Australian tax thread

hussey

Okay, hopefully we can get all tax questions in here, rather than multiple threads.

First things first, I am not a tax expert, but have done this a number of times, so know a fair bit about basic tax returns.

How do I get a Tax File Number?
View the ATO website here, it is easy and quick and will be delivered within a few days.

Are you a Resident for tax purposes?
This is important, it is not the same as a resident. This is about intent. If you intend on staying longer than 6 months then you can declare yourself a RfTP.
Read more here

Still confused? Use this wizard to see if you can be a RfTP

Remember this is between you and the tax office.

Tax returns
Now for most people a return is pretty straight forward, you type in any income, take away any deductions (you can claim $300 a year without receipts), minus any tax you paid and voilà you are done.

A sample 2010 tax return can be found here: http://www.boards.ie/vbulletin/showthread.php?p=67134622

Medicare:
Irish passport holders who are on temp visas (WHV/457) can claim medicare exemption (since we don't get medicare)
Use this form to apply for medicare exemption.

Takes about 4 weeks, once you apply for PR you no longer can claim medicare exemption and can apply for medicare.
I have been asked twice to provide this form for the years I applied through etax, it is a lot easier and is kept on record at medicare to apply quickly.

mandrake04

I posted this on the other thread before it was closed but since its relevant I will post it again.

If you are from the 6 counties and on a Irish passport you are entitled to medicare, but you need to show your National Insurance card. You are entitled and not exempt even if you never owned a Brit passport.

If you a travelling on a Brit passport of course you are entitled to Medicare without showing your NI card.

laoisforliam

Hey probably a stupid question but are tax returns only for people working on ABN or do people with a TFN also lodge one?

ballooba

laoisforliam wrote: »

Hey probably a stupid question but are tax returns only for people working on ABN or do people with a TFN also lodge one?

Everyone lodges a return.

Pisco Sour

http://www.ato.gov.au/individuals/content.aspx?doc=/content/00216872.htm

According to this link there appears to be a threshold for Medicare levy of $18,488. As I'll have only worked just under 5 months I am estimating that my gross earnings will be around $17,500. Am I right in assuming I don't need to bother applying for the medicare exemption as I am underneath this threshold anyway?

Good idea for a thread. Maybe could a "sticky" be put on it with it coming close to tax year end?

hussey

That's correct, you don't need to apply, as you are under the threshold.

Yeah I'll make it a sticky nearer tax year end.

ballooba

04072511 wrote: »

Am I right in assuming I don't need to bother applying for the medicare exemption as I am underneath this threshold anyway?

Aren't you an accountant? No, you don't need an exemption if you are under the threshold.

Pisco Sour

ballooba wrote: »

Aren't you an accountant? No, you don't need an exemption if you are under the threshold.

I was 99% sure. Just thought I'd ask, and be safe rather than sorry.

Feelgood

Thanks for the thread and info hussey.

Does anyone have any solid details on expenses that can be claimed?.
I'm a daily rate contractor so I believe I can claim the following expenses although this is completely hearsay. I have absolutely no doco to back this up.

a. The price of a laptop (I heard you can claim the price of one laptop per year)
b. The price of a mobile phone and the percentage of business calls.
c. A percentage of your home internet or mobile broadband costs for business use.
d. Around 30% of flights home.
e. Stationary and postage

I think this is about all I have?. Is there anything thats on here than shouldnt be or is there something that maybe I should have on here?.

Cheers

linola_c

Hi Everyone!!!

I have been living here for 4 months on a WHV and was told to declare myself as a non resident when filling out my tax declaration - when I started work here!!! I am now aware that this means I am paying higher tax rates. I am intending to stay on in Australia for many years to come.

My bf is only filling out his tax dec form now and it will be backdated for the period he has worked. Because, we have only lived in Australia for 4 months - would this automatically exempt us from being eligible to declare ourselves as Residents for tax purposes?

I have been earning around $1000 bucks a week for the past few months, as I am a non resident for tax purposes - will this virtually mean I will get sweet FA back?!

Cheers in advance

hussey

Feelgood wrote: »

a. The price of a laptop (I heard you can claim the price of one laptop per year)

This was the case, not sure if it still is,

b. The price of a mobile phone and the percentage of business calls.

You can claim a percentage of your mobile phone price, if it is 100% for business then 100%

c. A percentage of your home internet or mobile broadband costs for business use.

correct

d. Around 30% of flights home.

