NTEU Tax Guide 2016

nteu.org.au/tax

Tax Guide

2016

Budget 2016 ..............................................................................1

ATO Focus 2016 ......................................................................1

Work-related expenses 1Rental Properties 1Cash economy 1

Changes for 2016 ................................................................. 2

Individuals 2Business 2Superannuation 2

Changes for 2017 and Beyond .......................................3

Company tax rate reduction 3GST to low value goods imported 3HELP repayments from overseas debtors 3Income tax relief 3Residency rules 3Small Business Income Tax Offset 3Tax integrity package 3

The Tax System ....................................................................4

Who needs to lodge a return? 4Record Keeping 4Self-Assessment 4Self-Lodgement 4Using a Tax Agent 4

Income ......................................................................................5

Salary & Wage Income 5Government Income 5

Investment Income 5Other Income 5

Deductions .............................................................................6

Bank Fees 6Car Expenses 6Clothing 6Donations & Gifts (incl School Building Funds) 6Excursions, School Trips and Camps 6Home Office 7Insurance 7Rental Property Expenses 7Self-Education Expenses 7Tax Returns 7Teaching aids 7Travel Expenses 8Union and Professional Association Fees 8

Rebates and Offsets ...........................................................8

Invalid Relative Tax Offset 8Low Income Tax Offset 8Parent or Spouse’s Parent Tax Offset 8Private Health Insurance Rebate 8Senior Australians and Pensioners Tax Offset 8Zone Tax Offset 8

Do your 2016 tax NOW! ....................................................9

Where to find your NTEU Tax Statement ..............9

Questionnaire .....................................................................10

NTEU Tax Guide 2016. 16th edition. Published by NTEU. Written by Teacher Tax. All rights reserved ©2016. ISBN 978-0-9946377-1-0. Online version at www.nteu.org.au/tax

This guide has been prepared for information only. Australian Tax Legislation is a complex body of law and members should seek qualified tax advice for their personal situation. While every effort has been made to ensure that the information in this guide is accurate, Teacher Tax carries no responsibility for its application. The advice given is to be considered general. Information in italics has been directly sourced from Australian Government websites.

NSW & NationalPO Box 314, Bowral NSW 2576Ph: (02) 8006 5020 Fax: (02) 4210 8682 (central fax system)[email protected] www.teachertax.com.auVictoria Ph: (03) 9014 9590WA Ph: (08) 6102 0560

NTEU National OfficePO Box 1323, South Melbourne VIC 3205Ph: (03) 9254 1910 Fax: (03) 9254 [email protected] www.nteu.org.auBranch & Divisions: www.nteu.org.au/branches

NTEU TAX GUIDE 2016 1

Budget 2016

The Federal Budget was brought down on 3 May 2016. The key initiatives were presented as:

A plan for jobs and growth• Ten Year Enterprise Tax Plan that will boost new investment, create

and support jobs and increase real wages.• Continued investment in the National Innovation and Science

Agenda, including support for new start-up businesses.• The twenty year defence industry plan with focus on our local

defence manufacturing industry driving new high-tech jobs.• Export opportunities through trade agreements that are already

delivering new jobs and markets for Australian producers, manufacturers and service providers.

• A focus on youth employment by giving them real work experience with employers that leads to real jobs.

The tax system • Combating tax avoidance, especially by multinational corporations,

to ensure everyone pays the tax they should on what they earn in Australia.

• Closing off generous superannuation tax concessions for Australia’s most wealthy and better targeting superannuation tax concessions to support working Australians build independent wealth for their retirement.

• Giving hard working Australians and the Australian businesses that employ them greater tax relief to earn more without being taxed more.

Balancing the budget and reducing long-term debt• Continuing to keep government spending growth under control and

to ensure spending is as efficient, effective and well-targeted as possible.

• Targeting welfare abuse to ensure the social safety net is there for Australia’s most vulnerable.

• Responsibly investing in infrastructure like roads, rail, dams and public transport and guaranteeing real, affordable funding for health and education services that Australians rely on.

ATO Focus 2016

Work-related expenses

This year the Australian Tax Office (ATO) will have an increased focus on work-related expenses across all industries. Some red flag areas include:

Double-dippingThe ATO will be on the lookout for taxpayer’s making work-related claims when they have already been reimbursed for the expenses from their employer.

