My Tax Zone - TAX BLOG

ATO Campaign on Tradies and "Cash Economy"

2012-02-17T10:10:00.000+10:00

For some time now the ATO has been monitoring certain industries using "benchmarks" on income and expenses establised over the past few years.

As a accountant/tax agent, we have been informing clients of ATO expectations. Now, it seems, they are ready to strike.

In today's Courier Mail, the ATO annunced: "TENS of thousands of trades-people across the country could soon face tax audits after the Australian Taxation Office launched its biggest-ever crackdown on accountants and tax agents operating in the cash economy."

Tradies are not the only target. Any business operating in the "cash economy", including takaway shops and restaurants, may be at risk.

From my own experience, many small businesses have been doing it tough since the GFC, resulting in lower incomes and in some cases higher costs. In any case, if the figures included in tax returns can be properly substantiated, there should be no problem.

We had a case recently where a water business was traveling under benchmark income figures purely because of rain fall in South East Queensland over the last couple of summer seasons. Because the business operator kept detailed records, the ATO satisfied itself that all was above board.

If you fit the profile of under performing compared to benchmark figures, in all likelyhood you would have received a relevant letter from the ATO with all the appropriate warnings. If so you should be well prepared.

Queensland $10000 Building Boost - Extended Dates

2012-01-16T14:16:00.001+10:00

On Saturday the Queensland Government extended the $10,000 Building Boost (new construction only) until the end of April.

This grant is available to all investors regardless of whether they live in Queensland or not or whether the property is owner-occupyer or investor - ie, it applies to anyone who purchases a new property in the state.

To confirm requirements please follow the QLD Governmet link: http://boost.treasury.qld.gov.au/

Car, Truck & Equipment Finance

2012-01-16T11:47:00.001+10:00

Try our NEW finance service - No Financials required!

Finance available for car, truck and equipment purchases - business or private.

If you are a business / ABN holder, you can access our NEW finance product to purchase a car or equipment at low rates and no financials required.

What sets our loan offering apart from the competition is access to specialised Bank & Non-Bank products , allowing us to offer you the Best finance packages at the Lowest Rates.

Apart from GUARANTEED low rate car and equipment loans, we know how to structure loans to optimise tax savings.

Rates as follows:

No Financials finance available for ABN holders - fixed 6.59%

Call David or Elizabeth on 07 32083888.

or

Online Enquiry

David Maynard
My Tax Zone

Free Lost $uper $earch

2011-10-11T11:21:00.002+10:00

There is approximately $13.6 Billion in lost super.

Have you?

Changed jobs in the last ten years
Had more than one job
Changed address
Changed names

1 in 2 Australians have unclaimed super

We can help you find your lost super and assist to consolidate all of your accounts into one, easy to manage fund.

Contact our office on 07 32083888

email: admin@mytaxzone.com.au.

Ask for Christian Tapia.

Education Tax Refund - FAQ

2011-07-26T16:49:00.002+10:00

If you are looking for information on the ATO web site it can be difficuct to find. Here is a link to information on Education Tax refund - Frequently Asked Questions:

==> Education Tax refund - Frequently Asked Questions

It answeres question like:

who is eligible for Education Tax Refund
what if the grandparents purchase a computer for ?your kids?
what is the schooling requirement?
what are eligible expenses?

Medicare Levy Surcharge 2011

2011-06-28T12:56:00.002+10:00

The Medicare Levy Surcharge of 1% still applies to taxable income.

You are exempt from the surcharge if you have private hospital cover for 365 days. If number of days is less than 365 days the surcharge is portioned on number of days you had private hospital cover (this information is available from the statement issued by the fund).

Where you are not exempt from the Medicare Levy Surcharge, the margin of income applicable to Medicare Levy Surcharge 2011 has changed as follows:

Single - Your income for MLS purposes was $77,000 or less, and for the whole of 2010–11, you were single without a dependent child.
You were single with a dependent child and your income for MLS purposes was $154,000 or less (plus $1,500 for each dependent child after the first).
Part of year single - Your income for MLS purposes was $154,000 or less, and: for part of 2010–11 you were single; your spouse did not die during the year, and for the whole of the year you did not have a dependent child.
Married - You had a spouse (with or without dependent children), and your combined income for MLS purposes was $154,000 or less (plus $1,500 for each dependent child after the first).