Nope, not at all. You are getting mixed up with LAFHA

e. Stationary and postage

Yes, but seriously? How much postage does an IT contractor go through legitimately 0?

You can also claim harddrives etc (again if you use for business)

You can check on ATO website for details about laptop

hussey

linola_c wrote: »

Hi Everyone!!!

I have been living here for 4 months on a WHV and was told to declare myself as a non resident when filling out my tax declaration - when I started work here!!! I am now aware that this means I am paying higher tax rates. I am intending to stay on in Australia for many years to come.

My bf is only filling out his tax dec form now and it will be backdated for the period he has worked. Because, we have only lived in Australia for 4 months - would this automatically exempt us from being eligible to declare ourselves as Residents for tax purposes?

I have been earning around $1000 bucks a week for the past few months, as I am a non resident for tax purposes - will this virtually mean I will get sweet FA back?!

Cheers in advance

did you read my first post? The answer is there - You can claim to be a RfTP as it is about intent .. you can use the wizard too ... come on, the thread isn't that big!

You can claim to be a RfTP after 1 day in Australia ....

ellaq

hussey wrote: »

did you read my first post? The answer is there - You can claim to be a RfTP as it is about intent .. you can use the wizard too ... come on, the thread isn't that big!

You can claim to be a RfTP after 1 day in Australia ....

I don't know. I still read it differently. Must be in the country for 6 months or more or half the financial year.

http://www.ato.gov.au/taxprofessionals/content.aspx?doc=/content/64131.htm

ballooba

ellaq wrote: »

I don't know. I still read it differently. Must be in the country for 6 months or more or half the financial year.

http://www.ato.gov.au/taxprofessionals/content.aspx?doc=/content/64131.htm

The 183 day rule is only the last resort rule. The first two are: Common law test of where you dwell, the domicile test (3 types of domicile).

Edit: Have a look under "resident or resident of Australia" means: here: http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1936240/s6.html

hussey

ellaq wrote: »

I don't know. I still read it differently. Must be in the country for 6 months or more or half the financial year.

http://www.ato.gov.au/taxprofessionals/content.aspx?doc=/content/64131.htm

I'm right ... if you intend to stay for at least 6months then you are ....

If you filled out the wizard it would tell you this ...

ballooba

Another important point there is that even if you have been in Australia for over 183 days you can still be non-resident.

Mellor

hussey wrote: »

Medicare:
Irish passport holders who are on temp visas (WHV/457) can claim medicare exemption (since we don't get medicare)
Use this form to apply for medicare exemption.

Takes about 4 weeks, once you apply for PR you no longer can claim medicare exemption and can apply for medicare.
I have been asked twice to provide this form for the years I applied through etax, it is a lot easier and is kept on record at medicare to apply quickly.

I never bother with medicare exemption in previous years, basically I didn't know about it until I had lodged. How much is it worth roughly? I have a figure of 1.5% in my head.

Basically I can't apply until I get a new passport (I assume). I kinda want the tax refund money asap, as I'll be buying flights home for xmas, and they'll start to go up soon. Is there ANY way I can claim exemption without waiting?

can I tick the box and hope they don't ask for it, if they do i can deal with it then?

hussey

Mellor wrote: »

I never bother with medicare exemption in previous years, basically I didn't know about it until I had lodged. How much is it worth roughly? I have a figure of 1.5% in my head.

Basically I can't apply until I get a new passport (I assume). I kinda want the tax refund money asap, as I'll be buying flights home for xmas, and they'll start to go up soon. Is there ANY way I can claim exemption without waiting?

can I tick the box and hope they don't ask for it, if they do i can deal with it then?

You can apply for any previous years also.
Yes you can click the box and not get the form until you have your passport, assuming you are eTaxing it rather than a paper application

and yes 1.5% of wages, which over a couple of years can be worth something decent.

Doc

hussey wrote: »

Yes you can click the box and not get the form until you have your passport, assuming you are eTaxing it rather than a paper application

and yes 1.5% of wages, which over a couple of years can be worth something decent.

Did this last year I have never bothered to filled out the form and apply for Medicare exemption the eTaxing thing makes it so easy to do everything.

hussey

well they do ask, here a letter they sent me for 2009 records

They also sent me a letter for 2008.

