset.Gotostep12.
STEP12 Writeyourallowabletaxoffsetfrom(j)at P itemT1onpage4ofyourtaxreturn,oronapieceofnotepaperifyouaregoingtoclaimachild-housekeeperorhousekeepertaxoffsetforanotherpartoftheyear.Donotshowcents.
STEP13 LeaveblanktheCLAIMTYPEbox attherightof P itemT1.
STEP14 CompleteSpousedetails–marriedordefactoonpages6–7ofyourtaxreturn.Providerelevantdetailsincludingyourspouse’sseparatenetincome(SNI)atR .IfyourspousedidnothaveanySNI,write0.
Ifyouaregoingtoclaimachild-housekeeperorhousekeepertaxoffset,gotopartBonthenextpage.
Ifnot,gotoCheckthatyouhave...onpage83.
ExAMPLE �: Eligible for family tax benefit (FTb) Part b at any time during the year (see step 3 in worksheet � on the previous page)
Samremarriedon1October2006,sohehadaspousefor273daysduring2006–07.
From1October2006SamhadfullcareofElla,hisdaughterfromhispreviousrelationship.
Ellaleftschoolattheendofthe2006schoolyear.Sheturned16yearsoldon1May2007.
SamisentitledtoclaimFTBPartBforEllafrom1October2006until30April2007(212days).Hecanalsoclaimadependentspousetaxoffsetfor61days(273dayshehadadependentspouselessthe212dayshewasentitledtoclaimFTBPartBforElla).
Sam You
1 Fortheperiodyouhadadependentspouse,workoutthenumberofdaysthatneitherofyouwereentitledtoclaimFTBPartB. 61
2 Multiplythenumberofdaysyouworkedoutinno.1by4.53(thedailyrate).Transferthisamountto(c)inworksheet1onthepreviouspage. $276 $
ExAMPLE 2: Eligible for FTb Part b at the shared-care rate (see step 4 in worksheet � on the previous page)
Kobyhadadependentspouseforthewholeyear.
Kobyandhisformerspousesharedthecareoftheirson,Aiodan,forthewholeyear.Koby’sshareofthecarewas146nights:Koby’sshared-carepercentagefortheyearis40%(146nightsdividedby365,multipliedby100).
Koby You
1 Fortheperiodyouhadadependentspouse,workoutthenumberofdaysthatyourspouseoryouwereentitledtoFTBPartBattheshared-carerate. 365
2 Multiplythenumberofdaysworkedoutinno.1by$4.53(oruse$1,655ifyouhadadependentspouseforthewholeyear). $1,655 $
3 Workoutyourshared-carepercentage–seeabove. 40% %
4 Deductyourshared-carepercentagefrom100%. 60% %
5 Multiplytheamountworkedoutinno.2bythepercentageworkedoutinno.4. $993 $
Transferthisamountto(d)inworksheet1onthepreviouspage.
NOTEIftheshared-carepercentagechangedduringtheyear,youwillneedtodothiscalculationforeachperiodduringtheyearthatthepercentagewasdifferent.
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PART b Child-housekeeperAchild-housekeeperisyourchild,adoptedchildorstepchildwhokepthouseforyoufulltime.Achildwhoisafull-timestudentorafull-timeemployeeisnotconsideredtokeephousefulltime.Keepinghousemeansmorethansimplychild-mindingorperformingdomesticduties.Itincludeshavingsomeresponsibilityforthegeneralrunningofthehousehold.
Did you have a child-housekeeper?
NO GotopartConpage82.
YES Readbelow.
Child-housekeeper eligibility checklistYouareeligibletoclaimachild-housekeepertaxoffsetforanyperiodin2006–07thatyouhadachild-housekeeperandyoumetalltheseconditions: youmaintainedyourchild-housekeeper–seeWhatismaintainingadependant?onpage69
yourchild-housekeeperwasaresident–ifyouareunsure,readAreyouanAustralianresident?onpages11–12
youwerearesidentatanytimein2006–07 youwerenoteligibleforadependentspousetaxoffsetunderpartAonpage77
youwerenotentitledtofamilytaxbenefit(FTB)PartBorwereonlyentitledtoitattheshared-carerate–formoreinformationonFTB,readpages71–5.
NOTEYourchild-housekeeper’sseparatenetincome(SNI)fortheperiodyouareclaimingachild-housekeepertaxoffsetreducesyourclaimby$1forevery$4bywhichtheirSNIexceeds$282(seesteps6–10ofworksheet2onthenextpage).Youcannotclaimachild-housekeepertaxoffsetifyouhadachild-housekeeperforthewholeyearandyourchild-housekeeper’sSNIwasover$6,901(or$8,217ifyouhadanothereligibledependentchildorstudent).ReadWhatisseparatenetincome?onpages69–70.
How much can you claim?Themaximumchild-housekeepertaxoffsetyoumaybeabletoclaimis$1,655(or$1,984ifyouhadanothereligibledependentchildorstudent).Apartialtaxoffsetmayapplyif:
n youhadachild-housekeeperforonlypartoftheincomeyear,or
n youmetalltheeligibilityconditionsforonlypartoftheincomeyear.
Were you eligible to claim a child-housekeeper tax offset?
NO GotopartC.
YES Gotoworksheet2below.Followthestepstoworkoutyourallowabletaxoffsetamountfortheperiod(s)youareeligibletoclaim.
WORKSHEET 2: How to claim your child-housekeeper tax offset
Usecolumn1ifyouhadachild-housekeeperanddidnothaveanotherdependentchildunder21yearsoldorstudentunder25yearsold.
Usecolumn2ifyouhadachild-housekeeperandanotherdependentchildunder21yearsoldorstudentunder25yearsoldandtheSNIofthedependentchildorstudentwaslessthan$1,786.IftheSNIwas$1,786ormore,usecolumn1.
Iftheadditionalchildorstudentwasyourdependantforonlypartof2006–07,usethecolumn2dailyrateiftheirSNIwaslessthan$282plus$28.92foreachweekyoumaintainedthem.Otherwise,usethecolumn1dailyrate.
COLUMN1Nootherdependentchildorstudent
COLUMN2Anotherdependentchildorstudent
$1,655forthewholeyear(maximum)or$4.53aday
$1,984forthewholeyear(maximum)or$5.44aday
STEP1 Ifyouhadachild-housekeeperforthewholeyearandyouwereNOTentitledtoFTBPartBatANYtimeduringtheyear:
1 Writeat(a):n $1,655incolumn1ifyouhadnootherdependentchildorstudent,orn $1,984incolumn2ifyouhadanotherdependentchildorstudent.
2 Gotostep5. (a) $ (a) $
STEP2 Ifyouhadachild-housekeeperforonlypartoftheyearandyouwereNOTentitledtoFTBPartBatANYtimeduringthatperiod:
1 Workouthowmanydaysduringtheyearyouhadachild-housekeeper.
2 Multiplythenumberofdaysthatyouworkedoutinno.1bythefollowingdailyrate:n $4.53ifyouhadnootherdependentchildorstudent,writethe
answerat(b)incolumn1,orn $5.44ifyouhadanotherdependentchildorstudent, writetheanswerat(b)incolumn2.
3 Gotostep5. (b) $ (b) $
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SSTEP3 Ifyouwereentitledtofamilytaxbenefit(FTB)PartB
atanytimeduringtheyear:
1 Workouthowmanydaysduringtheyearyouhadachild-housekeeperandyouwerenotentitledtoFTBPartB.
2 Multiplythenumberofdaysworkedoutinno.1bythefollowingrelevantdailyrate:n $4.53ifyouhadnootherdependentchildorstudent,writethe
answerat(c)incolumn1,orn $5.44ifyouhadanotherdependentchildorstudent,writethe
answerat(c)incolumn2. (c) $ (c) $
STEP4 IfyouwereentitledtoFTBPartBattheshared-carerateatanytimeduringtheyear:
1 Workouthowmanydaysduringtheyearyouhadachild-housekeeperandyouwereentitledtoFTBPartBattheshared-carerate.
2 Multiplythenumberofdaysyouworkedoutinno.1bythefollowingdailyrate:n $4.53ifyouhadnootherdependentchildorstudent(youranswer
is$1,655ifyouhadachild-housekeeperforthewholeyear),orn $5.44ifyouhadanotherdependentchildorstudent(youranswer
is$1,984ifyouhadachild-housekeeperforthewholeyear).3 Workoutyourshared-carepercentage–seeexplanationonpage75
andexample2onpage79.4 Deductyourshared-carepercentagefrom100%.5 Multiplytheamountyouworkedoutinno.2bythepercentage
youworkedoutinno.4.
6 Writetheamountyouworkedoutinno.5at(d)column1ifyouused$4.53or(d)column2ifyouused$5.44. (d) $ (d) $
Note:Iftheshared-carepercentagechangedduringtheyearyouwillneedtorepeatthiscalculationforeachofthoseperiods,thenadduptheseamounts.
STEP5 Addupanyamountsat(a),(b),(c)and(d)andwritethetotalat(e).Thisisyourmaximumavailabletaxoffset.Theamountcannotbemorethan$1,655(ifcolumn1)or$1,984(ifcolumn2). (e) $ (e) $
STEP6 Writeat V itemT1onpage4ofyourtaxreturnyourchild-housekeeper’sseparatenetincome(SNI)fortheyear(orfortheperiodyouareclaimingachild-housekeepertaxoffset,ifthisisnotforthewholeyear).Donotshowcents.Ifyourchild-housekeeperdidnothaveanySNI,write0.Ifyourchild-housekeeper’sSNIwaslessthan$286,youwillreceivethefulltaxoffsetshownat(e)inyourcolumn.Thisisyourallowabletaxoffset–gotostep11.Otherwise,gotostep7.
STEP7 Ifyourchild-housekeeper’sSNIwas$286ormore,writeat(f)theirSNIfortheyear(orfortheperiodyouareclaimingachild-housekeepertaxoffset,ifthisisnotforthewholeyear).Donotshowcents.Makesureyouhavealsowrittenthisamountat V itemT1onyourtaxreturn. (f) $ (f) $
STEP8 SNIatwhichthetaxoffsetbeginstoreduce (g) $282 (g) $282
Take(g)awayfrom(f)andwritetheamountat(h). (h) $ (h) $
STEP9 Divide(h)by4andwritetheamountat(i). (i) $ (i) $
STEP10 Take(i)awayfrom(e)atstep5andwritetheamountat(j).Iftheamountat(j)is$0orless,youcannotclaimachild-housekeepertaxoffset–gotopartConthenextpage.Iftheamountat(j)ismorethan$0,thisisyourallowabletaxoffset–gotostep11. (j) $ (j) $
STEP11 Writeyourallowabletaxoffsetat P itemT1onpage4ofyourtaxreturnoraddittotheamountyouareclaimingforspousetaxoffset.IfyouarenotgoingtoclaimahousekeepertaxoffsetforanotherpartoftheyearatpartCofthisquestion,writethetotalat P itemT1.Donotshowcents.Ifyouaregoingtoclaimahousekeepertaxoffset,writeyourtaxoffsetentitlementsofaronapieceofnotepaperandgotopartC.Otherwise,gotostep12.
STEP12 PrintoneofthefollowingcodelettersintheCLAIMTYPEbox attherightof P itemT1onpage4ofyourtaxreturn:H–ifyouareclaimingachild-housekeepertaxoffsetonlyC–ifyouareclaimingaspousetaxoffsetforpartoftheyearandachild-housekeepertaxoffsetforanotherpartoftheyear.
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PART C HousekeeperAhousekeeperisapersonwhoworkedfulltimekeepinghouseforyouandcaredfor:n achildofyoursagedunder21years,irrespectiveof
thechild’sseparatenetincome(SNI)n anyotherchildagedunder21years(includingastudent
agedunder21years)whowasyourdependantandwhoseSNIwaslessthan$1,786
n yourinvalidrelativewhowasyourdependant(seepage69)andforwhomyoucanclaimadependanttaxoffset–ifyouareunsureyouwillneedtoreadquestionT11inTaxPack 2007 supplement,or
n yourspousewhoreceivedadisabilitysupportpension.
Keepinghousemeansmorethansimplychild-mindingorperformingdomesticduties.Itincludeshavingsomeresponsibilityforthegeneralrunningofthehousehold.
Did you have a housekeeper?
NO IfyouareclaimingataxoffsetatpartAorpartB,gotoCheckthatyouhave...onthenextpage.Ifnot,gotopage84.
YES Readbelow.
Housekeeper eligibility checklistIfyouwereanAustralianresidentatanytimein2006–07,youareeligibletoclaimahousekeepertaxoffsetforanyperiodin2006–07thatyouhadahousekeeperandyoumetalltheconditionsbelowforthecategorythatappliedtoyou.
You did not have a spouse. Youwerenotentitledtoclaimachild-housekeepertaxoffsetunderpartBonpage80.
Youwerenotentitledtofamilytaxbenefit(FTB)PartBorwereonlyentitledtoitattheshared-carerate–formoreinformationonFTB,readpages71–5.
You had a spouse who received a disability support pension. Youwerenotentitledtoclaimachild-housekeepertaxoffsetunderpartBonpage80.
You had a spouse who did not receive a disability support pension. YouwerenotentitledtoclaimadependentspousetaxoffsetunderpartAonpage77orachild-housekeepertaxoffsetunderpartBonpage80.
NeitheryourspousenoryouwereentitledtoFTBPartBorwereonlyentitledtoitattheshared-carerate–formoreinformationonFTB,readpages71–5.
Specialcircumstancesapplied–seeWherespecialcircumstancesapplyinthenextcolumn.
Where special circumstances applyExamplesofspecialcircumstancesinclude:n yourspousedesertedyouandyourchildren–and
youdidnotenterintoadefactorelationshipn youhadachildwithaseverementaldisabilitywho
requiredconstantattention,orn yourspousesufferedfromanextendedmentalillness
andwasmedicallycertifiedasbeingunabletotakepartinthecareofyourchildren.
Whereyouconsiderthatspecialcircumstancesappliedyouwillneedtocompletethisitemandprovideadditionalinformation.PrintSCHEDULEOFADDITIONALINFORMATION–ITEMT1PARTConthetopofaseparatepieceofpaperandexplainyoursituation.Includeyourname,addressandtaxfilenumber.PrintXintheYESboxatTaxpayer’s declarationquestion2aonpage8ofyourtaxreturn.Signyourscheduleandattachittopage3ofyourtaxreturn.
IftheCommissionerdoesnotconsiderthatspecialcircumstancesapplied,wewilladviseyou.Readon.
How much can you claim?Themaximumhousekeepertaxoffsetyoucanclaimis:n $1,655,orn $1,984ifyouhadaneligibledependentchildorstudent.
Youmaybeentitledtoapartialtaxoffsetif:n youhadahousekeeperforonlypartoftheincome
year,orn youmetalloftheeligibilityconditions(forthecategory
thatappliedtoyou)foronlypartoftheincomeyear.
Were you eligible to claim a housekeeper tax offset?
NO IfyouareclaimingataxoffsetatpartAorpartB,gotoCheckthatyouhave...onthenextpage.Ifnot,gotopage84.
YES Gotoworksheet3onthenextpage.
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SWORKSHEET 3: How to claim your housekeeper tax offset
COLUMN1Nodependentchildorstudent
COLUMN2Withadependentchildagedunder21yearsorastudentagedunder25years
$1,655forthewholeyearor$4.53aday
$1,984forthewholeyearor$5.44aday
STEP1 IfyouareeligibleforahousekeepertaxoffsetforthewholeyearAND:n neitheryourspouse(duringanyperiodtheywereyourspouse)noryouwereentitledtofamilytaxbenefit(FTB)PartBatANYtimeduringtheyear,or
n yourspousereceivedadisabilitysupportpensionforthewholeyear:
1 Writetheappropriateamountfromcolumn1($1,655)orcolumn2($1,984)at(d)step5,thenfollowtheinstructionsinstep5.
STEP2 Ifyouareeligibleforahousekeepertaxoffsetforthewholeyear:
1 Workoutthenumberofdaysthat:n neitheryourspouse(duringanyperiodtheywere
yourspouse)noryouwereentitledtoFTBPartB,orn eitheryourspouse(duringanyperiodtheywereyourspouse)
oryouwereentitledtoFTBPartB,butyourspousewasreceivingadisabilitysupportpension.
2 Multiplythenumberofdaysyouworkedoutinno.1bythedailyrate($4.53or$5.44).Writetheamountyoucalculatedat(a),thengotostep4. (a) $ (a) $
STEP3 Ifyouareeligibleforahousekeepertaxoffsetforonlypartoftheyear:1 Workoutthenumberofdaysduringthatpartyearthat:
n neitheryourspouse(duringanyperiodtheywereyourspouse)noryouwereentitledtoFTBPartB,or
n eitheryourspouse(duringanyperiodtheywereyourspouse)oryouwereentitledtoFTBPartB,butyourspousewasreceivingadisabilitysupportpension.
2 Multiplythenumberofdaysyouworkedoutinno.1bythedailyrate($4.53or$5.44)andwritetheamountyoucalculatedat(b). (b) $ (b) $
STEP4 If,foranyperiodduringtheyear,youdidNOThaveaspousereceivingadisabilitysupportpensionandyouareeligibleforahousekeepertaxoffset:1 Workoutthenumberofdaysduringthatperiodthatyourspouse
(duringanyperiodtheywereyourspouse)oryouwereentitledtoFTBPartBbasedonashared-carerate.
2 Multiplythenumberofdaysbythedailyrate($4.53or$5.44).
3 Multiplytheamountyouworkedoutinno.2by100%minustheshared-carepercentage(seeexample2onpage79)andwriteat(c)theamountyoucalculated. (c) $ (c) $
Note:Iftheshared-carepercentagechangesduringtheyearyouwillneedtodothisstepforeachperiodduringtheyearthatthepercentagewasdifferent.
STEP5 Addupanyamountsat(a),(b)and(c)andwritethetotalat(d).Ifyouarealsoclaimingaspouseorchild-housekeepertaxoffset,addtheamountat(d)totheotheramountonyournotepaper.Writetheamountat(d)orthetotalfromyournotepaperat P itemT1onpage4ofyourtaxreturn.PrinttheletterCintheCLAIMTYPEbox attherightof P itemT1ifyouarealsoclaimingaspousetaxoffset.Ifnot,printtheletterH. (d) $ (d) $
CHECK THAT YOU HAVE . . . workedoutyourchild-housekeeper’sseparatenetincome(SNI),ifrequired,andwrittentheamountonyourtaxreturn
writtenonyourtaxreturnyourtotaltaxoffset printedonyourtaxreturnthecorrectcodeletterintheCLAIMTYPEbox ,ifrequired
completedSpousedetails–marriedordefactoincludingyourspouse’sSNIonpages6–7ofyourtaxreturn
attachedtopage3ofyourtaxreturnyoursignedSCHEDULEOFADDITIONALINFORMATION–ITEMT1PARTC,ifyouneedtosendusone.
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CONDITION 2 – Eligibility for Australian Government pensions and similar paymentsTherearethreewaysofmeetingthiscondition.
� Youmeetthisconditionif:n youreceivedanAustralianGovernmentagepension,
orapension,allowanceorbenefitfromVeterans’Affairsatanytimeduringthe2006–07incomeyear.
2 Youalsomeetthisconditionif:n youwereeligibleforanAustralianGovernmentage
pensionbutdidnotreceiveitbecauseyoudidnotmakeaclaimorbecauseoftheapplicationoftheincometestortheassetstest
andn yousatisfyoneofthefollowing:
– youhavebeenanAustralianresidentforage-pensionpurposesforeither10continuousyearsorformorethan10years,ofwhichfiveyearswerecontinuous
– youhaveaqualifyingresidenceexemption(becauseyouarrivedinAustraliaasarefugeeorunderaspecialhumanitarianprogram)
– youareawomanwhowaswidowedinAustralia(atatimewhenbothyouandyourlatepartnerwereAustralianresidents),youhavemadeaclaimfortheagepensionandyouhadtwoyears’residenceimmediatelypriortoyourclaim
– youreceivedawidowBpension,widowallowance,matureageallowanceorpartnerallowanceimmediatelybeforeturningage-pensionage,or
– youwouldqualifyunderaninternationalsocialsecurityagreement.
IfyouneedassistanceindeterminingyoureligibilityforasocialsecurityorCentrelinkpensiononly,phoneCentrelinkon132300;forallotherenquiriesrelatingtotheseniorAustralianstaxoffset,phoneourPersonalInfoline(seetheinsidebackcover).
3 Youalsomeetthisconditionif:n youareaveteranwitheligiblewarservice,orn youareaCommonwealthveteran,alliedveteranor
alliedmarinerwithqualifyingservice andn youwereeligibleforapension,allowanceor
benefitfromVeterans’Affairsbutdidnotreceiveitbecauseyoudidnotmakeaclaimorbecauseoftheapplicationoftheincometestortheassetstest.
IfyouarenotsureifyouwereeligibleforapaymentyoucangetfurtherinformationfromtheDVAwebsiteorbyphoningVeterans’Affairs.
YoumustmeetthefollowingfourconditionstobeeligiblefortheseniorAustralianstaxoffset.Theseconditionsrelatetosuchfactorsasage,income,andeligibilityforAustralianGovernmentpensionsandsimilarpayments.
ELIGIBILITYCALCULATORTheseniorAustraliansandpensionertaxoffsetcalculatoronourwebsitecanhelpyouworkoutwhetheryouareeligible.Ifyouare,itcanalsoworkouttheamountyouareentitledtoclaim.
CONDITION � – AgeYoumeetthisconditionif,on30June2007youwere:n amaleaged65yearsormoren amaleveteranorwarwidoweraged60yearsormore
whomettheveteranpensionagetestn afemaleaged63yearsormore,orn afemaleveteranorwarwidowaged58yearsormore
whomettheveteranpensionagetest.
NOTEYoumettheveteranpensionagetestifoneofthefollowingappliedtoyouandyouwereeligibleforapension,allowanceorbenefitundertheVeterans’ Entitlements Act 1986:n youhaveeligiblewarservice,thatis,servicein
WorldWarIorWorldWarIIoroperationalserviceasamemberoftheAustralianDefenceForce
n youareaCommonwealthoralliedveteranwhoservedinaconflictinwhichtheAustralianDefenceForcewasengagedduringaperiodofhostilities,thatis,WorldWarIorWorldWarII,orinKorea,Malaya,IndonesiaorVietnam
n youareanAustralianoralliedmarinerwhoservedduringWorldWarII
n youarethewarwidoworwidowerofaformermemberoftheAustralianDefenceForce.
‘Pension,allowanceorbenefit’includes:n disabilitypensionn servicepension,andn whiteorgoldRepatriationhealthcardsfortreatment
entitlements.
Ifyouareunsureifyoumettheveteranpensionagetest,visittheDepartmentofVeterans’Affairs(DVA)websiteatwww.dva.gov.auorphoneVeterans’Affairson133254.
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TCONDITION 3 – Taxable income thresholdYoumeetthisconditionbysatisfyingtheincomethresholdthatappliestoyou,fromthefollowing:n Youdidnothaveaspouse–marriedordefacto–and
yourtaxableincomewaslessthan$42,707.n Youdidhaveaspouse–marriedordefacto–andyou
andyourspouse’scombinedtaxableincome*waslessthan$66,992.
n Youdidhaveaspouse–marriedordefacto–andforsomeorallof2006–07you‘hadtoliveapartduetoillness’orbecauseoneofyouwasinanursinghome,andyouandyourspouse’scombinedtaxableincome*waslessthan$79,840.
*Combinedtaxableincomeincludesyourspouse’ssharefor2006–07ofanynetincomeofatrustestatetowhichtheyarepresentlyentitledandonwhichthetrusteeisassessedundersection98oftheIncome Tax Assessment Act 1936.
ThethresholdamountsshownhererelatetodeterminingyoureligibilityfortheseniorAustralianstaxoffset.Theyarenottax-freethresholds.
DEFINITIONHadtoliveapartduetoillnessisatermusedtodescribeasituationwherethelivingexpensesofyouandyourspouse,marriedordefacto,areincreasedbecauseyouwereunabletolivetogetherinyourhomeduetotheindefinitelycontinuingillnessorinfirmityofeitherorbothofyou.
CONDITION 4 – Not in jailYoumeetthisconditionunlessyouwereinjailforthewholeincomeyear.
Are you eligible?Ifyoumeetconditions1,2,3and4,youareeligiblefortheseniorAustralianstaxoffset.
BeingeligiblemeansthatyouareentitledtotheseniorAustralianstaxoffsetbutitdoesnotmeanyouwillautomaticallygetanamountofseniorAustralianstaxoffset.Weuseyourtaxableincometoworkouttheamount,ifany,ofyourseniorAustralianstaxoffset.Thecombinedincomeamountsincondition3areusedforeligibilitypurposesandnotforworkingouttheamountofyourentitlement.
IfyoucametothissectionfromReason2inDoyouhavetolodgeataxreturn?onpage2,gobacktothatsection.Otherwise,youmustgotoquestionT2onthenextpage.
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QUESTION T2SENIOR AUSTRALIANS
Exceptionstothisrule:n IfbothAandBapplytoyouandyourspouse’staxable
incomewaslessthan$18,334,selectBasthisgivesyouthecorrecttaxoffset.Includeinyourspouse’staxableincomeanynetincomeofatrustestatetowhichyourspouseispresentlyentitledandonwhichthetrusteeisassessedundersection98oftheIncome Tax Assessment Act 1936(ITAA1936).
n IfbothAandCapplytoyou,andyourspousereceivedanAustralianGovernmentpensionorallowancelistedatquestion6,andyourspouse’staxableincomewaslessthan$17,260,selectCasthisgivesyouthecorrecttaxoffset.
n IfbothAandDapplytoyouandyourspouse’staxableincomewaslessthan$12,494,selectDasthisgivesyouthecorrecttaxoffset.Includeinyourspouse’staxableincomeanynetincomeofatrustestatetowhichyourspouseispresentlyentitledandonwhichthetrusteeisassessedundersection98oftheITAA1936.
n IfbothAandEapplytoyouandyourspousereceivedanAustralianGovernmentpensionorallowanceaslistedatquestion6,andyourspouse’staxableincomewaslessthan$11,960,selectEasthisgivesyouthecorrecttaxoffset.
STEP2 Printyourcodeletter(fromthetableinthepreviouscolumn)intheTAXOFFSETCODEbox attherightofN itemT2onpage4ofyourtaxreturn.
NOTEIfyoudonotprintacodeletteronyourtaxreturnoryouprintanincorrectcodeletter,youmaynotreceiveyourcorrectentitlement.
STEP3 If,in2006–07,yourspouseoryouwereaveteran,warwidoworwarwidower(seedefinitionintheNoteboxonpage84),readon.Otherwise,gotostep4.
Fromthefollowinglistselecttheveterancodethatappliestoyourcircumstances:
Youwereaveteran,warwidoworwarwidower. V
Yourspousewasaveteran,warwidoworwarwidower. W
BothVandWapplytoyou. X
PrintyourveterancodeintheVETERANCODEbox attherightof Y itemT2onpage4ofyourtaxreturn.
STEP4 Haveyouusedtaxoffsetcode(notveterancode)B,C,DorE?Ifso,youmustcompleteSpousedetails–marriedordefactoonpages6–7ofyourtaxreturn.Providerelevantdetailsincluding:n yourspouse’sdateofbirthat Kn yourspouse’staxableincomeatO .Ifthisamountis
zero,write0
CAUTIONIfthisquestionappliestoyou,youmustcompletetheitemonyourtaxreturnbeforegoingtothenextquestion.
Were you eligible for the senior Australians tax offset?Ifyouareunsure,pages84–5provideinformationoneligibilityforthistaxoffset.Ifyouhaveaspouse,youwillalsoneedtoworkoutifyourspousewaseligible.Seethedefinitionofspouseonpage110.
NO GotoquestionT3.
YES Readbelow.
COMPLETING THIS ITEM
STEP1 Findthetaxoffsetcodeletterthatappliestoyourcircumstancesinthetablebelow.Thiscodelettertellsustheamountoftaxoffsetyourentitlementwillbebasedon.
TAx OFFSET CODE LETTERS
Ifatanytimeduring2006–07,youweresingle,separatedorwidowed A
Ifyouandyourspouse,marriedordefacto,‘hadtoliveapartduetoillness’orbecauseoneofyouwasinanursinghomeatanytimein2006–07andyouwerebotheligiblefortheseniorAustralianstaxoffset B
Ifyouandyourspouse,marriedordefacto,‘hadtoliveapartduetoillness’orbecauseoneofyouwasinanursinghomeatanytimein2006–07,butyourspousewasnoteligiblefortheseniorAustralianstaxoffset C
Ifyouandyourspouse,marriedordefacto,werelivingtogetherandyouwerebotheligiblefortheseniorAustralianstaxoffset D
Ifyouandyourspouse,marriedordefacto,werelivingtogetherbutyourspousewasnoteligiblefortheseniorAustralianstaxoffset E
DEFINITIONHadtoliveapartduetoillnessisatermusedtodescribeasituationwherethelivingexpensesofyouandyourspouse,marriedordefacto,wereincreasedbecauseyouwereunabletolivetogetherinyourhomeduetotheindefinitelycontinuingillnessorinfirmityofeitherorbothofyou.
Ifmorethanonecodeletterappliestoyou,readon.Otherwise,gotostep2.
Selecttheletterthatappearsfirstinthefollowingorder:A,B,C,D,E.Forexample,ifbothBandDapplytoyou,selectB.
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Sn yourspouse’sshareoftrustincomeonwhichthe
trusteeisassessedundersection98oftheIncome Tax Assessment Act 1936 at T ,ifitisnotalreadyincludedinyourspouse’staxableincome.Ifthisamountiszero,write0
n yourspouse’sAustralianGovernmentpensionincomeat P .Ifthisamountiszero,write0
n yourspouse’sexemptpensionincomeatQ .Ifthisamountiszero,write0.
IfyouwereeligiblefortheseniorAustralianstaxoffsetandyourspousewaseligiblefortheseniorAustraliansorpensionertaxoffset,andoneofyoudoesnotfullyuseyourtaxoffset,theunusedportionmaybeavailablefortransfertotheotherperson.Byusingtheamountsyouwriteonthespousedetailssectionofyourtaxreturnwewillworkoutifyouareentitledtohavetheunusedportionofyourspouse’staxoffsettransferredtoyou.Ifanunusedamountisavailable,wewillmakesureitistakenintoaccountinworkingoutyourtaxoffset.
NOTEInworkingoutifthereisanyunusedspouse’sseniorAustraliansorpensionertaxoffsetavailablefortransfertoyou,wedonottakeyourspouse’sothercreditsandtaxoffsetsintoaccount.
ExAMPLE
SonyaismarriedtoRussellandtheylivedtogetherforthewhole2006–07incomeyear.Russell–whoisaveteran–receivedaservicepension.SonyaandRussellwerebothoverpensionageandtheircombinedtaxableincomewaslessthan$66,992.TheywerebotheligiblefortheseniorAustralianstaxoffset.Sonya’staxableincomewas$20,800andRussell’swas$10,200.
SonyawritestaxoffsetcodeletterDatN itemT2onhertaxreturn.
SonyaalsowritesveterancodeletterWat Y itemT2onhertaxreturn.
SonyacompletesSpousedetails–marriedordefactoonpages6–7ofhertaxreturn,soanytaxoffsetthatRusselldoesnotusewillbeautomaticallytransferredtoSonya,tobetakenintoaccountwhenhertaxoffsetiscalculated.