Education Tax Refund 2011

2011-06-23T14:02:00.002+10:00

You can claim the Education Tax Refund (ETR) each financial year for a child who meets the schooling requirement.

You can claim 50% of eligible education expenses up to the maximum amounts. For the 2010–11 financial year, the maximum amounts are:

$794 for each primary school child. You can claim a maximum refund of $397 for each primary school child you have, and
$1,588 for each secondary school child. You can claim a maximum refund of $794 for each secondary school child.

If you care for a child full time and are eligible to claim the ETR, you can claim the full maximum claimable amounts for each of your children who meet the schooling requirement.

Shared care:
If you share care of a child, the amount you can claim under the ETR depends on your share of the shared care percentage for Family Tax Benefit (FTB) Part A for that child.

If you share the care of a child with someone who is not your current partner and a payment was made for that child that prevented you receiving FTB Part A, you will need to calculate your ETR based on the percentage of nights during the year that the child was in your care.

Helpful links:

==> Items that can be claimed

==> Independent primary or secondary student

==> ETR calculator

==> FAQ's

Etax Prefill - 2011 Tax App

2011-06-20T11:34:00.002+10:00

Many of our clients have encounted problems with the ATO's etax service. That's why we developed our own online tax return app - EzTax.com.au.

Just like etax, our online tax app has built-in checks calculators to help you ensure your return is as accurate as possible. And EzTax returns are usually processed within 14 days.

Our internal systems allow us to check the ATO pre-fill reports to make sure all income and relevant information is included in your 2011 etax tax return. Pre-filling makes it easier for you to meet your tax obligations and claim your entitlements.

All our clients tell us the same thing - "EzTax.com.au is really easy to use."

What Tax Records Should I Keep

2011-06-16T22:49:00.000+10:00

In order to accurately complete your tax return you need to keep good records. Generally you must keep written evidence for five years. Some examples of records you should keep include:

payments you received, such as salary, share dividends, pension or bank interest
tax deductable gifts or donations
medical expenses
expenses related to income you received, such as work-related or rental property expenses
buying or selling assets such as rental properties shares or collectables.

Study Expense Deductions for Youth Allowance Recipients

2011-06-16T19:20:00.001+10:00

A recent High Court decision means you can also claim a deduction for study expenses this year if you received Youth allowance, Austudy or ABSTUDY. See question D4 for more information and our website http://www.ato.gov.au/studyexpensechanges

You are eligible for a deduction for each year you lodged a tax return if:

you received Austudy, ABSTUDY or Youth allowance to study and included the allowance as income in your tax return
you incurred study expenses, and
you did not claim a deduction for these expenses.

NOTE: Youth allowance paid to 16-20 year olds when they are looking for work or undertaking approved employment-related activities is not included.

Study expenses you may be able to claim include:

the cost of text books
home study expenses
the decline in value of your computer (you can only claim the study-related proportion, not the proportion used for private purposes).

NOTE: You cannot claim contributions you, or the Australian Government, make under HECS-HELP or repayments you make under the Higher Education Loan Program (HELP) or the Student Financial Supplement Scheme (SFSS).

Tax Deductions for Newstart and Youth Allowance Recipients

2011-06-16T19:11:00.000+10:00

Changes apply from the 2011 tax time for Newstart and youth allowance recipients who were actively seeking paid work.

A recent High Court decision means you can claim deductions this year for expenses you incurred in actively seeking paid work if you received Newstart allowance or were a Youth allowance job seeker. You must have records to support your claim.

You can claim:

expenses you incurred in meeting the requirements of your Employment Pathway Plan
short-term travel costs, such as travel to job interviews
training courses, including self-employment training and assistance, and text books
phone calls you made seeking paid work, and
résumé preparation.

You cannot claim expenses:

that relate to seeking employment in only a general way (for example, conventional clothing)
that are of a private or domestic nature (for example, conventional clothing, grooming and meals), or
paid for by your Job Services Australia provider.

Occupations Targeted by ATO During Tax Time 2011

2011-06-16T19:02:00.002+10:00

Statement by Tax Commissioner Michael D'Ascenzo in Media release dated 14 June 2011:

"This year the ATO will be paying close attention to deductions made by people employed as earthmovers, flight attendants, carpenters and joiners (including apprentices and trainees), and real estate employees," Mr D'Ascenzo said.

"We have found people in these industries are at higher risk of getting their work-related expense claims wrong due to the types of deductions they are entitled to claim such as motor vehicle and travel expenses.