I was lucky as I lost the original letter, but medicare just reprinted it, otherwise I would have had to apply all over again - which would have been difficult as my old passport is somewhere in my house in ireland

My advice is better safe than sorry, we're all eligible, so just apply as in 2/3 years time who knows where your passport will be

Mellor

Mellor wrote:

I never bother with medicare exemption in previous years, basically I didn't know about it until I had lodged. How much is it worth roughly? I have a figure of 1.5% in my head.

Just checked my tax return from last year.
Turns out I did claim it after all. Or rather my tax agent put it down, 365 full exemption.


i'm still not sure if I'll etax it this year or just go back to the agent.

Pros for eTax: It's free. It's easy.
Pros for agent: May advise of other areas I can claim that I might not know or think of, will also know how far I can "push it"

Feelgood

hussey wrote: »

You can apply for any previous years also.

and yes 1.5% of wages, which over a couple of years can be worth something decent.

So if you didn't apply for the medicare exemption on last years tax return, you can double up this year?. Thats a pretty sweet deal.

Mellor wrote: »

i'm still not sure if I'll etax it this year or just go back to the agent.

Any recommendations on an agent Mellor?. I'm thinking of going with one
and pulling as much info as I can off them so I can do my own next year.

ballooba

Feelgood wrote: »

So if you didn't apply for the medicare exemption on last years tax return, you can double up this year?. Thats a pretty sweet deal.

Hehe. Sweet!;) Not that simple though I suspect, I think you would actually need to request a review of your prior years return. I don't know how difficult that is. Essentially you tell the ATO you made a mistake.

Poker Engineer

Ok im a little confused by the website so could anybody clear this up form me.
my girlfriend and i have been in melbourne since late feb and have been working for about 3 months in office jobs, we are planning on living in our apartment for the full 6 months of the lease at least and plan on staying on beyond that. Are we entitled to claim tax back? and how much.

ballooba

Poker Engineer wrote: »

Ok im a little confused by the website so could anybody clear this up form me.
my girlfriend and i have been in melbourne since late feb and have been working for about 3 months in office jobs, we are planning on living in our apartment for the full 6 months of the lease at least and plan on staying on beyond that. Are we entitled to claim tax back? and how much.

What rate have you been taxed at roughly?

Poker Engineer

I havnt checked exactly but its somewhere above 30% i think.

ballooba

Poker Engineer wrote: »

I havnt checked exactly but its somewhere above 30% i think.

Then you're likely being taxed as if you have been working in Aus all year, you should be due a refund of about 75% of that tax I reckon. Use the wizard that Hussey linked to see if you're tax resident. There's also a tax calculator to work out how much you owe, you can compare that to how much you have paid.

Poker Engineer

So it doesnt matter that im in the country less than 6 months? The calculator is on the tax website i take it.

ballooba

Poker Engineer wrote: »

So it doesnt matter that im in the country less than 6 months? The calculator is on the tax website i take it.

http://www.ato.gov.au/individuals/content.aspx?doc=/content/26030.htm&mnu=42585&mfp=001

Being in the country less than 6 months does not affect your requirement to lodge a return. Use the wizard linked above to find out if you are resident.

hussey

Poker Engineer wrote: »

Ok im a little confused by the website so could anybody clear this up form me.
my girlfriend and i have been in melbourne since late feb and have been working for about 3 months in office jobs, we are planning on living in our apartment for the full 6 months of the lease at least and plan on staying on beyond that. Are we entitled to claim tax back? and how much.

It depends how much you have earnt, anything below 64k you are entited to a Low Income Tax Offset too
you can check here for calculator http://www.ato.gov.au/individuals/content.aspx?doc=/content/32032.htm

The wizards are in the first post, also a quick wizard to say how much you got back is here: http://calculators.ato.gov.au/scripts/axos/axos.asp?CONTEXT=&KBS=ctax2010.xr4&go=ok (well for 2010)
but can give you a rough idea.

Feelgood wrote:

So if you didn't apply for the medicare exemption on last years tax return, you can double up this year?. Thats a pretty sweet deal.

Where did you get that from? completely untrue ... you can make an adjustment to previous years tax returns and relodge it.
Mistakes happen the tax guys are forgiving (unless it is fraud)

Feelgood

hussey wrote: »

You can apply for any previous years also.

hussey wrote: »

Where did you get that from? completely untrue ...

I got it from you!