Excessive claimsThe ATO now has new software whereby it can compare the average deductions made by taxpayers in similar occupations with similar incomes. If your claim is too far above the average this may raise a red flag. Areas to watch, for example, are claiming all your mobile and internet costs instead of just the portion that is work-related. And personal travel claimed as work travel will be monitored.

Rental Properties

The ATO has made numerous announcements about its compliance focus on rental property deductions. Some common areas where errors are made include:

Holiday homesHoliday homes reserved for private use by family and friends will be under the spotlight this year. There must be realistic efforts made to let out the property and the rent must reflect market rate.

Interest DeductionsInterest deductions claimed for the private proportion of loans (e.g. if you have refinanced for an overseas holiday) are not an allowable deduction.

Repairs and maintenanceLarge repairs and maintenance claims may be disallowed. Often they should be viewed as a capital works deduction and be claimed as a percentage of the cost over several years. Also, initial repairs and improvements to a property are not deductible as repairs and maintenance.

Splitting income and expensesThe income and related expenses of an investment property need to be divided as per the ownership of the property.

Cash economy

The ATO receives data from third-party providers (banks, health insurers, state and territory title offices, online auction houses, share registries, AUSTRAC) about individual taxpayers. The ATO uses this data to cross-check taxpayer’s tax returns. It will also check popular websites such as eBay, Gumtree and cafe online reviews to detect taxpayers illegally operating in the cash economy. The rising popularity of shared economy concepts like Uber and Airbnb will also be under scrutiny.

2 NTEU TAX GUIDE 2016

Changes for 2016

Individuals

Car expensesFrom the 2015/16 income year there will be only two methods available to claim car expenses. These are the cents per km method, with one set rate of 66 cents per km for all cars, and the logbook method.

Gender identifiersIn recognition that individuals may identify within the community as a gender other than the sex (male or female) they were assigned at birth or an indeterminate sex and/or gender, the ATO will no longer ask for the taxpayer’s sex on a tax return.

Medicare levy low income thresholdsThe income thresholds have increased from $20,896 to $21,335 for individuals and from $35,261 to $36,001 for families. The family income threshold will be increased by $3,306 (previously $3,238) for each dependent child or student. For taxpayers eligible for the seniors and pensioners tax offset, the threshold will be increased to $33,738 (previously $33,044).

Net medical expenses tax offset From 1 July 2015, this offset can only be claimed by taxpayers for disability aids, attendant care or aged care. The offset is income tested and will be abolished from 1 July 2019.

Business

Company tax cuts for small businessFrom 1 July 2015, the company tax rate will be reduced from 30% to 28.5% for small business entities (annual turnover of less than $2 million).

Immediate deductions for start-up costsFrom 1 July 2015, small businesses can immediately deduct certain start-up expenses, such as professional, legal and accounting advice.

Simplified depreciation for small businessBusiness assets costing less than $20,000 purchased between 13 May 2015 and 30 June 2017 can be claimed as an immediate deduction by small business entities (annual turnover less than $2 million). This also applies to balances in the small business pool. From 1 July 2017, the thresholds for the immediate depreciation of assets will revert back to the previous arrangements (‘less than $1,000’ threshold).

Small business income tax offsetFrom the 2015/16 tax return, an individual can claim a tax offset on the tax payable on their share of net small business income earned by a sole trader, partnership or trust that is a small business entity. The discount will be 5% of the income tax payable on the business income capped to $1,000 per individual for the 2015/16 income year.

Superannuation

Catch-up concessional contributionsFrom 1 July 2017, individuals with a superannuation balance of less than $500,000 can make additional concessional contributions where they have not reached their concessional contributions cap in previous years. Unused amounts accrued from 1 July 2017 can be carried forward for a period of five consecutive years. This will allow taxpayers an opportunity to ‘catch-up’ if they have the means to do so.

Concessional contributions capFrom 1 July 2017, the annual cap on concessional superannuation contributions will be lowered to $25,000.

Contribution rulesFrom 1 July 2017, the current restrictions (i.e. the work test) will be removed on people aged 65 to 74 from making voluntary or non-concessional superannuation contributions.