CHECK THAT YOU HAVE . . . writtenyourtaxoffsetcodeletteratN itemT2 ifrequired,writtenyourveterancodeat Y itemT2 writtenyourspouse’sdateofbirthat K andtherelevantamountsatO , T , P andQ atSpousedetails–marriedordefactoonpages6–7ofyourtaxreturn
writtenyourdateofbirthonpage1.
DIDYOUCOMPLETETHISITEM?IfyouwereeligiblefortheseniorAustralianstaxoffset(thatis,ifyouprintedataxoffsetcodeletterandaveterancodeletter–ifapplicable–atitemT2onpage4ofyourtaxreturn)youcannotgetthepensionertaxoffsetatitemT3.GotoquestionT4.DonotcompleteitemT3Pensionertaxoffset.
DO YOU WANT TO WORK OUT YOUR TAx OFFSET?Youdonothavetoworkoutyourtaxoffset.Wewillworkitoutforyoufromyourtaxableincomedetailsandyourtaxoffsetcodeletterandyourveterancodeletter(ifapplicable).Makesureyouprintyourcodeletter(s)atitemT2onpage4ofyourtaxreturn.
Ifyoudowanttoworkoutyourtaxoffset,youcanusetheseniorAustraliansandpensionertaxoffsetcalculatoronourwebsite,orgotopage123.
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QUESTION T3PENSIONER
STEP2 PrintyourtaxoffsetcodeletterintheTAXOFFSETCODEbox attherightofO itemT3onpage4ofyourtaxreturn.
NOTEIfyoudonotprintacodeletteronyourtaxreturnoryouprintanincorrectcodeletter,youmaynotreceiveyourcorrectentitlement.
STEP3 Ifyourspouseoryouwereaveteran,warwidoworwarwidower(seedefinitionintheNoteboxonpage84)readon.Otherwise,gotostep4.
Fromthefollowinglistselecttheveterancodethatappliestoyourcircumstances:
Youwereaveteran,warwidoworwarwidower. V
Yourspousewasaveteran,warwidoworwarwidower. W
IfbothVandWapplytoyou. X
PrintyourveterancodeintheVETERANCODEbox attherightof T itemT3onpage4ofyourtaxreturn.
STEP4 Ifyourtaxoffsetcode(notveterancode)isSgotoCheckthatyouhave...onthenextpage.
IfyourtaxoffsetcodeisP,Q,IorJyoumustcompleteSpousedetails–marriedordefactoonpages6–7ofyourtaxreturn.
Providerelevantdetailsincluding:n yourspouse’sdateofbirthat Kn yourspouse’staxableincomeatO .Ifthisamountis
zero,write0n yourspouse’sshareoftrustincomeonwhichthe
trusteeisassessedundersection98ofthe Income Tax Assessment Act 1936 at T ,ifitisnotalreadyincludedinyourspouse’staxableincome.Ifthisamountiszero,write0
n yourspouse’sAustralianGovernmentpensionincomeat P .Ifthisamountiszero,write0
n yourspouse’sexemptpensionincomeatQ .Ifthisamountiszero,write0.
IfbothyouandyourspousewereeligiblefortheseniorAustralianstaxoffsetorpensionertaxoffsetandoneofyoudoesnotfullyuseyourtaxoffset,theunusedportionmaybeavailablefortransfertotheotherperson.Byusingtheamountsyouwriteonthespousedetailssectionofyourtaxreturnwewillworkoutifyouareentitledtohavetheunusedportionofyourspouse’staxoffsettransferredtoyou.Ifanunusedamountisavailable,wewillmakesureitistakenintoaccountinworkingoutyourtaxoffset.
Did you show any income at item 6? (Seequestion6onpage24.)
NO GotoquestionT4.
YES Readbelow.
Have you already claimed a tax offset at item T2?
NO Readbelow.
YES GotoquestionT4.
COMPLETING THIS ITEM
STEP1 Findthetaxoffsetcodeletterthatappliestoyourcircumstancesinthetablebelow.Thiscodelettertellsustheamountoftaxoffsetwewillbaseyourentitlementon.
TAx OFFSET CODE LETTERS
Ifatanytimeduring2006–07whileyouwerereceivinganAustralianGovernmentpensionorallowancelistedatquestion6
Youweresingle,widowedorseparated. S
Youandyourspouse(marriedordefacto)livedtogether. P
Youandyourspouse(marriedordefacto)‘hadtoliveapartduetoillness’orbecauseoneofyouwasinanursinghome. I
Ifmorethanonecodeletterapplies
IfbothPandIapplytoyou,select I
IfS,PandIallapplytoyou,select J*
IfbothSandIapplytoyou,select J*
IfbothSandPapplytoyou,select Q*
*TaxoffsetcodesJandQareusedtocalculatecorrectentitlementsincertainsituationsifmorethanonetaxoffsetcodeletterapplies.
DEFINITIONHadtoliveapartduetoillnessisatermthatrelatestothepaymentofpensions.ThiswouldapplytoyouifyouwerepaidthepensionatahigherratebecauseCentrelinkortheDepartmentofVeterans’Affairs(DVA)determinedthatyouandyourspousewereseparatedduetoillness.IfyouareunsurecheckwithCentrelinkorDVA.Seethedefinitionofspouseonpage110.
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NOTEInworkingoutifthereisanyunusedspouse’sseniorAustraliansorpensionertaxoffsetavailablefortransfertoyou,wedonottakeyourspouse’sothercreditsandtaxoffsetsintoaccount.
CHECK THAT YOU HAVE . . . writtenyourtaxoffsetcodeletterattherightofO itemT3 ifrequired,writtenyourveterancodeletterattherightof
T itemT3 writtenyourspouse’sdateofbirthat K andtherelevantamountsatO , T , P andQ atSpousedetails–marriedordefactoonpages6–7ofyourtaxreturn
writtenyourdateofbirthonpage1ofyourtaxreturn.
DO YOU WANT TO WORK OUT YOUR TAx OFFSET?Youdonothavetoworkoutyourtaxoffset.Wewillworkitoutforyoufromyourtaxableincomedetailsandyourtaxoffsetcodeletterandveterancodeletter(ifapplicable).Makesureyouprintyourcodeletter(s)atitemT3onpage4ofyourtaxreturn.
Ifyoudowanttoworkoutyourtaxoffset,youcanusetheseniorAustraliansandpensionertaxoffsetcalculatoronourwebsite,orgotopage123.
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QUESTION T4SUPERANNUATION ANNUITY AND PENSION
COMPLETING THIS ITEM
PART A
STEP1 TakeawayanydeductibleamountatitemD9fromthepartofyourannuityorpensionthatiseligibleforataxoffset.
STEP2 Multiplytheanswerfromstep1bytherebatableproportionofyourannuityorpension.
STEP3 Workout15%oftheansweryougotatstep2.Thisisyourannuityorpensiontaxoffset.
Writethetotalamountyouareentitledtoclaimasataxoffsetfromthisquestionat S itemT4onpage4ofyourtaxreturn.Donotshowcents.
PART b
STEP1 Workouttheamountofyourannuityorpensionthatwaspaidtoyouonorafteryour55thbirthday.
STEP2 Workoutthenumberofdaysfromyour55thbirthdayto30June2007.
STEP3 Workoutthenumberofdaysfromthedayyourannuityorpensionstartedto30June2007.Ifitstartedbefore1July2006,use365days.
STEP4 Dividethenumberofdaysatstep2bythenumberofdaysatstep3.
STEP5 Multiplyanydeductibleamount(atitemD9)bytheansweryougotatstep4.
STEP6 Takeawaytheansweryougotatstep5fromtheansweratstep1.
STEP7 Multiplytheansweryougotatstep6bytherebatableproportionofyourannuityorpension.Yourrebatableproportionwillbeoneunlessyouwereissuedwithareasonablebenefitlimitdeterminationstatingotherwise.
STEP8 Workout15%oftheansweryougotatstep7.Thisisyourannuityorpensiontaxoffset.
Writethetotalamountyouareentitledtoclaimasataxoffsetfromthisquestionat S itemT4onpage4ofyourtaxreturn.Donotshowcents.
Did you receive income from an Australian superannuation annuity or pension (this income is shown at item 7 on your tax return)?
NO GotoquestionT5.
YES Readbelow.
IfyoushowedincomefromanAustralianannuityorpensionatitem7onyourtaxreturn,youmaybeentitledtoataxoffsetequalto15%ofallorpartofyourtaxableannuityorpensionincome.
Yoursuperannuationannuityorpensionstatementororiginalsuperannuationfunddocumentswilltellyouifyourannuityorpensionqualifiesforataxoffset.Yourstatementordocumentswillshowyouhowmuchofyourannuityorpensioniseligibleforthetaxoffset.Ifyoucannotfindyourdocuments,orarenotsurewhetheryoucanclaimataxoffset,contactyoursuperannuationprovider.
BeforeworkingoutyourAustralianannuityorpensiontaxoffset,youwillneedtoknow:n anydeductibleamountfromitemD9onpage3ofyour
taxreturnn therebatableproportion.Thisisthepartofyourannuity
orpensionthatmaybeeligibleforthepensiontaxoffset.Itmaybeone,lessthanone,orzero,dependingonthetypeandamountofannuityorpension.TheTaxOfficedeterminestherebatableproportionbymeasuringyourannuityorpensionagainstyourreasonablebenefitlimit(RBL).
Yourrebatableproportionwillbeone,unless– youwereissuedwithanRBLdeterminationstating
otherwise,or– youwerereceivingapensionthatwaspreviously
payabletosomeonewhohasdiedandanRBLdeterminationhadbeenissuedforthepensionwhenitoriginallycommencedthatshowedarebatableproportionoflessthanone.
Ifyouneedassistance,phonetheSuperannuationInfoline(seetheinsidebackcover).
GotopartAinthenextcolumntoworkoutyourAustralianannuityorpensionif:n youwere55yearsoldbefore1July2006n youturned55yearsoldonorafter1July2006and
yourpensionstartedonorafteryour55thbirthday,orn youwerereceivingadeathordisabilitypension,
regardlessofyourage.
GotopartBinthenextcolumntoworkoutyourAustralianannuityorpensionif:n youturned55yearsoldonorafter1July2006andyour
pensionstartedbeforeyour55thbirthday.
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QUESTION T5PRIVATE HEALTH INSURANCE
Youcanonlyclaimtherebateunderonemethodforeachperiod,thatis,ifyouhavealreadyreceivedtherebatebywayofareductioninyourpremiumthroughthehealthfundorasarebatefromMedicareyoucannotalsoclaimataxoffsetforthepremiumspaidforthesameperiod.
NOTEIftwopeoplemakepaymentsforthesamepolicy–forexample,youmakepaymentsfromajointbankaccount–eachpersoncanclaimtherelevantpercentagefortheproportionofthepremiumtheypaid.
How the rebate worksTherebateisbasedonthepremiumyoupaid,oryouremployerhaspaidforyou,forappropriatehealthinsurancecover.Youworkoutyourentitlementat30%,35%or40%ofthepremiumpaid,dependingontheageoftheoldestpersoncoveredbythepolicyandthenumberofdaysthispersonwasinthisagecategory.
Ageoftheoldestpersoncoveredbythepolicy*
Amountofrebate
Lessthan65years 30%oftheamountofpremiumpaid
65yearstounder70years 35%oftheamountofpremiumpaid
70yearsorover 40%oftheamountofpremiumpaid
*Iftheoldestpersonmovesintothenextagegroupduringtheyear,therebateisbasedonthenumberofdaysthatpersonwasineachgroup.Yourhealthfundwillcalculatethisautomatically.
Oncethepolicybecomeseligibleforthehigherrebate,itwillretainthiseligibilityevenifthepersonwhoestablishedtheeligibilitycomesoffthepolicy.Additionally,theeligibilitycontinuesevenifthepolicyholderchangesfundsorpoliciesafterthis.However,thisongoingeligibilityforthehigherratewillbeaffectedifanewpersonisaddedtothepolicyafterthepersonwhoestablishedtheeligibilityleavesthepolicy.Inthiscircumstanceyoushouldcontactyourhealthfundformoreinformationonhowyourrebatelevelwillbedetermined.
Ifthepolicywasinoperationbefore1January1999youmaybeentitledtoahigheramountunderthePrivateHealthInsuranceIncentiveScheme(oldincentivescheme).Ifyouhadaneligiblepolicyundertheoldincentiveschemethestatementyoureceivedfromyourhealthfundwillshowtheamountyoumaybeabletoclaim.
Ifyourhealthfundstatementshowsanamountinaboxfor‘Maximumprivatehealthinsuranceincentiveamount(afterpremiumreductionsandsubjecttoincometests)–G ’–thisistheamountundertheoldincentivescheme.
Ifyouhavethisboxandtheamountshownisgreaterthantheamountintheboxfor‘Maximumclaimablerebateonprivatehealthinsurance(afterpremiumreductions)–G ’,youmaybeeligibletoclaimthehigheramountifyoumeetcertaineligibilityandincometests.
Did you, or your employer on your behalf, pay the premium for an appropriate private health insurance policy?
NO GotoquestionT6.
YES Readbelow.
Did you receive your full entitlement to a private health insurance rebate from your health fund or Medicare?
NO Readbelow.
YES GotoquestionT6.
DEFINITIONAnappropriateprivatehealthinsurancepolicyisoneprovidedbyaregisteredhealthfundforhospital,ancillary–alsoknownas‘extras’–orcombinedhospitalandancillarycoverwhereeverypersoncoveredbythepolicyisapersonwhoiseligibletoclaimbenefitsundertheMedicaresystem.Tofindoutifyourhealthfundisaregisteredhealthfund,visitthePrivateHealthInsuranceAdministrationCouncilwebsiteatwww.phiac.gov.au
YOU NEED TO KNOW Theprivatehealthinsurancerebateisworkedoutasapercentageofthepremiumpaidtoaregisteredhealthfundforappropriateprivatehealthinsurancecover.Thepercentageofrebateyoumaybeentitledtoclaimisdeterminedbytheageoftheoldestpersoncoveredbythepolicy(seeHowtherebateworksinthenextcolumn).Therebateisnotaffectedbyyourlevelofincome.
Yourfundshouldhavesentyouyourprivatehealthinsurancestatementshowingthedetailsofyourrebatelevel.
NOTEIfyouhavestatementsfromallofthehealthfundsyoupaidpremiumstoandtheamountsatG onyourstatementsare0youhavealreadyreceivedyourfullentitlementandyoudonotneedtoreadanyfurtherinthisquestion.GotoquestionT6.
Claiming the rebateTherebatecanbeclaimedas:n areductioninyourprivatehealthinsurancepremium
throughthehealthfundn acashorchequerebatefromMedicaren arefundabletaxoffsetattheendoftheincomeyear
throughyourtaxreturn,orn acombinationofalltheoptions–eachforadifferent
periodduringtheyear.
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Ifyouwanttoknowmoreaboutcalculatingtheprivatehealthinsuranceincentiveamountorhowtocompletethisitemifyouareclaimingthehigheramountundertheoldincentivescheme,seetheinstructionsonourwebsiteorphonethePersonalInfoline(seetheinsidebackcover).
Did you receive a private health insurance statement from your health fund?Yourhealthfundshouldhavesentyouastatementshowingthepremiumyouhavepaid.Ifyoupaidapremiumformorethanonepolicy,youshouldhavereceivedastatementforeachpolicy.
Ifyoudidnotreceiveastatementforoneormoreofthepoliciesyouhavepaidfor,youshouldcontactyourhealthfundandrequestone.
WHAT YOU NEEDn Aprivatehealthinsurancestatementn Theamountofanycashorchequerebatereceived
fromMedicareforyourprivatehealthinsurance
COMPLETING THIS ITEM
STEP1 IfyoudidnotreceiveanycashorchequerebatefromMedicareforyourprivatehealthinsurancepremium,transfertheamountatG fromyourstatementtoG itemT5onpage4ofyourtaxreturn.Ifyoupaidformorethanonepolicy,adduptheamountsatG onyourstatements.
STEP2 IfyoureceivedacashorchequerebatefromMedicareforyourprivatehealthinsurancepremium,useworksheet1belowtoworkoutyourentitlement.
WORKSHEET �
AmountshownatG onyourstatement (a) $
AmountofanycashorchequerebateyouhavereceivedfromMedicareforyourprivatehealthinsurancepremium (b) $
Take(b)awayfrom(a). (c) $
Ifyoupaidformorethanonepolicy,repeatthestepsinthisworksheetforeachpolicythenadduptheamountsat(c)ignoringanynegativeamount.
Iftheamountat(c)is0oranegativeamountyouhavealreadyreceivedyourfullentitlement.GotoquestionT6.
Iftheamountat(c)ispositive,thisisthetaxoffsetthatyouareeligibletoclaimatG itemT5onyourtaxreturn.Donotincludecents.
STEP3 CompletethePrivatehealthinsurancepolicydetailsonpage4ofyourtaxreturn.Seepage98forhowtocompletethesedetails.GotoquestionT6.
Itisbetterifyoucompletethisitemusingtheannualstatementwhichhealthfundsgivetoallpolicyholders.
However,ifyoucannotgetastatement,orifyourstatementshowsatotalamountexpectedtobepaidduringtheyearwhichisdifferenttothetotalamountactuallypaid(forexample,youdidnotmakeoneoftheexpectedpayments)youcanusethefollowingworksheettohelpyoucalculateyourtaxoffset.
Useworksheet2ifyourrebatepercentagedidnotchangeduringtheperiodthepaymentscover.
Useworksheet3ifyourrebatepercentagechangedduringtheperiodthepaymentscover–forexample,apersoncoveredbythepolicyturned65or70yearsold.
WORKSHEET 2
Totalpremiumspaidduring2006–07forthepolicybeforeanypremiumreductionfromyourhealthfundorrebatefromMedicare (a) $
Yourrebatepercentage (b) %
Multiply(a)by(b). (c)
Amount,ifany,ofpremiumreductionfromyourhealthfundorofrebatefromMedicare (d)
Take(d)awayfrom(c). (e)
Theamountat(e)iswhatyouareentitledtoclaim.If(e)is‘0’oranegativeamountyouhavealreadyreceivedyourfullentitlement.GotoquestionT6.
WORKSHEET 3
Totalpremiumspaidduring2006–07forthepolicybeforeanypremiumreductionfromyourhealthfundorrebatefromMedicare (a) $
Numberofdaystheamountshownat(a)covers (b)
COLUMN1Rebateforfirstperiod
COLUMN2*Rebateforsecondperiod
Yourrebatepercentagesforthedaysshownat(b) (c) % (c) %
Numberofdaystowhichtherebatepercentagesat(c)apply (d) (d)
Multiply(a)by(d). (e) $ (e) $
Divide(e)by(b). (f) $ (f) $
Multiply(f)by(c). (g) $ (g) $
Add(g)column1and(g)column2. (h) $
Amount,ifany,ofpremiumreductionfromyourhealthfundorofrebatefromMedicare (i) $
Take(i)awayfrom(h). (j) $
*Addanothercolumnifthepercentagechangedmorethanonce.
Theamountat(j)iswhatyouareentitledtoclaim.If(j)is‘0’oranegativeamountyouhavealreadyreceivedyourfullentitlement.GotoquestionT6.
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QUESTION T630% CHILD CARE TAX REBATE
Did you have a spouse on 30 June 2007?
NO GotoquestionT7.
YES Readbelowtoensureyourfamilyreceivesitsfull30%childcaretaxrebateentitlement.
DEFINITIONYourspouseisyourhusbandorwifetowhomyouarelegallymarried,orapersonwholiveswithyouonagenuinedomesticbasisasyourhusbandorwife.UnderAustralianlawyourhusbandorwifecannotbethesamesexasyou.
TRANSFER OF YOUR UNUSED CHILD CARE TAx REbATEThe30%childcaretaxrebatecanreduceyourtaxliabilitytonil.However,youcannotgetarefundofanyamountofrebatethatexceedsyourtaxliability.
Youcantransfertoyourspousethepartoftherebatethatisstillunusedafteryourtaxliabilityhasbeenreducedtonil.Thismaybeusedtoreduceyourspouse’staxliability.
NOTEIfyouareunsurewhetheryouwillhaveanyunusedrebatetotransfertoyourspouse,youshouldcompletetheSpousedetails–marriedordefactosectiononpage6ofyourtaxreturnandwewilltransferanyunusedrebatetoyourspouse.
Thepersontowhomyoutransferthisamount(the‘unusedrebate’)musthavebeenyourspouseon30June2007.
Ifthepersonwhowaseligibletoclaimtherebatediedduringtheyear,theexecutororadministratorofthatperson’sestatecantransfertheunusedrebatetothepersonwhowasthedeceasedperson’sspouseatthetimeofdeath.
Do you want to transfer the unused rebate to your spouse?
NO GotoquestionT7.
YES Readbelow.
Youneedtonotethefollowing:n Youcannotcancelorreverseatransfer.n Theamountyoucantransferdependsonyourtax
liability.Asubsequentchangeinyourtaxliabilitywillchangetheamounttransferredtoyourspouseandmayaffecttheirtaxliability.
NOTEThisisthelasttimeyouwillclaimtherebateinyourtaxreturn.YournextrebatewillbepaidbytheFamilyAssistanceOffice.
Did you have to pay child care fees for approved child care for any period between � July 2005 and 30 June 2006?
NO GotoquestionT7.
YES Youmaybeeligibleforarebate.Readbelow.
Ifyouareeligibleforthe30%childcaretaxrebatetheTaxOfficewillcalculateyourrebateentitlementbasedoninformationprovidedbytheFamilyAssistanceOffice(FAO).Youmayalsobeeligibletotransferanyunusedrebatetoyourspouse–seeTransferofyourunused30%childcaretaxrebateinthenextcolumn.
YOU NEED TO KNOWYoumaybeentitledtoarebateof30%fortheout-of-pocketchildcareexpensesyouhadtopayfortheperiod1July2005to30June2006,uptoamaximumof$4,096perchild.Out-of-pocketchildcareexpensesareyourtotalfeesforapprovedchildcarelessthechildcarebenefit(CCB)towhichyouwereentitled.
Youwillbeeligibletoclaimtherebateforchildcarefeesyouhadtopayifforatleastoneweekstartingintheperiod1July2005to30June2006,you:n usedapprovedchildcaren wereentitledtoreceiveCCB,andn passedtheCCBwork/training/studytestforthe
purposesoftherebate.
Youwillreceivetherebateforanyperiodduringwhichyoumeteachoftheeligibilityrequirements.
NOTEYoucanclaimthe30%childcaretaxrebateonlyifyouwerethepersonwhoreceivedtheCCBfromtheFAO.
Whereyouwereinasalarysacrificearrangementforchildcareyouwillreceivetherebateforthechildcarefeesyoupaidifyouwerereimbursedbyyouremployeroryouremployerpaidthechildcarefeesonyourbehalf.
Youarenoteligiblefortherebateifyouremployerprovidedyouwithachildcareserviceontheirbusinesspremisesunderasalarysacrificearrangement.Youremployershouldbeabletoconfirmifthecostofyourchildcareismetunderasalarysacrificearrangement.
COMPLETING THIS ITEMPrintXintheYESboxatitemT6onpage4ofyourtaxreturntoclaimyourrebate.
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HOW TO TRANSFER YOUR UNUSED REbATEWewillautomaticallytransferanyunusedrebatetoyourspouseafteryourtaxreturnislodgedifyoufollowtheinstructionsbelow.n YoumustcompletetheSpousedetails–marriedordefactosectiononpage6ofyourtaxreturn.Makesureyouincludeyourspouse’staxfilenumber.
n Youandyourspousemustalsocompletethetransferagreementinthenextcolumn.Keepthisagreementwithyourrecordsforthistaxreturn–donotsenditintotheTaxOffice.Yourspouseshouldalsokeepacopyofthisagreement.
n Yourspousedoesnotneedtoclaimtherebateontheirtaxreturn.Ifyourspousehasalreadylodgedtheir2007taxreturn,wewillautomaticallyamendittoincludeanyunusedrebate.
ExAMPLE
EmmaandJohnhadonechildinapprovedchildcareduringtheperiod1July2005to30June2006.Emmawasthechildcarebenefit(CCB)recipientwhichmeansthatsheiseligibletoclaimthe30%childcaretaxrebate.SheprintedXintheYESboxatitemT6onhertaxreturn.BecauseshewasunsurewhethershewouldhaveanyunusedrebatetotransfertoJohn,EmmaalsocompletedtheSpousedetails–marriedordefactosectiononpage6ofhertaxreturn,makingsurethatsheincludedJohn’staxfilenumber.SheandJohnalsocompletedthe30% child care tax rebate transfer agreement 2007andbothkeptacopywiththeirtaxrecords.WhenEmmalodgedhertaxreturn,theTaxOfficeappliedherrebateof$1,890tohertaxliabilityof$1,800.AsEmma’srebatewasmorethanhertaxliability,shehadanunusedrebateof$90.BecauseshehadcompletedtheSpousedetails–marriedordefactosectioncorrectly,theTaxOfficeautomaticallyappliedthisamounttoreduceJohn’staxliabilitywhenhelodgedhistaxreturn.Johndidnothavetoclaimtherebateonhistaxreturn.AsJohnhadalreadylodgedhistaxreturn,theTaxOfficeamendedhistaxreturntoincludetheunusedrebateamountof$90.
ExPLANATION OF TERMSApprovedchildcareiscareprovidedbylongdaycare,familydaycare,inhomecare,occasionalcare,beforeandafterschoolcare,andvacationcareapprovedbytheAustralianGovernmenttoreceiveCCBonbehalfoffamilies.
Ifyouareunsurewhetheryourchildcareisapproved,contactyourchildcareproviderorphonethechildcareaccesshotlineonFREECALL1800670305(TTYServiceFREECALL1800639327).
Childcarebenefit(CCB)isapaymentmadebytheFamilyAssistanceOffice(FAO)toassistwiththecostofchildcare.IfyouhaveusedapprovedchildcarebutnotclaimedCCB,contacttheFAOonwww.familyassist.gov.auorphone136150.
CCBentitlementistheamountofCCByouwereactuallyentitledtoforeachchildfortheperiod1July2005to30June2006.
CCBwork/training/studytestisadministeredbytheFAO.Youpassthetestifyouareinpaidwork,areactivelylookingforpaidwork,orarestudyingortraining.Ifyouhaveaspouse,theymustalsopassthetest.IfyouareunsurewhetheryoupassedthistestcontacttheFAOonwww.familyassist.gov.auorphone136150.
TotalfeesaretheamountofCCBpaiddirectlytoyourchildcareprovideraswellasanyadditionalamountthatyoupay.
CHECK THAT YOU HAVE . . . printedXintheYESboxatitemT6onpage4ofyourtaxreturn
completedtheSpousedetails–marriedordefactosectiononpage6ofyourtaxreturn(ifnecessary)
completedthetransferagreementbelow(ifnecessary)andbothyouandyourspousehavekeptacopyofthisagreement.
Ifyouwanttoworkoutyourrebateentitlement,youcanusetheworksheetonpage129.
30% child care tax rebate transfer agreement 2007Thisagreementmustbecompletedandretainedbybothyouandyourspouse.Cutoutandkeepwithyourtaxrecordsforthisyear.Printcarefully.Youneedtocompletethissectionofthisagreement.
I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .wanttotransfermyunused30%childcaretaxrebatetomyspouse.IamawarethatIcannotcancelorreversethetransfer.
Mytaxfilenumberis
......................................... . . . . . / . . . . ./. . . . . . . Yoursignature Date
Yourspouseneedstocompletethissectionofthisagreement.
I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .agreetoreceivethetransferoftheunused30%childcaretaxrebate.IamawarethatIcannotcancelorreversethetransfer.
Mytaxfilenumberis
Igivepermissionformytaxfilenumbertobedisclosedtoallowthetransfer.Ialsounderstandthattherebatetransferredtomecanbeincreasedordecreased,forexample,duetochangesinmyspouse’staxableincomeorchangestochildcarebenefit.
......................................... . . . . . / . . . . ./. . . . . . . Yourspouse’ssignature Date
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PART AYoucannotclaimthebabybonusatthisitem.Howyouclaimthebabybonusthisyeardependsonwhetheryouarerequiredtolodgeataxreturnthisyear.
Ifyouarerequiredtolodgeataxreturnfor2006–07,youneedtogettheBaby bonus instructions and claim 2007,completetheclaimandlodgeitwithyourtaxreturn.Tofindouthowtogetthispublication,seetheinsidebackcover.
Ifyouarenotrequiredtolodgeataxreturnfor2006–07,youcanlodgeyourbabybonusclaimonitsownby:n usinge-taxandlodgingonline–gotowww.ato.gov.au
e-taxwillestimateyourbabybonusamountforyou.Mostclaimsareissuedwithin14days,or
n gettingtheBaby bonus instructions and claim 2007andcompletingtheclaim.Tofindouthowtogetthispublication,seetheinsidebackcover.
NowgotoTaxoffsetsfromthesupplementarysection.
PART b Workthroughthefollowingstepstodeterminethenumberofdaysthatyouwereeligibletoclaimthebabybonusforthisclaimyear.
STEP1WriteinboxAthenumberofdaysin2006–07thatallofthefollowingappliedtoyouatthesametime:n youhadlegalresponsibilityforandcareofthechildn thechildwasundertheageoffiveyears,andn youwereanAustralianresident
(seepages11–12).Gotostep2. A
Ifalltheseappliedtoyouforthewholeyearwrite365.
NOTEAdoptive parentYoumaybeentitledtoclaimfromthedateyouradoptedchildcameintoyourcareratherthanfromthedateyoubecamelegallyresponsibleforthechild.Formoreinformation,visitourwebsiteorphonethePersonalInfoline.
ExAMPLE
DanielleisanAustralianresidentfortaxpurposes.ShehadlegalresponsibilityforandcareofMitchellforthefullyear.Mitchell’sfifthbirthdaywason20September2006.Daniellewouldwrite81inboxA,thenumberofdaysfrom1Julyto19September.
Did you have a baby – or gain legal responsibility for a child aged under five years – on or after � July 200� and before � July 2004?
NOTEYouhavealegalresponsibilityforachildif:n youareresponsible(whetheraloneorwithsomeone
else)fortheday-to-daycare,welfareanddevelopmentofthechildand
n youaretheirbirthmotherornaturalfather,orn youhaveacourtordergivingyoulegalresponsibility
(forexample,throughadoption).
NO GotoTaxoffsetsfromthesupplementarysectiononpage97.
YES Readbelow.
YOU NEED TO KNOWThemotherisusuallythepersonwhowillclaimthebabybonus.
Youcanclaimthebabybonuseachyearuntilthechildturnsfive.Thebabybonusispaidwhetherornotyougetanyotherfamilybenefitsandcanbeclaimedevenifyoudonotpaytax.
Ifyouaretransferringyoureligibilityforthebabybonustoyourspousefortheincomeyearthisquestiondoesnotapplytoyou.Youshouldonlytransferyoureligibilityifyourspousewasyourspouseforthewholeclaimperiodandtheywouldgetahigherbabybonusamountthanyou.Seethedefinitionofspouseonpage110.Formoreinformation,visitourwebsiteorphonethePersonalInfoline(seetheinsidebackcover).
GotopartAinthenextcolumnif:n thisisthefirstyearyouwillclaimthebabybonusn youwereatransfereein2005–06orn youwereatransfereein2006–07.
DEFINITIONAtransfereeissomeonewhoprovidedtheirspouse’sdetailsontheir2006babybonusclaimorwillprovidetheirspouse’sdetailsontheir2007babybonusclaim.