I thought you meant that you could apply for any previous years medicare
exemption that you haven't already received and tally them up. My bad.

Mellor

Feelgood wrote: »

I got it from you!

I thought you meant that you could apply for any previous years medicare
exemption that you haven't already received and tally them up. My bad.

How did you do your return last year, are you sure you didn't apply.

As i misunderstood the OP and I actually calimed exemption for the full year last year

rubberduckey

Hi There,

Mellor, you mentioned using a tax agent, I'm looking for a good tax agent with a decent understanding of Irish & Australian tax systems.

Could you or anyone else on this thread pass on any recommendations?

Thanks & Appreciated,

Mellor

rubberduckey wrote: »

Hi There,

Mellor, you mentioned using a tax agent, I'm looking for a good tax agent with a decent understanding of Irish & Australian tax systems.

Could you or anyone else on this thread pass on any recommendations?

Thanks & Appreciated,

What are you concerns regarding the irish tax system, not relevant as far as I can see.

A personal tax return is very simply, any agent can do this, or you can do it yourself and ave $100. There is literally no point in somebody recommending one here.

Anyone that has used one will not have anything to compare it to. You hear it the whole time "I went to X, he is excellant" when they have no point iof reference.*
More importantly, we ahve no clue where you are, no point in suggesting a agent in a different city or even suburb. There are literally 1000s over here, anyone of them would be fine.


*I'm not talking specifically about tax here. Similar to people saying how they used Visa First and they were excellant. They've only ever gotten one WHV so were obvlious to the fact that VF riped them off.

Doc

Mellor wrote: »

A personal tax return is very simply, any agent can do this, or you can do it yourself and ave $100.

You can clame back the cost of the agent next year.

Mellor

I know but it doesn't make a difference to the decision if I should use one or not.

I use an agent last year, I can (and will) claim that back this year regardless use and agent or go solo this year. Using an agent will this cost me $100 more at this moment in time.

Last year I intended to keep a log of tax write off, i've gotten none built up, how do mods feel about user posting variosu items they claimed. I imagine lots of us have stuff we missed out on.

As for the laptop above, you can't claim the cost of it, but you can claim the value of it, basically the cost minus some depriciated value.

rubberduckey

Thanks for getting back to me Mellor.

What are you concerns regarding the irish tax system, not relevant as far as I can see.

In 2011 I will have significant earnings while based in Ireland up to April and also in Australia from April onwards, hence I'm looking for tax advice on an optimised tax approach.

So would anyone have any recommendations, I'm based in Melbourne.

Thanks,

Rubberduckey

Mellor

I'm not sure, open to correction on this, that the two systems care about each other.

Australian tax - declar australian earnigns only and claim back 3 months spending

Ireland - claim you months tax separately - You can do this for up to 4 years in ireland, at least you could. i claimed 2005-2009 before I left

universe777

I don't understand this Medicare levy thing. I have a Medicare card and use it but the 1.5% hasn't been taken out of my ever. I might have only earned 20k in the last year. I am a resident for tax purposes.
Does everyone have to pay the levy? Over a certain threshold or age?
I will be doing my tax return online myself and should be due a tax refund so I don't want them to slug me for a years worth of Medicare levy..

s.c

Doc wrote: »

You can clame back the cost of the agent next year.

You can claim back the tax paid on the fee for the agent. Not the full amount.

Legend100

Mellor wrote: »

I'm not sure, open to correction on this, that the two systems care about each other.

Australian tax - declar australian earnigns only and claim back 3 months spending

Ireland - claim you months tax separately - You can do this for up to 4 years in ireland, at least you could. i claimed 2005-2009 before I left

It's a bit more complicated than that given the residence issue in Ireland for 2011 under the 280 day rule. Best seek a tax adviser just to be safe especially as the post said there was significant Irish earnings in Ireland up to April. If it is all PAYE income, it will be straight forward enough

Should be no incremental tax to pay under the Double Tax Treaty between Ireland and Australia but would only be guessing without knowing the individuals exact circumstances

hussey

universe777 wrote: »

I don't understand this Medicare levy thing. I have a Medicare card and use it but the 1.5% hasn't been taken out of my ever. I might have only earned 20k in the last year. I am a resident for tax purposes..

Does everyone have to pay the levy? Over a certain threshold or age?