Income Tax Rates (Residents) 2015/16

Taxable income Tax Rate$0 - $18,200 0$18,201 - $37,000 19c for each $1 over $18,200$37,001 - $80,000 $3,572 plus 32.5c for each $1 over $37,000$80,001 - $180,000

$17,547 plus 37c for each $1 over $80,000

$180,001+ $54,547 plus 47c for each $1 over $180,000

Income Test Thresholds for 2015/16

Base Tier Tier 1 Tier 2 Tier 3Singles $90,000 or

less$90,001-$105,000

$105,001-$140,000

$140,001 or more

Families $180,000 or less

$180,001-$210,000

$210,001-$280,000

$280,001 or more

Private Health Insurance Rebate (premiums paid to 31 March 2016)Under 65yrs

27.82% 18.547% 9.273% 0%

65-69yrs 32.457% 23.184% 13.910% 0%70yrs or over

37.094% 27.82% 18.547% 0%

Private Health Insurance Rebate (premiums paid after 1 April 2016)Under 65yrs

26.791% 17.861% 8.930% 0%

65-69yrs 31.256% 22.326% 13.395% 0%70yrs or over

35.722% 26.791% 17.861% 0%

Medicare levy surchargeRates 0.0% 1.0% 1.25% 1.5%


Lifetime cap for non-concessional contributionsFrom 3 May 2016, a $500,000 lifetime non-concessional contributions cap has been introduced. The lifetime cap will include all non-concessional contributions made from 1 July 2007. If an individual makes non-concessional contributions exceeding the cap, the ATO will send notice that they must withdraw the excess from their fund.Individuals who choose not to withdraw contributions will be subject to penalty tax.

Low income spouse balancesFrom 1 July 2017, the low income spouse superannuation tax offset eligibility will be widened. The income threshold for the low income spouse will increase from $10,800 to $37,000. The offset is gradually reduced for income above this level and completely phases out at income above $40,000. This offset provides up to $540 per year for the contributing spouse. allowing individuals to make contributions on behalf of their spouse who is under age 75, without the need for the spouse to satisfy the work test.

Low Income Superannuation Tax OffsetFrom 1 July 2017, a Low Income Superannuation Tax Offset will be introduced to reduce tax on superannuation contributions for low income earners. A non-refundable tax offset will be provided to superannuation funds, based on the tax paid on concessional contributions made on behalf of low income earners (adjusted taxable income under $37,000) up to $500.

Personal contributionsFrom 1 July 2017, individuals under age 75 can claim an income tax deduction for personal superannuation contributions. This is currently limited to self-employed individuals. Certain prescribed funds (such as all untaxed funds and Commonwealth defined benefit schemes) are excluded.

Transfer balance capFrom 1 July 2017, $1.6 million superannuation transfer balance cap will be introduced on the total amount of accumulated superannuation an individual can transfer into pension phase.

Changes for 2017 and Beyond

Company tax rate reduction

From 1 July 2016, the company tax rate will begin to be reduced to 25% over 10 years for small companies (ultimately with an annual $10 million or less). The turnover threshold will be progressively increased to have all eligible companies on the 27.5% tax rate in 2023/24, 27% by the 2024/25 and then be reduced progressively by 1% per year until it reaches 25% in the 2026/27 income year.

GST to low value goods imported

From 1 July 2017, GST will be extended to low value goods imported by consumers.Overseas suppliers that have an Australian turnover of $75,000 or more will be required to register for, collect and remit GST for low value goods supplied to consumers in Australia.

HELP repayments from overseas debtors

From 1 January 2016, the Higher Education Loan Programme (‘HELP’) repayment framework will apply to debtors residing overseas for six months or more. From this date, debtors going overseas for more than six months will be required to register with the ATO, while those already overseas will have until 1 July 2017 to register. Repayment obligations will apply to new and existing debts from 1 July 2017.

Income tax relief

From 1 July 2016, the income tax threshold will increase from $80,000 to $87,000 for the 32.5% rate. This effectively means the marginal rate of tax on incomes between $80,000 and $87,000 will be reduced from 37% to 32.5%.

Residency rules

From 1 July 2016, the Government intends to treat most people who are temporarily in Australia for a working holiday as non-residents for tax purposes, regardless of how long they are here. This means they will not be eligible for the tax-free threshold.

Small Business Income Tax Offset

From 1 July 2016, the offset will increase from 5% to 8%. The discount will stay at 8% for eight years and will then increase to10% in 2024/25, 13% in 2025/26 and 16% from 2026/27. The maximum offset available will continue to be $1,000 per year.