GotopartBinthenextcolumnif:n youclaimedthebabybonusinapreviousyear(not
asatransferee)andyouareclaimingforthesamechildthisyearand
n youarerequiredtolodgeataxreturnthisyear.
IfyoudonotmeetthesetwopointsgotopartA.
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bereavementIfyourchilddiedbeforetheirfifthbirthday,write365inboxAinstep1andgotostep6.
Child’s fifth birthday on � July 2006Ifyourchildturnedfiveon1July2006andtheincomeyearyougainedlegalresponsibilityforthechildisalsoyourbaseyearandyoudidnottransferyoureligibilityinyourbaseyear–writeinboxAinstep1thenumberofdaysfromthedateyoubecamelegallyresponsibleto30Juneofyourbaseyear.Gotostep6.
STEP2Did the legal responsibility for your child change, for example, through a court order, during 2006–07?
Achangeinlegalresponsibilityforyourchildmayaffectthenumberofdaysyouareeligibletoclaimandthestepsyouhavetocomplete.
NO Gotostep6.
YES Gotostep3.
STEP3Was there another person (including your spouse) who had legal responsibility for and care of your child during any of the days you have written in box A?
NO Donotcompletesteps4and5.Gotostep6.
YES WriteinboxBthetotalnumberofdaysthatthisapplied. B
Gotostep4.
STEP4Has this person been eligible for the baby bonus for another child without being a transferee?
NO Gotostep5.
YES Youcannotclaimforafullyear.TakeBawayfromA.WritetheanswerinboxC.Thisisyournumberofeligibledays. C
Gotostep6.
STEP5In the following list, are you listed after the person referred to in step 3?n Birthmothern Adoptivemothern Anyotherwomann Naturalfathern Adoptivefathern Anyotherman
NO Gotostep6.
YES Youcannotclaimforafullyear.TakeBawayfromA.WritetheanswerinboxD.Thisisyournumberofeligibledays. D
Gotostep6.
STEP6ThenumberofdaysyouareeligibletoclaimthebabybonuswillbethelowestofthenumberofdaysyouhavewritteninboxA,CandD.IfyouhavenothinginboxCorDyournumberofeligibledaysisinboxA.WritethenumberofeligibledaysatH itemT7onpage4ofyourtaxreturn.
Ifyourchilddiedduringtheyearbutbeforetheirfifthbirthday,printBintheCODEbox attherightofH itemT7.Thiswillallowyoutoclaimthebabybonusforanothereligiblechildinalateryear.
GotoTaxoffsetsfromthesupplementarysection.
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NO GotoTotaltaxoffsetsbelow.
YES YoumustcompletetheTax return for individuals (supplementary section) 2007.Readon.
COMPLETING THIS ITEMSTEP1 Completethedetailsatthetopofpage9ofyourtaxreturn(supplementarysection)ifyouhaven’talready.UseTaxPack 2007 supplement tocompletethetaxoffsetssection.
STEP2 TransfertheamountyouwroteatTOTALSUPPLEMENTTAXOFFSETSonpage12to T onpage4ofyourtaxreturn.
NOTEYoucanfindtheTax return for individuals (supplementary section) 2007atthebackofTaxPack 2007 supplement.Ifyoudon’thaveacopyofthissupplement,youcangetonefrommostnewsagentsduringthelodgmentperiod(1Julyto31October2007).CopiesarealsoavailableallyearfromourPublicationsDistributionService(seetheinsidebackcover)andshopfronts.
CAUTIONReadthisquestioncarefully–consultTaxPack 2007supplementifyouarenotfamiliarwiththetermsused.
Are you entitled to claim a tax offset for any of the following?n Superannuationcontributionsonbehalfofyourspousen LivinginaremoteorisolatedareaofAustralian ServingoverseasasamemberoftheAustralianDefence
ForceoraUnitedNationsarmedforcen Netmedicalexpensesoverthethresholdamountn Maintenanceofyourparent,spouse’sparentor
invalidrelativen Landcareandwaterfacilitytaxoffsetbroughtforward
fromanearlieryearn Interestfromthelandtransportfacilitiestaxoffset
schemeorinfrastructureborrowingsschemen PerformingworkorservicesintheJointPetroleum
DevelopmentArea(JPDA)
TOTAL TAx OFFSETS
STEP1 AddupallthetaxoffsetamountsatitemsT1,T4,T5and T intheright-handcolumnonyourtaxreturn.
STEP2 WritethetotalamountatU TOTALTAXOFFSETSonpage4ofyourtaxreturn.Donotshowcents.Ifyoudonothaveanytaxoffsets,write0.Readon.
Tax offset for low income taxpayersIfyouareanAustralianresidentfortaxpurposesandyourtaxableincomeislessthan$40,000,youmaygetataxoffset.Wewillworkoutthistaxoffsetandmakesureitcomesoffyourtax.Thistaxoffsetwillbeshownonyournoticeofassessment.
Mature age worker tax offsetIfyouareanAustralianresidentaged55yearsorolderon30June2007andyouhavereceivedcertainincomefromworking,youmaybeeligibleforthematureageworkertaxoffset.Ifyouonlyhavenetincomefromworkingfromitemsonyourtaxreturn,wewillworkoutyourmatureageworkertaxoffsetforyou.Ifyouhavenetincomefromworkingfromitemsonyourtaxreturn(supplementarysection),youwillneedtocompleteitemT13Netincomefromworking–supplementarysectionsothatwecanusethisamounttoworkoutyourmatureageworkertaxoffsetentitlement.
ADJUSTMENTS FROM THE SUPPLEMENTARY SECTION
Did you receive a distribution for 2006–07 on which family trust distribution tax has been paid?
NO Readthenextcolumn.
YES ReadquestionA3onpages61inTaxPack 2007 supplement.
Did you make a payment to the Tax Office more than �4 days before the due date for payment?
NO GotoPrivatehealthinsurancepolicydetailsonthenextpage.
YES ReadquestionC1onpages62inTaxPack 2007 supplement.
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STEP1 Printtheidentification(ID)codeofyourhealthfundat b HealthfundIDonpage4ofyourtaxreturn.
STEP2 PrintyourprivatehealthinsurancemembershipnumberatC Membershipnumber.
STEP3 IntheTypeofcoverbox printthecodeletterfromthetablebelowthatbestdescribesthetypeofprivatehealthinsurancecoveryouhad.
Typeofcover Codeletter
Ancillarycover,alsoknownas‘extras’ A
Hospitalcover H
Combinedhospitalandancillarycover C
NOTEIfyouhaveusedcodeletterHorCyourliabilityfortheMedicarelevysurchargemaybereduced.MakesureyoucarefullyreadquestionM2Medicarelevysurchargeonpages104–7.
Ifyouchangedyourtypeofcoverduringtheyear,printthecodeletterforthetypeofcoverthatgaveyouthehighestlevelofcover.Forexample,ifyouhadhospitalcoverandaddedancillarycoverduringtheyear,usecodeletterC(forcombinedhospitalandancillarycover).
Did you have more than one policy during the year?Thetaxreturnonlyhasspaceforinformationonthreepolicies.
Ifyouhadmorethanthreepolicies,completesteps1to3forthefirstthreepolicies.OnaseparatepieceofpaperprintSCHEDULEOFADDITIONALINFORMATION–PRIVATEHEALTHINSURANCEPOLICYDETAILS.Includeyourname,addressandtaxfilenumber,andlistthehealthfundIDcode,membershipnumberandtypeofcoverforeachoftheotherpoliciesyouheld.PrintXintheYESboxatTaxpayer’s declarationquestion2aonpage8ofyourtaxreturn.Signyourscheduleandattachittopage3ofyourtaxreturn.
YOU NEED TO KNOW TheinformationonthispagewillhelpyoucompletePrivatehealthinsurancepolicydetailsonpage4ofyourtaxreturn.YouwillneedtocompletethisitemifyouclaimedataxoffsetatitemT5.QuestionM2Medicarelevysurchargeonpages104–7mayalsodirectyoutocompletethisitem.
Ifyoureceivedastatementfromyourregisteredhealthfund,yourprivatehealthinsurancepolicydetailswillbeshownonthestatement.Ifyoudidnotreceiveastatementfromyourhealthfund,contactyourfund.Ifyoudonothaveastatementbecauseyouremployerpaidthepremiumforyou,contactyourfundorspeaktoyouremployer.
Youmaybecoveredunderafamilypolicyeventhoughyouoryouremployermaynothavepaidthepremium.Youcancompletethisitemshowingthetypeofcoverthatyouhadunderthatfamilypolicy.
Tofindoutifyourhealthfundisaregisteredhealthfund,visitthePrivateHealthInsuranceAdministrationCouncilwebsiteatwww.phiac.gov.au
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IndividualsandfamiliesonincomesabovetheMedicarelevysurchargethresholds(seepage106)whodonothaveprivatepatienthospitalcovermayhavetopaytheMedicarelevysurcharge.ThisisthesubjectofquestionM2.
ThissurchargeisinadditiontotheMedicarelevy.Wecalculateitattherateof1%ofyourtaxableincome(includingyourtotalreportablefringebenefits).Youwillneedtoreadpages104–7toseeifyouhavetopaythesurcharge.
ITEMM2ISCOMPULSORYFORALLTAXPAYERS.IfyoudonotcompleteitemM2onyourtaxreturnyoumaybechargedthefullMedicarelevysurcharge.
MedicareistheschemethatgivesAustralianresidentsaccesstohealthcare.
Tohelpfundthescheme,residenttaxpayersaresubjecttoaMedicarelevy.Normally,wecalculateyourMedicarelevyattherateof1.5%ofyourtaxableincome.Avariationtothiscalculationmayoccurincertaincircumstances.
Generally,taxoffsetsdonotreduceyourMedicarelevy.However,ifyouhaveexcessrefundabletaxoffsets,weusethemtoreduceyourtax,includingyourMedicarelevy.(Formoreinformationonrefundabletaxoffsets–forexample,theprivatehealthinsurancerebate–seepage91.)
InsomecasesyoumaybeexemptfromtheMedicarelevyoritmaybereduced.ThisisthesubjectofquestionM1.Youonlyneedtocompletethisitemifyoubelongtoanexemptioncategoryoryouareabletoclaimareductionbasedonfamilyincome.Readpages100–3toworkoutifyouareeligiblefortheexemptionorthereductionbasedonfamilyincome.
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QUESTION M�MEDICARE LEVY REDUCTION OR EXEMPTION
PART A Low income earnerYoudonotneedtocompletethisitemifyourtaxableincomewas:n equaltoorlessthantherelevantthresholdamount
(seethetablebelow).YoudonothavetopaytheMedicarelevy.DonotwriteanythingatitemM1onyourtaxreturn.GotoquestionM2
n morethantherelevantthresholdamountbutequaltoorlessthanthephase-inlimit(seethetablebelow)andyouwerenotin:– aMedicarelevyreductioncategorybasedonfamily
income(seepartBbelow),or– oneoftheexemptioncategoriesgivenonpage102.
YourMedicarelevyisreduced.Itiscalculatedat10centsforeverydollarabovetherelevantthresholdamountbutequaltoorlessthanthephase-inlimit.DonotwriteanythingatitemM1.WewillworkouthowmuchMedicarelevyyouhavetopay.GotoquestionM2.
Relevantthresholdamount
Phase-inlimit
IfyouareeligiblefortheseniorAustralianstaxoffset(seepages84–5) $24,867 $29,255
Ifyouareeligibleforthepensionertaxoffset(seepages88–9) $21,637 $25,455
Allothertaxpayers $16,740 $19,694
IftheabovepointsinpartAdonotapplytoyou,gotopartBbelow.
PART b Reductions based on family income‘Dependentchildrenandstudents’means:n anychildunder21yearsoldyoumaintainedwhowas
notafull-timestudentandwhoseseparatenetincomewaslessthan$1,786forthefirstchild,and$1,410foranyadditionalchild
n anyfull-timestudentunder25yearsoldyoumaintainedwhoseseparatenetincomewaslessthan$1,786.
SeeWhatismaintainingadependant?andWhatisseparatenetincome?onpages69–70.
Ifyouweresingleorseparatedon30June2007,youmusthavebeeneligibleforfamilytaxbenefitforthewholeorpartof2006–07foranychildorstudentyouwanttoincludeundertheterm‘dependentchildrenandstudents’(seepages71–5).
Were you a low income earner or were you in one of the Medicare levy reduction or exemption categories listed on page �02?
NO GotoquestionM2.
YES Readbelow.
YOU NEED TO KNOWMostAustraliansareliabletopaytheMedicarelevy.ThestandardMedicarelevyis1.5%ofyourtaxableincome.However,thismayvaryaccordingtoyourcircumstances.YourtaxableincomeisusuallytheamountyouwroteatTAXABLEINCOMEORLOSSonpage3ofyourtaxreturn.
Post-June �983 elementsForMedicarelevypurposes,taxableincomeexcludesanypost-June1983elementsofaneligibleterminationpaymentwherethemaximumtaxrateiszero(seequestion4onpages19–22).Ifyouareunsureofthetaxrate,phonetheSuperannuationInfoline(seetheinsidebackcover).
NOTETheamountsinthetablesinthisquestionreflectproposedchangestoMedicarelevythresholdsfor2006–07.AtthetimeofprintingTaxPack 2007 thesechangeshadnotbecomelaw.
TheTaxOfficewillworkoutyourMedicarelevy,includinganyMedicarelevyreduction,fromtheinformationyouprovideonyourtaxreturn.
WHAT YOU MAY NEEDn Your2006–07taxableincomen The2006–07taxableincomeofyourspouse,ifyou
hadoneon30June2007(seethedefinitionofspouseonpage110).Ifyourspousediedduring2006–07andyoudidnothaveanotherspousebeforetheendoftheyear,weconsideryoutohavehadaspouseon30June2007forthepurposesofcalculatinganyMedicarelevyreductionsbasedonfamilyincome
n Thenumberofdependentchildrenandstudentsyouhadduring2006–07
n Thenumberofdaysyou,yourspouseanddependentchildrenandstudentswereinanexemptioncategory–seepage102.
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Part b categoriesIfyourtaxableincomewasabovetherelevantthresholdamountinpartA,youmaystillbeeligibleforareducedMedicarelevybasedonyourfamilyincome.
TobeeligibleforareducedMedicarelevybasedonfamilyincome,youmusthavebeeninoneofthefollowingcategories:n Youhadaspouse–marriedordefacto–on
30June2007.n Yourspousediedduring2006–07andyoudidnothave
anotherspousebeforetheendoftheyear.n Youareentitledtoachild-housekeeperorhousekeeper
taxoffsetatitemT1onyourtaxreturnorwouldbeentitledifyouwerenoteligibleforthefamilytaxbenefit–seepages71–5.
n Youwereasoleparentatanytimeduring2006–07,thatis,youhadsolecareofanydependentchildrenorstudents.Thisincludesanychildforwhomyouhadsolecare,notjustyourownchild.
DEFINITIONSolecaremeansthatyoualonehadfullresponsibility,onaday-to-daybasis,fortheupbringing,welfareandmaintenanceofachildorstudent.Youarenotconsideredtohavesolecareifyouarelivingwithaspouse–marriedordefacto–unlessspecialcircumstancesexist.Generally,forspecialcircumstancestoexist,youmustbefinanciallyresponsibleforthedependentchildorstudentandhavesolecarewithoutthesupportaspousenormallyprovides.
Examplesofsituationswherespecialcircumstancesmayarise:n Youweremarriedatanytimeduring2006–07but
duringtheyearyouseparatedfromorweredesertedbyyourspouseandforthatperiodyouwerenotinadefactorelationship.
n Yourspousewasinprisonforasentenceofatleast12months.
n Yourspouseismedicallycertifiedasbeingpermanentlymentallyincapableoftakingpartincaringforthechildorstudent.
IfyouareunsureofwhetherspecialcircumstancesapplyphonethePersonalInfoline(seetheinsidebackcover).
Ifyouhadaspouseon30June2007oryourspousediedduringtheyear,yourfamilyincomeisyourandyourspouse’scombinedtaxableincomeforMedicarelevypurposes(seePost-June1983elementsonthepreviouspage).Otherwise,itisyourtaxableincome.
YoudonotpaytheMedicarelevyifyouwereinoneofthepartBcategoriesaboveandyourfamilyincomewasequaltoorlessthantherelevantlowerincomelimit.Findthelimitthatappliestoyourcircumstancesintable1or2inthenextcolumn.However,youstillneedtocompletesteps1and2.Gotostep1.
Ifyourfamilyincomewasgreaterthantherelevantlowerincomelimitbutequaltoorlessthantherelevantupperincomelimit,youpayareducedMedicarelevy.Gotostep1.
IfyourfamilyincomewasabovetherelevantupperincomelimityoudonotqualifyforareducedMedicarelevy.GotoExemptioncategoriesonthenextpage.
Twofamilyincometablesareshownbelow.Usetable1ifyouareeligiblefortheseniorAustralianstaxoffset.Usetable2inallothercircumstances.
TAbLE �: Family income table for taxpayers who are eligible for the senior Australians tax offset
Numberofdependentchildrenandstudentsduring2006–07
Lowerincomelimit
Upperincomelimit
0 $33,500 $39,411
1 $36,094 $42,463
2 $38,688 $45,515
3 $41,282 $48,567
4 $43,876 $51,618
Ifyouhadmorethanfourdependentchildrenorstudents,youcanextendthistable.Thelowerincomelimitincreasesby$2,594andtheupperincomelimitincreasesby$3,051foreachadditionalchildorstudent.
TAbLE 2: Family income table for taxpayers other than those eligible for the senior Australians tax offset
Numberofdependentchildrenandstudentsduring2006–07
Lowerincomelimit
Upperincomelimit
0 $28,247 $33,231
1 $30,841 $36,283
2 $33,435 $39,335
3 $36,029 $42,387
4 $38,623 $45,438
Ifyouhadmorethanfourdependentchildrenorstudents,youcanextendthistable.Thelowerincomelimitincreasesby$2,594andtheupperincomelimitincreasesby$3,051foreachadditionalchildorstudent.
Claiming your reduced Medicare levySTEP1 Ifyouhadaspouseat30June2007oryourspousediedduringtheyear,youmustcompleteSpousedetails–marriedordefactoonpages6–7ofyourtaxreturn.
Ifyourspouse’staxableincomeincludesanypost-June1983elementsofaneligibleterminationpaymentwherethemaximumtaxrateiszero,printSCHEDULEOFADDITIONALINFORMATION–ITEMM1SPOUSE’STAXABLEINCOMEonaseparatepieceofpaperandwritethisamount.Includeyourname,addressandtaxfilenumber.PrintXintheYESboxatTaxpayer’s declaration question2aonpage8ofyourtaxreturn.Signyourscheduleandattachittopage3ofyourtaxreturn.
STEP2 Writehowmanydependentchildrenandstudentsyouhadduring2006–07at Y itemM1onpage5ofyourtaxreturn.
Ifyouhadnodependentchildorstudent,write0.WewillworkoutyourreducedMedicarelevybasedonthisinformation.IfyouwishtocalculatetheMedicarelevyyourself,youcanusetheMedicarelevycalculatoronourwebsiteortheworksheetsonpages125–7.
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NOTEIfyoureceivedanyexemptforeignemploymentincomeweuseaspecialformulatoworkouttheamountoftax–includingMedicarelevy–youhavetopayonyourtaxableincome.YouwillnotbeabletoworkoutyourMedicarelevy.Wewillworkitoutforyou.
Readontoseeifyouareentitledtoanexemption.
PART C Medicare levy exemption
Exemption categoriesYouwereinanexemptioncategoryif:� Youwereablindpensioneroryoureceivedthesickness
allowancefromCentrelink.2 Youwereentitledtofullfreemedicaltreatmentfor
allconditionsunderdefenceforcearrangementsorVeterans’AffairsRepatriationHealthCard(GoldCard)orrepatriationarrangements.
3 YouwerenotanAustralianresidentfortaxpurposes.4 YouwerearesidentofNorfolkIsland.5 Youwereamemberofadiplomaticmissionorconsular
postinAustralia–oramemberofsuchaperson’sfamilyandyouwerelivingwiththem–andyouwerenotanAustraliancitizenandyoudonotordinarilyliveinAustralia.
6 YouhaveacertificatefromtheMedicareLevyExemptionCertificationUnitofMedicareAustraliashowingthatyouarenotentitledtoMedicarebenefits.AletterfromMedicareisnotsufficient.Formoreinformationonhowtoapplyforanexemptioncertificate,contactMedicareAustraliaon1300300271orvisittheirwebsitewww.medicareaustralia.gov.au
Ifyouwerenotinoneoftheseexemptioncategories,youarenotentitledtoanexemption.GotoquestionM2.
DEFINITIONForpartsCandD,dependantmeansanAustralianresidentyoumaintainedwhowas:n yourspousen yourchildagedlessthan21years,orn yourchildaged21yearsoroverbutlessthan25years
whowasreceivingfull-timeeducationataschool,collegeoruniversityandwhoseseparatenetincomewaslessthan$1,786.
SeeWhatismaintainingadependant?andWhatisseparatenetincome?onpages69–70.
Iftheparentsofachildlivedseparatelyorapartforallorpartoftheincomeyearandthechildwasadependantofeachofthem,thechildistreatedasadependantofeachparent.WebasetheMedicarelevycalculationonthepercentageoffamilytaxbenefitPartAthatwaspaidorispayableforthatchildforthatperiod.
Ifyouwereinexemptioncategory3or4forthewholeincomeyearyouqualifyforafullMedicarelevyexemptionregardlessofwhetherornotyouhaddependants.Write365at V itemM1onyourtaxreturnandgotoquestionM2.
Ifyouwereinanyotherexemptioncategory,orwereinexemptioncategory3or4foronlypartof2006–07,readon.
ExAMPLE
Leannewasamemberofthedefenceforcesforthewholeincomeyear.ShesharedthecareofDanielwithherex-spouseandreceived14%familytaxbenefitPartAbasedontheshared-carearrangement.ThismeansthatDanielisconsideredtobeLeanne’sdependantfor51days(14%of365)forMedicarelevyexemptionpurposesfortheyear.
Full levy exemption Youmayqualifyforafullexemptionforallorpartof2006–07.
Category � or 2YouwillqualifyforafullexemptionfromtheMedicarelevyforaperiodin2006–07ifyouwereinexemptioncategory1or2(seethepreviouscolumn)andyousatisfiedanyofthefollowingconditionsduringthewholeofthatperiod:n Youhadnodependantsforthatperiod.n Allyourdependants(includingyourspouseifyouhad
one)werealsoinoneoftheexemptioncategories,ortheyhadtopaytheMedicarelevy(forexample,youronlydependantwasyourspousewhowasnotinanexemptioncategoryandhadtopaytheMedicarelevy).
n Youhaddependentchildrenwhowerenotinanexemptioncategorybuttheywerealsodependantsofyourspouse,whoeither:– hadtopaytheMedicarelevy,or– wasinexemptioncategory1or2andyouhave
completedaFamilyagreementonthenextpagedeclaringthatyourspousewillpaythehalflevyforyourjointdependants.
TobeeligibletocompleteaFamilyagreementitisaconditionthatbothyouandyourspousewould,apartfromyourexemptioncategorystatus,havetopaytheMedicarelevy.
Category 3 or 4 for only part of the income year, or category 5 or 6 for any period of the income yearIfyouwereinexemptioncategory3or4(seethepreviouscolumn)foronlypartof2006–07orexemptioncategory5or6foranyperiodof2006–07,youwillqualifyforafullMedicarelevyexemptionforthatperiodifoneofthefollowingconditionsapplies:n Youhadnodependantsforthatperiod.n Allyourdependantswerealsoinanexemptioncategory
forthatperiod.
Ifyoumetanyoftheconditionsforanyfullexemptioncategoryyouwerein,gotoFulllevyexemptionforaperiodonthenextpage.
Ifyoudidnotmeetanyoftheconditionsforanyfullexemptioncategoryyouwerein,goto:n PartD:Halflevyexemptionifyouwereinexemption
category1or2foraperiodin2006–07,orn questionM2ifyouwerenotinexemptioncategory1
or2foraperiodin2006–07.Otherwise,readon.
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STEP1 Writethetotalnumberofdaysthatyouandallyourdependants,ifany,mettherequiredconditions,atV itemM1onpage5ofyourtaxreturn.
Ifyouwereinmorethanoneexemptioncategoryandthetimeyouwereinonecategoryoverlappedwiththetimeyouwereinanother,onlyaddupthenumberofdaysfromthedayyoustartedinthefirstcategorytothelastdayyouwereinthelastcategory.Donotcounteachoverlappingperiodseparately.
ExAMPLE
Youwereincategory1from1Augustto30Septemberandcategory2from15Septemberto1November.Thenumberofdaysfrom1Augustto1Novemberis93.Youwouldshow93daysat V itemM1.
STEP2 Ifyouhavecompleted V andyouareinexemptioncategory6,printtheletterCintheCLAIMTYPEbox attherightof V itemM1.
Otherwise,leavetheboxblank.
STEP3 Ifyouhadaspouseatanytimein2006–07youmustcompleteSpousedetails–marriedordefactoonpages6–7ofyourtaxreturn.
STEP4 Ifthenumberofdaysyouwroteat V is365,youwillnothavetopayanyMedicarelevy.Youhavefinishedthisquestion.GotoquestionM2.
Ifyouwereinexemptioncategory3,4,5or6,youhavefinishedthisquestion.GotoquestionM2.
Ifthenumberofdaysyouwroteat V islessthan365,andyouwereinexemptioncategory1or2,youmayqualifyforahalflevyexemption.Readon.
PART D Half levy exemption Youmayqualifyforahalflevyexemptionforallorpartof2006–07.
YouqualifyforahalfexemptionfromtheMedicarelevyforaperiodin2006–07ifyouwereinexemptioncategory1or2(seethepreviouspage)andyousatisfiedeitherofthefollowingconditionsduringthewholeofthatperiod:n Youhadatleastonedependant(forexample,aspouse)
whowasnotinanexemptioncategoryandwhodidnothavetopaytheMedicarelevy(forexample,becausetheywerealowincomeearner–seepartA).
n Yourspousewasinexemptioncategory1or2(seethepreviouspage)andyouandyourspousehadachildwhowasadependantofbothofyouandthechildwasnotinanexemptioncategory.Inthiscase,eitheryouoryourspousecanclaimafulllevyexemptionatpartCandtheothercanclaimahalflevyexemptionatpartD.YoudothisbycompletingaFamilyagreementinthenextcolumn.
Ifyoudidnotmeetoneoftheseconditions,gotoquestionM2.
Getting a half levy exemption
STEP1 WriteatW itemM1onpage5ofyourtaxreturnthetotalnumberofdaysthatyouandyourdependantsmettherequiredconditions.
Ifyouwereinbothexemptioncategoriesandthetimeyouwereinoneexemptioncategoryoverlappedwiththetimeyouwereintheotherexemptioncategory,onlyaddupthenumberofdaysfromthedayyoustartedinthefirstcategorytothelastdayyouwereinthesecondcategory.Donotcounteachoverlappingperiodseparately.
ExAMPLE
Youwereincategory1fortheperiod1Augustto30Septemberandcategory2from15Septemberto1November.Thenumberofdaysfrom1Augustto1Novemberis93.Youwouldshow93daysatW itemM1.
STEP2 Ifyouhadaspouseatanytimeduring2006–07youmustcompleteSpousedetails–marriedordefactoonpages6–7ofyourtaxreturn.
STEP3 Ifyouhadachildwhowasadependantofbothyouandyourspouse,andyouoryourspousewasclaimingahalflevyexemptionunderpartD,bothyouandyourspousewillneedtocompleteaFamilyagreementdeclaringwhichoneofyouwillpaythehalflevyforyourjointdependants.Adraftformforthisagreementisshownbelow.
FAMILY AGREEMENT
We (Yourname)
(Yourspouse’sname)
hereby agree that the half Medicare levy payable in respect of our dependant or dependants for 2006–07 will be paid by
(Nameofpersonclaiminghalfexemption)
Spouse’s signature
Your signature
NOTEIfyouaretheoneclaimingafullexemptionfromtheMedicarelevyatpartC,youwillneedtokeepthisFamilyagreementwithyourtaxrecords:n forfiveyearsfromthedateyoulodgeyourtaxreturn,
orn iftheCommissionerhasdeterminedthatyouare
subjecttoashorterperiod,thatshorterperiod.
Wewillworkoutyourexemptionbasedontheinformationonyourtaxreturn.Ifyouwishtocalculatetheexemptionyourself,youcanusetheMedicarelevycalculatoronourwebsiteortheworksheetonpage127.Otherwise,gotoquestionM2.
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QUESTION M2MEDICARE LEVY SURCHARGE
Explanation of termsForMLSpurposesyouwillneedtounderstandthefollowingterms:
PrivatepatienthospitalcoveriscoverprovidedbyaninsurancepolicyissuedbyaregisteredfundforsomeorallhospitaltreatmentprovidedinanAustralianhospitalordayhospitalfacility.However,ifyoutakeoutaninsurancepolicyforhospitalcoverafter24May2000thatcontainsan‘annualfront-enddeductible’amountorexcessofmorethan$500inthecaseofapolicycoveringonlyoneperson,andmorethan$1,000forallotherpolicies,youwillnotbeconsideredtohaveprivatepatienthospitalcover.Thesameappliestoaninsurancepolicyforhospitalcoverwithahighfront-enddeductibleamountorexcesstakenoutbefore24May2000thatceasedtoprovidecontinuouscoverafterthatdate.
Ifyoumadeapaymenttocoverashortfallinthecostofhospitaltreatment,otherthantheexcessagreedinyourpolicy,thisisnotafront-enddeductibleamountorexcess.Yourhealthfundmayincludedetailsoftheleveloffront-enddeductibleamountorexcessthatappliedtoyourpolicyintheprivatehealthinsurancestatementthatitsentyou.
Yourhealthfundstatementwillindicatethemaximumnumberofdaysthatyourpolicymayhaveprovidedanappropriatelevelofprivatepatienthospitalcoverat A .
TravelinsuranceisnotprivatepatienthospitalcoverforMLSpurposes.Privatepatienthospitalcoverdoesnotincludecoverprovidedbyanoverseasorunregisteredfund.
NOTETofindoutifyourhealthfundisaregisteredhealthfund,contactthePrivateHealthInsuranceAdministrationCouncilorvisittheirwebsiteatwww.phiac.gov.au
Ancillarycoveriscommonlyknownas‘extras’.Ancillarycoverisnotprivatepatienthospitalcover.Itcoversitemssuchasoptical,dental,physiotherapyorchiropractictreatment.
Dependants–adependantisanAustralianresident,being:n yourspouse–eveniftheyworkedduring2006–07or
hadtheirownincomen anyofyourchildrenwhowereunder21yearsofagen anyofyourchildrenaged21yearsandolderbutunder
25yearsofagewhowerefull-timestudents.
ForMLSpurposesyouneedtohavecontributedtoyourdependant’smaintenance.SeeWhatismaintainingadependant?onpage69.
THIS QUESTION IS COMPULSORY FOR ALL TAxPAYERS.
For the whole of 2006–07 did you and all of your dependants (this includes your spouse even if they had their own income) – if you had any – have private patient hospital cover?
Forthedefinitionsofprivatepatienthospitalcover,dependants,family,taxableincomeforMedicarelevysurcharge(MLS)purposesandotherrelevanttermsseeExplanationoftermsinthenextcolumn.
YES PrintXintheYESboxattherightof E itemM2onyourtaxreturn.MakesureyouhavecompletedPrivatehealthinsurancepolicydetails.Seepage98forassistance.GotoquestionA1onpage108.
