S.O.S Accounting - Tax Tips

Tax Tips


Income


What is a Living Away From Home Allowance?.

A living Away From Home allowance is paid by employers when they require an employee to work in an area that is different to their normal workplace and the employer pays the costs to the employee for living away from home.


Example, I work and live in Melbourne and after a few months the Company requires me to go to Regional NSW for a few months to do some work there. They pay me an allowance for the costs of living in regional NSW because they have requested me to work there for a time. I do not need to declare it in a tax return. It is an allowance paid by an employer to an employee and is not subject to tax by the employee. No expenses can be claimed against this allowance.


I won $150,000 on a game show this year, it this taxable income?

If you are a professional contestant it will be taxable. If someone appears as a regular contestant in these shows then they would be considered to be a professional. If your prize was from a one off appearance then it wouldn't be taxable.


I have inherited some money. Is it taxable?

No. The inheritance is not taxable unless advised by the executor that part is taxable. However, if you invest the income from the estate then any earnings will be taxable.


Can my wife declare all the interest from our joint accounts in her tax return because her income is much lower than mine?

No. All income must be apportioned to each recipient on the same basis as the accounts are held.


My bank interest is only $10. Does this amount have to be declared?

Yes. You must declare all interest from all sources.


My 14 year old daughter has received $600 from a trust distribution. Does she have to lodge a tax return?

Not if this is her only income. A minor may earn up to $1666 from investments before any tax would be payable on that income.


I have shares and received franked dividends this year but have no other income. Do I have to lodge a tax return to get the franking credit refunded to me?

No. You can complete the Refund of Franking Credits for Individuals form which can be lodged by telephone or mailed to the ATO.


I have just received a letter from the tax office saying that I did not declare some interest from my bank account. What should I do?

You should contact your bank if you believe that this is incorrect, to verify the income details for your accounts. The bank should notify the tax office in writing if this information is not correct. You have 28 days to correct this information. However, if you have omitted the income you will not need to contact the ATO. They will amend your return and send you a new assessment requesting you to pay the additional tax, a general interest charge and, in some cases, penalties.


Do I need to declare my overseas pension?

Yes. In most cases overseas pensions are taxable. There are a few exceptions to this rule. Please call Logic Accountants if you are not sure.


Do I have to declare income from Centrelink (Newstart, Austudy) on my tax return?

Yes. It must be declared so that the tax office can determine how much tax is payable on other earnings for the year. At the end of the financial year you will receive a Payment Summary from Centrelink indicating how much must be included in your tax return (taxable amount). You may be entitled to a rebate to ensure that no tax is payable on your benefit.


I have just moved permanently to Australia. Do I have to pay tax on the money that I have brought with me?

No. You will only have to pay tax on any earnings that you make from the time that you moved to Australia. If that money earns interest in a bank account you will have to pay tax on the interest.