Tax integrity package

From 1 July 2018, new arrangements to better protect individuals who disclose information to the ATO on tax avoidance behaviour will be introduced.


The Tax System

Who needs to lodge a return?

If you have earned income over $18,200 in this financial year, you must lodge a return. If you earned less than this amount but had tax withheld from your salary you will also need to lodge a tax return. Even if you’re not required to lodge a return it is a good idea to notify the ATO that a return is not necessary.

Record Keeping

As the tax system is self-assessment, it is essential that taxpayers be able to substantiate their income and expenses. In general, records should be kept for a period of five years from the date you receive your notice of assessment.Records should be kept in such categories as:• Payments you have received.• Expenses related to payments.• Acquisition or disposal of an asset – such as shares or a rental

property.• Tax deductible gifts or donations.• Medical expenses.If you’re not sure whether or not to keep a record, the best advice is to err on the side of caution. It is better to have too many records than not enough.

Self-Assessment

Australia has a self-assessment taxation system. This means that your return is accepted initially by the Australian Taxation Office (ATO) as truthful. However, the ATO will check the validity of your claims by data matching and auditing. They use this data to:• Provide pre-filling information to taxpayers and their agents to help

them correctly complete their income tax return first time.• Identify discrepancies between information reported by taxpayers

in their tax returns against details reported by third parties.• Identify particular non-compliant behaviour within selected target

groups, or to conduct risk assessments.• Assist in administration of the relevant legislation with other

government departments through data exchange.• Exchange with treaty partners.The responsibilities of taxpayers include: • Be truthful and cooperative in your dealings with us.• Take reasonable care in preparing your tax returns and in keeping

your records.• Lodge your documents and pay any amounts payable by the due

date.The responsibilities of the ATO:• Treat you fairly and reasonably.• Treat you as being honest in your tax affairs unless you act

otherwise.

• Offer you professional assistance to help you understand and meet your tax obligations.

• Accept you can be represented by a person of your choice and get advice about your tax affairs.

• Respect your privacy.• Keep your information confidential in accordance with the law.• Give you access to information we hold about you in accordance

with the law.• Give you advice and information you can rely on.• Explain to you the decisions we make about your tax affairs.• Respect your right to a review.• Respect your right to make a complaint.• Administering the tax system in a way that minimises your costs of

complying.• Be accountable for what we do.

Self-Lodgement

Tax returns are submitted either by individuals or their tax agent to the Australian Tax Office on an annual basis. If you are doing the return yourself, it must be lodged by 31 October. The ATO has the power to fine the taxpayer up to $180 for every 28 days the return is late to a maximum of $900. Interest on any tax payable may also be charged. Our advice is to get it in on time and save the stress and hassle.The return is assessed by the ATO and you are issued with a Notice of Assessment. The Notice of Assessment will summarise your taxable income for the year. It may include a tax refund or an amount payable.

Using a Tax Agent

If you lodge through a Tax Agent, you may be able to avail yourself of the general extension of time granted to Tax Agents (usually 31 March of the following year). To avoid penalty however, you must be registered as a client with a tax agent by 31 October.There are other advantages of using a Tax Agents. These can include:• A quicker turnaround for refunds.• A thorough and professional check to ensure all information is

correct.• Advocacy in the case of audit / dispute.• Tax planning to reduce tax.


Income

In general, income tax is calculated by subtracting allowable deductions from assessable income. Assessable income can be obtained in a variety of ways:

Salary & Wage Income

Salary and wages are the main forms of payments made to an employee. Generally they are considered to be payments made to an individual as remuneration for services, and provided under a contract of service (employment contract). Other payments include:• Allowances can be for car, travel or transport, tools, clothing or

laundry, dirt, site, risk, meal or entertainment or for qualifications held e.g. a first aid certificate.

• Any payment received under sickness or insurance policy for loss of income is usually considered assessable.

• Certain lump sum payments in respect of unused annual leave and long service leave are entitled to concessional tax treatment when you terminate your employment. That is why the amounts are separately recorded on your payment summary and separately recorded on your tax return. We suggest that you obtain professional advice if you have any lump sum payments labelled A B C D or E on your payment summary.

• Eligible Termination Payment (ETP) is a lump sum payment paid by an employer or a superannuation fund. Some of these payments receive concession tax treatment up to certain limits called caps. Areas include resignation, age retirement, redundancy, dismissal, death of an employee.