NO PrintXintheNOboxattherightof E itemM2onyourtaxreturn.Readbelow.
For the whole of 2006–07 were you:n a single person – without a dependent child
or children – with a taxable income for MLS purposes of $50,000 or less
ORn a member of a family and the combined taxable
income for MLS purposes of you and your spouse (if you had one) was $�00,000 (plus $�,500 for each dependent child after the first, that is, for the second and subsequent child, if you had children) or less?
NO YoumayhavetopaytheMedicarelevysurcharge.PrintXintheappropriateNOboxatitemM2onyourtaxreturn.Ifyouhadaspouseduring2006–07youmayalsohavetocompleteyourspousedetailsonpages6–7ofyourtaxreturn.GotoYouneedtoknowbelow.
YES YoudonothavetopaytheMedicarelevysurchargeforanypartoftheyear.PrintXintheappropriateYESboxatitemM2onyourtaxreturn.GotoCompletingthisitemonpage107.
YOU NEED TO KNOWIndividualsandfamiliesonincomesabovetheMLSthresholdswhodonothaveprivatepatienthospitalcoverpayMLSforanyperiodduring2006–07thattheydidnothavethiscover.
MLSis1%oftheirtaxableincome.Itisadditionaltothe1.5%Medicarelevy.
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Spouse–marriedordefacto–Ifyouarelivingseparatelyandapartfromyourspousewetreatyouasnotbeingmarried(seethedefinitionofspouseonpage110).
Family–weconsideryoutobeamemberofafamilyduringanyperiodof2006–07thatyoucontributedtothemaintenanceofadependant.Anyparent(includingasoleparent)whocontributedtothemaintenanceofadependentchildorchildrenisconsideredtobeamemberofafamily.
TaxableincomeforMedicarelevysurcharge(MLS)purposes–isthetotalof:n yourtaxableincomen yourtotalreportablefringebenefitsamountsatW item9
onyourtaxreturnn theamountonwhichfamilytrustdistributiontaxhas
beenpaid(seequestionA3onpages61inTaxPack 2007 supplement)
lessn anypost-June1983elementsofaneligibletermination
payment(ETP)wherethemaximumtaxrateiszero.Ifyouareunsureofthetaxrate,phonetheSuperannuationInfoline(seetheinsidebackcover).
Ifyouhadanyexemptforeignemploymentincomeandataxableincomeof$1ormore,youneedtocompletethisitemasiftheexemptincomewereaddedtoyourtaxableincome.
ThetaxableincomeofyourspouseforMLSpurposesisthetotalof:n yourspouse’staxableincomen yourspouse’stotalreportablefringebenefitsamountsn theamountonwhichfamilytrustdistributiontaxhas
beenpaidwhichyourspousewouldhavehadtoshowasassessableincomeifthattaxhadnotbeenpaid
n anyshareinthenetincomeofatrustestatetowhichyourspouseispresentlyentitledandonwhichthetrusteeofthetrustisassessedundersection98oftheIncome Tax Assessment Act 1936(ITAA1936)andwhichhasnotbeenincludedinyourspouse’staxableincome*
lessn anypost-June1983elementsofanETPwherethe
maximumtaxrateiszero.*Atrusteeisassessedundersection98oftheITAA1936inrelationtoapresentlyentitledbeneficiaryunderalegaldisability.Apersonisunderalegaldisabilityiftheyare:n under18yearsofageon30June2007n abankrupt,orn apersonwhohasbeendeclaredlegallyincapablebecause
ofamentalcondition.
NOTEIfyouhaveshownalumpsumpaymentinarrearsatitem19Foreignsourceincomeandforeignassetsorpropertyoritem22Otherincomeonyourtaxreturn(supplementarysection)andyouareliableforMLS,youmaybeentitledtoataxoffsetuptotheamountofMLSyouhavetopayonthelumpsumpayment.Wewillcalculatethetaxoffsetforyou.
IfyouareliableforMLSonlybecauseyourspousehasshownalumpsumpaymentinarrearsatitem19Foreignsourceincomeandforeignassetsorpropertyoritem22Otherincomeontheirtaxreturn(supplementarysection),youmaybeentitledtoataxoffsetuptotheamountofMLSyouhavetopay.Wewillcalculatethetaxoffsetforyou.Youwillneedtoprovideadditionalinformation.PrintSCHEDULEOFADDITIONALINFORMATION–ITEMM2onthetopofaseparatepieceofpaperandexplainthatyourspousereceivedalumpsumpaymentinarrears.Includeyourname,address,taxfilenumberanddetailsofyourspouse.PrintXintheYESboxatTaxpayer’s declarationquestion2aonpage8ofyourtaxreturn.Signyourscheduleandattachittopage3ofyourtaxreturn.
When don’t you have to pay the Medicare levy surcharge?YoudonothavetopayMLSifyouwereinanexemptioncategoryforthewholeof2006–07andyoudidnothaveanydependantsor,ifyouhaddependants,theywerealsoallinanexemptioncategoryand/ortheyallhadprivatepatienthospitalcoverforthewholeof2006–07.
FormoreinformationontheexemptioncategoriesfortheMedicarelevy,readpage102.Iftheaboveparagraphappliestoyou,gotoCompletingthisitemonpage107.
YoudonothavetopayMLSifyouhadprivatepatienthospitalcoverforthewholeof2006–07andyoudidnothaveanydependantsor,ifyouhaddependants,theyalsoallhadprivatepatienthospitalcoverforthewholeof2006–07and/ortheywereallinanexemptioncategory.Ifthisappliestoyou,gotoCompletingthisitemonpage107.
YoudonothavetopayMLSforthefullyearifyouhadprivatepatienthealthcoverforpartoftheyearand:n youandyourdependants,ifany,werenotinan
exemptioncategoryatanytimeduring2006–07,andn yourtaxableincomeorcombinedtaxableincomefor
MLSpurposeswasabovetherelevantthreshold.
However,youmustpayMLSforthenumberofdaysyouoranyofyourdependantsdidnothaveprivatepatienthospitalcover.Examples1and2mayhelpyouworkthisout.GotoCompletingthisitemonpage107.
ExAMPLE �: Part-year private patient hospital cover
Jacintaisnotmarriedandhadnodependants.In2006–07shehadataxableincomeforMLSpurposesof$59,000.ShewasnotinaMedicarelevyexemptioncategoryatanytimeduringtheyear.
Jacintatookoutprivatepatienthospitalcoveron15December2006.BecauseJacinta’staxableincomewasabovethesinglesurchargethresholdof$50,000andshedidnothaveprivatepatienthospitalcoverforthefullyearshewillhavetopayMLSforthepartoftheyearthatshedidnothaveprivatepatienthospitalcover.
JacintawillnothavetopayMLSforthetimeshehadprivatepatienthospitalcover–15December2006to30June2007(198days).
Jacintawillwritethenumberofdaysin2006–07thatsheisnotliableforMLS–198–at A itemM2onhertaxreturnandcompletePrivatehealthinsurancepolicydetailsonpage4ofhertaxreturn.
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ExAMPLE 2: Part-year liability
KathyandMarkhavebeenmarriedforanumberofyears.Theyhavethreedependentchildren.Kathy,MarkandtheirchildrenwerenotinaMedicarelevyexemptioncategoryatanytimeduringtheyear.Kathyandthechildrenwerecoveredbyprivatepatienthospitalcoverforthefullincomeyear.Markhadhisnameaddedtothepolicyon10December2006.
KathyandMarkhadacombinedtaxableincomeforMedicarelevysurcharge(MLS)purposesof$115,000.Becausenoteveryonewascoveredforthefullperiod1July2006to9December2006,KathyandMarkarebothliableforMLSforthisperiod–162days.KathyandMarkwouldbothwritethenumberofdaysin2006–07thattheywerenotliableforMLS–203–at A itemM2ontheirtaxreturnsandcompletePrivatehealthinsurancepolicydetailsonpage4oftheirtaxreturns.
When do you have to pay the Medicare levy surcharge?YouwillhavetopaytheMLSforanyperiodduring2006–07thatyouoranyofyourdependantsdidnothaveprivatepatienthospitalcoverandyouwere:n asinglepersonwithnodependantsandhadataxable
incomeforMLSpurposesgreaterthan$50,000,orn amemberofafamilyandthecombinedtaxableincome
forMLSpurposesofyouandyourspouse(ifyouhadoneforthewholeof2006–07)wasabovetherelevantfamilysurchargethresholdshowninthetablebelow.
NOTEIfyourspousediedduringtheincomeyearandyoudidnothaveanotherspousebeforetheendoftheyear,weconsideryoutohavehadaspouseuntiltheendoftheincomeyearandyouretainthebenefitofthefamilysurchargethreshold.
FAMILY SURCHARGE THRESHOLD
Numberofdependentchildren
Surchargeincomethreshold
0–1 $100,000
2 $101,500
3 $103,000
4 $104,500
Morethan4 $104,500plus$1,500foreachadditionalchild
Itispossiblethatboththesingleandfamilysurchargethresholdsappliedtoyouatdifferentperiodsduring2006–07becauseyourcircumstanceschangedduringtheyear–seeWhatifyourcircumstanceschangedduringtheyear?inthenextcolumn.However,ifonlyoneoftheMLSthresholds–singleorfamily–appliedtoyouforthewholeof2006–07and:n yourtaxableincomeorcombinedtaxableincomefor
MLSpurposesdidnotexceedthisthreshold,youarenotliableforMLSforanypartoftheyear.GotoCompletingthisitemonthenextpage.Otherwise,readon
n youandyourspouse’scombinedtaxableincomeforMLSpurposesexceededthefamilysurchargethresholdbutyourowntaxableincomeforMLSpurposesdidnotexceed$16,740,youarenotliableforMLSforanypartoftheyear.(Thisamountreflectsaproposedchangetothelawfor2006–07whichatthetimeofprintingTaxPack 2007hadnotbecomelaw.)However,yourspousemaystillbeliableforMLS.GotoCompletingthisitemonthenextpage.Otherwise,readon
n yourtaxableincomeorcombinedtaxableincomeforMLSpurposesexceededthisthresholdthenyouwillhavetopayMLSforthewholeofthe2006–07incomeyearifforthewholeof2006–07youoranyofyourdependants:– didnothaveprivatepatienthospitalcover,and– werenotinoneoftheMedicarelevyexemption
categoriesonpage102.GotoCompletingthisitemonthenextpage.
What if your circumstances changed during the year?Ifyouhadanewspouseoryouseparatedfromyourspouse,oryoubecameorceasedtobeasoleparent,boththesingleandthefamilysurchargethresholdsmayapplytoyoufordifferentperiods.
ToworkoutifyouwereliableforMLSforanyperiodduring2006–07thatyou:n weresingle(thatis,youhadnospouseandno
dependentchildorchildren)–applythesinglesurchargethresholdof$50,000toyourowntaxableincomeforMLSpurposes
n hadaspouseoradependentchildorchildren–applythefamilysurchargethresholdof$100,000plus$1,500foreachdependentchildafterthefirst,toyourowntaxableincomeforMLSpurposes.
Example3mayhelpyouworkoutifyouwereliableforMLSforanyperiodduring2006–07.
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ExAMPLE 3: Spouse for part of the year
SallyseparatedfromAdrianon12October2006andstayedsingle.NeitherSallynorAdrianhadanydependentchildren.SallyandAdrianweredependantsofeachotherforMedicarelevysurcharge(MLS)purposesonlyfortheperiodtheyweretogether.For2006–07,Adrian’staxableincomeforMLSpurposeswas$45,000andSally’staxableincomeforMLSpurposeswas$60,000.SallyandAdriandidnothaveprivatepatienthospitalcoveratanytimeduring2006–07.
Astheyareconsideredtobeafamilyfortheperiod1July2006to12October2006,theyareeachentitledtothefamilysurchargethresholdof$100,000forthisperiod.Fortheperiod1July2006to12October2006,SallyisnotliableforMLSashertaxableincomeforMLSpurposesof$60,000wasunderthefamilysurchargethreshold.AdrianisalsonotliableforMLSforthisperiodashistaxableincomeforMLSpurposesof$45,000wasalsounderthefamilysurchargethreshold.
Fortheperiod13October2006to30June2007–261days–thesinglepersonsurchargethresholdof$50,000appliestobothofthem.Forthisperiod,AdrianisnotliableforMLSbecausehehadataxableincomeforMLSpurposesof$45,000.Adrianwillwrite365at A itemM2onhistaxreturn.
SallyisliabletopayMLSfortheperiod13October2006to30June2007–261days–becausehertaxableincomeforMLSpurposeswas$60,000.Sallywillwrite104,thenumberofdaysin2006–07thatsheisnotliableforMLS,at A itemM2onhertaxreturn.
COMPLETING THIS ITEM
WHAT YOU MAY NEEDn YourtaxableincomeforMLSpurposesn Yourspouse’staxableincomeforMLSpurposes,ifyou
hadaspouseforthewholeof2006–07oryourspousediedduringtheyear
n Thenumberofyourdependentchildrenduring2006–07n Thenumberofdaysyouandallyourdependantshad
privatepatienthospitalcoverduring2006–07n Yourprivatehealthinsurancepolicydetailsn ThenumberofdaysyoudonothavetopayMLS
SeeTaxableincomeforMedicarelevysurcharge(MLS)purposesonpage105forthecalculationofyourandyourspouse’staxableincome.
STEP1 Ifyouandallyourdependants(thisincludesyourspouseeveniftheyhadtheirownincome)hadprivatepatienthospitalcoverforthewholeof2006–07,printXintheYESboxattherightof E itemM2onpage5ofyourtaxreturn.MakesureyoualsocompleteyourPrivatehealthinsurancepolicydetails.Seepage98forassistance.Youhavenowfinishedthisquestion.GotoquestionA1.
Ifyouandallyourdependants(includingyourspouse)didnothaveprivatepatienthospitalcoveroronlyhadcoverforpartoftheyear,printXintheNOboxattherightof E initemM2onpage5ofyourtaxreturn.Gotostep2.
STEP2 Writethenumberofdaysduring2006–07thatyoudonothavetopayMLSat A itemM2.
NOTEThenumberofdaysyouhadprivatehealthinsurancecoverwillbeshownonyourhealthfundstatementat A .
IfyoudonothavetopayMLSforthewholeperiod1July2006to30June2007,write365at A .
IfyouhavetopayMLSfor:n thewholeperiod1July2006to30June2007write0
at A n partoftheperiod1July2006to30June2007writethe
numberofdaysyoudonothavetopayMLSat A .
Ifyouhadadependentchildduring2006–07gotostep3.Otherwise,gotostep4.
STEP3 Writethenumberofyourdependentchildrenduring2006–07atD itemM2.
STEP4 Ifyouhadaspouseduring2006–07andyouandallofyourdependants(thisincludesyourspouseeveniftheyhadtheirownincome)werenotcoveredbyprivatepatienthospitalcoverforthefullyear,completeSpousedetails–marriedordefactoonpages6–7ofyourtaxreturn.Ifyoucannotfindoutanyoftheamountsrequired,youmaymakeareasonableestimate.
Ifyourspouse’staxableincomeatO onpage7ofyourtaxreturnincludedanypost-June1983elementsofaneligibleterminationpaymentwherethemaximumtaxrateiszero,printSCHEDULEOFADDITIONALINFORMATION–ITEMM2SPOUSE’STAXABLEINCOMEonaseparatepieceofpaperandwritethisamount.Includeyourname,addressandtaxfilenumber.PrintXintheYESboxatTaxpayer’s declarationquestion2aonpage8ofyourtaxreturn.Signyourscheduleandattachittopage3ofyourtaxreturn.
STEP5 IfyouhadprivatepatienthospitalcoverforanypartoftheyearyoumustcompletePrivatehealthinsurancepolicydetails.Seepage98forassistance.
Youhavenowfinishedthisquestion.GotoquestionA1.
DO YOU WANT TO WORK OUT YOUR MEDICARE LEVY SURCHARGE?YoudonothavetoworkoutyourMLSamount.Wewillworkitoutbasedontheinformationyouprovide.Ifyouwouldliketoworkitoutforyourrecords,youcanusetheMedicarelevycalculatoronourwebsiteortheworksheetonpage128.
NOTEIfyoureceivedanyexemptforeignemploymentincome,weuseaspecialformulatoworkouttheamountoftax–includingMLS–youhavetopayonyourtaxableincome.YouwillnotbeabletocalculateyourMLS.Wewilldothiscalculationforyou.
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STEP1 Addupallofthefollowingincomeamountsthatyouhaveshownonyourtaxreturn:n employmentincomen taxablepensionsorpaymentsfromCentrelinkorthe
DepartmentofVeterans’Affairsn acompensation,superannuationorpensionfundbenefitn incomefromadeceasedperson’sestaten incomefrompropertytransferredtoyouasaresultof
another’sdeathorfamilybreakdown,ortosatisfyaclaimfordamagesforaninjuryyousuffered
n incomefromyourownbusinessn incomefromapartnershipinwhichyouwerean
activepartnern netcapitalgainsfromthedisposalofanyoftheproperty
orinvestmentsreferredtoaboven incomefrominvestmentofamountsreferredtoabove.
Althoughyouwillbeshowingthisincometwice,youwillnotbetaxedtwice.
STEP2 Addupallyourdeductionsthatrelatetotheincomefromstep1.(SeetheDeductionssectiononpages36–64.)Takeawaythetotalofthosedeductionsfromthetotalincomeworkedoutatstep1.
STEP3 Writetheamountfromstep2at J itemA1onyourtaxreturn.Donotshowcents.Thisisyourexceptednetincome.Ifyoudidnothaveanyoftheincomelistedinstep1ortheamountfromstep2iszero,write0at J itemA1onyourtaxreturn.
ExAMPLE
Joshuaisaschoolstudentwhoworksparttimeatasupermarket.Heearned$2,200in2006–07andisentitledtoadeductionof$100forprotectiveclothing.Atstep2hetakes$100from$2,200=$2,100.Hewrites$2,100at J itemA1andprintsMintheTYPEbox .
STEP4 PrintthecodeletterMintheTYPEbox attherightof J itemA1.
Theamountyouhaveshownat J itemA1willbetaxedatnormalrates.Ahigherrateoftaxwillapplyforyourotherincome.Formoreinformation,phonethePersonalInfoline(seetheinsidebackcover).
NOTEIfyoureceivedadistributionfromatrust,readquestion12Partnershipsandtrustsonpagess2–6inTaxPack 2007 supplement.
STOPIfyouwereunder18yearsofageon30June2007,youmustcompletethisitemoryoumaybetaxedatahigherratethannecessary.
Were you under �8 years of age on 30 June 2007?
NO GotoquestionA2.
YES Readbelow.
Therearedifferentratesoftaxfordifferenttypesofincome.Tomakesureyouarepayingtherightrate,completethisitem.
Did any of the following apply to you on 30 June 2007?n You:
– wereworkingfulltimeorhadworkedfulltimeforthreemonthsormorein2006–07(ignoringfull-timeworkthatwasfollowedbyfull-timestudy)
and– wereintendingtoworkfulltimeformostorall
of2007–08andnotstudyfulltime.n Youwereentitledtoadisabilitysupportpensionor
arehabilitationallowance,orsomeonewasentitledtoacarerallowancetocareforyou.
n Youwerepermanentlyblind.n Youweredisabledandwerelikelytosufferfromthat
disabilitypermanentlyorforanextendedperiod.n Youwereentitledtoadoubleorphanpensionandyou
receivedlittleornofinancialsupportfromyourrelatives.n Youwereunabletoworkfulltimebecauseofpermanent
mentalorphysicaldisabilityandyoureceivedlittleornofinancialsupportfromyourrelatives.
NO GotoCalculatingyour‘exceptednetincome’.
YES Readon.
Ifyouwereinanyoftheabovecategorieson30June2007,allofyourincomewillbetaxedatnormalrates.
Write0at J itemA1onpage6ofyourtaxreturn.ThenprintthecodeletterAintheTYPEbox attherightof J .Youhavenowfinishedthisquestion.GotoquestionA2.
Calculating your ‘excepted net income’Youneedtocalculatehowmuchofyourincomewillbetaxedatnormalrates.Thisincomeiscalled‘exceptednetincome’.
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QUESTION A2PART-YEAR TAX-FREE THRESHOLD
PART bDid you stop being an Australian resident in 2006–07?
NO GotoCheckthatyouhave...
YES Readbelow.
STEP1 WritethedateyoustoppedbeinganAustralianresidentfortaxpurposesintheDateboxatitemA2onpage6ofyourtaxreturn.
STEP2 Writethenumberofmonthsfrom1July2006towhenyouleftAustralia–countingthemonthduringwhichyouleftAustralia–atN itemA2onyourtaxreturn.
CHECK THAT YOU HAVE . . .ForpartA: writtenintheDateboxthedateyoubecameanAustralianresident
writtenthenumberofmonthsthatyoulivedinAustraliain2006–07.
ForpartB: writtenintheDateboxthedateyouleftAustralia writtenthenumberofmonthsfrom1July2006towhenyouleftAustralia.
In 2006–07 did you:n become an Australian resident orn stop being an Australian resident?
IfyouareunsurereadAreyouanAustralianresident?onpage11–12.
NO GotoSpousedetails–marriedordefactoonpage110.
YES Readbelow.
Thefull-yeartax-freethresholdis$6,000.Thetax-freethresholdmayapplytoyouforonlypartoftheyearandisthereforeaproportionofthefull-yeartax-freethreshold.Weusethefollowinginformationtoworkoutyourtax-freethreshold.
PART ADid you become an Australian resident in 2006–07?
NO GotopartB.
YES Readon.
STEP1 WritethedateyoubecameanAustralianresidentfortaxpurposesintheDateboxatitemA2onpage6ofyourtaxreturn.
STEP2 WritethenumberofmonthsthatyouwereanAustralianresidentin2006–07–countingthefirstmonthduringwhichyoubecameanAustralianresident–atN itemA2onyourtaxreturn.
NOTEIfyourresidencychangedduring2006–07andyoushowedincomeatitem5or6onyourtaxreturn,youmaynotneedtocompletethisitem.PhonethePersonalInfoline.
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STEP3 Ifyouhadaspouseforthefullyear–1July2006to30June2007,printXintheYESboxat L .Ifyoudidnothaveaspouseforthefullyear,printXintheNOboxat L andwritethedatesyouhadaspousebetween1July2006and30June2007atM andN .
STEP4 Do you have any unused 30% child care tax rebate you wish to transfer to your spouse?
Ifyouareeligibleforthe30%childcaretaxrebate,youcantransferyourunused30%childcaretaxrebatetoyourspouse,ifyouandyourspousehavecompletedatransferagreementandyouhaveobtainedyourspouse’sconsenttousetheirtaxfilenumber.SeequestionT6onpages93–4formoreinformation.
NO PrintXintheNOboxat A andgotostep5.
YES PrintXintheYESboxat A andwriteyourspouse’staxfilenumber(TFN)at b .
STEP5 Did you complete item T�, T2, T3, M�, M2 on your tax return or T8 in the supplementary section?
NO Gotostep6.
YES Readbelow.
Thefollowingtableshowswhichdetailsrelatingtoyourspouse’sincomeyouneedtocomplete.
Ifyouhavecompleted: youneedtocomplete:
itemT1 R
itemT2orT3 O , T , P andQ
itemM1( V orW ) O
itemM1( Y only) O ifyouhadaspouseon30June2007
itemM2andyouprintedXintheNOboxat E
O , T ,U and S ifyouhadaspouseforallof2006–07oryourspousediedduringtheyear
itemT8 O and S
LabelO WriteatO yourspouse’s2006–07taxableincome.Donotshowcents.Ifthisamountiszero,write0.Thisamountcanusuallybeobtainedfromyourspouse’staxreturnornoticeofassessment.Ifyourspousedoesnothavetolodgeataxreturn,pleaseprovideanestimateoftheirtaxableincome.
YoumustcompleteSpousedetails–marriedordefactoonpages6–7ofyourtaxreturnifyouhadaspouseduring2006–07,andn youcompletedanyoftheitemslistedbelow,orn youconsentedtousepartorallofyour2007taxrefundto
repayyourspouse’sFamilyAssistanceOffice(FAO)debt.
DEFINITIONYourspouseisyourhusbandorwifetowhomyouarelegallymarried,orapersonwholiveswithyouonagenuinedomesticbasisasyourhusbandorwife.UnderAustralianlawyourhusbandorwifecannotbethesamesexasyou.
Did you complete any of the following items?T1 Spouse(withoutdependentchildorstudent)taxoffsetT2 SeniorAustralianstaxoffsetT3 PensionertaxoffsetT6 30%childcaretaxrebateM1 MedicarelevyreductionorexemptionM2 Medicarelevysurcharge–andyouprintedXinthe
NOboxat ET8 Superannuationcontributionsonbehalfofyour
spouse(onthetaxreturnsupplementarysection)
NO Youdonotneedtocompletethissection.GotoChecklist–taxreturnpages1–8onpage112.
YES Readbelow.
WHAT YOU MAY NEEDn Yourspouse’sPAYG payment summary – individual
non-businessn Therelevantdistributionstatements,ifany,fortrust
incomeandfamilytrustdistributiontax
YOU NEED TO KNOWTheinformationonthispagewillhelpyoucompleteSpousedetails–marriedordefactoonpages6–7ofyourtaxreturn.
Youmayhavehadmorethanonespouseduring2006–07.Thedetailsyouusetocompletethissectionshouldbethedetailsforyourspouseon30June2007,oryourlatestspouse.
COMPLETING THIS SECTION
STEP1 Printyourspouse’snameintheboxesprovided.
STEP2 Writeyourspouse’sdateofbirthat K andprintXintherelevantboxforyourspouse’ssex.
SDSpouse details – married or de facto
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Label T Writeat T yourspouse’sshareoftrustincomeonwhichthetrusteeisassessedundersection98oftheIncome Tax Assessment Act 1936ifitisnotalreadyincludedinyourspouse’staxableincome.Donotshowcents.Ifthisamountiszero,write0.Checkthetrustdistributionstatements.
LabelU WriteatU distributionstoyourspouseonwhichfamilytrustdistributiontaxhasbeenpaidwhichyourspousewouldhavehadtoshowasassessableincomeifthetaxhadnotbeenpaid.Donotshowcents.Ifthisamountiszero,write0.Checkthetrustdistributionstatements.
Label S Addupthereportablefringebenefitsamountsshownonyourspouse’spaymentsummariesandwritethetotalat S .Donotshowcents.Ifthisamountiszero,write0.
Label P Writeat P theamountofAustralianGovernmentpensionsandallowancesthatyourspousereceivedin2006–07(notincludingexemptpensionincome).Donotshowcents.Ifthisamountiszero,write0.AustralianGovernmentpensionsandallowancesarelistedonpage24.
LabelQ WriteatQ theamountofanyexemptpensionincomethatyourspousereceivedin2006–07.Makesureyouonlyincludeyourspouse’sexemptpensionincome.Donotshowcents.Ifthisamountiszero,write0.Exemptincomeislistedonpages13–14.
LabelR WriteatR yourspouse’s2006–07separatenetincome.Donotshowcents.Ifthisamountiszero,write0.Seepages69–70forinformationonseparatenetincome.
Ifyoucannotfindoutanyoftheamountsrequired,youmaymakeareasonableestimate.
STEP6 Do you consent to use part or all of your 2007 tax refund to repay your spouse’s Family Assistance Office (FAO) debt?
OnlyanswerYEStothisquestionifallofthefollowingapplytoyou:n youwerethespouseofanFTBclaimantorthespouse
ofachildcarebenefitclaimanton30June2007andyourincomewastakenintoaccountintheirclaim
n yourspousehasgivenyouauthoritytoquotetheircustomerreferencenumber(CRN)onyourtaxreturn–ifyourspousedoesnotknowtheirCRN,theycancontacttheFAO
n yourspousehasadebtduetotheFAOorexpectstohaveaFAOdebtfor2007
n youexpecttoreceiveataxrefundfor2007,andn youconsenttousepartoralloftherefundtorepay
yourspouse’sFAOdebt.
NO PrintXintheNObox.Youhavefinishedthissection.GotoChecklist–taxreturnpages1–8onthenextpage.
YES PrintXintheYESbox.Youmustcompleteyourspouse’sCRNat Z ,andsignanddatetheconsentforFTBpurposes.
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CHECKLIST – TAX RETURN PAGES 1–8
attachedcopiesofthefollowingtopage3ofyourtaxreturn:– anyeligibleterminationpayment(ETP)payment
summaries,lettersorreasonablebenefitslimits(RBL)determinations,and
– otherattachmentsasinstructedbyanysectionorquestioninTaxPack 2007
completedSpousedetails–marriedordefactoifrequired.Thisincludesifyouwanttotransferyourunused30%childcaretaxrebatetoyourspouse
completedyourspouse’sdetailsandprovidedyoursignatureonpage7ofyourtaxreturnifyouhaveconsentedtooffsetpartorallofyourtaxrefundagainstyourspouse’sFamilyAssistanceOfficedebt
ifyouwereunder18yearsofageasof30June2007,completeditemA1–thisiscompulsory(ifitisincomplete,youmaybetaxedatahigherratethannecessary)
readSelf-assessment–it’syourresponsibilityonpage10
read,completed,signedanddatedtheTaxpayer’s declaration
attachedpages9–12ofyourtaxreturn(supplementarysection)topage8
attachedyourBaby bonus claim 2007 tothebackofyourtaxreturnifyouareclaimingthebabybonusforthefirsttime
attachedyourFamily tax benefit (FTB) tax claim 2007tothebackofyourtaxreturnifyouareclaimingFTBwithyourtaxreturn
keptcopiesofyourtaxreturn,allattachmentsandrelevantpapersforyourownrecords.
UsethischecklisttomakesureyourtaxreturniscompletebeforeyoulodgeitwiththeTaxOffice.Toavoidanydelayinprocessing,pleaseusethepre-addressedenvelopeprovidedwithyourTaxPack 2007.Ifyoudon’thaveapre-addressedenvelope,seebelowfortheaddresstouse.
CHECK THAT YOU HAVE . . . writtenyourtaxfilenumber filledinallyourpersonaldetails filledintheappropriatedetailsforelectronicfundstransferifyouwanttohaveyourrefundpaiddirectlyintoafinancialinstitutionaccount
filledinthecodeboxes–ifyouwereaskedtodoso–atitems3, I ,TOTALINCOMEORLOSS,D1,D3,D4,SUBTOTAL,TAXABLEINCOMEORLOSS,T1,T2,T3,T7,M1andA1
completeditemM2–thisiscompulsoryforalltaxpayers
ifrequired,completedpages9–12ofthetaxreturn(supplementarysection)andworkedthroughthechecklistonpages63inTaxPack 2007 supplement
writtentotalsat: TOTALTAXWITHHELD TOTALINCOMEORLOSS TOTALDEDUCTIONS SUBTOTAL TAXABLEINCOMEORLOSS TOTALTAXOFFSETS
LODGING bY MAILTomakesurewecanprocessyourtaxreturnasquicklyaspossible,usethepre-addressedenvelopeenclosedwithyourcopyofTaxPack 2007.Theaddressshownonitisourofficiallodgmentaddress.Ifyoupostyourtaxreturntoanyofourotheraddressesyoumayexperiencedelays.
Onlyusethisenvelopeforlodgingyourtaxreturn(anditsattachments)oranon-lodgmentadvice.DonotuseittosendcorrespondenceintendedforotherTaxOfficelocations(thesearelistedwiththeiraddressesonpage131).
