E-Lodge Tax Blog


How to Qualify for the Australian Family Tax Benefit

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A new addition to the family is both exciting and overwhelming.

Once the “baby daze” subsides, reality begins to kick in. Suddenly, expenses begin to add up and you start to feel as though you’re in over your head. Don’t panic. We’re on your side. That’s why we’re here to discuss the Family Tax Benefit.

 

What exactly is the Family Tax Benefit?

To put it simply, this is a set of payments that is provided to qualifying Australians to help with the costs of having and caring for children. There are two parts to this tax benefit:

  1. Family Tax Benefit Part A
  2. Family Tax Benefit Part B

You must meet different requirements for each. Let’s take a deeper look.

 

Family Tax Benefit Part A Eligibility

The Part A payment is paid for each child but the amount you receive depends on your family and financial situation for that year. You may be eligible for the Family Tax Benefit Part A if you care for a dependent child who is either of the following:

  • 15 years of age or under, or
  • 16 to 19 years of age, and
    • is enrolled in a full time education program or training in an approved course leading towards a year 12 qualification
    • has an acceptable (by ATO guidelines) study load, or
    • Is exempt from education or training requirements

 

It is imperative that you also satisfy an income test (set forth by ATO guidelines), are an Australian resident, and care for the child for at least 35% of the time. Your child must also meet immunisation requirements. They must be:

  • current with their medical immunisations, according to the early childhood vaccination schedule appropriate to your child’s age
  • on a recognised immunisation catch up schedule, or
  • medically exempt from these guidelines

 

QUICK TIP: Do you have a newborn at home? You may also qualify for Newborn Upfront Payment and Newborn Supplement. Newborn Supplement is a component of Part A. It is paid over a span of three months with your regular Part A payment. You can find out more about this by checking out the full list of guidelines HERE.

 

Family Tax Benefit Part B Eligibility

Part B of this tax benefit takes things a step further and provides even more financial assistance to the following people who qualify:

  • Single parents
  • Couples with only one main income flow
  • Non-parent carers (ie: grandparents)

 

If you are a single parent or non-parent carer, you may be eligible for the Part B payment if you care for a child at least 35% of the time and the child is:

  • 16 years old or younger, or
  • a full time secondary student, up until the end of the calendar year in which they turn 18 years old

 

If you are part of a couple with one main income source, you may be eligible for art B if you care for a dependent child 12 years of age or younger at least 35% of the time.

In order to qualify as an “eligible carer” according to the ATO, you must be one of the following:

  • parent
  • guardian
  • foster carer
  • grandparent
  • great grandparent, or
  • another non parent carer

 

If I qualify, how much am I entitled to?

Now that you have a good idea whether or not you are eligible for the full or partial Family Tax Benefit, let’s address how much you’ll be receiving. Since the Family Tax Benefit consists of two different parts, there are two separate payment structures as well.

 

Family Tax Benefit Part A Payment Rates

If you qualify for Part A of the benefit, you’ll receive a base payment per fortnight. To determine your base payment, you will need to consider the following:

  • How many children you are caring for
  • Your annual income

 

You will then use that information to navigate the government table HERE.

To give you an idea of the maximum you could receive, here is a basic Part A table:

pat a family tax benefit structure

 

QUICK TIP: Did you have multiples? You’ll receive $152.88 a fortnight for triplets or $203.56 a fortnight for quadruplets if you qualify for Part A. A separate claim for each child is not necessary under these circumstances.

 

Family Tax Benefit Part B Payment Rates

Unlike Part A, the amount you receive from Part B is usually based on the age of your youngest child. While many other specific factors play a part in determining your actual payment, here is a basic table of the maximum you could receive.

family tax benefit part b

 

How can I report the Family Tax Benefit?

This family tax benefit seems to cause some confusion with the multiple parts and payment tiers. That’s why we’re here to help you out. When lodging your tax with E-Lodge, you’ll have access to tax experts who can answer your questions about this benefit and numerous others that you may qualify for. We’ll steer you in the right direction so that you’ll be on your way to the greatest refund possible.

 

It's easier with E-Lodge!

 

Tax Calculator 2017 FAQ

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Curious about your tax refund 2017? Let’s take a look.

With our Australian Tax Calculator 2017you can see your refund or tax due amount in no time at all. We’ve accumulated the most frequently asked questions about using our calculator to put your mind at ease.

What information will I need to use the E-Lodge tax calculator 2017?