Government Income

Assessable government payments include;• Age pension• Newstart allowance• Youth Allowance• Austudy payment• Parenting payment (partnered)• Partner Allowance• Sickness Allowance• Special benefit• Widow Allowance• Farm household allowance• Interim income support payment• The following payments if you are 16 or older• Abstudy living allowance• Payments under the Veterans’ Children Education Scheme• Payments under the Military Rehabilitation And Compensation Act

Education and Training Scheme 2004 (MRCA education allowance)• Other taxable Australian Government education or training payments• Community Development Employment Project (CDEP) payments• Disaster recovery allowance

Investment Income

• Rental income when you rent out your property. The rental income must go on the tax return of the taxpayer whose name appears on the title deed of the property. This is most often a 50% spilt between two taxpayers.

• Dividend income including dividends paid directly to you, dividends applied under a dividend reinvestment plan, dividends that were dealt with on your behalf and bonus shares that qualify as dividends.

• Interest income can include interest the ATO credited tax account with. It also includes money received from financial institution accounts and term deposits. NB If you operated an account for a child and the funds in that account belonged to you, or you spent or used the funds in the account as if they belonged to you, you must include any interest from the account.

Other Income

Business income may include earnings from your operation through a Sole Trader, Partnership, Trust or Company structure. The ATO makes a distinction between what is considered a business and what is a hobby. There are certain tests that must be satisfied in order to gain treatment as a business (e.g. the ’business’ must make a consistent profit).Capital Gains income could include any capital gain or capital loss on the disposal of certain assets. Reasons leading to a possible event can include:• An asset you own is lost or destroyed (voluntary or involuntary).• You give an asset away.• You enter into an agreement not to work in a particular industry for

a set period of time.• Shares you own are cancelled, surrendered or redeemed.• A liquidator or administrator declares that shares or financial

instruments you own are worthless.• You grant an option to someone to buy an asset that you own.• You receive a non-assessable payment from a unit trust or managed

fund.• You dispose of a depreciating asset that you used for private

purposes. • You stop being an Australian resident.This is a complex area of tax law and we recommend you consult a tax professional.


Deductions

Deductions are allowable expenses or outgoings that have been incurred in earning any assessable income. An expense must be incurred, that is either paid, or definitely committed to be paid, Such as holding the Invoice. You must have written evidence to prove your claims if your total claims exceed $300. Deductions can include:

Bank Fees

Fees incurred due to having your salary paid directly into a bank account are a claimable expense.

Car Expenses

Using your car for work purposes can be claimed as a deduction. It does not include travel between work and home. You can claim for travel between two separate workplaces, or between a workplace and a place of business.

Method 1 – Cents per kilometreYou can claim up to 5,000 business kilometres per car. The rate of 66c per kilometre is applicable for all cars. You do not need written evidence as such but you need to be able to show how you calculated your claim.

Method 2 – LogbookYou claim the business percentage of costs associated with running your car. You need to record odometer readings and you need evidence of all costs except fuel.

Clothing

You can claim the cost of clothing if it falls into one of the following categories:• A compulsory uniform – a set of clothing that identifies you as an

employee.• A single item of distinctive clothing, such as a jumper or tie, if it

is compulsory for you to wear it at work. Generally having a logo permanently attached and the clothing is not available to the general public.

• A non- compulsory BUT registered uniform.• The cost of buying, hiring, replacing or maintaining protective

clothing. You can also claim a deduction for the cost of clothing that you use at work to protect your ordinary clothes from soiling or damage – for example, laboratory coats or art smocks. Also, you are allowed to claim for sun protection such as sunscreen, sunglasses and sunhats.

n.b. Expenditure on sports clothes such as tracksuits, t-shirts, aerobics clothing, swimming costumes and running shoes is considered conventional clothing and is not an allowable deduction.