IfyoudidnotreceiveanenvelopewithyourTaxPack 2007,orhavemisplacedit,postyourtaxreturninabusiness-sizedenvelopeto:
AustralianTaxationOfficeGPOBox9845INYOURCAPITALCITY
DonotreplacethewordsINYOURCAPITALCITYwiththenameofyourcapitalcityanditspostcode–becauseofaspecialagreementwithAustraliaPost,theyarenotneeded.
LODGING FROM OVERSEASYoucanlodgeyourtaxreturnonlineusinge-tax–gotowww.ato.gov.auformoreinformation.Mostrefundsareissuedwithin14days.
LODGING YOUR TAX RETURN
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TAlternatively,youcanlodgeapapertaxreturnusingthepre-addressedenvelope.ChangetheaddressbycrossingoutIN YOUR CAPITAL CITY andreplacingitwithSYDNEY NSW 2001,AUSTRALIA.
Itwillassistusifyoucrossoutthebarcodeabovetheaddress.
NOTEBeforeyoulodgeyourtaxreturn,makesureyouhavereadSelf-assessment – it’s your responsibilityonpage10.
Ifyourealisethatyoudidnotincludesomethingonyourtaxreturnthatyoushouldhave,orthereissomeothererroronyourtaxreturn,youneedtocorrectitassoonaspossiblebyrequestinganamendment.
Torequestanamendment,writealettertotheTaxOffice.
Intheletterprovideyourname,address,phonenumber,taxfilenumberandinformationaboutwhatyouwanttoamend.Include:n theyearshownonthetaxreturnyouwanttoamend–
forexample,2007n thetaxreturnitemnumberanddescriptionaffectedby
thechangen theamountofincomeordeductionstobeaddedor
takenaway,ifrelevantn theamountoftaxoffsetstobeincreasedordecreased,
ifrelevantn theclaimtypecode–ifoneappliestotheitemyou
arechangingn anexplanationofwhyyoumadethemistaken adeclarationasfollows:‘Ideclarethatalltheinformation
Ihavegiveninthisletter,includinganyattachments,istrueandcorrect.’
n thedate,andn yoursignature.
Itisveryimportantthatyourletterexplainswhyyoumadethemistake,sothatwecanassessanypenaltyorinterestchargecorrectly.Makesureyouattachtoyourletteranyadditionalinformationthatappliestotheitembeingchanged.Post your letter and attachments to the tax office that sent your notice of assessment.Keepacopyforyourrecords.Donotsendanothertaxreturnunlessweaskyouto.
Example of a letter requesting an amendment
RileyFinn 3WoodSt,Collingville1234
Taxfilenumber:123456789Phone:(01)23456789
DearDeputyCommissionerofTaxationPleaseamendmy2007taxreturn.Myemployersentmealetteradvisingthatmypaymentsummarywasincorrect.Pleaseincreasemyincomeatitem1by$1,450andalsoincreasemytaxwithheldby$368.Acopyoftheletterisattached.IdeclarethatalltheinformationIhavegiveninthisletter,includinganyattachments,istrueandcorrect.
RileyFinn20September2007
IF YOU MADE A MISTAKE ON YOUR TAX RETURN
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Wewillnotimposeapenaltyiftheamendmentreducestheamountoftaxyouhavetopay–forexample,whereyouincreaseyourdeductionsortaxoffsets.
Ifyouvoluntarilytellusthatyoumadeamistakeandanamendmentwillresultinyoupayingmoretax,theamountofanypenaltywill,inmostcases,bereduced.
IfyoumadeamistakebecausewestatedthelawincorrectlyinTaxPack 2007,wewon’tchargeyouapenaltyorinterest,oraskyoutopaytheextratax.
IfanyotherinformationinTaxPack 2007isincorrectandasaresultyoudonotpayenoughtax,wemayaskyoutopaytheextratax.However,wewillnotchargeyouapenaltyorinterest.
IfouradviceinTaxPack 2007ismisleadingandyoumakeamistakeasaresult,wemuststillapplythelawcorrectly.Ifthatmeansyouoweusmoney,wemustaskyoutopayit.However,wewillnotchargeyouapenaltyorinterestifyouactedreasonablyandingoodfaith.
Ifyoumakeanhonestmistakewhenyoutrytofollowouradviceandyouoweusmoneyasaresult,wewillnotchargeyouapenalty.However,wewillaskyoutopaythemoney,andwemayalsochargeyouinterest.
Ifcorrectingthemistakemeansweoweyoumoney,wewillpayittoyou.Wewillalsopayyouanyinterestyouareentitledto.
Is there any time limit for you to request an amendment?Ifyouareeligibleforatwo-yearamendmentperiod,youmustlodgeyourrequestforanamendmentwithintwoyearsofthedatetheCommissionerissuedyournoticeofassessment.Ifafour-yearamendmentperiodappliestoyou,youmustlodgeyourrequestforanamendmentwithinfouryears.Seepage10formoreinformation.
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WHERE DO YOU PAY YOUR TAx DEbT?WedonotacceptpaymentsoverthecounteratTaxOfficeshopfronts.Informationaboutpaymentoptionsisonthebackofyournoticeofassessment.Ifyouneedmoreinformation,phone1800815886(8.00amto6.00pmAustralianEasternStandardordaylight-savingtime).
TheTaxOfficedoesnotacceptpaymentbycreditcard.
DO YOU HAVE TO PAY YOUR TAx IF YOU DON’T AGREE WITH THE ASSESSMENT?Youmustpayyourtaxontimeevenifyouhavelodgedanobjectionoraskedforanamendment.Iftheobjectionisdecidedinyourfavour,youwillnormallyreceivearefundoftheamountyouhaveoverpaidplusinterest.
WHAT IF YOU CANNOT PAY YOUR TAx DEbT ON TIME?Ifyoucannotpayyourtaxdebtontime,contactusimmediatelyon131142todiscussyoursituation.Dependingonyourcircumstances,youmaybeableto:n deferthepayment,orn enterintoanarrangementtopaybyinstalments.
Insomecircumstancesyoumayneedtoprovidewrittendetailsofyourfinancialposition,includingastatementofyourassetsandliabilitiesanddetailsofyourincomeandexpenditure.
Wealsoneedtounderstandwhatstepsyouhavetakentoobtainfundstopayyourtaxandwhatstepsyouaretakingtomakesureyoupayfuturetaxdebtsontime.
Ifweagreetodeferthetimeforpayment,GICwillnotapplyuntilafterthedeferreddateforpayment.Alternatively,ifweallowyoutopaybyinstalments,wewillchargeyouGIContheoutstandingbalancefromtheoriginalduedate.
Youcanclaimanyinterestwechargeasataxdeductionintheincomeyearinwhichitisincurred.Inadditionyoucanrequestaremissionofallorpartoftheinterest.Phoneuson131142ifyouwouldliketorequestaremission.
WHAT IF PAYMENT WILL CAUSE YOU HARDSHIP?Serioushardshipexistswhenyouareunabletoprovidefood,accommodation,clothing,medicaltreatment,educationorothernecessitiesforyourself,yourfamily,orotherpeopleforwhomyouareresponsible.Ifyouaresufferingfromhardship,youcanapplyforareleasefrompaymentofyourtaxdebt.Formoreinformationandanapplicationform,phoneuson131142.
HOW DO YOU KNOW HOW MUCH YOU HAVE TO PAY?Yournoticeofassessmentwilltellyouhowmuchtaxyouhavetopay,ifany,andwhenyoumustpaytoavoidbeingchargedinterestforlatepayment.
WHEN DO YOU PAY YOUR TAx DEbT?Youmustlodgeyourincometaxreturnby31October2007,unlessyouhavebeengivenadeferraloftimetolodge,oryourtaxreturnisbeingpreparedbyaregisteredtaxagent.Ifyoudidnotuseataxagentlastyearbutintendtodosothisyear–oryouwillbeusingadifferenttaxagentthisyear–makesureyoucontacttheagentbefore31October2007.
Ifyoulodgeyourtaxreturnontime,anytaxpayablewillbeduethelaterof:n 21daysafteryoureceiveyournoticeofassessment,orn 21daysafteryourtaxreturnwasduetobelodged.
Ifyou:n prepareyourowntaxreturnanditislodgedby
31October2007,anytaxpayablewillbeduenoearlierthan21November2007
n havecontactedtheTaxOfficeandbeengivenadeferraloftimetolodgeyourtaxreturn,anytaxpayablewillbeduenoearlierthan21daysafterthedeferreddateforlodgment.
Ifyoudonotlodgeyourtaxreturnontime,thelawtreatsanytaxpayableasbeingdueforpayment21daysafteryourtaxreturnwasdueforlodgment,irrespectiveofthedateyoulodgeditorareadvisedofthedebt.
Generalinterestcharge(GIC)willaccrueonanyamountthatisnotpaidbytheduedateforpayment.
WHAT IF YOUR TAx DEbT IS INCREASED bECAUSE YOUR ASSESSMENT IS AMENDED? Whereyourassessmentisamendedandthetaxpayableincreased,theduedateforpaymentoftheadditionaltaxis21daysaftertheCommissionergivesyournoticeofamendedassessmenttoyou.
Youwillalsobeliabletopayashortfallinterestcharge(SIC)fromtheduedateofyouroriginalassessmenttothedaybeforetheissueofthenoticeofamendedassessment.WhereyouroriginalassessmentdidnothaveaduedatebecausetherewasnotaxpayabletheSICiscalculatedfromthedaytaxwouldhavebeenpayableiftherehadbeenanytaxdue.TheSICwillalsobedue21daysaftertheCommissionergivesyournoticeofamendedassessmenttoyou.GICwillcontinuetoapplytoanyunpaidamountoftheamendedassessmentandtheSICaftertheduedatefortheamendedassessment.
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ReconciliationWhenyouractualfamilyincomeisknown,theFAOwillmakesureyouhavebeenpaidthecorrectamountofFTB.Ifyouandyourspouse(ifyouhaveone)arerequiredtolodgeataxreturn,theTaxOfficewillsendyouractualincomedetailstotheFAOforcalculationofyourcorrectFTBentitlement.TheFAOwillcomparetheamountofFTByoureceivedthroughouttheyearwiththeamountyouareentitledto,basedonyourandyourspouse’sactualincome.Ifyourspouse(ifyouhaveone)isnotrequiredtolodgeataxreturn,youneedtoadvisetheFAO.
IfyouwerepaidlessFTBthanyouareentitledto,yourpaymentmaybetoppedup.Thetop-upwillbeincludedinyourassessmentor,ifthatisnotpossible,theFAOwillpayittoyoudirectly.Yourtop-upmaybeusedtopayanytaxdebtyouhave.
IfyouhavebeenpaidtoomuchFTB,theFAOwillrecoveranyamountyoushouldnothavereceived.Atreconciliation,theFAOmayalsorecoveranydebtyoumayhavefromanoverpaymentinrespectofapreviousyear.Yourtaxrefund–oryourspouse’siftheygaveconsent–canbeusedtorecovertheseamountsdirectly.
IfyoureceivedFTBdirectlyfromtheFAO–forexample,asafortnightlypayment–andyournoticeofassessmentdoesnotshowanFTBreconciliationresult,donotbeconcerned.ThereasonmaybethattheFAOwasunabletoreconcileyourFTBpaymentbythetimeweissuedyournoticeofassessment.IfyouhaveanFTBoverpaymentorareentitledtoatop-uptheFAOwillcontactyoudirectly.
NOTETheFAOwilldetermineyourfinalentitlementtoFTB.Ifthispaymentisnotshownonyournoticeofassessment,theFAOwillpayyouatalatertime.
IfyouareunsureaboutanFTBamountormessageonyournoticeofassessment,phone136150orvisittheFAO.
Child Support AgencyIfyouhaveoutstandingliabilitiestotheChildSupportAgency(CSA),yourtaxrefundcanbeusedtomeetthem;incertaincircumstancesyourFTBentitlementcanalsobeused.
WHAT IS YOUR NOTICE OF ASSESSMENT?Thenoticeofassessmentwesendyouisanitemisedaccountoftheamountoftaxyouoweonyourtaxableincomebasedontheinformationprovidedonyourtaxreturn.Italsocontainsotherdetailsthatarenotpartoftheassessment,suchastheamountofcreditfortaxyouhavealreadypaidthroughtheincomeyear.
Whenyoureceiveyournoticeofassessment,makesurethateverythingiscorrect.
Formoreinformationabouttheitemsonyournoticeofassessment,visitourwebsitewww.ato.gov.au/individualsorphoneourinfolinesaslistedontheinsidebackcover.
Unlessyouareusingelectronicfundstransfer(EFT),thebottomsectionofyournoticeofassessmentwillbeeitheryourrefundchequeor,ifyouowetax,yourpaymentadvice.
Notethatifyouhaveanyotheroutstandingtaxdebts,childsupportdebts,familytaxbenefit(FTB)debtsorCentrelinkdebts,thesemaybedeductedfromanyrefundyouareentitledto.Ifthishappens,wewillgiveyoutherelevantdetails.
NOTEYoushouldreceiveyournoticeofassessmentwithinsixweeksofthedateyoulodgeyourtaxreturn(seeHowlongdoyouhavetowaitforyourassessment?onthenextpage).
Underthelawwehavesometimeduringwhichwecanreviewyourtaxreturn.Duringthistime,wemayincreaseordecreasetheamountoftaxpayable(orrefundable)asshownonyourinitialnoticeofassessment.Thisreviewperiodisnormallytwoyearsbutincertaincircumstancesitcanbefouryears(seeSelf-assessment–it’syourresponsibilityonpage10).
Family tax benefit and your notice of assessmentIfyoulodgedanFTBclaimwithyourtaxreturn,yournoticeofassessmentwillincludeinformationaboutyourFTBentitlement.IftheFamilyAssistanceOffice(FAO)wasunabletoprocessyourentitlementintime,itwillbeindicatedonyournoticeofassessment.Ifyouhaveataxdebt,yourFTBentitlementmaybeusedtowardspayingthatdebt.IfyouhaveanFAOdebt(whichincludesFTBandchildcarebenefitdebts),yourtaxrefund(includingFTBentitlement)maybeusedtowardspayingthatdebt.
IfyoureceivedFTBdirectlyfromtheFAO–forexample,asafortnightlypayment–yournoticeofassessmentmayincludeinformationaboutyourreconciliationresult.
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HOW LONG DO YOU HAVE TO WAIT FOR YOUR ASSESSMENT?OurcurrentstandardforprocessingtaxreturnspostedtotheTaxOfficeissixweeks.Ifyoulodgedyourtaxreturnonlineusinge-tax,ourstandardprocessingtimeistwoweeks.
However,ifyoureceivedafamilytaxbenefit(FTB)paymentfromtheFamilyAssistanceOffice(FAO),oryouclaimeditfromtheTaxOffice,youre-taxreturnmaytakelongertoprocess.ThisadditionaltimeisnecessarytomakesurethatyouarepaidthecorrectamountofFTB.
Ifyousentyourtaxreturnbyordinarypost,waitsevenweeksbeforephoningtocheckonourprogresswithyourtaxreturn.Ifyoulodgedonlineusinge-tax,waitthreeweeks.
Afterthattimeyoucanusetheautomatedself-helpserviceon132865(available24hoursaday,everyday)tochecktheprogressofyourtaxreturn.Youwillneedtokeyinyourtaxfilenumber(TFN)usingyourphonekeypad.
CAN YOU GET YOUR REFUND FASTER?Wemaybeabletohelpyougetaquickerrefundifyouareinseriousfinancialhardship.Seriousfinancialhardshipmeansyouareunabletoprovidefood,accommodation,clothing,medicaltreatment,educationorothernecessitiesforyou,yourfamilyorotherpeopleforwhomyouareresponsible.
PhonethePersonalInfoline(seetheinsidebackcover)beforeyoulodgeyourtaxreturntofindoutifyouareeligibleforthisfasterservice.Haveonhandyourtaxreturn,TFN,pensionorbenefitstatement,paymentsummariesandotherpapersthatshowyouareinseriousfinancialhardship.
WHAT IF YOU THINK YOUR ASSESSMENT IS WRONG?Checkallthedetailsonyournoticeofassessmentwiththoseonyourtaxreturn.Ifyouthinkthereisaproblem,phonethePersonalInfoline(seetheinsidebackcover)forhelp.Youwillneedyournoticeofassessmentand,ifpossible,acopyofyourtaxreturn.
WHAT IF YOU STILL THINK YOUR ASSESSMENT IS WRONG?Youcanwritetousandobjecttoyourassessment.Ifyouwanttoobjecttoyourassessment,seethefactsheetonhowtolodgeanobjectiononourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
Generally,youmustlodgeyourobjectionwithinthetwo-yearorfour-yearamendmentperiod,whicheverappliestoyou.Formoreinformation,visitwww.ato.gov.au/notices
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COLLECTING YOUR TAx INFORMATIONTheTaxOfficeisauthorisedbytheTaxation Administration Act 1953 torequestyoutoquoteyourtaxfilenumber(TFN).ItisnotanoffencenottoquoteyourTFN.However,yourassessmentmaybedelayedifyoudonotquoteyourTFN.
TheTaxOfficeisalsoauthorisedbytheIncome Tax Assessment Act 1936,theIncome Tax Assessment Act 1997 andtheA New Tax System (Family Assistance) (Administration) Act 1999 toaskfortheotherinformationonyourtaxreturn.Weneedthisinformationtohelpustoadministerthetaxlaws.
WHO ELSE CAN WE GIVE YOUR TAx INFORMATION TO?Wecangiveyourtaxinformationtosomegovernmentagenciesspecifiedintaxlaw,forexample:n benefitpaymentagenciessuchasCentrelink,the
DepartmentofEducation,ScienceandTraining,andtheDepartmentofFamilies,CommunityServicesandIndigenousAffairs
n lawenforcementagenciessuchasstateandfederalpolicen otheragenciessuchastheChildSupportAgency(CSA)
andtheAustralianBureauofStatistics.
Thisdisclosureisusuallytocheckeligibilityforgovernmentbenefits,forlawenforcementpurposesorforcollectingstatistics.Anyfurtheruseofyourinformationbytheseagenciesisalsocontrolledbylaw.Wecanalsodiscloseyourinformationinperformingourdutiesunderthetaxlaws.
Otherwise,wecangiveyourtaxinformationonlytoyouortosomeoneyouhaveappointedtoactforyou.
Reserve bank of AustraliaIfyoureceivearefundchequewithyournoticeofassessment,weprovidedetailsofyourrefundtotheReserveBankofAustraliatoassistinclearingyourcheque.
Child Support Agency clientsTheCSAmayusetheinformationyougiveustoassessorcollectchildsupport.
HOW DO WE PROTECT YOUR TAx INFORMATION?ThetaxlawscontainsecrecyprovisionsthatprohibitanyofficeroftheTaxOffice(includingemployeesandcontractors)oranyothergovernmentagencyfromimproperlyaccessing,recordingordisclosinganyone’staxinformation.Theseprovisionsallowofficerstodisclose
PRIVACY AND ACCESS TO INFORMATION
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informationinperformingtheirdutiesandincertainotherspecifiedcircumstances.Apersoncanbefinedupto$11,000andsentencedtotwoyearsinprisonforbreakingtheseprovisions.
Inaddition,thePrivacy Act 1988 protectspersonalinformationheldbyfederalgovernmentagencies.Italsoprotectstaxfilenumbers(TFNs),nomatterwhoholdsthem.
ASKING ABOUT YOUR ASSESSMENT
If you phoneWhenyouphonewewillaskyoutoprovideyourTFNandotherinformationtoconfirmyouridentity–forexample,detailsfromarecentnoticeofassessment.
Ifyouwantarepresentativetophoneusonyourbehalf,youmustfirstauthoriseus,inwriting,todiscussyourinformationwiththem.Whenthepersoncontactsus,theywillneedtoquoteyourwrittenauthorityandprovideinformationtoprovetheiridentity.
Thisrequirementistoprotectyourprivacy.
If you writeQuoteyourTFN,yourfullnameandyouraddress.Provideyourphonenumberifitisconvenient.Remembertosigntheletter.
WHO CAN ASK YOU FOR YOUR TFN?OnlycertainpeopleandorganisationscanaskyouforyourTFN.Theseincludeemployers,somefederalgovernmentagencies,trusteesforsuperannuationfunds,payersunderthepayasyougo(PAYG)system,highereducationinstitutions,theCSAandinvestmentbodiessuchasbanks.YoudonothavetogiveyourTFNbuttheremaybeconsequencesifyoudonot–forexample,ifyouareapplyingforagovernmentbenefitandyoudonotgiveyourTFN,youmaynotbepaidthebenefit.
AUSTRALIAN BUSINESS REGISTERWe are authorised by theA New Tax System (Australian Business Number) Act 1999 to collect certain information relating to your business.Wemayusethebusinessdetailsyouprovidedonyourtaxreturntoupdateyourtradingname,industryclassification,statusofbusiness,fundwind-update,publicofficer(ifacompany)andmainbusinessaddressontheAustralianBusinessRegister(ABR).NotethatyoumustadvisetheRegistraroftheABRwithin28daysofanychangestoyourregistereddetailsincludingyourcurrentpostaladdressfortheABR.WemayalsousepostaladdressdetailsfromyourincometaxreturnifwecannotcontactyouthroughyourABRpostaladdress.
Tohelpbusinessandgovernmentinteractmoreeasily,undercertaincircumstances,theRegistrarmaydiscloseinformationprovidedbytheentitytootherCommonwealth,state,territoryandlocalgovernmentagencies.
YoucanfinddetailsofthegovernmentagenciesregularlyreceivinginformationfromtheAustralianBusinessRegister(ABR)ontheinternetatwww.abr.gov.au oryoucanphone13 28 66 between8.00amand6.00pmMondaytoFridayandaskforalistofagenciestobeemailed,faxedorpostedtoyou.
TheseagenciesmayuseABRinformationforpurposesauthorisedbytheirlegislationorforcarryingouttheirotherfunctions.Examplesofpossibleusesincluderegistration,reporting,compliance,validationandupdatingofdatabases.
TheRegistraroftheABRrequiresallgovernmentagenciestodetailtheirspecificuseofABRinformationandsignamemorandumofunderstanding(MOU)beforetheycanaccessABRinformationorinteractwiththeABR.TheMOUsetsoutacommonunderstandingbetweenpartiesandensurestheRegistrarhasconsideredtheappropriateuseofABRinformationundertheA New Tax System (Australian Business Number) Act 1999.
Inadditiontothepubliclyavailableinformation,theseagenciescanalsoaccessthe:n nameoftheentity’sassociates,suchaspublicofficer,
directorortrusteen entity’saddressforserviceofnoticesn entity’sprincipalplaceofbusinessn entity’semailaddress,andn AustralianandNewZealandStandardIndustrial
Classification(ANZSIC)codeforthebusinessconductedbytheentity.
DO YOU NEED MORE INFORMATION?Ifyouneedmoreinformationabouthowthetaxlawsprotectyourpersonalinformationorhaveanyconcernsabouthowwehavehandledyourpersonalinformation,phonethePersonalInfolineon13 28 61.
Ifyouareunabletoresolveyourconcernswithusabouthowwehavehandledyourpersonalinformation,youcancontacttheOfficeofthePrivacyCommissionerbyvisitingtheirwebsiteatwww.privacy.gov.auorbyphoningtheirprivacyhotlineon1300 363 992.
FREEDOM OF INFORMATIONTheFreedom of Information Act 1982 (FOIAct)givesyoutherighttoseeyourtaxreturnandotherdocuments–forexample,paymentsummariesandnoticesofassessment.Insomecircumstancesthisinformationmaybeprovidedfreeofcharge,butusuallythereisachargetocoverthetimeandexpenseinvolvedingettingtheinformationforyou.WesuggestyouphonethePersonalInfolineon13 28 61beforeyouaskforinformationundertheFOIAct.
Keep copies of your tax returns, as a request for a copy from us may involve a charge.
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DEALING WITH THE TAX OFFICE
It is important that you are aware of both your rights and your obligations when dealing with us.Whenwemakeadecisionaboutyourtaxaffairs,wewilltellyouaboutyourrightsandobligationsinrelationtothatdecision.Wewillgiveyoucontactdetailsincaseyouhaveanyqueriesorneedmoreinformation.
Wealsohaveacharterwhichsetsoutthewayweconductourselveswhendealingwithyou.Thereisinformationunder‘Yourrights’onourwebsite.SeetheinsidebackcovertofindouthowtogetaprintedcopyoftheTaxpayers’ charter – what you need to know(NAT2548).
YOUR RIGHT TO COMPLAIN
Ifyouaredissatisfiedwithaparticulardecisionwehavemade,orwithoneofourservicesoractions,youhavetherighttocomplain.
Werecommendthatyoufirsttrytoresolvetheissuewiththetaxofficeryouhavebeendealingwith(orphonethenumberyouhavebeengiven).
Ifyouarenotsatisfied,talktothetaxofficer’smanager.
Ifyouarestillnotsatisfied,phoneourcomplaintslineon132870.
Youcanalsomakeacomplaintby:n writingto: Complaints AustralianTaxationOffice LockedBag40 DandenongVIC3175n lodgingonlineatwww.ato.gov.aun sendingaFREEFAXon1800060063.
THE COMMONWEALTH OMbUDSMANIfyouarenotsatisfiedwithourdecisionsoractions,youcanraisethematterwiththeCommonwealthOmbudsman.Beforelookingintoamatterforyou,theCommonwealthOmbudsmanmayaskyoutogotoourcomplaintsareaifyouhavenotalreadydoneso.
TheCommonwealthOmbudsman’sofficecaninvestigatemostcomplaintsrelatingtotaxadministrationandmayrecommendthatweprovideasolutionorremedytoyourproblem.Investigationsareindependent,private,informalandfreeofcharge.
YoucancontacttheCommonwealthOmbudsman’sofficeby:n visitingtheirwebsiteatwww.ombudsman.gov.aun phoning1300362072n visitingtheofficenearesttoyou(thereareofficesinall
Australiancapitalcities),orn writingto: TheCommonwealthOmbudsman GPOBox442 CanberraACT2601
THE PRIVACY COMMISSIONERThePrivacyCommissionerreceivescomplaintsunderthePrivacy Act 1988 andtaxfilenumberguidelines.YoucancontactthePrivacyCommissionerby:n visitingtheirwebsiteatwww.privacy.gov.aun phoningtheprivacyhotlineon1300363992,orn writingto: ThePrivacyCommissioner GPOBox5218 SydneyNSW2001
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HOW WE WORK OUT YOUR TAX
INCOME YoushowthisamountatTOTALINCOMEORLOSSonpage2ofyourtaxreturn.
minus
ALLOWAbLE DEDUCTIONSYoushowthisamountatTOTALDEDUCTIONSonpage3ofyourtaxreturn.IfyoualsoshowanamountatL1,wewilltakethisamountawayfromyourincometoworkoutyourtaxableincome.
equals
TAxAbLE INCOMEYoushowthisamountatTAXABLEINCOMEORLOSSonpage3ofyourtaxreturn.WeusethisamounttoworkouttheTAXONTAXABLEINCOME.
TAx ON TAxAbLE INCOMEIfyouwanttoestimatethetaxonyourtaxableincome,usethecalculatoronourwebsiteorgotopages120–2.
minus
TAx OFFSETS
YoushowmosttaxoffsetsatTOTALTAXOFFSETSonpage4ofyourtaxreturn.Ifyouareentitledtoalowincome,beneficiary,seniorAustralians,pensioner,matureageworker,orMedicarelevysurchargelumpsumtaxoffset,oratransferofunused30%childcaretaxrebatefromyourspouse,weworkitoutforyou.Youcanestimatesometaxoffsetsforyourselfusingthecalculatorsonourwebsiteorgotopages123–5.
Refundabletaxoffsets,ontheotherhand,areincludedbelowintheamountforTAXCREDITSANDREFUNDABLETAXOFFSETS.
equals
NET TAx PAYAbLE
plus
HELP AND SFSS REPAYMENTS
IfyouhaveaHigherEducationLoanProgramme(HELP)debtorStudentFinancialSupplementScheme(SFSS)debt,weworkoutyourrepayment.Ifyouwanttoestimateit,usethecalculatorsonourwebsiteorgotopages128–9.
plus
MEDICARE LEVY AND SURCHARGE
WeworkouttheseamountsfromitemsM1andM2onyourtaxreturn.Ifyouwanttoestimatethem,usethecalculatoronourwebsiteorgotopages125–8.
minus
TAx CREDITS AND REFUNDAbLE TAx OFFSETS
Weworkouttheseamountsfromtaxyoupaidduringtheyearandanyrefundabletaxoffsetsthathavenotalreadybeencreditedorrefunded.Thebabybonus(itemT7),privatehealthinsurancetaxoffset(itemT5)andfrankingcredits(item11or12)arerefundabletaxoffsets.
equals
REFUND OR AMOUNT OWING
Weshowthisamountonyournoticeofassessment.YourrefundmaybeaffectedbyanyoutstandingliabilitiestotheTaxOfficeortheChildSupportAgency.Theseamountswillappearonyournoticeofassessmentas‘Otheramountspayable’.Yourfamilytaxbenefit(FTB)entitlementortop-upmaybeaffectedbyanyFamilyAssistanceOfficedebt(whichincludesFTBandchildcarebenefitdebts).Thismayalsoaffectyourrefundoramountowing.
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WORKING OUT YOUR TAX REFUND OR TAX DEBT
PART � Tax-free thresholdToworkoutthetaxonyourtaxableincomeyouneedtoknowyourtax-freethreshold.Thisistheamountofincomeyoucanearnbeforeyoumuststartpayingtax.
Australian residentIfyouwereanAustralianresidentfortaxpurposesforthefullyear,yourtax-freethresholdis$6,000.Gotopart2.
Non-residentIfyouwereanon-residentforthefullyearyouarenotentitledtoatax-freethreshold.Gotopart2.
Part-year residentIfyouwereanAustralianresidentfortaxpurposesforlessthanthefullyear,alowerthresholdamount–thepart-yeartax-freethreshold–mayapply.InthiscaseyouansweredYESatquestionA2onpage109.QuestionA2appliesifyou:n becameanAustralianresidentduring2006–07n stoppedbeinganAustralianresidentduring2006–07.
Workingoutyourpart-yeartax-freethreshold:n Ifyoualsoshowedincomeatitem5or6onyourtax
return,youmightbeentitledtoafulltax-freethreshold–phonethePersonalInfolineforhelp.
n Otherwise,workoutyourpart-yeartax-freethreshold.MultiplythenumberyouwroteatN itemA2onyourtaxreturnby$500.Theresultisyourpart-yeartax-freethreshold.Inthesecalculationswerefertoyourpart-yeartax-freethresholdamountasT.
PART 2 Tax on taxable incomeWeprovideanumberoftablesandworksheetsonthefollowingpagestohelpyouworkoutthetaxonyourtaxableincome.Theonesyouusedependonyourresidencystatus.Ifyouwere:n anAustralianresidentfortaxpurposesforthefullyear
youareentitledtoa$6,000tax-freethreshold,gotoAustralianresidentbelow
n anon-residentforthefullyear,gotoNon-residentonthenextpage
n apart-yearresidentfortaxpurposesandyourtax-freethresholdTislessthan$6,000,gotoPart-yearresidentonpage122.Ifyourtax-freethresholdTis$6,000,justusetable2.1andworksheet2.1.
Australian residentTousetable2.1,firstfindincolumn(a)thetaxableincomerangetowhichyourtaxableincomebelongs,andthenrefertotheamountsinthatrow.
Youdonothavetoworkoutyourtaxrefundortaxdebt.Wewillworkitoutfromtheinformationyouprovideonyourtaxreturnandadviseyouoftheresultonyournoticeofassessment.
