Changes to tax in the past year may affect you and your return - find out what has changed
July 9, 2010 by admin
Filed under Prior Year Taxes
Changes to tax in the past year may affect you and your return - find out what has changed
It is time to start organising yourself for 2008-09 tax return preparation and lodgement. The past financial year has seen some changes to the taxation landscape that will certainly make a difference to lot of Australian taxpayers this “tax time”.
Changes include education tax refunds and family tax benefits as well as changes in the Medicare levy surcharge threshold and claiming donations to charity.
Education tax refund
Eligible parents who incurred education expenses for primary or secondary school students in their care on or after 1 July 2008 are able to claim a tax refund for a proportion of the incurred expenses.
Generally, eligible parents are able to claim 50% of their education expenses for the year. The maximum claimable amount for primary and secondary school children is 0 and 00 respectively. This results in a maximum refund of 5 for primary school children and 0 for secondary school children. Parents can claim the full refund for each child who meets the schooling requirement. Independent students under the age of 25 who are undertaking primary or secondary school studies are also eligible to claim a refund on some of their education expenses.
You should be aware that not all expenses can be claimed. Purchases such as laptop and home computers and school text books are able to be claimed, whilst school fees and uniforms are not. The most important thing is keep you receipts in order to verify the eligible purchases in your return.
Family tax benefit
Effective from the 2008-09 financial year you are no longer able to claim the family tax benefit in your return. In order to claim the benefit for both current and existing years you must claim it as either a fortnightly or a lump sum payment through the Family Assistance Office.
Family Assistance Offices are located in Medicare Australia offices and Centrelink Customer Service Centres around the country or you can contact them on 13 61 50 for assistance with your family tax benefit queries.
First home saver accounts
First home saver accounts were introduced in October 2008. For those with a first home saver account the Government will make an annual contribution to that account based on contribution amounts for the year. You are not required to pay tax on any earnings by the account and as a result you don’t need to declare any income from this account on your tax return. If you are not required to lodge a tax return, you will need to lodge a First home saver account – notification of eligibility form before the Government will pay any contributions.
Medicare levy surcharge thresholds
For the previous financial year, 2008-09, the Medicare levy surcharge thresholds have been increased for both single persons and families. For single persons who earned above ,000 during 2008-09 and did not have private patient hospital cover a surcharge of 1 percent for any period during the year that they did not have the cover will be levied. For families the threshold is increased to 0,000.
For the 2008-09 financial year only, you are considered to have been covered by private hospital cover all year if you took out an appropriate policy some time between 1 July 2008 and 31 December 2008, and then continued to be covered from 1 January to 30 June 2009.
Claiming donations to charity
As a result of the dramatic events of the past year, such as the Victorian bushfires and Queensland floods, many taxpayers made donations to fund-raising and charitable organisations.
You are able to claim a tax deduction in your 2009 tax return for any gift or donation if the organisation is a registered deductible gift recipient.
When claiming the deduction you should be sure to keep your receipt as evidence. For donations made via the web, over the phone or through a third party such as a bank or retail outlet web receipts or credit card statements are acceptable. Additionally, for any ‘bucket donations’ made during the year you are able to claim a tax deduction equal to your contribution up to without being required to produce a receipt.
The team of accountants and tax agents at The Quinn Group are able to advise you on all of the deductions and refunds that you are eligible for in your 2008-9 tax return. We will work with you to legally minimise your tax liability and get you the maximum return that you are eligible for. Contact us on 1300 QUINNS or click here to submit an online enquiry.
The Quinn Group is an integrated, accounting, legal, and financial planning practice offering expert advice to help you achieve your business and personal goals. With more than 15 years’ professional experience, we are committed to building long-lasting relationships with our clients by providing superior service in a timely and cost-effective manner. For more free advice please visit Lawyers.
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How Taxes Affect Your Home Business
June 28, 2010 by admin
Filed under Tax Articles
There is a common adage that says the only two things that are certain in life are death and taxes. While death is definitely not certain when it comes to a home business, taxes assuredly are. If you are going to operate a home business, there are some things you need to know about taxes or you may find yourself in a world of trouble.
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I can not think of one person I know who likes paying taxes, doing taxes or talking about taxes; but the fact of the matter is taxes are an inevitable part of life and if you start a home business, they are probably going to be an even bigger part of your life than they were before.
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When you work for someone else, your taxes are taken out of your paycheck and then at the end of the year, you simply file your tax return and you either pay money to the IRS or you get money back. Paying home business taxes gets to be quite more complicated than that. While income taxes are the main concern of those employed by others, home business owners need to worry about use taxes, sales taxes, employment taxes, income taxes and a number of other taxes that may apply to their business.
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The first thing you need to take care of in terms of home business taxes is the process of getting an EIN number. A business’ EIN number is much like a social security number for your business. It is the number that is used when reporting taxes to the IRS. Once you have your EIN number and your home business starts generating income, you are going to have to start making estimated tax payments to the IRS.
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Unlike the annual tax returns you filed when you were employed by someone else, home business owners have to pay taxes on a quarterly basis. For example, you are going to have to pay taxes on the money you make from January through March in April and for the money you make in April through May, you have to pay taxes on in June. The IRS provides home business tax payers with the Electronic Federal Tax Payment System in order to make paying your quarterly taxes more convenient.
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If your home business has employees, you are also going to have to take care of your employees’ income taxes. When you have employees, you are required to withhold their income tax from their paychecks and you must pay that income tax to the IRS. If you have less than one-thousand dollars in income tax liability each year, you can do this annually. However, if your employees’ income tax liability is going to total up to more than one-thousand dollars a year, you are going to need to pay the IRS either monthly or semi-weekly.
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Remember, this only applies to you if your home business has actual employees. Independent contractors are not considered employees and taxes do not have to be withheld from payments made to independent contractors.
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Home business owners also have to pay self employment taxes. Self employment taxes are taxes self employed people pay to Social Security and Medicare. This tax allows you to receive Social Security and Medicare benefits when you retire.
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If you are not sure how to manage your home business taxes, you should hire a small business accountant to consult with you on the best way to approach your tax requirements. Hiring an accountant who is willing to teach you how to do your own home business taxes can be much more cost effective than hiring an accountant who insists on doing all of your taxes for you without any explanation of what is being done.??
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