"In the lead up to 1 July we are writing to around 116,000 people employed in these industries about assistance that is available from the ATO, including new guides developed specifically for these occupations to ensure they get their claims right this tax time."

Flood Levy for (2011-2012 only)

2011-06-16T18:55:00.004+10:00

Who will have to pay the flood levy?

Remember, the temporary Flood levy applies for the 2011-2012 year only.

Individual taxpayers, who have a taxable income over $50,000 in the 2011-12 financial year will have to pay the flood levy. This includes foreign residents who have Australian income.

Note: Certain people affected by natural disasters will not pay the flood levy regardless of whether their taxable income is under or over $50,000. There are special rules to work out who is exempt .

How much will you pay and how?

Taxable income	Flood levy on this income
$0 to $50,000	Nil
$50,001 to $100,000	Half a cent for each $1 over $50,000
Over $100,000	$250 plus 1c for each $1 over $100,000

Employers will need to include the Flood Levy in their payroll systems.

Tax Return Estimate 2011

2011-06-15T09:04:00.002+10:00

You can see what your 2011 tax refund will be using our new 2011 online simple tax refund calculator tool:

==> 2010 Tax Refund Calculator

The calculator is based on a single person income and includes Medicare levy and Medicare Levy surcharge where it applies. It does not allow for deductions and other tax offsets. If you have Deductions and/or are entitled to various tax offsets (eg. Education Tax Refund), please use our comprehensive tax refund calculator at EzTax .

Don't forget to check out our Tax Deduction Finder. It may help increase you 2011 tax refund.

ATO eTax 2011 Download

2011-06-15T08:07:00.016+10:00

In early July 2011 the ATO will make their 2011 version of etax available for download (see link at bottom of page below).

Changes for 2011 tax return:

Remember: Flood Levy (2011-2011 year only)

Good news first - We continue to update our knowledge base/tax blog, offering effective tax tips both for now and over the next tax year. Here are a couple of samples that will help you get the best tax refund possible and be informed of relevant tax changes:

Tax deduction finder for my job - locate 32 occupation specific tax deduction summaries;
Education Tax Refund 2011 - updates on rates and tips;
Tax rates 2011 - tax rates and tables;
Paid Parental Leave- Fact sheet on introduction on 1 January 2011
Tax Refund Calculator - simple tax refund calculator

New tax deductions for 2011:

New items on tax return forms - Last year there were quite a few NEW items on the tax return form which caused problems for many self preparers. The changes included income tests used to work out some tax offsets, deductions and the Medicare levy surcharge. These changes could increase the amount of tax and Medicare levy surcharge you have to pay in 2009-10 and reduce the amount of Spouse tax Offset, Senior Australians Tax Offset and Pensioner Tax Offset. They will also affect the 2011 tax return.

You may be affected by the changed income tests if:

you pay child support
your employer has made extra super contributions for you such as salary sacrifice super contributions – these are called reportable employer super contributions
you have rental properties, and the deductions you will claim exceed the income you have derived from them
you have financial investments and the deductions you will claim exceed the income you have derived from them.

Now that the income tests include these additional amounts, your income may be above the existing income thresholds. This means that you may:

no longer qualify for certain tax offsets or you may only qualify for a reduced amount
no longer qualify for super co-contributions or personal super contribution deductions
be liable for the Medicare levy surcharge
be required to pay more of your Higher Education Loan Program or Student Financial Supplement Scheme debt.

See this post for more details on Adjusted Taxable Income==> What Is Adjusted Taxable Income (ATI)

We'd love to help you get the best possible tax refund. We can do that when you use our online tax return resources.

Our 2011 online tax return system is functioning NOW. See you at our online tax return site.

Here is a link to the ATO site for etax 2011 download.

Tax Refund Calculator

2011-06-07T09:57:00.016+10:00

You can see what your 2011 tax refund will be using this tax refund calculator tool:

==> 2011 Tax Refund Calculator

This is a simple tax refund calculator - ie. it does not take into account deductions and tax offsets.

What if:

you have allowable deductions?
you are eligible for Education Tax Refund?
you have Centrelink income?
you are entitled to low income tax offset?
you are entitled to a reduction in Medicare Levy?
you are not required to pay Medicare Levy Surcharge?

For a comprehensive tax refund calucator, please use our online tax return system - EzTax.

