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Receive A Relief Or Support Payment? Here’s What You Need To Watch Out For This Tax Season

Posted on July 12, 2021 by admin

Have you, over the course of the past financial year, received a government assistance payment, support payment or disaster relief supplement? There have been a number of cases where people who received financial assistance from the government were hit with additional owed tax to the ATO, due to their payments increasing their income threshold. When lodging your individual income tax return this year, you will need to declare certain Australian Government payments, pensions and allowances in your tax return. If you did not elect to pay tax on those payments, this could affect the payment received from your return (or mean that you actually owe money to the ATO). Some of the taxable payments that you may need to include in your tax return include: the age pension carer payment Austudy payment JobSeeker payment Youth allowance Defence Force income support allowance (DFISA) where the pension, payment or allowance to which it relates is taxable veteran payment invalidity service pension, if you have reached age-pension age disability support pension, if you have reached age-pension age income support supplement sickness allowance parenting payment (partnered) disaster recovery allowance (but not in relation to 2019–20 bushfires) Most of these pensions, payments and allowances will […]

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ATO Says Different Payments Will Have Different Tax Treatments.

Posted on June 30, 2021 by admin

The ATO is looking to make tax season a little bit easier this year, particularly in light of the unique but significant challenges that Australians have been facing over the last year, and are continuing to face. If you received a financial assistance payment, grant or scheme package during the 2020 financial year, you need to be aware of your taxable requirements. There are different tax treatments for different payments that you may have received.    Jobkeeper Payments that were received from Jobkeeper as an employee will be automatically included in your income statement as either salary and wages, or as an allowance. Sole traders who have received a Jobkeeper payment on behalf of their business will need to include the payment as assessable income for the business.   Jobseeker All information will be included in your tax return (in the Government Payments & Allowances question) when ready. Lodging your return prior to the information being available will require you to add it yourself. Leaving out income will slow your return, so it is important to ensure that you have all of the information when lodging.   Stand Down Payments If you were the recipient of a one-off or regular […]

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The ATO Warns Gig Economy Workers To Declare Their Income, Or Face Severe Penalties

Posted on June 21, 2021 by admin

The inexpensive and profitable side hustle is under the ATO’s watchful eye when it comes to declaring income this tax season. With many gig economy workers often earning their income as independent contractors, the ATO warns that a failure to report all income from all of the work that they carry out could land them with severe penalties.    The ATO is expected to employ advanced data-matching from platforms that play host to large proportions of Australia’s gig economy to ensure that tax is declared and paid on the income from workers of the gig economy. Those workers may include Uber workers, Doordash, Lyft, Airbnb and many more similar side hustle income earners.   There is a silver lining for gig workers this tax time. Many gig economy workers may find themselves more eligible for tax deductions – but are warned against claiming more than they are allowed to.   Gig workers are eligible to claim deductions for most costs incurred while earning their income (such as travel or vehicle expenses, financing and marketing). These deductions, however, can only be claimed for the work-related proportion of the claim. You won’t be able to claim the whole amount for the deduction […]

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Your First Tax Return: What You Need To Know

Posted on June 15, 2021 by admin

Tax return season is quickly approaching for individuals. You may need to begin thinking about the process sooner rather than later to ensure that you have everything ready for your accountant. If you’ve never had to complete a tax return before (and it’s your first time) or are still uncertain about what you need to do, this process can feel a bit like a Mount Everest you need to climb. Putting it simply, if you are earning or will earn more than $20,542 this year, you will need to lodge a tax return. However, if you haven’t made that amount but your employer has taken tax out of your pay, you should lodge a return anyway to receive some (if not most) of that money back. How much money you receive back from the tax return will be affected by how much income you have earned. Some debts (such as HECS or HELP) will begin to take money out of your return after reaching a certain income threshold level (currently set at $46,620). A tax return is where you report all of your income earned over the past financial year. It should include ATO-reported income (which you generally won’t have […]

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Crypto Tax Crackdown Announced By ATO

Posted on June 8, 2021 by admin

Cryptocurrency investments are on the ATO’s radar this tax return season, with 100,000 taxpayers to be alerted by the ATO of their tax obligations from their cryptocurrency investments this financial year. It’s an outcome that has resulted from a growing concern that many taxpayers who invest in cryptocurrency believe their gains to be tax-free, or only taxable when their holdings are cashed into Australian dollars. This proactive prompt to taxpayers is a repeat of the ATO’s 2020 attempt, which resulted (after contacting 100,000 taxpayers) in the lodgement of 140,000 returns. Cryptocurrency’s current popularity as an investment solution for many taxpayers, due to the fairly consistent returns, is causing the ATO to evaluate the digital asset’s tax implications further. Currently, those who invest in cryptocurrency need to be aware of the capital gains tax implications that may eventuate from selling or buying and any losses or gains that may come about due to investing, particularly in how it impacts their reportable income tax. The ATO will also be heading into tax time with access to more data and the ability to track those investing in crypto-assets and ensure they are meeting their tax obligations. The best way to ensure that your […]