Ifyoudowanttoworkoutyourtaxrefundortaxdebtforyourownpurposes,youcan:n usethetaxcalculatorsonourwebsiteatwww.ato.gov.au
orn followtheinstructionsonthefollowingpages.
Therearesomesituationswhereyoucannotworkoutyourtaxrefundortaxdebtbecausethecalculationistoocomplextoexplainhere.Thesearesituationswhereyou:n hadincomesubjecttocapitalgainstaxn hadaneligibleterminationpaymentn areentitledtotheunusedportionofyourspouse’s
seniorAustraliansorpensionertaxoffsetn hadanunusedamountofthe30%childcaretaxrebate
transferredtoyoun hadalumpsumpaymentinarrearsn hadalumpsumpaymentbecauseyouretiredor
finishedworkinginajobn wereunder18yearsoldandearnedmorethan$1,333
ininterest,dividendsorotherinvestmentincomen hadcreditfortaxpaidbyatrusteen hadafamilytaxbenefittaxclaimn hadexemptforeignemploymentincomen hadincomethatwassubjecttoaveragingn hadfilmindustryinvestmentdeductionsn hadadividendfromaNewZealandcompanywith
Australianfrankingcreditsattachedn haveclaimedtheentrepreneurstaxoffset.
Youneedtoworkoutthefollowingamountsiftheyapplytoyou.n Tax-freethreshold–seepart1.n Taxonyourtaxableincome–seepart2.n Lowincometaxoffset–seepart3n Beneficiarytaxoffset–seepart4.n SeniorAustraliansorpensionertaxoffset–seepart5.n Matureageworkertaxoffset–seepart6.n Medicarelevy–seepart7.n Medicarelevysurcharge–seepart8.n HigherEducationLoanProgramme(HELP)andStudent
FinancialSupplementScheme(SFSS)compulsoryrepayments–seepart9.
n 30%childcaretaxrebate–seepart10.n Babybonus–seepart11.
NOTEDonotwriteonyourtaxreturnanyoftheamountsyouworkouthere.
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TAbLE 2.�: Income tax rates – resident for full year
Taxableincome
Taxbracketthreshold
Taxonthresholdamount
Marginaltaxrateonamountabovethreshold
(a) (b) (c) (d)
$1to$6,000 $0 $0 Nil
$6,001to$25,000 $6,000 $0 0.15
$25,001to$75,000 $25,000 $2,850 0.30
$75,001to$150,000 $75,000 $17,850 0.40
$150,001andover $150,000 $47,850 0.45
Transfertheamountsat(b),(c)and(d)fromtherelevantrowto(b),(c)and(d)inworksheet2.1,andfollowthestepsinthatworksheet.
Intheexampleinworksheet2.1,Samhadataxableincomeof$28,682.Samlooksuptherowintable2.1whichappliestohistaxableincome($25,001to$75,000)andworksouthistaxontaxableincomeusingworksheet2.1asshown.
WORKSHEET 2.�: Working out your tax on taxable income – resident for full year
Sam’s Yours
Yourtaxableincome(fromTAXABLEINCOMEORLOSS
onpage3ofyourtaxreturn) $28,682 (a) $
Yourtaxbracketthresholdamount:(b)fromtable2.1 $25,000 (b) $
Taxonthatthresholdamount:(c)fromtable2.1 $2,850 (c) $
Marginaltaxrateonamountabovethreshold:
(d)fromtable2.1 0.30 (d)
Amountofincomeabovethreshold:
take(b)awayfrom(a). $3,682 (e) $
Taxonincomeabovethreshold:multiply(e)by(d). $1,104.60 (f) $
Add(c)and(f). $3,954.60 (g) $
Theamountat(g)isyourtaxontaxableincome.
Transferyourtaxontaxableincometostep1ontheFINALWORKSHEETonpage130.Youhavefinishedpart2,gotopage123.
Non-residentTousetable2.2,firstfindincolumn(a)thetaxableincomerangetowhichyourtaxableincomebelongs,andthenrefertotheamountsinthatrow.
TAbLE 2.2: Income tax rates – non-resident for full year
Taxableincome
Taxbracketthreshold
Taxonthresholdamount
Marginaltaxrateonamountabovethreshold
(a) (b) (c) (d)
$1to$25,000 $0 $0 0.29
$25,001to$75,000 $25,000 $7,250 0.30
$75,001to$150,000 $75,000 $22,250 0.40
$150,001andover $150,000 $52,250 0.45
Intheexampleinworksheet2.2,Jan’staxableincomewas$28,682.Janlooksuptherowintable2.2whichappliestohertaxableincome($25,001to$75,000)andworksouthertaxontaxableincomeusingworksheet2.2asshown.
WORKSHEET 2.2: Working out your tax on taxable income – non-resident for full year
Jan’s Yours
Yourtaxableincome(fromTAXABLEINCOMEORLOSS
onpage3ofyourtaxreturn) $28,682 (a) $
Yourtaxbracketthresholdamount:(b)fromtable2.2 $25,000 (b) $
Taxonthatthresholdamount:(c)fromtable2.2 $7,250 (c) $
Marginaltaxrateonamountabovethreshold:
(d)fromtable2.2 0.30 (d)
Amountofincomeabovethreshold:
take(b)awayfrom(a). $3,682 (e) $
Taxonincomeabovethreshold:multiply(e)by(d). $1,104.60 (f) $
Add(c)and(f). $8,354.60 (g) $
Theamountat(g)isyourtaxontaxableincome.
Transferyourtaxontaxableincometostep1ontheFINALWORKSHEETonpage130.Youhavefinishedpart2,gotopage123.
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Part-year residentYoucalculatedyourpart-yeartax-freethresholdTatpart1.Writeitat(b)inworksheet2.3.
Ifyourtaxableincomeis$25,000orless,gotostep1.Yourtaxrateis15%(or15cents)foreach$1overyourpart-yeartax-freethresholdT.
Ifyourtaxableincomeisover$25,000gotostep2.
STEP1 Intheexampleinworksheet2.3Karenhadatax-freethresholdTof$5,000andataxableincomeof$25,000.
WORKSHEET 2.3: Working out the tax on your taxable income of $25,000orless with a part-year tax-free threshold
Karen’s Yours
Yourtaxableincome(fromTAXABLEINCOMEORLOSS
onpage3ofyourtaxreturn) $25,000 (a) $
Yourtax-freethresholdT $5,000 (b) $
Amountofincomeabovetax-freethreshold:
take(b)awayfrom(a). $20,000 (c) $
Taxonincomeabovethreshold:
multiply(c)by0.15. $3,000 (d) $
Ifyourtaxableincomeis$25,000orless,theamountat(d)isyourtaxonyourtaxableincome.
Ifyourtaxableincomeis$25,000orless,transferyourtaxontaxableincometostep1ontheFINALWORKSHEETonpage130.Youhavefinishedpart2,gotothenextpage.
STEP2 Ifyourtaxableincomeisgreaterthan$25,000,youfirstneedtoworkoutthetaxyoupayonthefirst$25,000ofyourtaxableincome.Useworksheet2.3,write$25,000at(a)anddothecalculation.Theamountat(d)isthetaxyoupayonthefirst$25,000ofyourtaxableincome.Transfertheamountat(d)fromworksheet2.3to(s)inworksheet2.4.WerefertothisamountasSintable2.3.
Tousetable2.3,firstfindincolumn(a)thetaxableincomerangetowhichyourtaxableincomebelongs,andthenrefertotheamountsinthatrow.
TAbLE 2.3: Income tax rates for part-year residents with part-year tax-free threshold
Taxableincome
Taxbracketthreshold
Taxonthresholdamount
Marginaltaxrateonamountabovethreshold
(a) (b) (c) (s) (d)
$1to$T $0 $0 $0 Nil
$(T+1)to$25,000 $T $0 $0 0.15
$25,001to$75,000 $25,000 $0 $S 0.30
$75,001to$150,000 $75,000 $15,000 $S 0.40
$150,001andover $150,000 $45,000 $S 0.45
Intheexampleinworksheet2.4Karenhadatax-freethresholdTof$5,000andataxableincomeof$76,000.n HertaxSonthefirst$25,000ofhertaxableincomeis
$3,000from(d)inworksheet2.3.n Shelooksuptherowintable2.3whichappliestoher
taxableincome($75,001to$150,000),transferstheamountsat(b),(c)and(d)fromtherelevantrowto(b),(c)and(d)inworksheet2.4andworksouthertaxasshown.
WORKSHEET 2.4: Working out the tax on your taxable income of over $25,000 with a part-year tax-free threshold
Karen’s Yours
Yourtaxableincome(fromTAXABLEINCOMEORLOSS
onpage3ofyourtaxreturn) $76,000 (a) $
Yourapplicabletaxbracketthresholdamount:(b)fromtable2.3 $75,000 (b) $
Taxamountsdueonthethresholdamount
(c)fromtable2.3 $15,000 (c) $
Sfrom(d)atworksheet2.3 $3,000 (s) $
Marginaltaxrateonamountabovethreshold:
(d)fromtable2.3 0.40 (d)
Amountofincomeabovethreshold:
take(b)awayfrom(a). $1,000 (e) $
Taxonincomeabovethreshold:multiply(e)by(d). $400 (f) $
Add(c),(s)and(f). $18,400 (g) $
Theamountat(g)isyourtaxontaxableincome.
Transferyourtaxontaxableincometostep1ontheFINALWORKSHEETonpage130.
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TPART 3 Low income tax offsetYouareentitledtothelowincometaxoffsetifyourtaxableincomeislessthan$40,000.
Yougetthemaximumtaxoffsetof$600ifyourtaxableincomeis$25,000orless.Thetaxoffsetreducesby4centsforeachdollaroftaxableincomeover$25,000.
Ifyourtaxableincomeismorethan$25,000butlessthan$40,000,useworksheet3.1toworkoutyourlowincometaxoffset.
WORKSHEET 3.�: Working out your low income tax offset
Maximumtaxoffset (a) $ 600
Yourtaxableincome(fromTAXABLEINCOMEORLOSS
onpage3ofyourtaxreturn) (b) $
Thresholdatwhichtaxoffsetreduces (c) $ 25,000
Take(c)awayfrom(b). (d) $
Multiply(d)by0.04. (e) $
Take(e)awayfrom(a). (f) $
Theamountat(f)isyourlowincometaxoffset,ifitismorethanzero.
Transferyourlowincometaxoffsettostep2ontheFINALWORKSHEETonpage130.
PART 4 beneficiary tax offsetIfyouhaveshownincomeatitem5onyourtaxreturn,useworksheet4.1toworkoutyourbeneficiarytaxoffset.
WORKSHEET 4.�:Working out your beneficiary tax offset
Totalamountofallowanceorpaymentyoureceived(from A
item5onyourtaxreturn) (a) $
Yourtax-freethreshold:$6,000(orTifyouareapart-yearresident) (b) $
Take(b)awayfrom(a). (c) $
Iftheamountat(c)iszerooranegativeamount,youarenotentitledtoabeneficiarytaxoffset.
Multiply(c)by0.15. (d) $
Theamountat(d)isyourbeneficiarytaxoffset,ifitismorethanzero.Iftheamountat(a)ismorethan$25,000youareentitledtoanadditional15%taxoffsetontheamountover$25,000.
Take$25,000awayfrom(a). (e) $
Multiply(e)by0.15. (f) $
Theamountat(f)isanadditionaltaxoffset.
Add(d)and(f). (g) $
Theamountat(g)isyourbeneficiarytaxoffset.
Transferyourbeneficiarytaxoffset,either(d)or(g)asapplicable,tostep2ontheFINALWORKSHEETonpage130.
PART 5 Senior Australians or pensioner tax offset (from item T2 or T3 on your tax return)IfyoucompleteditemT2toclaimtheseniorAustralianstaxoffset,oritemT3toclaimthepensionertaxoffset,youcanworkouttheamountofyourtaxoffset.YouneedtorefertothetaxoffsetcodeletteryoushowedateitheritemT2orT3onyourtaxreturn.
Table5.1showsthetaxableincomethresholdsthatapplyforyourtaxoffsetcodeletter.
Youcanworkoutyourtaxoffsetatstep1.However,ifanyofthefollowingsituationsappliestoyou,youwillnotbeabletoworkoutyourtaxoffsethere.� Ifyouareeligibleforthepensionertaxoffsetandyou
usedtaxoffsetcodeletter:n S,Q,IorJandyourpensionwasmorethan
$13,356,orn Pandyourpensionwasmorethan$11,154
thenyouractualmaximumtaxoffsetmaybehigherthanyourmaximumtaxoffset(d)intable5.1,andyoumaygetataxoffsetifyourtaxableincomewasmorethantheuppertaxableincomethreshold(c)intable5.1.
2 Ifyourtaxableincomeisbetweenthelowertaxableincomethreshold(b)andtheuppertaxableincomethreshold(c)intable5.1,andanunusedportionofyourspouse’sseniorAustraliansorpensionertaxoffsetisavailablefortransfertoyou,youmayreceiveahighertaxoffset.
3 Ifyourtaxableincomeisequaltoormorethantheuppertaxableincomethreshold(c)intable5.1,youmaystillqualifyforataxoffsetfromthetransferofanyunusedportionofyourspouse’sseniorAustraliansorpensionertaxoffsettoyou,ifapplicable.
Ifthesesituationsapply,youcouldusethecalculatorsonourwebsitetoworkoutyourtaxoffset.
Whetherornotyoucancalculateyourtaxoffsethere,wewillworkouttheoptimumtaxoffsetwhichappliesforyou,andshowthatonyournoticeofassessment.
STEP1 Findincolumn(a)intable5.1therowwiththecodeletterthatyoushowedatitemT2orT3onyourtaxreturn.
STEP2 Refertotherowwithyourcodeletterintable5.1todeterminewhetheryouareentitledtoataxoffset.n Ifyourtaxableincomeisequaltoormorethanthe
amountat(c)youwillnotgetataxoffset.n Ifyourtaxableincomeisequalto,orlessthan,the
amountat(b),youmaygetuptothemaximumtaxoffsetshownat(d).
n Ifyourtaxableincomeismorethantheamountat(b)andlessthantheamountat(c)intable5.1,transfertheamounts(b)and(d)fromtable5.1to(b)and(d)inworksheet5.1toworkoutyourtaxoffset.
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TAbLE 5.�: Senior Australians and pensioner tax offset thresholds
Taxoffsetcodeletter
Lowertaxableincomethreshold
Uppertaxableincomethreshold
Maximumtaxoffset
(a) (b) (c) (d)
A $24,867 $42,707 $2,230
B,C $23,600 $39,920 $2,040
D,E $20,680 $33,496 $1,602
S,Q,J $19,454 $35,598 $2,018
I $18,527 $33,559 $1,879
P $16,147 $28,323 $1,522
STEP3 Workoutyourtaxoffsetusingworksheet5.1.
WORKSHEET 5.�: Working out your senior Australians or pensioner tax offset
Yourtaxableincome(fromTAXABLEINCOMEORLOSS
onpage3ofyourtaxreturn) (a) $
Lowertaxableincomethreshold:(b)fromtable5.1 (b) $
Take(b)awayfrom(a). (c) $
Maximumtaxoffset:(d)fromtable5.1 (d) $
Divide(c)by8. (e) $
Take(e)awayfrom(d). (f) $
Theamountat(f),ifitismorethanzero,isyourseniorAustraliansorpensionertaxoffset.
TransferyourseniorAustraliansorpensionertaxoffsettostep2ontheFINALWORKSHEETonpage130.
PART 6 Mature age worker tax offsetTobeeligibleforthematureageworkertaxoffsetyoumusthave:n hadnetincomefromworkingwithincertainlimitsn beenanAustralianresidenton30June2007,andn beenaged55yearsorolderon30June2007.
Themaximummatureageworkertaxoffsetis$500.Tocalculateyourtaxoffset,youneedtoworkoutyournetincomefromworking.
STEP1 Workoutyournetincomefromworkingusingworksheet6.1.Youwillneedtotransfercertainamountsfromyourtaxreturnandfromyourtaxreturn(supplementarysection),ifrelevant.
WORKSHEET 6.�: Working out your net income from working
Ifanyoftheamountslistedbelowdonotapplytoyou,write0intheappropriatebox.
Totalincomefromworking
Salaryorwages(C toG item1) (a) $
Allowances,earnings,tipsdirectorsfeesetc(K item2) (b) $
Attributedpersonalservicesincome(O item8) (c) $
Totalreportablefringebenefitsamounts(W item9) (d) $
Add(a),(b),(c)and(d). (e) $
Theamountat(e)isyourtotalincomefromworking.
Relateddeductions
Work-relatedcarexpenses( A itemD1) (f) $
Work-relatedtravelexpenses(b itemD2) (g) $
Work-relateduniform,occupation-specificorprotectiveclothing,laundry
anddry-cleaningexpenses(C itemD3) (h) $
Work-relatedself-educationexpenses(D itemD4) (i) $
Otherwork-relatedexpenses( E itemD5) (j) $
Low-valuepooldeduction(K itemD6) (k) $
Addupallyourrelateddeductions,(f)to(k) (l) $
Theamountat(l)isyourtotalrelateddeductions.
Totalnetincomefromworking
Take(l)awayfrom(e). (m) $
IfyoucompletedM itemT13fromthesupplementarysection,
writethisamountat(n). (n) $
Theamountsat(m)and(n)canbezeroornegativeamounts.
Add(m)and(n). (o) $
Theamountat(o)isyourtotalnetincomefromworking.
STEP2 Usetable6.1tofindoutwhatyouneedtodotoworkoutyourmatureageworkertaxoffset.
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Yournetincomefromworking:(o)fromworksheet6.1
Yourmatureageworkertaxoffset
Actionrequired
$0oranegativeamount
$0 None.Youarenotentitledtothematureageworkertaxoffset.Youhavefinishedpart6.
$1to$9,999 5%ofyournetincomefromworking
Gotoworksheet6.2.
From$10,000to$53,000
$500 Thisisyourmatureageworkertaxoffset.Write$500atstep2ontheFINALWORKSHEETonpage130.Youhavefinishedpart6.
Morethan$53,000butlessthan$63,000
Reducedby5centsperdollarover$53,000
Gotoworksheet6.3.
$63,000andabove
$0 None.Youarenotentitledtothematureageworkertaxoffset.Youhavefinishedpart6.
WORKSHEET 6.2: Working out your mature age worker tax offset – net income from working from $� to $9,999
Yourtotalnetincomefromworking:(o)fromworksheet6.1 (a) $
Multiply(a)by0.05. (b) $
Theamountat(b)isyourmatureageworkertaxoffset.
Transferyourmatureageworkertaxoffsettostep2ontheFINALWORKSHEETonpage130.Youhavefinishedpart6.
WORKSHEET 6.3: Working out your mature age worker tax offset – net income from working from $53,00� to $62,999
Maximumtaxoffset (a) $ 500
Yourtotalnetincomefromworking,(o)fromworksheet6.1 (b) $
Thresholdatwhichtaxoffsetreduces (c) $ 53,000
Take(c)awayfrom(b). (d) $
Multiply(d)by0.05. (e) $
Take(e)awayfrom(a). (f) $
Theamountat(f)isyourmatureageworkertaxoffset.
Transferyourmatureageworkertaxoffsettostep2ontheFINALWORKSHEETonpage130.
PART 7 Medicare levy (from item M� on your tax return)
STEP1 WorkoutyourbasicMedicarelevy.ThebasicMedicarelevyyoupaydependsontheamountofyourtaxableincomeandwhetheryouareeligiblefortheseniorAustralianstaxoffsetorthepensionertaxoffset.n IfyouareeligiblefortheseniorAustralianstaxoffset,
usecolumn1inworksheet7.1.n Ifyouareeligibleforthepensionertaxoffset,use
column2inworksheet7.1.n Ifyouarenoteligibleforeitherofthosetaxoffsets,use
column3inworksheet7.1.
WORKSHEET 7.�: Working out your basic Medicare levy
COLUMN1 COLUMN2 COLUMN3EligiblefortheseniorAustralianstaxoffset
Eligibleforthepensionertaxoffset
Noteligibleforeitherofthosetaxoffsets
Whenyourtaxableincome*(fromTAXABLEINCOMEORLOSSonpage3ofyourtaxreturn)isbelowaspecifiedlowerthreshold,youpaynoMedicarelevy.
Lowertaxableincomethreshold
(a) $ 24,867 $ 21,637 $ 16,740
Ifyourtaxableincomeisequaltoorlessthanyourthresholdat(a),youpaynoMedicarelevy.Youhavefinishedpart7.
Whenyourtaxableincomeisaboveaspecifiedupperthreshold,youpayMedicarelevyattherateof1.5%ofyourtaxableincome.
Uppertaxableincomethreshold
(b) $ 29,255 $ 25,455 $ 19,694
Ifyourtaxableincomeisequaltoormorethanyourthresholdat(b),usethefollowingtoworkoutyourbasicMedicarelevy:
Yourtaxableincome (c) $ $ $
Multiply(c)by0.015. (d) $ $ $
Theamountat(d)isyourbasicMedicarelevy.Gotostep2.
Whenyourtaxableincomeisbetweenthelowerandupperthresholdat(a)and(b)above,youpayMedicarelevyattherateof10%onthatpartofyourtaxableincomeabovethelowerthreshold.UsethefollowingtoworkoutyourbasicMedicarelevy:
Yourtaxableincome (e) $ $ $
Yourlowerthreshold (f) $ 24,867 $ 21,637 $ 16,740
Take(f)awayfrom(e). (g) $ $ $
Multiply(g)by0.10. (h) $ $ $
Theamountat(h)isyourbasicMedicarelevy.Gotostep2.
*ForMedicarelevypurposes,taxableincomeexcludestheamountofanypost-June1983componentofaneligibleterminationpaymentonwhichthemaximumtaxrateiszero.
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NOTEIfyouhadexemptforeignemploymentincomeyouwillnotbeabletoworkoutyourMedicarelevy.Wewilldothiswhenworkingouttheamountoftax(includingMedicarelevy)youhavetopayonyourotherincome.
ExAMPLE 7.�
n CecilieiseligiblefortheseniorAustralianstaxoffset,sosheusescolumn1.Cecilie’staxableincomeis$24,000.Itislessthanthe$24,867thresholdincolumn1.ShepaysnoMedicarelevy.
n JoelisnoteligiblefortheseniorAustralianstaxoffsetnorthepensionertaxoffset,soheusescolumn3.
Joel’staxableincomeis$40,000.Itisabovethe$16,740thresholdincolumn3.HisbasicMedicarelevyis:
$40,000×1.5%=$600.
n Peteriseligibleforthepensionertaxoffset,soPeterusescolumn2.Peter’staxableincomeis$25,000.Itisbetweenthe$21,637and$25,455thresholdsincolumn2.HisbasicMedicarelevyis:
($25,000–$21,637)×10%=$336.30.
STEP2 DidyouclaimaMedicarelevyreductionorexemption?IfyouclaimedaMedicarelevyreductionorexemptionatitemM1,gotostep3.
IfyoudidnotclaimaMedicarelevyreductionorexemption,yourMedicarelevyistheamountat(d)or(h)atworksheet7.1.Transferthisamounttostep4ontheFINALWORKSHEETonpage130.Youhavefinishedpart7.
STEP3 DidyouclaimaMedicarelevyreduction?
IfyouclaimedaMedicarelevyreductionat Y itemM1,gotostep4.
IfyoudidnotclaimaMedicarelevyreduction,butclaimedonlyanexemptionatitemM1(at V orW ,orboth),transferyourbasicMedicarelevyfrom(d)or(h)atworksheet7.1directlyto(q)atstep7onthenextpage.
STEP4 Workoutwhetheryouareentitledtothefamilyreductionamount.
Ifyouhadaspouseon30June2007oryourspousediedduring2006–07,yourfamilyincomeisthecombinedtaxableincomeofyouandyourspouse.
Ifyoudidnothaveaspouseon30June2007andyouwereeligibleforareducedMedicarelevybasedonfamilyincome,yourfamilyincomeisyourtaxableincome(fromTAXABLEINCOMEORLOSSonpage3ofyourtaxreturn).
Tocompletestep4,findthelowerandupperincomelimitsthatapplytoyourcircumstancesintable7.1.
TAbLE 7.�: Family income table for 2006–07
Numberofdependentchildrenandstudents
Lowerincomelimit
Upperincomelimit
IfyouwereeligiblefortheseniorAustralianstaxoffset
0 $33,500 $39,411
1 $36,094 $42,463
2 $38,688 $45,515
Increment $2,594 $3,051
IfyouwerenoteligiblefortheseniorAustralianstaxoffset
0 $28,247 $33,231
1 $30,841 $36,283
2 $33,435 $39,335
Increment $2,594 $3,051
Ifyouhadmorethantwochildrenwhoweredependantsorstudents,youcanextendthistable.Increasetherelevantlowerandupperincomelimitsbytheappropriateincrementforeachadditionalchildorstudent.
Ifyourfamilyincomewaslessthanorequaltoyourlowerincomelimit,youdonotpaytheMedicarelevy.Youhavefinishedpart7.
Ifyourfamilyincomewasgreaterthanyourlowerincomelimitbutlessthanorequaltoyourupperincomelimit,youpayareducedMedicarelevy.
TheworksheetsatthefollowingstepsshowyouhowtoworkouttheamountofreducedMedicarelevyyoupay.
ExAMPLE 7.2
Trevor,whoisnoteligiblefortheseniorAustralianstaxoffset,hadtwodependentchildrenandaspouseon30June2007.Histaxableincomewas$21,000andhisspouse’staxableincomewas$17,000–afamilyincomeof$38,000.Hisfamilyincomeisbetweenthelowerandupperfamilyincomelimitsintable7.1.HisbasicMedicarelevyis$315,fromworksheet7.1.Gotostep5toseehowTrevorworksouthisMedicarelevy.
STEP5 Workoutyourfamilyreductionamountandyourshareofit.
WORKSHEET 7.2: Calculating your family reduction amount
Trevor’s Yours
Familyincome $38,000 (a) $
Lowerincomelimitfromtable7.1 $33,435 (b) $
Take(b)awayfrom(a). $4,565 (c) $
Multiply(b)by0.015. $501.52 (d) $
Multiply(c)by0.085. $388.02 (e) $
Take(e)awayfrom(d). $113.50 (f) $
Theamountat(f)isyourfamilyreductionamount.
Ifyourspouse’staxableincomewaslessthan$16,741,gotostep6toworkoutyourreducedMedicarelevy.
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TIfyourspouse’staxableincomewas$16,741ormore,youwillsharethefamilyreductionamountshowninworksheet7.3.
WORKSHEET 7.3: Calculating your share of the family reduction amount
Trevor’s Yours
Familyreductionamount(f)fromworksheet7.2 $113.50 (g) $
Taxableincome(fromTAXABLEINCOMEORLOSS
onpage3ofyourtaxreturn) $21,000 (h) $
Multiply(g)by(h). $2,383,500 (i) $
Familyincome(a)fromworksheet7.2 $38,000 (j) $
Divide(i)by(j). $62.72 (k) $
Theamountat(k)isyourshareofthefamilyreductionamount.
YourfamilyreductionamountisunlikelytobemorethanyourbasicMedicarelevyfromstep1.Ifitis,yourMedicarelevywillbereducedtozero,andanyexcessfamilyreductionamountmaybetransferredtoreduceyourspouse’sbasicMedicarelevy.Ifthisappliestoyou,youwillnotpayanyMedicarelevy,andyouhavefinishedpart7.
Similarly,itispossiblethatyourspousehasanexcessfamilyreductionamountwhichcanbetransferredtoyou.Todeterminewhetherthatisthecase,proceedwithworksheet7.4.
WORKSHEET 7.4: Calculating your share of the family reduction amount after a transfer from your spouse
Calculatingyourspouse’sshareofthefamilyreductionamount
Trevor’s Yours
Yourspouse’sbasicMedicarelevyusingstep1 $26.00 (aa) $
Yourfamilyreductionamount(f)fromworksheet7.2 $113.50 (f) $
Yourshareofthefamilyreductionamount(k)from
worksheet7.3 $62.72 (k) $
Take(k)awayfrom(f). $50.78 (bb) $
Theamountat(bb)isyourspouse’sshareofthefamilyreductionamount.
Transferofanyexcessfamilyreductionamountfromyourspouse
Take(aa)awayfrom(bb). $24.78 (l) $
If(l)iszeroorlessthanzero(negative),yourspousedoesnothaveanexcessfamilyreductionamount.Gotostep6andusetheamountat(k)aboveforthatstep.Otherwisetheamountat(l)istheexcessfamilyreductionamounttransferredtoyoufromyourspouse.
Add(k)and(l). $87.50 (m) $
Theamountat(m)isyournewshareofthefamilyreductionamountafterthetransfer.
STEP6 WorkoutyourreducedMedicarelevy.
Trevor’s Yours
YourbasicMedicarelevyfrom(d)or(h)atworksheet7.1 $315.00 (n) $
Yourfamilyreductionamount(f),(k)or(m)asapplicable,fromworksheets7.2,7.3
or7.4respectively $87.50 (o) $
Take(o)awayfrom(n). $227.50 (p) $
Theamountat(p)isyourreducedMedicarelevy.
IfyouclaimedanexemptionatitemM1(eitherat V orW ,orboth)onyourtaxreturn,gotostep7.
Otherwise,transferyourreducedMedicarelevytostep4ontheFINALWORKSHEETonpage130.Youhavefinishedpart7.
STEP7 WorkoutyourexemptionamountandyourMedicarelevy.
YourreducedMedicarelevy(p)fromstep6oryourbasicMedicarelevy(d)
or(h)fromworksheet7.1 (q) $
Fullexemption
Numberofdaysat V itemM1onyourtaxreturn (r)
Multiply(q)by(r). (s) $
Divide(s)by365. (t) $
Halfexemption
NumberofdaysatWitemM1onyourtaxreturn,ifany (u)
Multiply(u)by(q). (v) $
Divide(v)by365. (w) $
Divide(w)by2. (x) $
Add(t)and(x). (y) $
Theamountat(y)isyourexemptionamount.
Take(y)awayfrom(q). (z) $
Theamountat(z)isyourMedicarelevy,ifany.
TransferyourMedicarelevytostep4ontheFINALWORKSHEETonpage130.
PART 8 Medicare levy surcharge (from item M2 on your tax return)TheMedicarelevysurchargeappliesonlyifyouselectedNoat E itemM2onyourtaxreturnandthenumberyouwroteat A itemM2islessthan365.ToworkoutyourMedicarelevysurcharge,followthestepsbelow.
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NOTEIfyouhadexemptforeignemploymentincomeyouwillnotbeabletoworkoutyourMedicarelevysurcharge.Wewilldothiswhenweworkouttheamountoftax(includingtheMedicarelevysurcharge)youhavetopayonyourotherincome.
WORKSHEET 8.�: Working out your Medicare levy surcharge
Yourtaxableincome(fromTAXABLEINCOMEORLOSSonpage3ofyourtaxreturn).Ifyouhadaloss,write0. (a) $
Yourtotalreportablefringebenefitsamounts(fromitem9onyourtaxreturn) (b) $
AnyamountyouhaveshownatitemA3onyourtaxreturn
(supplementarysection) (c) $
Anypost-June1983componentofaneligibleterminationpayment
wherethemaximumtaxrateiszero (d) $
Add(a),(b)and(c),thentakeaway(d). (e) $
Divide(e)by100toget1%. (f) $
Theamountat(f)isthewhole-yearMedicarelevysurchargeyouhavetopay.
