TAX HOT TIPS


Tax News 2011

 FLOOD LEVY
What is proposed?
 The legislation is not passed by Parliament yet, however this is a summary of how it will work, if passed.
The Government will apply a flood levy to help fund reconstruction in flood affected areas. The flood levy will apply to individual’s taxable income only in the 2011-12 financial year.
The amount of levy payable is at the rate

  • 0 % where your taxable income is $50,000 or below
  • 0.5% where your taxable income is between $50,001 and $100,000,
  • 1.0% where the taxpayer has a taxable income in excess of $100,000.

Exemption from the flood levy  
Where the person has received an Australian Government Disaster Recovery Payment in relation to a flood event in 2010-11 they will be exempt from the levy.
The levy cannot be reduced by non-refundable tax offsets. That is, the taxpayer's income tax liability for the 2011-12 financial year is calculated as the taxpayer's basic income tax liability on taxable income less their tax offsets, to which the levy liability is then added.

EDUCATION TAX REBATE
Are you claiming what you are entitled to?
The Tax Office has indicated that they believe 1 in 5 missed out in their 2009 tax return.
The rebate was introduced to help families pay for the costs of educating their primary and secondary school aged children. If you qualify, you can claim the costs of the following items you purchase for your children’s education.
 Items you can claim, if you purchased them

  • Laptop computer & home computer purchases
  • Internet costs
  • Printers, paper and consumables - like printer ink, disks and flash drives
  • School textbooks
  • Prescribed trade tools (where required and compulsory acquisition for education)
  • Stationery
  • Any other expense (but not school fees, excursions. tuck shop or uniforms) that relates to your children’s education

CLAIMING DEDUCTIONS AGAINST YOUTH ALLOWANCE
 The Tax Office announced how it will deal with the required amendments from the High Court Case.
 The Tax Office will allow an automatic deduction of $550 from the 2006-07 to the 2009-10 income years for eligible taxpayers and they will be writing to taxpayers advise how they will be amending your assessment(s). You will receive a letter from the Tax Office between 1 March 2011 and 30 April and the ATO estimates the average refund taxpayers will receive in their pocket will be $90 for each year.
You can make higher claims than these automatic payments as long as you are eligible and can prove the expenses.
The Australian Tax Office will be working hard to ensure that affected individuals will receive their deductions. This is expected to result in around 460,000 tax refunds for affected individuals who received Youth Allowance while in full-time study and paid tax in any of the 2006-07 to 2009-10 financial years."
Educational expenses such as textbook costs and depreciating a computer used for study purpose are what the case now entitles you to claim
NOTE:  In terms of deductibility against youth allowance for the current and future income years, this will be considered by the Government.