You’ll want to have as much of your tax information on hand as possible, but, if you do not have access to all of the necessary documents, no worries! Our calculator will provide a close estimate with the information you do have. Some of the information that we will prompt you for is included in the list below:

  • Basic household information
  • Centrelink and Retirement
  • Investments and Business Income
  • Health Insurance and Medical Expenses
  • Education Debt
  • Work-related Expenses
  • Charitable Donations

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It’s Not Too Late to Lodge a 2016 Tax Return Online

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Always running late? Stay on time this tax season!

The tax deadline to lodge your 2016 tax return is 31 October. Maybe you’ve been late lodging your tax return in the past but we’re going to help you turn over a new leaf. E-Lodge makes it easy for you since you can lodge your 2016 tax return online, right from the comfort of your own couch!

Let’s discuss a few tips that will make this process as stress-free and simple as possible.

 

Make sure you have your PAYG Summary (and other income documents).

This may seem self explanatory but is easy to overlook sometimes. According to the ATO, employers should have employee PAYG payment summaries issued by 14 July. That being said, you should have your PAYG by mid-July whether or not the withheld amount is nil.

Don’t have yours yet? We can help with that.

There are a few ways to track down your payment summary:

  • Request a copy from your employer
  • Request a letter from your employer which stated your income and amount withheld
  • Review your payslips, timesheets and bank statements

Worst case scenario? You can lodge your tax return without a PAYG. Of course, you’ll need to estimate your income and withholding details as best you can. For help, use the ATO’s tool, gross pay estimator. Read the rest of this entry »

Airport Lounge Membership Tax Deduction

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A businessman walks into a (airport lounge) bar…can he deduct that?

No, this isn’t a riddle and the answer is yes. Generally speaking, an airport lounge club membership can be claimed as a tax deduction.

 

What does the ATO have to say about this?

Funny you should ask. According to the ATO, “The primary function of Airport Lounge Clubs is to provide business facilities and prompt and efficient services relating to the travel of their members.

Now, you may be thinking the initial thought that also popped into my mind…what about the complimentary hors d’oeuvres and bottomless mimosas served to loungers? Don’t worry. It’s no huge secret and the ATO does in fact know what occurs. However, they simply state that this hospitality is ‘merely incidental to the primary function’ of the clubs’ business.  

 

Can the entire membership be deducted?

Taking a flight is not exclusive to business travelers however, it is essential to certain businesses. That being said, you can most certainly use your Qantas or Virgin memberships when you’re vacationing with friends or family too. With that in mind, you should be separating business use from personal, and only deducting the business percentage on your tax return. Read the rest of this entry »

2016 ATO Tax Update: Taxpayer Gender Identifiers

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Australian government takes steps to engage controversy among taxpayers.

When preparing your tax return, you’re more or less relaying the facts of your tax situation for that financial year. However, what happens when some of those facts end up in a grey area?

In recent years, there has been controversy among Australians about gender. Beginning with the hefty pay gaps between men and women in the workplace, a majority of taxpayers already aren’t thrilled with the government.

Well, this takes a step beyond gender equality and hits home with gender identifiers; specifically on birth certificates, toilet stalls, passports, and…you guessed it…tax returns.

 

What’s the real issue here?

According to the Australian Human Rights Commission, “Individuals should be handed the power to decide their gender identity for themselves, without prior approval from doctors and psychologists…”.

This statement hit the nail on the head for those who are going through this thought process themselves or happen to know someone who is. On the flip side, for others, this belief has been chewed up and spit back out. The issue, in general, remains controversial among Australians. However, the ATO (not to mention some other government agencies) has done what they can do to make both parties happy.

 

If you can prove it, you can change it.

When it comes to your tax return, whether you’re a male or female really makes no difference to the ATO. You’re asked for your personal details in order to match what is currently on file, and has been since birth.

The ATO has more recently allowed the option to update your gender. All you need to do is provide a certified copy of one of the following documents:

  • Statement from a registered medical practitioner or a registered psychologist which specifies your preferred gender/sex
  • Valid Australian Government travel document (eg: passport) which specifies your preferred gender/sex
  • State or territory birth certificate which specifies your preferred gender/sex
  • Document from a state or territory Registrar of Births, Deaths and Marriages recognising a change of gender/sex

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ATO’s Dodgy Tax Deduction Crackdown

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If it sounds too good to be true, it usually is.” –Graham Whyte

Tax agents will promise to maximise your refund if you choose to lodge your tax return with them. What you may not realize is that some will encourage you to claim too big of a refund – more than the ATO would deem you entitled to if they were aware of your actual tax situation. This definitely does not mean that they’re all out to get you. Just be wary, and don’t be too shy to ask the questions that you feel you need answers to.