Donations & Gifts (incl School Building Funds)

Donations must meet certain conditions. They must be made to a Deductible Gift Recipient – a list of such organisations can be found at www.abn.business.gov.au. Gifts can include:• $2 or more

• Property purchased during the 12 months before making the gift• Listed shares valued at $5,000 or less• Trading stock disposed of outside the ordinary course of business• Cultural gifts Program• Heritage gifts Examples of payments that are not gifts include:• Purchases of raffle or art union tickets• Purchases of chocolates, pens etc.• The cost of attending fundraising dinners, even if the cost exceeds

the value of the dinner • Membership fees• Payments to school building funds as an alternative to an increase

in school fees• Payments where the person has an understanding with the

recipient that the payments will be used to provide a benefit for the donor

Contributions to school building funds can also be deductions. The ATO states that a school building fund has the following characteristics:• The fund is a public fund.• The public fund is established and maintained solely for providing

money for the acquisition, construction or maintenance of a building.

• The building is used, or is to be used, as a school or college, by a government or a public authority, or a non-profit society or association.

n.b. A deduction is not allowable for purchasing gifts for other teachers or students:

“Teachers may outlay their own money to supply items to students for their own individual needs (e.g. books and uniforms); purchase gifts for students (e.g. Christmas gifts); purchase food and drinks for special occasions (e.g. student birthdays) and replace money lost by students (e.g. money for bus fares and lunch). While employee teachers may feel a moral, personal or social obligation to outlay these expenses, there is no connection between the expenditure incurred by the employee teacher and producing assessable income.”

Excursions, School Trips and Camps

The trips MUST be related to the curriculum or extra-curricular activities. Factors determining relevance would include the purpose of the trip, the activities undertaken, and the duties of the teacher. For example, a teacher accompanies a class of school students on a day excursion to visit Parliament House as part of the social studies curriculum. The purpose of the trip as well as the activities have a direct relevance to the curriculum therefore, all expenses would be deductible. Supervising students alone is not sufficient to make the expenses deductible. For example, a teacher accompanies a group of students to visit their sister school. Half of the time is spent at the sister school engaging in social, classroom and sporting activities. Half of the time is spent in tourist activities. The trip is open to all students and is not part of the curriculum of any particular course at the school. Even though the trip may provide social and cultural benefits to the


students, the expenses incurred by the teacher are not deductible. However, if the trip is not curriculum-related but forms an integral part of the extra-curricular activities and the teacher accompanies students as a representative of the school (e.g. school sporting events or school band competitions) the expenses would be allowable.The deductibility of expenses incurred to inspect a possible excursion venue prior to taking the students depends on the purpose and reasons for undertaking such an inspection; e.g. expenses associated with prior visit of a venue to ensure that it meets safety requirements are allowable. However, if a teacher visits a venue privately then decides that it would make a good excursion venue, the private visit expenses are not claimable.

Home Office

When you carry out work activities your home office, you can claim the heating, cooling, lighting and cleaning as well as the decline in value of and repairs to your home office furniture and fittings. The ATO has set a fixed rate of 45 cents per hour for these office expenses instead of keeping details of actual costs. Also, the following may be applicable (apportioned for private and work use):• Answering machines• Briefcase• Calculators and electronic organisers• Computers and computer software• Mobile phones , Telephones• Facsimile machines• Pagers• Hiring equipment• Technical or professional publications• Teaching aids

Insurance

Insurance against the loss of income is usually a legitimate expense.It should be noted that this does not include Private Health insurances and the like.

Rental Property Expenses

You can claim expenses relating to your rental property but only for the period your property was rented or available for rent – e.g. advertised for rent. Expenses could include:• advertising for tenants• bank charges• body corporate fees• borrowing expenses• council rates• decline in value of depreciating assets• gardening and lawn mowing• insurance• land tax

• pest control• property agent fees or commissions• repairs and maintenance• stationery• telephone• water charges• travel costs to inspect the property.If only part of your property is rented out, these expenses must be apportioned.

Self-Education Expenses

Expenses incurred in completing training provided by a school, college, university or other place of education. You must have undertaken the course for use in carrying on a profession, business or trade or in the course of employment. It MUST relate to your work as an employee at the time you were studying. The first $250 of these expenses is not claimable. Such expenses may include:• Textbooks• Student union fees• Stationery• Course fees• Travel expenses• Decline in value of equipment.NB In general, the costs associated with personal motivation seminars are not tax deductible. Whilst they vary from course to course, the ATO’s view is that ‘the material covered is too general to be classed as relating specifically to income-producing activities.’

Tax Returns

The cost of managing your tax affairs is a tax deductible expense in the year that it is incurred (e.g. this year, you can claim last year’s costs). These expenses must relate to a qualified tax advisor. They can include the preparation and lodgement, advice, costs of travel to and from the advisor and obtaining reference works.

