1st July 2010
Dear Client,
Happy New Financial Year! We appreciated the opportunity to help prepare your tax return last financial year and once again look forward to preparing and lodging your return for 2010.
Changes to the 2010 Individual Tax Return
The Tax Office has introduced Adjusted Taxable Income to determine eligibility for tax offsets such as Dependent Spouse, Senior Australians, Pensioner and Mature Age Workers. It is also used to determine whether or not you are liable to pay the Medicare Levy Surcharge. Adjusted Taxable Income includes: Taxable Income, reportable employer superannuation Contributions (salary sacrifice superannuation), adjusted fringe benefits, and net financial investment losses (including rental property losses)…..Just to name a few. In a nutshell the ATO are reducing access to tax offsets and increasing liability to Medicare Levy Surcharge where you do not have private hospital cover. We are here to assist you through these changes and make sure you get what you are entitled to.
The Medicare Levy Surcharge threshold has been increased to $73,000 for singles or $146,000 for couples with the threshold increasing by $1,500 for each dependent child; however you need to take your ATI into consideration.
A High Court Ruling now means that if you are receiving Youth Allowance and it is a condition of receiving Youth Allowance that you undertake study you can claim the cost of the education expenses against the allowance income.
Employee Share Schemes are now becoming more streamlined with the determination of whether to pay tax in the year the shares are received or at a later date being determined by the scheme itself rather than by the taxpayer. Please keep all documentation for the Employee Share Scheme when you receive them and all following documentation.
Negative gearing of foreign investment properties is to continue however future capital gains tax applies.
There is also a new 90 day rule for Australian residents working overseas.
Please be aware that the ATO are enforcing penalties for failure to lodge or late lodgment of individual tax returns the fines are $110 per 28 days to a maximum of $550.
There are no automatic tax returns via the ATO with deductions of $500 as was proposed by the Henry Review.
Ongoing Tax Issues
If you are employed and you adjusted taxable income is less than $61,919 and you make a personal contribution to your superannuation fund you are entitled to a co contribution of up to $1000.
If you are claiming motor vehicle expenses under the log book method please remember that a log book lasts for five years or if your pattern of use changes by more than 20% you must complete a new log book. We have log books available at our office in electronic and hard copy version.
If you received a letter from the ATO in relation to claiming expenses please understand it is not an audit and the issues they are looking for are discussed with you by us every year.
The First Home Saver Accounts are continuing, broadly the government will contribute 17% of your personal contributions to the savings account up to a Maximum of $5,000; therefore for every $5,000 you save in the account the government will contribute $850. Any interest on the account will be taxed at maximum of 15% regardless of your marginal tax rate. You will need to ask us about other important aspects of the account.
We look forward to hearing from you soon, to make an appointment for myself or Milorad Pajic please call or email the office. Saturday morning appointments are still available.
As a tax agent I can offer extensions between March 2011 and May 2011, please contact the office for your specific date.
Interactive Tax Consultants has associate practices in financial planning, wealth management, commercial law, mortgage broking, commercial loans and quantity surveyors, so please ask if you require no obligation assistance in any of the areas mentioned.
I have a newsletter for business client coming out at the end of each quarter, if you are not receiving it and would like to please let us know.
We look forward to hearing from you soon!
Best Regards,
Adam Beasley
Principle Tax Agent
Company Director