Tax Return Calculator 2011

2011-06-03T13:02:00.007+10:00

For some people TAX TIME is a time of fear or anxiety. But for many, tax time is a once-a-year cash grab – the annual TAX REFUND.

People get refunds for all sorts of reasons – didn’t work the full year, sizable tax deductions relating to work activities and for many, the annual Family Tax Benefit (FTB) top-up based on the annual income submitted with the tax return.

From my (nearly) thirty years experience, what ever the reason for the tax refund, I find clients are having their tax returns prepared earlier each year in order to access the cash from their tax refund.

I also know from the pattern of usage of our online sites that clients start searching for tax tips as early as May, increasing through June and exploding in July.

So, here are some tips to help with your tax refund 2011:

1. Know your industry

Knowing your industry and what you can claim as a tax deduction can result in substantial tax deductions, which flows onto a tax refund.

For example, many workers receive a “meal allowance” of $12, paid as a result of working a certain number of overtime hours. Not all of those workers are aware they are able to claim a deduction of $24.95 (eligible amount for 2010 tax year) against that allowance. If a large number of overtime hours are worked throughout the year, that can amount to a substantial deduction.

We have included details of allowable deductions for 32 occupations on our website – check it out here:

TaxDeduction Finder for Occupations

2. Tax Offsets

There are a number of tax offsets that taxpayers may be entitled to. Some are automatically allocated/calculated by the ATO (eg. Low Income Tax Offset, Beneficiary Tax Offset) and some must be identified on the tax return.

Here is a little list of common Tax Offsets that may apply to you:

Education Tax Refund - for 2012 is still limited to computers, internet, books and stationery. Addiitional items allowed for the 2012 financial year;
Medical Expenses – threshold has been raised this year from $1500 to $2000. The rebate of 20% applies to the excess over that limit;
Spouse (phasing out announced in the 2011 Budget) – eligibility requires non-receipt of FTB and is income tested;
Senior Australian – must receive Age pension or Service pension to be eligible;
Pensioner – some Centrelink recipients (like Parenting Payment Single or Carers Pension) are entitled and is income tested;
Private Health Insurance – where policy holder does not receive the governments 30% rebate as a reduction in premiums;
Zone or Overseas Forces – applies if you lived or served in certain locations throughout the year. Some conditions apply.

Whilst there are other Tax Offsets available, these are the most common for working Australians.

3. Prepayments

There are opportunities for people to prepay tax-deductible expenses before July 1. One of the biggest is interest on investment loans.

This may be useful if you are a property investor and share market investor and you borrow money on margin loans or home equity loans to fund the investment.

If this applies to you you can find some information on this topic in my ebook on taxation and property explained.

4. Timing of transactions and events

If you own property or shares and are considering selling, timing and planning can make a big difference. For example, if CGT assets are held longer than one ear there is a 50% discount on a CGT profit. Another issue relating to property is that CGT is calculated on date of contracts – not date of settlement.

So holding assets to optimise CGT discounts or deferring a transaction, where possible, can save tax.

5. Superannuation and SMSF

Superannuation and Self Managed Superannuation Funds (SMSF) is an area where all taxpayers, whether a wager earner or self employed, can obtain substantial tax savings.

Some years ago I had one client who saved almost $80,000 tax per year. Granted, not all taxpayers profiles will achieve that kind of tax savings, but suffice to say that many of them can make significant tax savings.

However, taxpayers need to get the right advice from the right people with the right strategies. I believe tax advice, together with investment planning advice from our preferred financial advisor, can achieve success for all our clients – YES, unless you DIY a SMSF (which I wouldn’t recommend) you do need a financial planner.

6. Super for you Spouse

Not many taxpayers are aware that a tax offset of $540 (tax credit) is available if they make a super contribution on behalf of their spouse if the spouse earns less than $13,800 (below age 65).

7. Debt Recycling

Debt recycling is a long-term strategy but, depending on circumstances, can result in major tax savings.

Debt recycling involves converting non-deductible debt to deductible debt – for example, your personal or mortgage debt into investment debt. An example would be selling shares held by you without borrowing attached, using the funds to reduce the home mortgage, then using the equity in the home via a separate investment loan to buy shares using borrowed funds.

8. THERE'S MORE!

There are many more tax deductions and tax offsets that may apply to individuals so obtaining the right information and advice can impact directly on your 2011 tax refund.