Teaching aids

Items purchased must have a direct and relevant use in carrying out your duties. Examples include:• Pens, pencils, markers/highlighters, stamps, stickers, paints,

stationery, posters, maps, laminating.• Storybooks, jigsaws, games, toys used by early childhood, primary

school or special education teachers.• Items used in cooking or sewing classes or science experiments.• Prizes purchased to reward achievement and encourage students.• Entrance fees for school excursions.• Whistles and stopwatches used by physical education employee

teachers.• Calculators/calculator batteries• Maintaining classroom or school pets.


Travel Expenses

If you have to travel away for work, then certain expenses may be deductible which may include:• air, bus, train, tram and taxi fares• bridge and road tolls • parking• car hire fees• meals• accommodation.If a travel allowance is received and the amount of the claim for expenses incurred is no more than a reasonable amount, substantiation is not required. If the deduction claimed is more than the reasonable amount (rates outlined by the ATO depending on travel location) the whole claim must be substantiated, not just the excess over the reasonable amount.If the dominant purpose in incurring the cost is the attendance at the conference or seminar then the existence of any private activity would be merely incidental and the cost would be fully deductible. If the attendance at the conference or seminar is only incidental to a private activity (e.g. a holiday) then only the costs directly attributable to the conference or seminar is allowable deduction. The cost of accommodation, meals and travel directly relating to the private activity is not allowable.

Union and Professional Association Fees

You can claim for the cost of being a member of a Union or Association. See the boxed aside on p.6 for where to find your NTEU Tax Statement.

Rebates and Offsets

Rebates are different to deductions. Deductions reduce your assessable income, whereby rebates directly reduce the tax payable. They are also known as tax offsets. Usually, tax rebates can only reduce your tax payable to zero, with the exception of franking and private health insurance. This is a complicated area of tax. Seek professional guidance. Below is a basic outline of the major rebates.

Invalid Relative Tax Offset

If you maintained a dependent invalid relative you may be entitled to a tax offset depending on your adjusted taxable income.

Low Income Tax Offset

Low income earners can have their tax offset by a maximum of $445 if their taxable income does not exceed $37,000.

Parent or Spouse’s Parent Tax Offset

If you maintained your parent, your spouse’s parent you may be entitled to a tax offset depending on your adjusted taxable income.

Private Health Insurance Rebate

If you have private health insurance, you are entitled to a tax rebate. Most people claim this throughout the year in the form of a premium reduction.

Senior Australians and Pensioners Tax Offset

The pensioner tax offset and the senior Australians tax offset have been combined to form the seniors and pensioners tax offset (SAPTO).

Zone Tax Offset

If you live and work in a remote area you may be entitled to the zone offset.


Do your 2016 tax NOW!

At Teacher Tax, we offer competitive rates on tax returns. Our system has been designed BY Teachers FOR Teachers.There are 3 main ways of doing your tax with us:

EmailSimply send your details to [email protected]

By PhoneCall us on (02) 8006 5020 or contact our nearest office and discuss your details. We can then guide you through our easy step by step process.

By PostUse this form and questionnaire and post to:Teacher Tax, PO BOX 314, Bowral NSW 2576

The fee is $99 for NTEU members for a standard individual tax return.

AUTHORITY TO ACT AS YOUR AGENT

Personal Details

First Name

Middle Name(s)

Last Name

Date of birth

Tax File Number

Street Address

Suburb

Postcode

State

Email Address

Home Phone

Mobile

Fax

Signed Client _______________________________________________________ Date ___________________Proceed to questionnaire...

Where to find your NTEU Tax StatementIf you pay your fees via direct debit, credit card or invoiceStatement can be accessed from your online Member Tools page. Login in at www.nteu.org.au/members and click on Print Tax Statements in the Payments box. Statements will not be mailed out.

If you pay your fees via payroll deduction Membership fees will appear on the PAYG summary supplied by your employer. Contact your Payroll Department for any inquiries regarding this.

TAFE members and ex-membersTax statements will be sent to your home address in early July.


QUESTION DETAILS PROOF REQUIRED Who is your employer? Include any

business who has given you a PAYG Summary.

PAYG Payment Summary

D1 Were you required to use your vehicle for work purposes?

