20 Dec 2010

2010 Tax Time

Things to consider for 2009/10

Education Tax Refund

  • Education tax refund – Now in its second year, the offset is 50% of eligible education expenses up to:
  • $750 for each child undertaking primary studies (maximum offset $375); and
  • $1,500 for each child undertaking secondary studies (maximum offset $750).

Eligible families will be those eligible for Family Tax Benefit (Part A).  Independent students may also be eligible.

Eligible expenses include: laptop or home computers; computer related equipment or repairs; internet; textbooks and stationery; tools for trade courses, educational software.

You CANNOT CLAIM for school fees; uniforms; excursions and camps; tutoring; sport equipment; musical instruments; school subject levies eg consumables for woodwork or home science; building levies; library book fees; photos; donations; canteen; transport.

Low Income Tax Offset

  • The Low Income Tax Offset has increased again from $1,200 to $1,350 in the 2009/10 tax year. This effectively means those eligible will not pay tax until their taxable income exceeds $15,000.
  • Also, due to the Low Income Tax Offset, minors receiving non-excepted income (e.g. trust distributions) will be allowed to receive $3,000 in 2010 financial year without paying tax compared to $2,666 in 2009 financial year.

Senior Australians Tax Offset

  • Senior Australians eligible for the Senior Australians Tax Offset will not pay tax on income up to $29,867 for singles and $25,680 for each couple living together because of the effect of the offset. (The max offset or 2009/10 is $2,230 for singles or $1,602 for each couple).

Tax Break for Business

  • Tax Break for Business – The 50% deduction (for businesses with turnover < $2Mil) is available for investments in new eligible depreciating assets costing over $1,000 acquired by 31 December 2009 and installed ready for use by 31 December 2010.

The Investment allowance is a deduction in addition to the usual depreciation deduction.

For businesses with turnover greater than $2mil the deduction is 10% for acquisitions between 1 July 2009 and 31 December 2009 and installed ready for use by 31 December 2010.

Dependant Offsets

  • A reminder from last year, eligibility for dependant offsets will be subject to an income threshold of $150,000 for the claimant.

FBT Exemptions

  • Another reminder, FBT exemption for eligible work-related items such as laptop computers and mobile phones is now limited. Effective 13 May 2008, these items must now be primarily used for work purposes and be limited to one item each per employee per year. Employees will no longer be able to claim depreciation for the work related percentage of FBT exempt items. Previously employees were obtaining a double benefit.

 Don’t Forget

  • To substantiate your expenses, you must retain all your receipts for five years from date of lodgement.
  • Adding and summarising your income and expenses before your appointment will help us tremendously and save you time during our interview.
  • If you lodged your 2009 Tax return on time through a Tax Agent, 31 October deadline DOES NOT APPLY, you automatically receive an extension to lodge after 31 October. If you have not previously lodged through a tax agent, you must be registered with a tax agent before 31 October.

 New things for 2010/11

  • The marginal tax thresholds for 2010/11 for individuals have changed as follows:
  1. 30% starts at $37,001 up from $35,001
  2. 37% starts at $80,001 this rate was 38% in 2009/10
  3. 45% starts at $180,001 no change from 2009/10
  • The Low Income Tax Offset will increase again from $1,350 to $1,500 in the 2010/11 tax year. This effectively means those eligible will not pay tax until their taxable income exceeds $16,000.
  • The temporary reduction of the Superannuation Co-contribution from 150% to 100% has now been made permanent. The maximum co-contribution remains at $1,000.
  • Medical expenses rebate threshold has been raised from $1,500 to $2,000 from 1 July 2010. The rebate is 20% of expenses over the threshold. From 1 July 2011, the threshold will be increased annually in line with the CPI.
  • From 1 July 2011, the Government proposes a 50% discount on up to $1,000 of interest earned by individuals.
  • From 1 July 2012, the government proposes individuals will get a standard deduction of $500 for work related expenses and the cost of managing tax affairs. This will increase to $1,000 from 1 July 2013.
  • From 1 July 2012, it is proposed small businesses will be able to immediately write off assets valued under $5,000 (currently $1,000) and all other assets (except buildings) will be written off in a single depreciation pool at a rate of 30%.  





Kerslake Gray Accountants - (02) 4751 4091
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