That’s why we built and recommend using our online tax app. It provides a comprehensive tax calculation for most working Australians and, for a small fee, we look after the preparation and lodgement of your 2011 tax return.

We would live to help you get the best possible tax refund. Give it a try. It’s FREE to get started:

EzTax - 2011 tax return calculation / prepartion

Changes to Car FBT Statutory Rates - Budget 2011

2011-05-26T07:20:00.030+10:00

Good nes for Australian families!

In the 2011 Federal Budget, the government changed the statutory formula method for determining the taxable value of car fringe benefits by replacing the current statutory rates with a single rate of 20% that applies regardless of the distance travelled.

The changes apply to NEW contracts entered into after 7.30pm (AEST) on Monday 10 May 2011, and will be phased in over four years. There are no changes to novated leases entered into prior to this time.

For novated leases entered into after 10 May 2011 the following statutory formula transitional rates apply:

		New contracts entered into after 7.30pm (AEST) on 10 May 2011
Distance travelled during the FBT yr	Existing Contracts	From 10 May 2011	From 1 Apr 2012	From 1 Apr 2013	From 1 Apr 2014
< 15,000 km	26%	20%	20%	20%	20%
15,000-24,999km	20%	20%	20%	20%	20%
25,000-40,000km	11%	14%	17%	20%	20%
> 40,000km	7%	10%	13%	17%	20%

These changes make the family car one of the most effective tax savings available to employees and will drive novated leasing as the cheapest and most effective car ownership option for most Australian families.

Key benefits:

Retains current benefit for all existing novated leases
Allows all Australian employees to access tax benefits regardless of how far they travel each year
Simplifies the calculation and administration of FBT for employers which will allow a broader pool of employees to be able to benefit from vehicle salary Packaging
Makes the packakging of additional family cars travelling low kilometres attractive (eg. spouse or univiersity student)
Provies freedom fo explore alternate ways to travel to work including carpooling and the use of public transport.

Related posts:

==> What is a novated lease

==> Tax implications of novated lease

Medicare Levy Surcharge Income Margins 2011

2011-05-23T16:36:00.000+10:00

Single - Your income for MLS purposes was $77,000 or less, and for the whole of 2010–11, you were single without a dependent child.
You were single with a dependent child and your income for MLS purposes was $154,000 or less (plus $1,500 for each dependent child after the first).
Part of year single - Your income for MLS purposes was $154,000 or less, and: for part of 2010–11 you were single; your spouse did not die during the year, and for the whole of the year you did not have a dependent child.
Married - You had a spouse (with or without dependent children), and your combined income for MLS purposes was $154,000 or less (plus $1,500 for each dependent child after the first).

Federal Budget 2011-12 and Changes for Business

2011-05-14T13:50:00.001+10:00

The 2011-12 federal budget made a couple of significant changes.

Scale back of FBT concessions on company cars

The Government proposes changes to fringe benefits tax, which are intended to remove the current incentive for people to drive salary‑sacrificed and employer‑provided cars and to increase their tax concession. The measure is set to replace the current 'statutory formula' method for determining the taxable value of car fringe benefits by replacing the statutory rates with a single flat rate of 20 per cent that applies regardless of the distance travelled. This measure will apply to new arrangements entered into after 7:30pm (AEST) on 10 May 2011, and will be phased in over four years.

Under the statutory formula method, the calculated car fringe benefit decreases as the distance travelled by the car increases. This encourages people to drive their vehicle

Abolishing the Entrepreneurs' Tax Offset

The Entrepreneurs’ Tax Offset will be abolished with effect from the 2012‑13 income year.

This does not represent a big tax saving for small businesses but they all add up.

Accelerated initial depreciation deduction for motor vehicles

Small businesses will be allowed to claim up to $5,000 as an immediate deduction for motor vehicles acquired from the 2012‑13 income year. The remainder of the motor vehicle value will be pooled in the general small business pool (depreciated at 15% in the first year and then 30% in later years.

Federal Budget 2011-12 and Tax Changes

2011-05-14T13:36:00.002+10:00

On the surface, the 2011-12 budget didn't make significant changes. However, as usual, the fine print revealed some nasties.

Phasing out of dependent spouse offset

The first nasty is the phasing out of the Dependent Spouse Tax Offset for taxpayers with a dependent spouse born on or after 1 July 1971. This could reduce a refund by up to $2300. This measure is set to eliminate one of the barriers to workforce participation by gradually removing the tax concession for taxpayers with a non‑working spouse and no children.