YES / NO

#

If YES, place the approx km next to the appropriate box and complete D1A

Travel directly between two separate workplaces because you have two different employers – for example, you have a second job

#

Travel for work-related purposes from your normal workplace to an alternative workplace and back to your normal workplace or directly home – for example, if you need to go to a regional meeting/excursion

#

Travel between two workplaces or between a workplace and a place of business – for example, between two schools or between your school and the Exam Marking Centre

#

Any other reasons? Please outline. #D2 Did you have any other travel expenses?

(You cannot claim costs met by the school or costs that are reimbursed)

YES / NO

#

D3 Did you have any “work related clothing” expenses?

YES / NO

#

If YES, place the cost next to the appropriate box (write details below)

A compulsory uniform – a set of clothing that, worn together, identifies you as an employee of an organisation having a strictly enforced policy that makes it compulsory for you to wear the uniform while at work.

#

A single item of distinctive clothing, such as a jumper or tie, if it is compulsory for you to wear it at work. Generally, clothing is distinctive if it has the employer’s logo permanently attached and the clothing is not available to the general public.

#

A non compulsory BUT registered uniform # The cost of buying, hiring, replacing or maintaining

protective clothing. You can also claim a deduction for the cost of clothing that you use at work to protect your ordinary clothes from soiling or damage – for example, laboratory coats or art smocks.

#

D4 Have you incurred a self education expense? (There MUST be a direct connection between your self-education expense and your work as a teacher)

YES / NO

Please give brief description of course. #

If YES, place the cost next to the appropriate box.

Textbooks #

NOTE - You cannot claim costs met by the school or costs that are reimbursed

Student union fees #

Stationery ## Expense must be able to be proved if audited

Questionnaire


QUESTION DETAILS PROOF REQUIRED Course fees # Travel expenses # Decline in value of equipment #D5 Have you made any donations to

registered charities?YES / NO

#

D6 If you used a tax agent last year, how much were you charged? (claimable expense).

YES / NO

Please provide the agents name and address.

If you have incurred the following expenses, provide brief details (as well as cost)D7 Calculators and electronic organisers YES /

NO #

D8 Computers and computer software YES / NO

This is usually a pro rata expense - apportioned for private and work use.

#

D9 Answering machines, telephones, facsimile machines, mobile phones, pagers and other telecommunications equipment

YES / NO

#

D10 Excursions, school trips and camps YES / NO

#

D11 First aid courses YES / NO

#

D12 Hiring equipment YES / NO

#

D13 Technical or professional publications YES / NO

#

D14 Seminars, conferences and training courses

YES / NO

#

D15 Teaching aids YES / NO

#

D16 Work-related telephone calls. YES / NO

#

D17 Union and professional association fees (usually listed on your group certificate – in which case, disregard)

YES / NO

#

D18 Dedicated stopwatches YES / NO

#

Please answer the following questions about your tax affairs Q1 Have you earned interest from any

source?YES / NO

Bank interest - Call your bank to obtain the exact amount or use your July bank statement

Q2 Do you receive any Government pensions or allowances incl FTB?

YES / NO

Centrelink Statement of Benefits - including Pensions, Job Start, etc

Q3 Do you have Private Health OR Income Protection Insurance (please specify)?

YES / NO

Private Health Insurance Statement

Q4 Have you sold an investment property this year?

YES / NO

Purchase details and settlement details

# Expense must be able to be proved if audited Liability Limited by a scheme approved under professional standards legislation.


QUESTION DETAILS PROOF REQUIREDQ5A Do you own shares? YES /

NO Dividend Statements

Q5B Have you sold any shares this year? YES / NO

Sales Certificates

Q6 Do you have another source of income (e.g. second job/business)?

YES / NO

PAYG Payment Summary

Q7 Have you been charged any deductible interest? (e.g. investment loan, tax debt)

YES / NO

Bank Statements

Q8 Have you made any personal superannuation contributions on behalf of yourself or a spouse?

YES / NO

Superannuation Statement

Q10 Do you have dependant children? (please indicate how many)

YES / NO

Q11 Do you have (or a share in) an investment property?

YES / NO

If YES, please provide details on a separate sheet. We will call you at a convenient time to discuss specific details.

NTEU Tax Guide 2016

Documents

Transcript of NTEU Tax Guide 2016