Beginning this tax season, the ATO is really cracking down on certain tax deductions being claimed. If your tax return is “red flagged” by the tax office, the best that could happen is that your processing time is delayed because an ATO representative will need to review it further. The worst that could happen, in circumstances where a taxpayer has deliberately claimed an incorrect amount, is that an investigation could begin and you could be liable for multiple penalties.

 

Three Golden Rules to remember when claiming tax deductions.

Whether it’s a manual, e-book, or by word of mouth, there are a set of rules for almost everything. This even includes something that seems as simple as reporting tax deductions. When doing so, be sure to take into account these three rules of thumb:

  1. Make sure the expenses you claim have actually been incurred.
  2. Ensure that your expenses are 100% work-related.
  3. Keep the receipts to prove the claims are for valid expenses.

 

Let’s discuss some of the dodgy ones…

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How to Claim the Capital Works Deduction

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The ATO rewards you for making houses into homes for your renters.

Being a property owner comes with risks, but also reaps rewards. I’m not just talking holiday gift certificates and bottles of wine from your tenants. You can actually claim a tax deduction for the maintenance and care you put into your property that you work so hard on.

The Australian Tax Office offers property investors the capital works tax deduction to claim. Think of this as a reward for all the blood, sweat and tears you put into your investment. Now, let’s see how much it’s worth, how to claim it, and what it applies to.

 

What is a capital works deduction?

The capital works deduction, aka the “building allowance”, are one and the same. Whatever you’d prefer to call it, it’s applied to your tax return as a deduction, as well as a reduction of the cost basis on the property or building in question. It will offset the cost of any construction you’ve done that assists with bringing in rental income.

Updates to your property that could apply to this tax deduction include, but aren’t limited to:

  • Building expansions
  • Building alterations
  • Concrete and brickwork
  • Property items (excluding equipment and plant, meaning certain utility items)
  • Sealed driveways
  • Excavation
  • Fences
  • Retaining walls
  • Other structural improvements

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Backpacker’s Guide to Australian Tax

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You’re a backpacker. That puts you somewhere between a tourist and a…resident?

Actually, yes. The Australian Tax Office may consider you an Australian resident for tax purposes under certain circumstances. As a backpacker, there are some other things you should know as well that could affect your tax return. We know you’re out and about so let’s not waste time getting down to the most frequently asked questions.

 

Are you a resident for tax purposes?

This sounds like a trick question. You don’t have a permanent residence here. Your family doesn’t necessarily live here. You left your dog with your mom when you came here. However, when it comes to taxes, residency is based on what you do while you’re touring the country. As a resident, you are able to lodge a tax return and claim tax back. If you are deemed a nonresident, then you are not eligible for a refund.

Generally speaking, the ATO considers you a resident for tax purposes if ANY of the following applies:

  • You have always lived in Australia.
  • You moved to Australia and live here permanently.
  • You have been in Australia for at least six months, and for most of the time, you have been working the same job and living at the same place.
  • You have been in Australia for more than half of the financial year, unless your usual home is overseas and you do not intend to live in Australia.

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6 Things To Know About Your Super Fund

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Super young or super old – it’s important to know how your Super works.

Whether your Super Fund has been up and running for years or you just started learning the ropes, we’ll let you in on a few rules you should know.

 

Know that there is a Superannuation Guarantee.

Employers are typically required to contribute to your Super Fund at a rate of 9.5% of your ordinary time earnings*. It’s even been rumored that this rate will increase to 12% in upcoming years.

*Ordinary time earnings are what what employees earn for their ordinary hours of work. These include over-award payments, commissions, shift loading, and certain bonuses and allowances. Overtime is not considered part of ordinary time earnings.

 

Know that there are two types of Super contributions.

Concessional Contributions are payments made to your Super prior to your income tax being taken out. These contributions are taxed at a flat rate of 15% once they enter your Super fund and include:

  • Employer contributions
  • Salary sacrificed contributions
  • Other contributions in which you have claimed a tax deduction

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What are the Australian Financial Year Dates?

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Mark your calendar. The Australian Financial Year Runs from 1 July to 30 June.

The Australian financial year dates can easily be confused with the Australian tax season dates. The financial year always ends on 30 June.

It’s good to keep in mind that during the Australian tax season, you’ll report the income you earned throughout the financial year.

Still confused? Unsure of the dates? We’re here to help.

Financial Year & Tax Season Dates

Here’s what you’ll need to know…

2013-2014 Financial Year: 1 July, 2013 – 30 June, 2014

2014-2015 Financial Year: 1 July, 2014 – 30 June, 2015

2015-2016 Financial Year: 1 July, 2015 – 30 June, 2016

2016-2017 Financial Year: 1 July, 2016 – 30 June, 2017

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