Taxpayers with an invalid or permanently disabled spouse, supporting a carer, or people who are eligible for the zone, overseas forces and overseas civilian tax offsets will not be affected by this change.

Removing minors' eligibility for low income tax offset on unearned income

The second nasty is the Government will remove access to the Low Income Tax Offset (LITO) for unearned income of minors, effective from 1 July 2011.

The measure will discourage high income earners allocating their income to children under 18 years of age. The removal of this access to LITO will only impact unearned income such as dividends, interest, rent, royalties, income from property and trust distribution to minors.

Children under 18 will continue to be able to use the LITO to reduce income tax on their employment income. Unearned income of minors who are orphans or disabled, as well as compensation payments and inheritances received by minors, will not be affected by this measure.

This measure will have a significant impact on tax outcomes for affected taxpayers, adding around $1000 tax for each dependent child eligible for distributions from trusts etc.

Other than this the budget was fairly bland.

Tax Rates for 2011-12

For example, the tax rate remains the same as 2010-11:

Taxable income	Tax on this income
0 - $6,000	Nil
$6,001 - $37,000	15c for each $1 over $6,000
$37,001 - $80,000	$4,650 plus 30c for each $1 over $37,000
$80,001 - $180,000	$17,550 plus 37c for each $1 over $80,000
$180,001 and over	$54,550 plus 45c for each $1 over $180,000

Increasing the Medicare levy low-income thresholds

With retrospective effect from 1 July 2010, the Medicare levy low-income thresholds will increase to $18,839 for individuals and $31,789 for families.

The additional amount of threshold for each dependent child or student will also increase to $2,919.

Also effective from 1 July 2010, the Medicare levy threshold for single pensioners below Age Pension age will increase to $30,439.

Medicare levy surcharge thresholds for 2011/12

For the 2011/12 income tax year, the income tax thresholds for Medicare Levy Surcharge will be:

$80,000 single surcharge threshold
$160,000 family surcharge threshold (increases by $1,500 for each dependant child after the first)

Note ==> private hospital cover will negate this surcharge.

Additional expenses eligible for Education Tax Refund

The Education Tax Refund entitles eligible parents, carers, legal guardians and independent students to a tax refund upon incurring certain expenses. Currently, these expenses include computers, educational software, textbooks and other items. The Government is proposing to extend the definition of eligible expenses to include school uniforms. This measure will apply from 1 July 2011.

Novated Lease

2011-04-20T08:36:00.005+10:00

Many people utilise salary packaging options to minimise tax. A very common option when using this strategy with motor vehicle fringe beenefits is a Novated Lease.

Novated lease
Simply put, a novated lease is a finance arrangement between a full-time employee, the employer and a motor vehicle finance provider where:

the employee is the lease holder and owner of the vehicle and
the employer has a legal obligation to pay the lease payments out of the employee's pre-tax wage.

Depending on the finance provider, running costs like petrol, repairs and servicing, insurance etc can also be rolled into the finance arrangement.It is important to note that on a subsequent termination of employment, all obligations under the lease (including lease payment obligation) will normally then revert back to the employee.

Types of Novated Lease arrangements
There are two types of novated lease:

Full novation lease- under a full novation arrangement, the employer is responsible for making the lease payments and guaranteeing the residual value of the vehicle at the end of the lease.
Split fill novation lease- under a split full novation arrangement, the employer is responsible for making the lease payments but is not responsible for guaranteeing the residual value of the vehicle at the end of the lease. The employee retains this obligation.

Benefits to the employee

Income tax savings - the related car expenses are paid from your pre-tax income. That means your taxable income is lower resulting in less income tax you have to pay.
Free GST - your employer claims back most of the GST on purchase of the vehicle on your behalf.
Budget your money - when combined with running costs, the Novated Lease payment is fixed for the duration of the lease arrengement which helps maintain a steady cash flow.
Tax Free Profit - at the end of the lease, if you sell your vehicle and make a profit, this profit is tax free.

Benefits for the employer

No or minimal additional costs - It is an effective method to increase an employees’ salaries with no or minimal cost to the employer.
Effective management - where the running costs of the vehicle are rolled into the Novated Lease arrangement, it is potentially a cost effective choice to operate a fleet of company vehicles that are owned by the employees.
Low risk - the company does not assume any additional risk for the vehicles as they are owned by the empoloyee
The employer can claim GST on the purchase price and running costs of the vehicle, even though it is owned by the employee.