No it depends on your income - read here http://www.ato.gov.au/individuals/content.aspx?doc=/content/00250854.htm&page=2

also if you earn over 80k and on medicare you need to get private hospital cover or else an extra 1% surcharge

ballooba

Doc wrote: »

You can clame back the cost of the agent next year.

Not entirely true. You can claim it as a deduction. Meaning a $100 tax return service will cost you between $100 and $58 depending on your marginal rate.

rubberduckey

It's a bit more complicated than that given the residence issue in Ireland for 2011 under the 280 day rule. Best seek a tax adviser just to be safe especially as the post said there was significant Irish earnings in Ireland up to April. If it is all PAYE income, it will be straight forward enough

Should be no incremental tax to pay under the Double Tax Treaty between Ireland and Australia but would only be guessing without knowing the individuals exact circumstances

Thanks for the feedback Legend100, its quite complex as there's complications with share awards, DIRT etc.

So would anyone have any recommendations on a tax agent with the required expertise on both Irish and Australia tax systems?

Thanks in advance,

Rubberduckey

Slunk

Thanks for all the info people. I'm on on my phone now and its pretty slow. Will check the links in a few days when ill get everything done together online.
Just a quick questiow. Guy in work says i can claim for my hi vis workwear and safety boots. Also with the phone credit, would ringing agencies for work locations etc be considered business calls or is that pushing it?

Cheers

ellaq

E-tax 2011 is now available to download

http://www.ato.gov.au/individuals/content.aspx?doc=/content/32234.htm&page=5&H5

hussey

Slunk wrote: »

Thanks for all the info people. I'm on on my phone now and its pretty slow. Will check the links in a few days when ill get everything done together online.
Just a quick questiow. Guy in work says i can claim for my hi vis workwear and safety boots. Also with the phone credit, would ringing agencies for work locations etc be considered business calls or is that pushing it?

Cheers

Yeah you could claim the boots easily enough, as you need them for work, you can also claim suncream if you are outdoors etc

and yeah I'd charge the phonecalls.

ballooba

hussey wrote: »

Yeah you could claim the boots easily enough, as you need them for work, you can also claim suncream if you are outdoors etc

In this instance that is correct, but not necessarily always. The test for deductibility is more complicated than 'needed for work'. The essential character of the expenditure has to be work related, i.e. 'but for my job, I would not have purchased this'.

There are two famous law cases on this topic, one involved a number of outdoor workers (including a tax office worker) who claimed sun protection was deductible. Another was an air hostess (Mansfield) who managed to get most of her uniform deductible for various reasons. She claimed her work shoes were deductible because they needed to be a size bigger for working in the air as your feet expand, so they were no good for her on the ground.

Pompey Magnus

hussey wrote: »

Are you a Resident for tax purposes?
This is important, it is not the same as a resident. This is about intent. If you intend on staying longer than 6 months then you can declare yourself a RfTP.
Read more here

Say I intend to stay in one place for the 6+ months, I declare as a RfTP but circumstances change and I have to return to Ireland after, say, just under the 6 months, does that mean I lose the eligibility to reclaim tax once leaving Australia and actually would be presented with a bill to make up the difference for the higher rate of tax that I wasn't paying? This is a situation that might arise for me (hopefully not though).

hussey

Pompey Magnus wrote: »

Say I intend to stay in one place for the 6+ months, I declare as a RfTP but circumstances change and I have to return to Ireland after, say, just under the 6 months, does that mean I lose the eligibility to reclaim tax once leaving Australia and actually would be presented with a bill to make up the difference for the higher rate of tax that I wasn't paying? This is a situation that might arise for me (hopefully not though).

Highly unlikely, but you can claim it now and if they dispute it they ask you to provide evidence, or make a readjusted claim.

You won't be presented with a bill on simple mistakes, usually they ask for re-assessment first, and if you owe them money then pay them back

Slunk

Just looking atthe taxform hussey has filled out for 2010. In the expenses category it says work related travel expenses. Maybe a silly question but can I claim a % or all of my train fares back?
And again, work related education. if I was to do a forklift training course could I claim this back in next years return?

Also tried to download etax2011 and its saying cant dowload because of banned extension .msi. This is from ato website saying this. Anyone else having this problem?

Another thing, while i was working in october for three months i was being taxed at 30% but now when I filled in my details for current job I ticked the rftp box and only being taxed 15%. Will the tax office knowabout the differences by my TFN or am I only likely to recive 15% back of everythign?

Sorry for all the questions :P