Ifthesurchargeappliesforthewholeyear,theMedicarelevysurchargeamountyouhavetopayis(f).Inthatcase,transfertheamountforthewhole-yearMedicarelevysurchargetostep4ontheFINALWORKSHEETonpage130.
Ifthesurchargeappliesforonlypartoftheyear,continuewiththestepsbelow.
Numberofdaysat A itemM2onyourtaxreturn (g)
Take(g)awayfrom365. (h)
Multiply(f)by(h). (i) $
Divide(i)by365. (j) $
Theamountat(j)isthepart-yearMedicarelevysurchargeyouhavetopay.
Transfertheamountforthepart-yearMedicarelevysurchargetostep4ontheFINALWORKSHEETonpage130.
PART 9 Compulsory Higher Education Loan Programme (HELP) and Student Financial Supplement Scheme (SFSS) repaymentsAcompulsoryHELPorSFSSrepaymentwillbeincludedwhen:n youhaveanaccumulatedHELPorSFSSdebt,andn yourHELPorSFSSrepaymentincomeat(e)inworksheet9.1ismorethan$38,148.
YouraccumulatedHELPdebtmayincludeHECS-HELP,FEE-HELPorOS-HELPdebts.OnlyonecompulsoryHELPrepaymentwillbecalculatedinthisassessmentbasedonyouraccumulatedHELPdebt.
YouraccumulatedSFSSdebton1June2007includesalloutstandingloanstakenoutfrom1993to2002.OnlyonecompulsorySFSSrepaymentwillbecalculatedinthisassessmentbasedonyouraccumulateddebt.
NOTEYouwillnothavetomakeacompulsoryHELPorSFSSrepaymentifyouhaveaspouseordependantsandif,duetolowfamilyincome,you:n areentitledtoareductionofyourMedicarelevy,orn donothavetopaytheMedicarelevy.
PartBofquestionM1onpages100–2showsyouhowtoworkoutifyouqualifyfortheMedicarelevyreduction.
YourcompulsoryHELPorSFSSrepaymentisapercentageofyourHELPorSFSSrepaymentincome.Followthestepsbelowtoworkoutyourcompulsoryrepayment.
STEP1 WorkoutyourHELPorSFSSrepaymentincome.
WORKSHEET 9.�
Yourtaxableincome(fromTAXABLEINCOMEORLOSSonpage3ofyourtaxreturn).Ifyouhadaloss,write0. (a) $
Yourtotalreportablefringebenefitsamounts(fromitem9onyourtaxreturn) (b) $
Netrentallossamountfromitem20onyourtaxreturn(supplementarysection) (c) $
Yourexemptforeignemploymentincomeamountsfromitem19onyour
taxreturn(supplementarysection) (d) $
Add(a),(b),(c)and(d). (e) $
Theamountat(e)isyourHELPorSFSSrepaymentincome.
STEP2 FindtherepaymentratethatappliestoyourHELPrepaymentincomeintable9.1andyourSFSSrepaymentincomeintable9.2.
TAbLE 9.�: HELP repayment rates as a percentage of HELP repayment income
Income Rate Income Rate
Below$38,149 nil $52,995–$57,394 6%
$38,149–$42,494 4% $57,395–$60,414 6.5%
$42,495–$46,838 4.5% $60,415–$66,485 7%
$46,839–$49,300 5% $66,486–$70,846 7.5%
$49,301–$52,994 5.5% $70,847andabove
8%
TAbLE 9.2: SFSS repayment rates as a percentage of SFSS repayment incomeRepaymentincome Repaymentrate
Below$38,149 Nil
$38,149–$46,838 2%
$46,839–$66,485 3%
$66,486andabove 4%
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TSTEP3 Multiplyyourrepaymentincome(e)fromworksheet9.1bytherelevantratefromstep2.TheresultisyourcompulsoryrepaymentwhichwillbeshownonyournoticeofassessmentatXforHELPandRforSFSS.Ifthebalanceofyouraccumulateddebtislessthanthecalculatedrepaymentamount,youpayonlythebalance.
TransferyourHELPrepaymentorSFSSrepaymentamounttostep7ontheFINALWORKSHEETonpage130.
FormoreinformationaboutrepayingyourHELPdebt,seeRepaying your HELP debt in 2006–07(NAT3913).Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
FormoreinformationaboutrepayingyourSFSSloanstakenoutbetween1993and2002,seeRepaying your Financial Supplement loan 2006–07(NAT2789).Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.
PART �0 30% child care tax rebateToworkoutyour30%childcaretaxrebate,youwillneedtoknowyourtotalfeesandyourchildcarebenefit(CCB)entitlementwhichcanbeaccessedby:n goingtothewebsiteatwww.familyassist.gov.auand
byclickingon‘View30%childcaretaxrebatedetails’n phoningtheFamilyAssistanceOfficeon136150,orn phoninguson132861.
Foreachchildinapprovedcare,workdownacolumninworksheet10.1.
Ifyouhadmorethantwochildreninapprovedcare,continuetheworksheetonanotherpieceofpaper.
WORKSHEET �0.�: Calculating your 30% child care tax rebate
Child1 Child2
Totalfeesforeachchild (a) $ $
YourCCBentitlementforeachchild (b) $ $
Take(b)awayfrom(a). (c) $ $
Theamountsat(c)areyourout-of-pocketexpenses.
Multiply(c)by30%. (d) $ $
Therebateforeachchildislimitedto$4,096.
Writeheretheamountat(d)or$4,096
whicheverislower. (e) $ $
Addalltheamountsfrom(e). (f) $
Theamountat(f)isyour30%childcaretaxrebate.
Transferyour30%childcaretaxrebatetostep2ontheFINALWORKSHEETonpage130.
PART �� baby bonusIfyouareclaimingthebabybonusandyouwanttoworkouttheamount,usethebabybonuscalculatoronourwebsiteorphonethePersonalInfoline(seetheinsidebackcover).
Transfertheamountofyourbabybonustostep9ontheFINALWORKSHEETonpage130.
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To estimate your tax refund or debt, you can use the comprehensive tax calculator on our website or complete the steps below. Read pages 120–9 to work out the amounts which you need to complete this worksheet. If any of the amounts listed do not apply to you, write 0 in the appropriate box. Items marked with an asterisk (*) appear on your tax return (supplementary section), if you have completed one.
STEP 9 Tax credits and refundable tax offsets
Total credits from payment summaries – amounts at:
$ TOTAL TAX WITHHELD on your tax return $
E item 22* on your tax return $
Credits from tax withheld – amounts at:
P + A item 12* on your tax return $
G + H + J item 13* on your tax return $
D + W + E + F item 14* on your tax return $
Pay as you go (PAYG) instalments – from your instalment activity statement, if you have one $
Credits from tax file number amounts withheld – amounts at:
M item 10 on your tax return $
V item 11 on your tax return $
R item 12* on your tax return $
Credit for interest on early payments – amount at L item C1* on your tax return $
Private health insurance tax offset – amount at G item T5 on your tax return $
Franking tax offset (franking credit) – amounts at:
U item 11 on your tax return $
Q item 12* on your tax return $
Baby bonus (See page 129.) $
Add up all your tax credits and refundable tax offsets. $ J
STEP 10 Refund or net amount payable
Take J away from I. $ K
Are you entitled to a refund or do you have a tax debt?If K is negative (less than zero), this is the amount of refund due to you. If you have a Family Assistance Office debt (which includes family tax benefit and child care benefit debts), tax debts or outstanding child support payments, we may deduct some or all of them from your refund.
If K is positive (more than zero), this is the net amount you have to pay.
STEP 1 Tax on taxable income
Write the amount of tax you worked out on pages 120–2. $ A
STEP 2 Tax offsets
Total tax offsets claimed on page 4 of your tax returnDo not include your private health insurance tax offset ( G item T5 on your tax return), you show that amount at step 9. $
Low income tax offset from page 123 $
Beneficiary, senior Australians or pensioner tax offset from pages 123–4. If you have more than one, use the one that gives you the most. $
Mature age worker tax offset from pages 124–5 $
Tax offset on life insurance bonuses 30% of W item 21* on your tax return $
30% child care tax rebate from page 129 $
Add up all your tax offsets. $ B
STEP 3 Tax payable
Take B away from A. If this amount is less than zero, write 0. $ C
STEP 4 Medicare levy and Medicare levy surcharge
Medicare levy from pages 125–7 $
Medicare levy surcharge from pages 127–8 $
Add up your Medicare levy and Medicare levy surcharge. $ D
STEP 5 Total tax payable
Add C and D. $ E
STEP 6 Foreign tax credits
Amount at O item 19* on your tax return $ F
Take F away from E. If this amount is less than zero, write 0. $ G
STEP 7 HELP and SFSS repayments
HELP repayments from pages 128–9 $
SFSS repayments from pages 128–9 $
Add up your HELP and SFSS repayments. $ H
STEP 8 Add G and H. $ I
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Ourshopfrontaddresses,andmailingaddressesforcorrespondence,arelistedbelow.Pleasesendcorrespondencetotheofficeshownonyourlastnoticeofassessment,ifyouhaveone;otherwisesendittoyournearesttaxoffice.
Ifyouhaveanenquiryyoucanvisitourwebsiteatwww.ato.gov.auoryoucancontactusbyphone.Ourphoneservicesarelistedontheinsidebackcover.
Ifyouprefertomakeyourenquiryinperson,phone132861tomakeanappointmentatoneofourshopfronts.
STOPLodgeyourtaxreturnattheaddressonpage112orpage113.
PAYINGYOURTAXDEBTWedonotacceptpaymentsoverthecounteratourshopfronts.Thevariouswaysyoucanpayyourtaxdebtaresetoutonthebackofyournoticeofassessment.Ifyouneedmoreinformation,phone1800815886.
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ParramattaGroundFloorCommonwealthOffices2–12MacquarieStreet,ParramattaPOBox9990ParramattaNSW2123
Sydney2LangStreet,SydneyGPOBox9990SydneyNSW2001
Wollongong93–99BurelliStreet,WollongongPOBox9990WollongongNSW2500
NORTHERN TERRITORYAliceSpringsJockNelsonCentre16HartleyStreet,AliceSpringsGPOBox9990AdelaideSA5001
Darwin24MitchellStreet,DarwinGPOBox9990AdelaideSA5001
QUEENSLANDBrisbane280AdelaideStreet,BrisbaneGPOBox9990BrisbaneQLD4001
TownsvilleStanleyPlace235StanleyStreet,TownsvillePOBox9990TownsvilleQLD4810
UpperMtGravattGroundFloorNexusBuilding96MtGravatt-CapalabaRoadUpperMtGravattPOBox9990UpperMtGravattQLD4122
SOUTH AUSTRALIAAdelaide91WaymouthStreet,AdelaideGPOBox9990AdelaideSA5001
TASMANIAHobart200CollinsStreet,HobartGPOBox9990HobartTAS7001
Launceston54CameronStreet,LauncestonGPOBox9990HobartTAS7001
VICTORIACheltenham4A,4–10JamiesonStreet,CheltenhamPOBox9990DandenongVIC3175
Dandenong14–16MasonStreet,DandenongPOBox9990DandenongVIC3175
Geelong92–100BroughamStreet,GeelongPOBox9990GeelongVIC3220
MelbourneLevel1,CasseldenPlace2LonsdaleStreet,MelbournePOBox9990DandenongVIC3175
WESTERN AUSTRALIANorthbridge45FrancisStreet,NorthbridgeGPOBox9990PerthWA6848
OTHER OFFICESBoxHilltaxofficePOBox9990BoxHillVIC3128
ChermsidetaxofficePOBox9990ChermsideQLD4032
MooneePondstaxofficePOBox9990MooneePondsVIC3039
PenrithtaxofficePOBox9990PenrithNSW2740
SHOPFRONTS
�32 www.ato.gov.au TAXPACK 2007
IND
EX
ABN,seeAustralianbusinessnumberABR,117ABSTUDY,13,23accidentinsurance,seesicknessandaccident
insuranceaccommodationcomponentofscholarships,69accommodationexpenses,45–6accounts,seefinancialinstitutionaccountsactivitystatements,27,63adjustedfringebenefits,74adjustedtaxableincome,72,73,74adjustments,108–9,s61
balancing,40,s31projectpoolvalues,s38
AdministrativeAppealsTribunal(AAT),63,s31adoptedchildren,seechildrenadvance(prepaid)expenditure,36,s26advertisingexpenses,s26advice,3,7,63
aboutinvestment,56non-lodgment,3–4
age,108childforwhombabybonusclaimed,95,96dependants,69familytaxbenefitchildren,71–4housekeepers,82matureageworkertaxoffseteligibility,s54oldestpersoncoveredbyprivatehealthinsurance policy,91personalsuperannuationcontributors,s36seniorAustralianstaxoffseteligibility,84taxationofETPsand,21–2
agepension,24,84agedAustralian,seeolderAustraliansagedcare,residential,s51agents
property,s26tax,6,12,63,114
agriculture,seeprimaryproductionaidsandappliances,s50airfares,45–6allowances,16–17,36
DefenceForcepersonnel,14foreignemployment,s22–3see alsogovernmentpensions
amendmentofassessments,10,114,s62requests,113
ancillaryprivatehealthinsurancecover,98,104annualleave,lumpsumpaymentsforunused,18,69annuities,seesuperannuationandannuitiesantiques,seecapitalgainsappeals,63,s31apportionmentrules,36approvedchildcare,93,94approveddepositfunds,seesuperannuationand
annuitiesaprons,48artificiallimbsoreyes,s50artists,seespecialprofessionalsassessablebalancingadjustment,s31assessmentnotices,10,115–16
see alsoamendmentofassessmentsassessmentperiod(FTB),71,74–5assets,s16–18
foreign,s20–1,s25transferredto/fromnon-residententities,s19,s20–1,s23see alsocapitalgains;depreciatingassets; dividends;gifts
AssistanceforIsolatedChildrenScheme,13associationsubscriptions,53attorney,powerof,6attributedforeignincome,seeforeignincomeattributedpersonalservicesincome,26auctions,charitable,58Austradeapprovedprojects,workon,s22–3Australian–AmericanEducationalFoundationgrants,
13Australianbusinessnumber(ABN),15
amountswithheldbecausenotquoted,29,s5,s7–11;expensesincurred,63
AustralianBusinessRegister,117AustralianDefenceForce,seeDefenceForce
personnelAustralianfilmindustryincentives,s33AustralianfrankingcreditsfromNZcompanies,
s24–5AustralianGovernmentpensions,seegovernment
pensionsAustralianresidents,2,11–12
became/stoppedbeing,12,109,120,122dependants,69forfamilyassistancepurposes,71–2NorfolkIslanders,102–3,105overseasinterests,56,s19–21,s25,s40taxoffseteligibility,77,80,82,95,s42,s50;seniorAustralians,84,s54
see alsoforeignincome;migrants;non-residents;temporaryresidents
AustralianTaxOffice,seeTaxOfficeAustralianValuationOffice(AVO),58,59Austrianpensions,s21,s34austudypayment,13,23authors,seespecialprofessionalsaveraging,s4,s31awardpayments,17,40–1,53
babybonus,70,95–6electronicfundstransferwanted?,12
baddebts,forgivenessof,30–1balancedtrusts,seetrustsandtrustincomebalancingadjustments,40,s31bankaccounts,seefinancialinstitutionaccountsbankruptcy,66,s2,s3
farmmanagementdeposits,s14spouses,105
barristers’fees,63bed,carersofpeopleconfinedto,s50beneficiarytaxoffset,23,123benefits,seegovernmentpensionsbereavement,seedeathblindpeople,102–3,105
carersof,s50under18yearolds,108
bodycorporatefees,s26bondmoney,s26bonusshares,30–3bonuses,15–17
forbabies,70,95–6;electronicfundstransfer,12exemptincome,13foreignemployment,s22–3lifeinsurancecompaniesandfriendlysocieties, s28,s30
booksandjournals,50,53,56,63bootsandshoes,47–8borrowedcars,46borrowedmoney,seeloansbridgetolls,37,45–6Britishpensions,s21,s33BSBnumber,12buildingsocietyaccounts,seefinancialinstitution
accountsbursariesandscholarships,13,69,70,s30busfares,45–6,50Business and professional items schedule for
individuals 2006,s8,s9,s10,s12,s13businessassociationsubscriptions,53businessestablishmentcosts,s40businessincome,s2–15,s19–20
dependants,69under18yearolds,108see alsolosses
businesskilometres,38,41–4BusinessRegister(ABR),117
Cabfares,45–6capitalexpenditure,s39
projects,s37–8rentalproperties,s27section48-880deductions,s40
capitalgainsandlosses(CGT),s16–18dependants,69listedinvestmentcompany(LIC)amount,56under18exceptednetincome,108
carers,24,69,70,s50exemptincome,13,14see alsodependants;familytaxbenefit
carry-forwardlosses,67,s24carsandmotorvehicles,38–46,50
allowancesandreimbursementofexpenses,17dependants’,70parkingandtollfees,37,45–6asprizes,s30–1
cashmanagementaccounts,56cashmanagementtrusts,seetrustsandtrust
incomecasualjobs,incomefrom,15–17CDEP,23CDs,53Centrelinkpayments,seegovernmentpensions‘centsperkilometre’method,40,41,44,50,70CFCmeasures,s19charitablegiftsanddonations,57–60,63chemists’expenses,s50childcare,50,70
taxrebate,3,93–4,110,129childcarebenefit(CCB),13,69,93,94childsupport(maintenance),68,115,116
exemptincome,14,70familytaxbenefitand,72–3,75liableparent,2
children(under18yearolds),69–83babybonus,70,95–6;electronicfundstransfer wanted?,12financialinstitutionaccounts,29
governmentpensionersandbeneficiaries,13, 23,108ashousekeepers,80–3,101,s45–6,s50–1income,2,72,108,s3;separatenet,69–70,s50maternitypayment/immunisationallowance,14,70medicalexpenses,s50–1Medicarelevy/levysurcharge,100–7superannuationcontributions,s35–7zoneoroverseasforcestaxoffsetfor,s44–7see alsodependants;familytaxbenefit; sharedcare
cleaning,17,47–8,53clothingandaccessories,17,47–8,53
textile,clothingandfootwearspecialallowance,23co-ownershipofcars,39co-ownershipofrentalproperties,s26collectables,seecapitalgainscommissions,15–17
foreignemployment,s22–3topropertyagents,s26
CommonwealthOmbudsman,118Commonwealthpensions,seegovernmentpensionsCommonwealthscholarshipsandbursaries,13,69,
s30Commonwealthsecondaryeducationassistance,13CommonwealthTradeLearningScholarship,13CommunityDevelopmentEmploymentProjects
(CDEP),23communityinfrastructure,creatingorupgrading,
s37–8compactdiscs,53companies
director’sfees,16–17foreign,s19–20non-assessablepayments,s16,s17personalservicesincomeattributedtoyoufrom, 26see alsodividends(distributions)
compensationpayments,15–17,19–22exemptincome,14,70under18yearolds,108see alsoinsurance
complaints,seeobjections/complaintscomposers,seespecialprofessionalscomputerrecords,37computersandsoftware,50,53,56
allocatingtolow-valuepools,54see alsointernet
conduitforeignincome,32conferences,seminarsandworkshops,45–6,53conservationcovenants,59,63
see alsocapitalgainsconstructioncosts
projectpools,s37–8rentalproperties,s27
consularstaff,102–3,105,s22consultants,16–17,s7–8contactlenses,s50contractors,independent,s7–11controlledforeigncompanies,s19cooling,53cosmeticoperations,s50costs,seedeductionscouncils,seelocalgovernmentcoursefees,50courtappeals,63courtjuryattendancefees,16,17creditunionaccounts,seefinancialinstitution
accountscredits,seetaxcreditsculturalgiftsanddonations,57,58–9,63currencyexchange,seeforeignexchangeCycloneLarryorCycloneMonicaincomesupport
payment,23
Dateforlodgment,10–11see alsolatelodgment
defactospouses,seespousesdeathanddeceasedestates,3,12
child,71,96culturalbequests,59farmmanagementdeposits,s14governmentpensions,allowancesandpayments receivedafter,13,24,71,108inheritance,20,59,108;capitalgains,s17spouse,100,101,106,110see alsowidows/widowers
deathbenefitETPs,20–1,22debtdeductions,56,s26,s40
see alsointerestdebtforgiveness,30–1debtowingontax,12,114deceasedestates,seedeathdeclineinvalue,seedepreciatingassetsdeductions(expenses),36–64,s31,s33–41
dependants’separatenetincome,70farmmanagementdepositwithdrawals,s14–15partnershipandtrustdistributions,s4–5
INDEx ThisisacombinedindexcontainingreferencestobothTaxPack 2007andTaxPack 2007 supplement(pagenumbersprecededby‘s’refertothesupplement).
TAXPACK 2007 www.ato.gov.au �33
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EX
rentalincome,s26–7STSannualturnoverand,s56–7
DefenceForcepersonnel,37,s43–9exemptincome,13,14incomesupportallowance(DFISA),13,24Medicarelevy/levysurchargeexemption,102–3, 105MRCAEducationAllowance,13,23see alsoveterans
deferredlosses(earlierincomeyearlosses),65–7capital,s18non-commercialbusiness,s2,s4,s5,s12–13; dependants,70section40-880deductions,s40usedtoreducedforeignsourceincome,s25
demergerdividends,30,31dentalexpenses,s50DepartmentofAgriculture,FisheriesandForestry,s14DepartmentofCommunications,Information
TechnologyandtheArts,59DepartmentofEducation,ScienceandTraining,
IndigenousTutorialAssistanceScheme,s7,s9DepartmentofImmigrationCitizenship,Translating
andInterpretingService,s7,s9DepartmentoftheEnvironmentandWaterResources,59
DepartmentofVeterans’Affairspayments,seeveterans
dependants,69–83,s52ofdeceasedpersons,20,22medicalexpenses,s50–1Medicarelevy/levysurcharge,100–7zoneoroverseasforcestaxoffsets,s44–7see alsochildren;separatenetincome;spouses
depreciatingassets,53,56,s31cars,39–40,42,44low-valuepools,54–5recordretentionperiod,37rentalproperties,s26–7self-educationexpenses,50sitepreparationfor,s37–8STSpooldeductions,s39usedforself-educationpurposes,50
destroyedassets,s31cars,40see alsocapitalgains
destroyedrecords,37DFISA,13,24diaries,53diplomaticstaff,102–3,105,s22directrefunds/debits,12director’sfees,16–17dirtallowances,17disability,peoplewith,7
exemptincome,13,14invalidrelatives,69–70,82,s44,s50–2medicalexpenses,s50–1pensioners,13,24;under18yearolds,108see alsoblindpeople;mentaldisability,peoplewith
disasterrecovery/reliefpayments,13discountsonsharesorrights,s29–30,s31disposalofassets,40
see alsocapitalgainsdividends(distributions),30–3,56,s2–6
dependants’,69employeeshareschemes,s17,s29–30,s31foreign,s20–1,s23–4,s62;withholdingtaxcredit, s3,s6traditionalsecurities,s31,s39see alsocapitalgains;familytrustdistributiontax; trustsandtrustincome
divorce,seemarriagebreakdowndoctors’expenses,s50dogs,s50donations,57–60,63doubleorphanpension,13,108doubletaxationagreements,s21,s22dramatists,seespecialprofessionalsdrycleaning/laundry,17,47–8Dutchpensions,s21,s34DVDs,53
E-tax,6,116earlierincomeyearlosses,seedeferredlossesearlypayments,s62earlyretirementpayments,seeretirementpaymentsearnings,seeincomeearsandhearing,s50educationandtraining,49–51
ageofdependentstudents,69attendanceatconferences,seminarsand workshops,45–6,53familytaxbenefitpaymentsand,71,72IndigenousTutorialAssistanceScheme,s7–11lumpsumpaymentsinarrears,s30,s31,s32qualificationsallowances,17scholarshipsandbursaries,13,69,70,s30schoolbuildingfunds,57,58–60stoppedfull-time,9studentallowancesandpayments,13,23,24studentloansschemes,27,49,50,128–9,s62see alsooverseasstudents
educationentrypayment,24electionexpenses,s31,s39,s41electiontospreaddeductionforgifts,59–60electoralcandidates,seeparliamentarianselectricityconnections,s4,s5electronicfundstransfer(EFT),12
farmmanagementdeposits,s14electroniclodgment(e-tax),6,116electronicrecords,37eligibleterminationpayment(ETP),18–22,24,34,
105,s29,s31dependants,69MedicareLevySurchargeand,105spouse’s,107see also retirementpayments,superannuation andannuitiesembassystaff,102–3,105
emigrants,12,109employeeshareschemes,s17,s29–30,s31employerlettersorstatements,seepayment
summariesemployers
childcareprovidedby,93privatehealthinsuranceprovidedby,91–2
employment,15–22,s7–11foreign,s20–1,s22–4governmentallowancesandpayments,13,14,23matureageworkertaxoffset,124–5,s54–5parentsreturningto,74personalsuperannuationcontributions,s35–7spousesworkingforpartofyear,69under18yearolds,108visaholderswithworkrights,11work-relatedexpenses,36–53workplace-givingprograms,57see alsofringebenefits;retirementpayments;superannuationandannuities
employmententrypayment,13entertainers,seeperformingartistsentertainmentallowances,17entrepreneurstaxoffset,s56–8environmentprotectionactivities
conservationcovenants,59,63,s16landcareoperations,s4,s5,s53projectassessments,s37–8waterconservation,s39waterfacilities,s4,s53
environmentalorganisations,giftsordonationsto,57,58–9,63
equitytrusts,seetrustsandtrustincomeerrors,seemistakesevidence,seepaymentsummaries;recordkeepingex-prisonersofwar,14,70ex-servicepersonnel,seeveterans‘exceptednetincome’,108exceptionalcircumstancesdeclarations,s14exceptionalcircumstancesreliefpayment,23,s44exemptincome,13–14
foreign,s22–3net,65separatenetincome(SNI),69–70spouses,87,88,111
expenses,seedeductionseyesandvision,53,s50
see alsoblindpeople
F-111deseal/resealex-gratialumpsumpayments,13failuretolodgeontimepenalty,11familyadjustedtaxableincome,73Familyagreement,102,103
record-keepingperiod,10FamilyAssistanceOffice(FAO),paymentsfrom,71,
72familyassistanceone-offpayment,14,69familyincome,100–2,115familytaxbenefit(FTB),71–4,115
advicerelatingtoclaims,63consenttousepartoftaxrefundtorepay spouse’sdebt,111electronicfundstransferwanted?,12exemptincome,13,69taxoffsetsand,77–83Withholding declaration(NAT3093–7.2007),27
Family tax benefit (FTB) tax claim 2007,74familytrustdistributiontax,s61
frankingcreditsdonotattachwhenpaid,31whichspousewouldhavetopay,105,111
fares,45–6,50faresallowance,13farmmanagementdepositsorwithdrawals,s14–15farmsupportpayments,13,23,s44farming,seeprimaryproductionfeasibilitystudies,s37–8FEE-HELP,49,50fees,6
deductions,45–6,49–53,56,63,s26; recordkeeping,37income,16–17see alsochildcare
fertilisationtreatment,s50FIFmeasures,s19–20filmindustryinvestments,s33,s41
finaltaxreturn,12financialinstitutionaccounts,29
electronicfundstransferwanted?,12feesandcharges,56,s26
financialinstitutionlotteries,s30–1fire-resistantclothing,47firstaidallowance,17fishing,seeprimaryproductionFLICdeductions,s41foodandmeals,17,45–6,50,53footwear,protective,47–8forcedlabourcompensationpayments,14,70foreignaidfunds,giftsanddonationsto,57,58–60foreignentities,s19–20
superannuationfunds,s19–21,s22–3trusts,s19,s62
foreignexchange(forex),s30,s31,s38losses,s40
foreignexchangerates,s21,s25foreignincome,s19–25
Australianlossesand,66capitalgains,s16conduit,32deductions,s33–4,s40familytaxbenefitand,74,75partnershipsandtrusts,s2–3,s6temporaryresidents,14
foreigninvestmentfunds,s19–20foreignpensionsandannuities,s19–23,s33–4
lumpsuminarrears,s30,s31,s32foreignresidentwithholding,s9–11
dividendincome,31interestincome,29partnershipandtrustincome,s2–3,s6
foreignresidents,seenon-residentsforeignstudents,seeoverseasstudentsforeigntaxcredits,s20,s21,s25forestry,seeprimaryproductionforgivendebts,30–1frankingcredits(imputationsystem),31–3,70,s6
fromNewZealandcompanies,s24–5freedomofinformation,117friendlysocietybonuses,s28,s30friendlysocietyscholarships,s30friends,helppreparingtaxreturnfrom,6fringebenefits,28
adjusted,74exemptcarexpensepayment,17spouses,105,111,s42
FTB,seefamilytaxbenefitfuelandoilcosts,42,44fund-raisingevents,contributionsrelatingto,58–9furnitureandfittings,50,53futureTaxOfficeplans,6futuretaxreturn?,12
Gainsfromforeignexchange,s30,s31,s38fromtraditionalsecurities,s31see alsocapitalgains
gameshowwinnings,s31gaol,peoplein,85,101,s46gardeningexpenses,s26generalinterestcharge(GIC),11,63,s31,s62GermanForcedLabourCompensationProgramme,
14,70Germanpensions,s21,s34gifts,57–60,63
cars,38glasses,53,s50gloves,53goldenhandshakes(ETPs),19–22,105,s29,s31goodsandservicestax,36,63,s31governmentpensions,allowancesandpayments,
12,23–4,111,s31dependants’separatenetincomeand,69–70exemptincome,13–14,87,88,111familytaxbenefitpaymentsand,72,75foreign,s21–2,s30,s33–4lumpsumpaymentsinarrears,s30,s31,s32Medicarelevyexemption,100,102–3,105taxoffsets,23,84–9,100,123–4taxableincomeforlodgingtaxreturns,2under18yearoldrecipients,108zonetaxoffsetreducedby,s44
GovernmentSuperCo-contribution,13,s36grapevines,s4gratuities,16–17GreenCorpstrainingallowance,23grossinterest,29grosspayment,15–16grossed-downfringebenefitsamount,74grossed-upfringebenefitsamount,28groupcertificates,seepaymentsummariesgrowthtrusts,seetrustsandtrustincomeGST,36,63,s31guidedogs,s50
Hardhats,53hardship,114,116health,s50–1
�34 www.ato.gov.au TAXPACK 2007
IND
EX
invalidityretirementpayments,18–22privateinsurance,14,70,91–2,98,104–6protectiveclothingandaccessories,47–8,53sickleave,paymentforunused,19–22sicknessallowance,23,102–3,105see alsoMedicarelevy;sicknessandaccident insurance
healthcarecards,72hearingaids,s50heating,53heavydutyshirtsandtrousers,48heightallowances,17helpservices,7,inside back coverheritage(cultural)
organisations,giftsanddonationsto,57,58–9,63HigherEducationContributionScheme(HECS),s62HigherEducationLoanProgramme(HELP),27,49,
50,128–9,s62hiredvehicles,38–46holdingperiodrule,31–2,s6holidayhomes,s61