Who is Qualified
Everybody who is gainfully employed can qualified to salary package a car (the only exception is if you are self-employed or a temporary contractor).

Tax savings associated with salary packaging a motor vehicle, whether it is with a novated lease or other finance arrangements, can range from $40 per week and higher.

ATO
Fringe Benefits Tax (FBT) was first introduced to Australia by the Hawke Labour governemnt in 1986/87. Businesses complained bitterly about the new tax but, over time, have adapted their business practices to suit the market place. Novated leases are an example of adaptaion and have been around for some time now. The introduction of GST complicated novated lease arrangements a little. For further details on novated lease ATO or novated lease and tax see this post:

==> Novated Lease ATO

For further assistance with fringe benefits tax please contact our this office at your convenience - 07 32083888 or email us here.

Related posts:

==> Tax implications of novated lease

==> Changes to FBT rates - Federal Budget 2011

Novated Lease and Tax Implications

2011-04-19T15:25:00.002+10:00

the employee is the lease holder and owner of the vehicle and
the employer has a legal obligation to pay the lease payments out of the employee's pre-tax wage.

Depending on the finance provider, running costs like petrol, repairs and servicing, insurance etc can also be rolled into the finance arrangement.

Benefits to the employee

Income tax savings - the related car expenses are paid from your pre-tax income. That means your taxable income is lower resulting in less income tax you have to pay.
Free GST - your employer claims back most of the GST on purchase of the vehicle on your behalf.
Budget your money - when combined with running costs, the Novated Lease payment is fixed for the duration of the lease arrengement which helps maintain a steady cash flow.
Tax Free Profit - at the end of the lease, if you sell your vehicle and make a profit, this profit is tax free.

Benefits for the employer

No or minimal additional costs - It is an effective method to increase an employees’ salaries with no or minimal cost to the employer.
Effective management - where the running costs of the vehicle are rolled into the Novated Lease arrangement, it is potentially a cost effective choice to operate a fleet of company vehicles that are owned by the employees.
Low risk - the company does not assume any additional risk for the vehicles as they are owned by the empoloyee
The employer can claim GST on the purchase price and running costs of the vehicle, even though it is owned by the employee.

Who is Qualify
Everybody who is gainfully employed can qualified to salary package a car (the only exception is if you are self-employed or a temporary contractor).

Tax savings associated with salary packaging a motor vehicle, whether it is with a novated lease or other finance arrangements, can range from $40 per week and higher.

For further assistance with fringe benefits tax please contact our this office at your convenience.

Related posts:

==> Changes to FBT rates - 2011 Federal Budget

PAYG Withholding Weekly Tax Calculator - Online

2011-04-14T09:04:00.011+10:00

Using this ATO online PAYG Withholding Weekly Tax calculator is fairly easy. It calculates the amount of tax that should be deducted from your pay. You can choose - weekly; fortnightly; monthly or quarterly.

You will need to answer a couple of basic questions that help determine appropriate rates (leave at the defaults if you are not sure). Once you get the hang of it it is really is easy to use.

PAYG Withholding Weekly Tax Calculator - Online:

If this page is not working on your browser go here ==> Online PAYG Calculator

ATO encourages young people to be more aware of tax and super

2011-04-07T14:32:00.015+10:00

According to a recent media release, the ATO believes young people should take a closer look at tax and superannuation:

"Tax Commissioner Michael D'Ascenzo today encouraged young people to use National Youth Week and its activities as an opportunity to take a closer look at tax and superannuation. “I encourage young people to get to know their tax and superannuation systems and understand how they work for them,” Mr D'Ascenzo said.

“Tax is a vital and important part of our society and funds community services such as parks, health education and other government programs. Superannuation provides money for retirement for individuals, and it really adds up over time.

“Understanding tax and superannuation is important, and it can be easier than most people think.”

Well, I'm not sure that it is easy, however, in the current environment of instant and online, it certainly is easier to access relevant infomation. Indeed, this web site does just that - makes it easy to access relevant tax information and takes the trouble out of preparing an online tax return by providing an effective alternative to the ATO's etax online tax system.

Check our index and menu items - there's plenty to chose from.