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Don’t Copy/Paste Your Tax Return From Last Year

Posted on May 31, 2021 by admin

Due to the impacts of COVID-19, how Australians claim work-related expenses on their tax returns every other year is sure to be different this year. The ATO is warning Australians that they will be watching what is claimed and how the impacts of COVID-19 are reflected in tax returns. During the 2020 tax return season, up to 8.5 million Australians claimed nearly $19.4 billion in work-related expenses, with new trends and figures of claims reflected in their returns. Expenses in the 2021 tax return season are expected to reflect the changing nature of how Australians work, given the ongoing impact of COVID-19 is still being felt by workers. In 2020, the value of car and travel-related expenses decreased by nearly 5.5% (as a result of lockdowns, office closures and the pandemic). There was a slight increase of up to 2.6% in terms of clothing expenses (in part a result of frontline workers’ first time needs for items such as hand sanitiser and face masks so that they could continue doing their jobs. As an example, though working from home claims are expected to rise in this year’s tax returns, the ATO would not expect to see a marked increase in […]

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Stamp Duty Tax – The Invisible Cost To Purchases

Posted on May 25, 2021 by admin

When you’re buying a property, there’s a high likelihood that you’re going to need to pay a tax known as stamp duty on top of the price originally agreed on for that property. Stamp duty is a tax levied by all Australian states and territories on property purchases. It is considered one of the most expensive costs you will encounter when buying a property in Australia. It may also be incurred for motor vehicle registrations, insurance policies, leases and mortgages, hire purchase agreements and transfers of property. The amount that a buyer pays for stamp duty when it comes to a property, for example, is based on the property purchase price, location and loan purpose and can vary in rate depending on which state the property is purchased in. As a rule of thumb, the more expensive the property is when buying, the higher the amount of stamp duty to be paid.  What you pay for stamp duty may vary depending on the state, as it depends on factors such as first home buyer benefits and concessions that some states may not currently have in place. A property that is worth $500,000 for example may incur an estimated stamp duty […]

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Stamp Duty Tax – The Invisible Cost To Purchases

Posted on by admin

When you’re buying a property, there’s a high likelihood that you’re going to need to pay a tax known as stamp duty on top of the price originally agreed on for that property. Stamp duty is a tax levied by all Australian states and territories on property purchases. It is considered one of the most expensive costs you will encounter when buying a property in Australia. It may also be incurred for motor vehicle registrations, insurance policies, leases and mortgages, hire purchase agreements and transfers of property. The amount that a buyer pays for stamp duty when it comes to a property, for example, is based on the property purchase price, location and loan purpose and can vary in rate depending on which state the property is purchased in. As a rule of thumb, the more expensive the property is when buying, the higher the amount of stamp duty to be paid.  What you pay for stamp duty may vary depending on the state, as it depends on factors such as first home buyer benefits and concessions that some states may not currently have in place. A property that is worth $500,000 for example may incur an estimated stamp duty […]

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The Federal Budget 2021-22: Low & Middle Income Tax Asset Rebate Extension Announced

Posted on May 17, 2021 by admin

The Low and Middle Income Tax Offset has been extended for another 12 months, meaning that taxpayers whose wage earnings situate them within a certain income bracket will again be able to receive a little extra cash back into their pockets again this year. Tax offsets are also known as rebates and directly reduce the amount of tax payable on your taxable income. Sometimes, this can lead to the payable amount lowering to zero, but these rebates cannot be used on their own to get a refund. You are only able to receive this amount after you have filed your tax return at the end of the financial year and in a lump sum amount that is in accordance with which wage bracket you are in and the amount you will receive. You don’t need to complete anything in your tax return for your low or low and middle-income tax offset to be worked out for you. Instead, the amount of tax offset you will receive is worked out for you once your tax return is lodged. If you earn under $37,000 this financial year, you will receive an offset of $225. For those who earn between $37,001 and $48,000, […]

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The Federal Budget 2021-22: Low & Middle Income Tax Asset Rebate Extension Announced

Posted on by admin

The Low and Middle Income Tax Offset has been extended for another 12 months, meaning that taxpayers whose wage earnings situate them within a certain income bracket will again be able to receive a little extra cash back into their pockets again this year. Tax offsets are also known as rebates and directly reduce the amount of tax payable on your taxable income. Sometimes, this can lead to the payable amount lowering to zero, but these rebates cannot be used on their own to get a refund. You are only able to receive this amount after you have filed your tax return at the end of the financial year and in a lump sum amount that is in accordance with which wage bracket you are in and the amount you will receive. You don’t need to complete anything in your tax return for your low or low and middle-income tax offset to be worked out for you. Instead, the amount of tax offset you will receive is worked out for you once your tax return is lodged. If you earn under $37,000 this financial year, you will receive an offset of $225. For those who earn between $37,001 and $48,000, […]

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