see alsocapitalgainsholidayprizes,s30–1homeandcapitalgains,s17homeandeducation,travelbetween,50homeandwork,travelbetween,38,39,50
dependants,70homeofficeexpenses,38,53honoraria,16–17horticulturalplants,s4hospitalexpenses,s50hospitalinsurance,private,14,70,91–2,98,104–6hostelexpenses,s51housekeepers,80–3,101,s45–6,s50–1
see alsodependantshouses,s61
see alsocapitalgains;renthusbands,seespouses
Illness,seehealthimmigrants,seemigrantsimprovementstorentalproperties,s27imputationsystem,seefrankingcreditsimputationtrusts,seetrustsandtrustincomein-vitrofertilisationtreatment,s50income,2–3,13–35,s2–32
children(under18yearolds),2,72,108,s3receivedafterdateofdeath,12see alsoexemptincome;foreignincome; low-incomeearners;separatenetincome; tax-freethresholds;taxableincome
incomebondbonuses,s30incomeprotectioninsurancepremiums,s29,s39–40incomesupportpayments,seegovernment
pensionsincomesupportsupplement,24independentcontractors,s7–11IndigenousTutorialAssistanceScheme,s7–11information,accessto,116–17infrastructure,creatingorupgrading,s37–8infrastructureborrowingsscheme,s29,s39,s59inheritance,59,108
capitalgains,s17deathbenefitETP,20
injuries,compensationfor,14insolvency,seebankruptcyinsurance,15–16,s29
bonuses,s28,s30cars,42,44foreignlifepolicies,s19–20lumpsumpaymentsinarrears,s30,s31,s32premiumcosts,s39–40privatehealth,14,70,91–2,98,104–6rentalproperties,s26
intellectualpropertyrights,s37–8interest,29,69
deductions,56,s40foreignsource,s20–1,s23–4,s62infrastructureborrowings,s29,s39,s59landtransportfacilitiestaxoffsetscheme,s29,s39,s59paidoncars,42,44paidtoTaxOffice,11,63,114,s31,s62rentalpropertyloans,s26TaxOfficegaveorcreditedyouwith,29,s62see alsowithheldtax
interest-free/lowinterestloansasprizes,s30,s31interimincomesupportpayment,23internationalagreements,84,s21,s22internationalaidfunds,giftsanddonationsto,57,
58–60internationalexchange,seeforeignexchangeinternet,56
lodgmentby(e-tax),6,116OfficeofPrivacyCommissioner’swebsite,118TaxOfficewebsite,7
interpretingandtranslatingservices,s7–11invalidrelatives,69–70,s44,s50–2
see alsodependantsinvalidityretirementpayments,18–22invalidityservicepension,13,24inventors,seespecialprofessionals
investment,56inAustralianfilmindustry,s33inforeignentities,s19–25under18yearolds,108see alsocapitalgains;debtdeductions;dividends;rent
investment-relatedlotteries,s30–1isolatedareas,13,s43–9Italianpensions,s34itinerantwork,38–46
Jail,peoplein,85,101,s46Japaneseinternmentcompensationpayments,
14,70jewellery,seecapitalgainsjointfinancialinstitutionaccounts,29,56JointPetroleumDevelopmentArea,workor
servicesin,s59jointlyownedcars,39jointlyownedrentalproperties,s26journals,53,56juryattendancefees,16,17
Labourhirearrangements,independentcontractsunder,s7–11
land,conservationcovenantson,59,63see alsocapitalgains
landtax,s26landtransportfacilitiestaxoffsetscheme,s29,s39,
s59landcareoperations,s4,s5,s53language,literacyandnumeracysupplement,13,69lasereyesurgery,s50lasttaxreturn,12latelodgment,10–11,s62
record-keepingretentionperiodafter,37latepayment,114latepaymentsummaries,11,15laundry,17,47–8lawnmowingexpenses,s26lawyers’fees,63leasedvehicles,38–46leave,lumpsumpaymentsfor,18–22,69legaldisability,105,s3legalexpenses,63legalresponsibilityforchildren,95–6leviestostrikefunds,53libraries,professional,53lifeassurance/insurance,19–22,s28,s30
foreign,s19–20see alsosuperannuationandannuities
lighting,53limbs,artificial,s50liquidatedcompanies,sharesin,s17listedinvestmentcompanies(LICs),seedividends
(distributions)loans
interestpayments,56,s26low-interest/interest-free,s30–1toprivatecompanyshareholders,9,30–1studentschemes,27,49,50,128–9,s62see alsodebtdeductions;interest
localgovernment,s29electionexpenses,s31,s39,s41rates,s26
lodgment,2–6,10–11,112–13,116activitystatements,27,63costs,6,63,s31inthefuture,12record-keepingretentionperiodand,37see alsolatelodgment
‘logbook’method,39,40,43–4,50loneparents,24,74,101,106–7,s46–7longserviceleave,lumpsumpaymentsforunused,
18,69lossofearningspayments,15–16
Veterans’EntitlementsActallowance,14lossofjob,paymentfor,19–22losses,65–8,s9–13
capital,s16–18;madebytemporaryresidents,14foreign,s24foreignexchange,s40netrentalproperty,74partnerships,s2–5,s12–13personalservicesincome,s8,s41recordkeepingperiod,10traditionalsecurities,s39trusts,s2–5see alsodeferredlosses
lostassets,s31cars,40see alsocapitalgains
lostrecords,37paymentsummaries,11,15
lotterybenefitsandprizes,s30–1low-incomeearners,3,100
spouses,superannuationcontributionson behalfof,s42taxoffset,68,123see alsogovernmentpensions;taxableincome
lowratethresholds,21–2
low-valuepools,54–5lumpsumpayments,18–22
inarrears,s3-2;spouse’s,105dependants’separatenetincome,69,70exemptincome,13,14,70foreign,s20–1,s23–4
luxurycars,39–40,41–2
Magazinesandjournals,53,56‘mainresidence’exemption,s17maintenance,14,69
see alsochildsupportmaintenanceandrepairs,seerepairsand
maintenancemaintenanceincome-freearea,75managedfunds,seetrustsandtrustincomemanagementfees,56managingtaxaffairs,6,63,s31marriagebreakdown,2,82
assettransferon,s17see alsomaintenance;sharedcare
marriedspouse,seespousematernityimmunisationallowance,14,70
maternitypayment,14,70matureageallowance,23,84matureageworkertaxoffset,124–5,s54–5meals,17,45–6,50,53medicalexpenses,s50–1Medicarelevy,99–107,110,125–8MedicareLevyExemptionCertificationUnit,102Medicarelevysurcharge,104–7,110,127–8medicine(pharmaceuticals),14,s50membersofparliament,seeparliamentariansmembershipsubscriptions,53mentaldisability,peoplewith,s3
housekeepereligibility,82spouse,82,101,105,s46under18yearolds,108
migrantsdependantsawaitingoverseas,69,s50taxfilenumberapplications,11
migrationoverseas,12,109MilitaryRehabilitationandCompensationAct,14
EducationandTrainingScheme2004,13,23minors,seechildrenmistakes
onpaymentsummaries,15ontaxreturns,113see alsoobjections/complaints
mobilityallowance,14money,seeassetsmoneymarkettrusts,seetrustsandtrustincomeMortgageandRentReliefSchemepayments,14mortgagetrusts,seetrustsandtrustincomemotorvehicles,seecarsmotorcycles,45–6MRCAEducationAllowance,23musicians,seeperformingartists
Netcapitalgain,69,108,s18netcapitallosses,s18netexemptincome,65netfarmmanagementdepositsorwithdrawals,
s14–15netforeignsourceincome,seeforeignincomenetincomefromworking,124–5,s54–5netincomeorlossfrombusiness,s9–11netmedicalexpenses,s50–1netnon-primaryproduction,s5netpersonalservicesincome,s8,s41netprimaryproductiondistribution,s5netrent,s27Netherlandspensions,s21,s34NewEnterpriseIncentiveSchemeallowance,23NewZealandcitizens,71NewZealandcompanies,s24–5Newstartallowance,23non-commercialbusinesslosses,s2,s4,s5,s12–13
dependants,70non-lodgmentadvice,3–4non-primaryproduction,s10,s14
partnerships,s3,s5taxlossesofearlierincomeyears,65,66,67,s12trusts,s4,s5
non-residents,2,121became/stoppedbeing,12,109,120,122capitalgainstax(CGT),s17debtdeductions,56,s40Medicarelevy/levysurchargeexemption,102–3, 105netexemptincome,65overseasdependantswaitingtomigrate,69,s50see alsoforeignentities;foreignresidentwithholding
non-shareequityinterests,31non-slipshoes,47–8NorfolkIslandresidents,102–3,105noticeofassessment,10,115–16
see alsoamendmentofassessmentsnursingexpenses,s50nursinghomeexpenses,s51
TAXPACK 2007 www.ato.gov.au �35
IND
EX
Objections/complaints,114,116,118costsof,63,s31
occupations,15,37clothingandaccessoriesspecificto,47–8,53notreceivingemployersuperannuationsupport, s35–7see alsoprofessionals
odometerrecords,42,43offsets,seetaxoffsetsoffshoreincome,seeforeignincomeoilandfuelcosts,42,44olderAustralians,24
matureageallowance,23,84matureageworkertaxoffset,124–5,s54–5one-offpaymentsto,13,14,69–70seniorsconcessionallowance,14see alsoseniorAustralianstaxoffset;superannuationandannuities
Ombudsman,118one-offAustralianGovernmentpayments,13,14,69one-parentfamilies,24,74,101,106–7,s46–7‘one-thirdofactualexpenses’method,39,40,42,
44,50openemploymentincentivebonus,14operations(surgery),s50optician/optometristexpenses,s50oralhealthexpenses,s50oralrulings,7ornamentaltreesandshrubs,s37–8orthodontistexpenses,s50OS-HELP,49,50otherAustralianpensionsorannuities,see
superannuationandannuitiesotherdeductions,s39–41otherincome,s29–32
spousereceives,105othertaxoffsets,s59otherwork-relatedexpenses,52–3overalls,48overnightbusinesstrips,45–6overseasaidfunds,giftsanddonationsto,57,
58–60overseasdependantswaitingtomigrate,69,s50overseasforces,14,s43–8overseasincome,seeforeignincomeoverseasinterests,56,s19–21,s25,s40overseaslodgment,112–13overseasmove,permanent,12,109overseasresidents,seenon-residentsoverseasstudents,12
exemptincome,13OS-HELPforAustralians,49,50taxfilenumberapplications,11
overseastravellers,11,12,112–13onbusinesstrips,45–6medicalexpenses,s50
overtimemeals,17,53
Panelvans,45–6parentingpayment(partnered),23,69parentingpayment(single),24parents(yours/yourspouses),69,s44,s50–2
see alsochildrenparkingfees,37,45–6parliamentariansandelectoralcandidates,s39,s41
donationsandgiftsto,57–8partownershipofcars,39partownershipofrentalproperties,s26part-timejobs,incomefrom,15–17part-yeartax-freethreshold,109partners,seespouses,partnershipspartnerships,
s2–6,s12–13amendmentperiod,10entrepreneurstaxoffset,s56–8personalservicesincomeattributedtoyoufrom, 26section40-880deductions,s40under18exceptednetincome,108see alsodividends(distributions)
passiveincome,seedividends;rent;royaltiespay,seesalaryorwagespayasyougo(PAYG)instalments,63,s31payasyougo(PAYG)voluntaryagreements,s7–11payasyougo(PAYG)withholding,seewithheldtaxPayer’sAustralianbusinessnumberbox,15,16paymentsummaries,lettersorstatements,15–28,
53,57,110dividend/distributionstatements,30,32,56,s3forETPs,20,21financialinstituteaccountstatements,29,56late,lostorwrong,11,15lumpsumpayments,s30MedicareLevyExemptionCertificationUnit certificate,102personalsuperannuationcontributions,s35privatehealthinsurancestatements,92,98,104record-keepingperiod,10taxfilenumber(TFN)shownon,11travelandawardovertimemealallowancesnot shownon,17
paymentsreceived,seeincomepeacekeepingforces,14,s43–8penalties,11,63,s62pensionereducationsupplement,13pensionertaxoffset,88–9,100,110,123–4pensioners,seegovernmentpensions;
superannuationandannuitiesperformingartists,37,s7–11,s29,s30–1
instrumentsandequipment,38partnershiportrustdistributions,s5
periodicalsandjournals,53,56personalservicesincome,16–17,26,s7–8,s41personalsuperannuationcontributions,s35–7personaluseassets,seecapitalgainspestcontrolexpenses,s26petrolandoilcosts,42,44pharmaceuticalallowances,14pharmaceuticalexpenses,s50phoneallowance,14phoneexpenses,53,s26phonelines,s4phoningTaxOffice,7,117,inside back coverplants,s4,s37–8
see alsoprimaryproductionplaywrights,seespecialprofessionalspolitical(election)expenses,s31,s39,s41politicalparties,donationsandgiftsto,57–8‘post-June1983component’,21powerconnections,s4,s5powerofattorney,6prepaidexpenses,36,s26prescriptionexpenses,s50presents,seegiftsprimaryproduction,s9–11,s39
farmmanagementdepositsorwithdrawals, s14–15farmsupportpayments,13,23,s44partnershipincomederivedfrom,s3,s4,s5sugarindustryexitgrant,14trustincomederivedfrom,s4,s5
primaryproductionlosses,s9–11earlierincomeyears,65,66,67,s12partnershipsandtrusts,s2–5
prioryearlosses,seedeferredlossesprisoner-of-warcompensationpayments,14,70prisoners,85,101,s46privacy,116–17,118privatecompanydistributions,9,30–1privatehealthinsurance,14,70,91–2,98,104–6privatehospitalexpenses,s50privaterulings,7,61,s34prizes,59,s30–1productrulings,7productionassociates,seespecialprofessionalsprofessionalassociationsubscriptions,53professionallibraries,53professionals,s7–11,s29,s30–1
deductions,37,53partnershiportrustdistributions,s5
projectpools,s37–8property,seeassetspropertyagentfeesandcommissions,s26propertytrusts,seetrustsandtrustincomeprotectiveclothingandaccessories,47–8,53PSI,s7–8publichospitalexpenses,s50publictradingtrusts,seedividends(distributions)publictransportfares,45–6,50publications,50,53,56,63
Qualificationsallowances,17qualifyingresidenceexemption,84quizshowprizes,s31
Raffleprizes,s31rates,council,s26ratesoftax,seetaxratesRDOs,paymentforunused,19–22realestate,seecapitalgainsreasonablebenefitlimits(RBLs),19–22rebates,seetaxoffsetsrecordkeeping,10,36–7
employeeshareschemes,s30fringebenefits,28giftsanddonations,57,59–60homeoffices,53‘logbook’method,4330%childcaretaxrebatetransferagreement,94travelexpenses,45–6
recordsinprofessionallibraries,53recreationleave,lumpsumpaymentsforunused,
18,69redundancypayments,seeretirementpaymentsreferencebooks/material,50,53,63refugeequalifyingresidenceexemption,84refunds,12,115–16,s31registeredpoliticalparties,giftsanddonationsto,
57–8registeredtaxagents,6,12,63,114rehabilitationallowance,108relatedpaymentsrule,31–2,s6
relatives,69–70,s44,s50–2helppreparingtaxreturnfrom,6see alsodependants
religiouspractitioners,s35–7remoteareaallowance,14,69,s44remoteareazonetaxoffset,s43–9rent,s26–7
dependants,69familytaxbenefit(FBT)and,74foreign,s20–1,s23–4see alsocapitalgains
rentassistance/relief,14,72repairsandmaintenance,50,53
cars,42,44clothing,47rentalproperties,s26
reportablefringebenefitsamounts,seefringebenefits
Request for a determination of the deductible amount of UPP of an Australian pension or annuity(NAT16544),61
ReserveBankofAustralia,116residences,s61
see alsocapitalgains;rentresidency,seeAustralianresidents;non-residentsresidentialagedcareexpenses,s51retainers,56retirementexemption,smallbusiness,s18retirementpayments18–9,22,24-5,s29,s31
dependants’,70foreign,s20–1,s23–4see alsoeligibleterminationpayments,termination payments,superannuationandannuities
returnedservicespersonnel,seeveteransreturns,seetaxreturnsriskallowances,17roadtolls,37,45–6rolledoverETPs,19,22rostereddaysoff,paymentforunused,19–22royalties,s3,s20–1,s23–4,s30rulings,7,61,s34
Salaryorwages,15–17,69adjustments,108–9AustralianNaval,ArmyorAirForceReserve,14CDEP,23childcaresalarysacrificearrangement,93foreignemployment,s22–3lumpsumpaymentsinarrears,s30,s31,s32monthlylimitforpersonalsuperannuation contribution,s35partnershippaidyou,s2
saleofassets,seecapitalgainssavingsaccount,seefinancialinstitutionaccountsscholarshipsandbursaries,13,69,70,s30schoolbuildingfunds,57,58–60schooling,seeeducationandtrainingsecondjob,traveltoandfrom,39SecondWorldWar,paymentsrelatingto,14,70secondaryeducationassistance,13section40-880deductions,s40securities,seedividendsself-assessment,10self-education,seeeducationandtrainingself-employedpeople,s7–13,s35–7,s40,s56–8seminars,conferencesandworkshops,45–6,53seniorAustralianstaxoffset,84–7,110
calculating,123–4Medicarelevyreductionorexemption,100,101taxreturnlodgment,2,12
seniorsconcessionallowance,14separatenetincome(SNI),69–70,s50,s52
child-housekeepers,80,81,s46housekeepers,82Medicarelevyreductionorexemption,100spouse,77,78,111,s45zoneoroverseasforcestaxoffsetcalculations, s45–6
servicepensioners,seeveteransservicepersonnel,seeDefenceForcepersonnelservices,paymentfor,16–17,26,s7–8,s41servicestransferredtonon-residenttrusts,s19SFSS,128–9,s62sharetrusts,seetrustsandtrustincomesharedcare,71,74,75
taxoffsetcalculations,78,81;example,79zone/overseasforcestaxoffset,s46–7
shares,seecapitalgains,dividendsshirts,48shoesandboots,47–8shorttaxreturn,6shortfallinterestcharge,114,s62shrubsandtrees,s37–8sickleave,paymentforunused,19–22sickness,seehealthsicknessallowance,23,102–3,105sicknessandaccidentinsurance,15–17,s29
lumpsumpaymentsinarrears,s30,s31,s32premiums,s39–40
signingtaxreturns,6deceasedestates,12
�36 www.ato.gov.au TAXPACK 2007
IND
EX
simplifiedtaxsystem,40,52,s39,s56–8recordkeepingperiod,10
singleparents,24,74,101,106–7,s46–7siteallowances,17sitepreparation,s37–8smallshareholderexemption,32smocks,48SNI,seeseparatenetincomesocialsecuritypayments,seegovernmentpensionssoftwareandcomputers,50,53soleparents,24,74,101,106–7,s46–7soletraders,s7–13,s35–7,s40,s56–8solicitors’fees,63specialbenefit,23specialhumanitarianprogramarrivals,84specialprofessionals,s29,s31
netincomeorlossfrombusiness,s10partnershiportrustdistributions,s5personalservicesincome,s8
spectacles,53,s50sportspersons,seespecialprofessionalsspouse(partner),69–70,110–11
babybonustransferees,95childcaretaxrebatetransfers,3,93–4,110familytaxbenefitand,72–3,75,111governmentpensionersorbeneficiaries,2,13, 23–4,69,84,111housekeepertaxoffsetand,82jointfinancialinstitutionaccounts,29,56maintenancepaymentsreceivedby,14,69medicalexpenses,s50–1Medicarelevy/levysurcharge,100–7pensionertaxoffset,88–9,110seniorAustralianstaxoffset,2,85,86–7superannuationcontributionsplitting,s36superannuationcontributionsonbehalfof,s42taxoffset(withoutdependentchildorstudent), 77–9,110,s43,s45zoneoroverseasforcestaxoffsetcomponent, s43,s45see alsodependants
stapledsecurities,s17,s29–30,s31stationery,50,s26Statutory declaration(NAT4135),15steel-cappedboots,48stepchildren,seechildrenstrikefundlevies,53structuralimprovementstorentalproperties,s27STS,seesimplifiedtaxsystemStudentFinancialSupplementScheme(SFSS),27,
128–9,s62studentunionfees,50students,seedependants;educationandtrainingsubscriptions,53,56sugarindustryexitgrant,14sunprotection,47,53SuperCo-contribution,13,s36Superannuation Act 1976pensionsandpayments,
13superannuationandannuities,18–22,25,69,90, s30,s35-7contributions,s35–7;onbehalfofspouse,s42exemptincome,13,14foreign,s19–23,s30,s33–4lastreturn,12lumpsumpaymentsinarrears,s30,s31,s32taxoffset,90under18exceptednetincome,108see alsoundeductedpurchaseprice;governmentpensions,allowancesandpaymentssurgery,s50
Tapes,53targetforeignincome,74,75taxadvice,3,7,63taxagents,6,12,63,114taxassessment,seeassessmentnoticestaxcosts,6,63,s31taxcredits,s62
foreign,s20,s21,s25foreignresidentwithholding,s2–3,s6partnershipsandtrusts,s2–3,s5–6see alsofrankingcredits
taxdebt,12,114taxfilenumber(TFN),11,116,117
amountswithheldbecausenotquoted,29,32, s6;example,33
tax-free(taxdeferred,taxexempted)distributions,s2tax-freethresholds,2,9,12,120
eligibleterminationpayments(ETPs),19part-year,109reportablefringebenefits,28see alsotaxrates;taxableincome
TaxHelp,3taxlosses,seelosses
TaxOffice,7,116–17,118,inside back coverfamilytaxbenefitclaimsfrom,74futureplans,6interestandpenaltiescharged,11,63,114,s31, s62interestreceivedfrom/creditedwith,29lodgmentaddress,112–13
paymentofsuperannuationamountscollected by,19–22shopfronts,131
taxoffsets(rebates),3,76–97,110,123–5,s28, s42–60landtransportfacilitiesborrowings,s29,s39,s59lowincome,68,123Medicarelevyreductionorexemption,100-3;for Medicarelevysurcharge(MLS),105pensionersandbeneficiaries,23,84–9,123–4;Withholding declaration(NAT3093–7.2007),27see alsofrankingcredits;seniorAustralians taxoffset
taxrates,121,122eligibleterminationpayments(ETPs),21–2frankeddividends,32Medicarelevy,100Medicarelevysurcharge,104specialprofessionals,s31TFNwithholding,32usedtogrossupfringebenefits,28
taxrefunds,12,115–16,s31taxreturns,2–12,112–13
mistakeson,113preparing,6,63,s31see alsolodgment
taxwithheld,15–18,23–7ETPpayments,20partnershipsandtrusts,s2–3,s5–6TFN/ABNnotquoted,29,32,63,s5–6,s7–11; example,33see alsoforeignresidentwithholding;taxcredits
taxableincome,2,12,68,110calculatingtaxon,120–2familytaxbenefit(FBT)and,72–5Medicarelevy,100,101Medicarelevysurcharge,104,105–7non-primaryproductionandfarmmanagement deposits,s14seniorAustralianstaxoffset,2,85,86,100,101specialprofessionals,s31
taxableusepercentage,54taxationrulings,7,61,s34taxifares,45–6Taxpayer’s declaration,6technicaljournals,53,56teeth,s50telephoneallowance,14telephoneexpenses,53,s26telephonelines,s4telephoningTaxOffice,7,117,inside back cover
temporaryresidents,14capitalgainstax,s18departingAustraliasuperannuationpayment,19employeeshareschemes,s29–30familytaxbenefiteligibility,71foreignincome,assetsorproperty,s19,s21taxfilenumberapplications,11
termdeposits,29terminationpayments,seeeligibletermination
paymentstextbooks,50,53textile,clothingandfootwearspecialallowance,23TFN,seetaxfilenumbertherapeutictreatment,s50thincapitalisationrules,56,s4030%childcaretaxrebate,3,93–4,110,129TimorSeaJointPetroleumDevelopmentArea
(JPDA),s59tips,16–17tolls,37,45–6tools,38
allowances,17,36totaldeductions,64totalincomeorloss,35totalreportablefringebenefitsamounts,28,105totalsupplementdeductions,s41totalsupplementincomeorloss,s32totalsupplementtaxoffsets,s60totaltaxoffsets,97totaltaxwithheld,27tradeassociationsubscriptions,53TradeLearningScholarships,13trademagazines,53tradeunionfees,53traditionalsecurities,s31,s39train,tramandbusfares,45–6,50training,seeeducationandtrainingTrainingforEmploymentProgramallowance,23transferortrustmeasures,s19translatingandinterpretingservices,s7–11travelandtransport,38–46,70
allowances,17governmentpayments,13forinvestmentmanagementpurposes,56,s26landtransportfacilitiestaxoffsetscheme,s29, s39,s59forself-education,50fortaxadvice,63see alsocars;overseastravellers
treesandshrubs,s37–8
trousers,48trucks,45–6trustees,taxpaidby,105,s3,s6trustsandtrustincome,s2–6
amendmentperiod,10attributedpersonalservices,26dependants,69entrepreneurstaxoffset,s56–8spouse,87,88,105,111transferofproperty/servicestonon-resident,s19ultimatebeneficiarynon-disclosuretaxpaid,31see alsocapitalgains;dividends(distributions)
tutorialservices,s7–11‘12%oforiginalvalue’method,40,41–2,44,50
Ultimatebeneficiarynon-disclosuretax,31undeductedpurchaseprice(UPP),61–2,70
foreignpensionsandannuities,s22,s23,s33–4undeductedtaxlosses,seedeferredlossesunder18yearolds,seechildrenunfrankeddividends,32,33
non-residents,31uniforms,47–8unionfees,50,53unittrusts,seetrustsandtrustincomeUnitedKingdompensions,s21,s33UnitedMedicalProtectionLimited(UMP)support
payments,s41UnitedNationsforces,14,s43–8unusedleave,lumpsumpaymentsfor,18–22,69utilitiesallowance,14utilitytrucks,45–6
Valueofdeductiblegifts,57–60,63vans,45–6vests,safety-coloured,47veterans,24,69–70
exemptincome,13,14,70Medicarelevy/levysurchargeexemption,102–3, 105pensionertaxoffset,88seniorAustralianstaxoffset,84–6see alsogovernmentpensions
Veterans’ChildrenEducationScheme,13,23videos,53vision,53,s50
see alsoblindpeoplevoluntaryagreements,s7–11voluntaryservices,paymentsfor,16–17
Wages,seesalaryorwageswarwidows/widowers,13
pensionertaxoffset,88seniorAustralianstaxoffset,83–6
watercharges,s26waterconservationactivities,s39waterfacilities,s4,s53websites,seeinternetwheelchair,carersofpeopleconfinedto,s50widows/widowers,2,23,24
seniorAustralianstaxoffseteligibility,84see alsogovernmentpensions;warwidows/ widowers
wife,seespouseswinnings,s30–1Withholding declaration(NAT3093–7.2007),27withholdingpayernumber(WPN),15withholdingtaxsee taxwithheldwives,seespouseswork,seeemploymentwork-in-progressamounts,s29,s31work-relatedexpenses,36–53workuniforms,47–8worker’scompensation,seesicknessandaccident
insuranceworkplace-givingprograms,57workshops,seminarsandconferences,45–6,53WorldWarII,paymentsrelatingto,14,70worthlessshares,s17writers,seespecialprofessionalswritingtoTaxOffice,117writtenevidence,seerecordkeepingwrongpaymentsummaries,15wrongfuldismissal,paymentfor,19–22
Youth,seechildrenyouthallowance,13,23
Zonetaxoffset,s43–9
MORE INFORMATIONPUbLICaTIONS (including taxation rulings, practice statements and forms)
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ARABIC
如你不懂英語但需稅務局協助,請致電 131450 翻譯及傳譯服務處(TIS), 翻譯及傳譯服務處的職員可提供超過 120 種語言的傳譯服務。 CHINESE
Ako imate poteškoća s engleskim, a potrebna vam je pomoć od Poreznog ureda, nazovite
Službu prevoditelja i tumača (Translating and Interpreting Service – TIS) na 13 14 50. Osoblje
TIS-a može pružiti pomoć u tumačenju na više od 120 jezika. CROATIAN
) Tax Office(درصورتيکه به لسان انگليسی خوب صحبت کرده نمی توانيد و ضرورت به کمکِ اداره ماليات
می توانند TISموظفين . تيلفون کنيد131450 به نمبر (TIS)تحريری و شفاهی انیداريد، به خدمات ترجم
. لسان کمک کنند120در ترجمانی شفاهی به بيشتر از
DARI
داريد، به خدمات ترجمه ) Tax Office(ه انگليسی خوب صحبت نمی کنيد و نياز به کمکِ اداره ماليات اگر ب
می توانند در ترجمه شفاهی به بيش از TISکارکنان . تلفن کنيد131450 به شماره (TIS)کتبی و شفاهی
. زبان ياری دهند120
FARSI
Αν δεν µιλάτε καλά Αγγλικά και χρειάζεστε βοήθεια από την Εφορία, τηλεφωνήστε στην
Υπηρεσία Μετάφρασης και ∆ιερµηνείας (ΤΙS) στο 13 14 50. Το προσωπικό της TIS µπορεί
να βοηθήσει µε διερµηνεία σε πάνω από 120 γλώσσες. GREEK
Se non parlate bene l’inglese e vi serve aiuto dall’Ufficio delle imposte, telefonate al
Servizio traduzioni e interpreti (TIS) al numero 13 14 50. Il personale del TIS può offrirvi
un servizio interpreti in oltre 120 lingue. ITALIAN
英語でお困りの方で、国税庁のサポートが必要な場合には、翻訳通訳サービス (TIS) 13 14 50 にお電話ください。 TIS では、各種言語との通訳(120 ヶ国語以上)を提供しています。
JAPANESE 영어에 어려움이 있는 분이 국세청으로부터 도움이 필요한 경우, 번역 및 통역
서비스 (TIS) 13 14 50 번으로 전화하십시요. TIS 직원은 120 여개 언어의 통역을
도와 드립니다. KOREAN
Ако не зборувате добро англиски и ви треба помош од Даночната управа,
телефонирајте во Службата за писмено и усмено преведување (Translating and
Interpreting Service - TIS) на 13 14 50. Персоналот од TIS може да помогне со усмено
преведување на над 120 јазици. MACEDONIAN
Если вы не говорите хорошо по-английски и нуждаетесь в помощи Налогового
управления, звоните в Переводческую службу TIS по тел. 13 14 50. Сотрудники TIS
могут помочь с устным переводом более чем на 120 языках. RUSSIAN
Ako ne govorite dobro engleski a potrebna vam je pomo} Poreske uprave, pozovite
Slu`bu za prevo|ewe i tuma~ewe (TIS) na 13 14 50 . Osobqe TIS-a pru`a prevodila~ke
usluge na vi{e od 120 jezika. SERBIAN
Si no habla bien el inglés y necesita ayuda de la Oficina de Impuestos, llame al Servicio
de Traducción e Interpretación (Translating and Interpreting Service - TIS) al 13 14 50. El
personal de TIS puede ayudar con la interpretación en más de 120 idiomas. SPANISH
��������������������������� ���������������������������������������� ����������
������������������� (Translating and Interpreting Service - TIS) ������������ 13 14 50
������������ TIS ������������������������������������� 120 ���� THAI
İyi İngilizce konuşamıyorsanız ve Vergi Dairesi’nden yardıma ihtiyacınız varsa, Yazılı ve
Sözlü Çeviri Servisi’ni (TIS) 13 14 50 numaralı telefondan arayın. TIS görevlileri 120’den
fazla dilde sözlü tercüme yardımında bulunabilirler. TURKISH
Nếu không nói thạo tiếng Anh và cần Sở Thuế giúp đỡ, xin quý vị gọi điện cho Dịch Vụ
Thông Phiên Dịch (TIS) theo số 13 14 50. Nhân viên của TIS có thể làm thông dịch cho
trên 120 ngôn ngữ. VIETNAMESE